Welcome The PERS Update

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Welcome! The PERS Update

• An Overview of PERS, OPSRP and the IAP
• Revised 4/09/09

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Disclaimer

• Information in this presentation may change as
  the result of administrative, legislative, or
  judicial decisions.

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Agenda

• PERS/OPSRP members
• Individual Account Program
• PERS Tier One and Tier Two
• Oregon Public Service Retirement Plan
• Member resources

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PERS/OPSRP Members

• PERS members
• Tier One Hired before January 1, 1996
• Tier Two Hired January 1, 1996 through August
  28, 2003
• OPSRP members
• Hired on or after August 29, 2003

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Your Responsibilities

• Important that PERS has up-to-date accurate
  information to send you member annual statements
• Throughout your career, its your responsibility
  to ensure your employer always has your correct
  personal information
• Employer sends PERS this information

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Individual Account Program

• HB 2020 (effective date of change January 1,
  2004)
• Member contributions to Individual Account
  Program (IAP)
• No contributions to PERS member account after
  this date

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Individual Account Program

• By statute member must contribute 6 salary
  contribution whether employer picks up
  contribution or not
• Oregon Investment Council provides investment
  oversight for IAP and PERS/OPSRP pension funds

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IAP and Member Contributions

• Member contributions before January 1, 2004 to
  PERS member account
• Contributions effective January 1, 2004 and
  after to IAP
• IAP member account has earnings/losses until last
  dollar paid out to inactive or retired member

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Employer Pension Contributions

• Employer makes separate contributions to fund
  PERS/OPSRP pension plan
• PERS employer makes contributions to fund PERS
  pension plan
• OPSRP employer makes contributions to fund OPSRP
  pension plan
• Pension benefit is separate from IAP benefit

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PERS/OPSRP Retirement

• PERS retiree receives IAP benefit, and chooses
  between thirteen options for PERS pension
  benefit
• OPSRP retiree receives IAP benefit, and chooses
  between five options for OPSRP pension benefit

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IAP Distributions

• Inactive member (withdrawal)
• Lump sum
• PERS retiree (retirement)
• Lump sum (mailed direct to member)
• Installments over 5-10-15-20 year periods, or
• Anticipated Life Span Option
• Can receive IAP distributions only after
  separation from PERS covered employment

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PERS Members

• PERS members
• Tier One Hired before January 1, 1996
• Tier Two Hired January 1, 1996 through August
  28, 2003

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PERS Retirement Eligibility

• 30 years PERS Total Creditable Service Time
• OR
• Age
• Normal retirement
• 58 Tier 1
• 60 Tier 2
• 55, or 50 25 years total service PF
• Early retirement
• 55
• 50 PF

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The PERS Retirement Benefit

• Calculation factors
• Age
• Service time
• Final average salary
• Account balance

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Calculation Methods

• Full Formula
• Service time x final average salary x .0167
• Money Match
• Age factor x account balance x 2
• Formula Annuity (August 21, 1981)
• Service time x final average salary x .01
• Age factor x account balance

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Calculation Method Comparison

• One of three calculation methods
• Full Formula
• Money Match
• Formula Annuity
• (only for those with service time prior to
  August 21, 1981)
• Receive benefit based on highest calculation

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PERS Benefit Estimate Calculator

• Tier One and Tier Two estimated benefit
• Includes
• Variable adjustment
• Tax remedies
• http//oregon.gov/PERS

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Retirement and Variable Account Participation

• City of Eugene vs. PERS settlement agreement
• Will affect Money Match calculation
• Benefit adjustment

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Tax RemedyHB3349 or SB656

• The greater of either...
• HB 3349
• Benefit increase
• Based on service time prior to October 1, 1991
• SB 656
• Based on service time prior to July 14, 1995
• Maximum 4 increase

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OPSRP Effective August 29,2003

• Oregon Public Service Retirement Plan
• Established by legislature
• For new employees hired on or after August 29,
  2003

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OPSRP

• Two components of the plan
• Pension Program a defined benefit plan based on
  salary, service time, and a factor
• Individual Account Program a defined
  contribution plan

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OPSRP Pension Program

• Funded by your employer
• Employer must make contributions necessary to
  fund the Pension Program
• Employer contribution rate determined by PERS

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OPSRP Vesting

• Vested in pension when
• Member reaches normal retirement age, or
• Member completes five years of qualifying service
• Five years need not be consecutive
• Before becoming vested
• Five consecutive years of less than 600 hrs/year
  causes loss of any prior vesting service

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OPSRP Retirement Eligibility

• Normal retirement age
• General service members
• Age 65, or
• Age 58 with 30 years of creditable service time
• Police and firefighter members
• Age 60, or
• Age 53 with 25 years of creditable service time

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OPSRP Retirement Eligibility

• Early retirement age
• General service members
• Age 55
• Police and firefighter members
• Age 50, if the five prior years were as PF
  member
• Age 55, if less than five years of PF service
  time

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OPSRP Pension Program

• At retirement, provides lifetime pension benefit
• For general service member with 30 years of
  service (25 years for P F) retiring at normal
  retirement age
• Will provide approx. 45 percent of your final
  average salary at retirement

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OPSRP Pension Program

• Benefit determined by formula
• General service Final average salary x years of
  service x 1.5
• P F Final average salary x years of service x
  1.8

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Benefit Calculation Example

• General service member (not P F)
• Final average monthly salary 3750
• 30 years creditable service time
• Single Life Option monthly benefit
• 3750 x 30 yrs x 1.5 percent 1687
• Above based on normal retirement age

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Benefit Calculation Example

• Police and Firefighter
• Final average monthly salary 3750
• 25 years creditable service time
• Single Life Option monthly benefit
• 3750 x 25 yrs x 1.8 percent 1687
• Above based on normal retirement age

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Planning for the Future

• Save more for retirement?
• Educational employees
• Eligible to participate in a 403(b)/TSA program
  or 457 deferred compensation plan
• State of Oregon or participating local government
  employees
• Eligible to participate in the Oregon Savings
  Growth Plan
• A 457 deferred compensation plan
• Earnings accumulate tax-deferred until withdrawal

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Member Education

• Hired on or after January 1, 1996
• Early Career classes (PERS and OPSRP)
• Within five years of retirement
• Group counseling classes (PERS only)
• Within one year of retirement
• One-year Group classes (PERS only)
• Retirement benefit estimates available through
  PERS
• PERS and financial planning

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Member Resources

• Websites and E-mail link for PERS website
• PERS http//oregon.gov/PERS
• PERS Insurance http//pershealth.com
• IAP account https//iap.csplans.com
• Toll-free telephone number
• PERS
• 1-888-320-7377 or 503-598-7377
• PERS Insurance
• 1-800-768-7377 or 503-224-7377
• PERS and financial planning
• http//oregon.gov/PERS

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QUESTIONS?