PERS Update - For Informational Purposes Only
- This information is being provided to assist employees in researching, reviewing, and evaluating how proposed PERS reform and/or changes may impact their retirement benefits.
- Employees are responsible for researching, verifying, and evaluating how these changes and reform measures may impact them and their retirement benefits.
- UO is NOT providing legal interpretation of the PERS reform and/or changes and cannot evaluate how these changes may impact an individual employee’s retirement benefits.
The Benefits Office recognizes there is a significant amount of concern around this topic. While we cannot specifically advise individuals on how proposed changes may impact their retirement benefits, we strongly encourage PERS members to do two things: Get informed and Get a PERS estimate.
Reports about proposed reform to the Public Employees Retirement System (PERS) has generated considrable discussion and many questions. You are encouraged to research and monitor PERS legislation to determine how these changes may impact you. Human Resources provides the following information to assist UO employees with keeping current on PERS reform issues and educating themselves:
PERS Task Force
The Oregon Legislature ended its last session without making changes to Public Employees Retirement System despite active debate on the issue. Governor Brown appointed a task force to identify and rank options for reducing the PERS liability.
PERS reform discussion will likely continue in the next legislative session, which begins in February 2018.
Changes to Assumed Earnings Rate
At the July 28 meeting, the PERS Board lowered the assumed earnings rate from 7.5% to 7.2%, which takes effect January 1, 2018. The “assumed rate”—the rate of investment returns (including inflation) that the PERS Fund’s regular account is expected to earn over the long term—is reviewed by the PERS Board every two years when considering all the actuarial methods and assumptions that are used to assess the system’s financial position.
For more information, visit the PERS News website.
2017 Legislative Session Summary
Multiple bills were introduced in the 2017 legislative session regarding retirement programs. A brief overview of each bill and links to more information is provided below:
Get a PERS Estimate
Online pension estimates are available to anyone:
- Go to Online Member Services webpage.
- Click on "Log In" in the upper right corner.
- Log in using your User ID or "Open a New Account."
- You're now on the Account Home Page.
- Click on "Member" in the "Account Plan" section, you are now on the Account Summary Page.
- Click on "Benefit Estimate" (on the left hand side of the screen)
- Click on "Create a New Benefit Estimate," the system will ask a series of questions (i.e., retirement date, beneficiary, etc.)
Written pension estimates are available to those who are retiring within two years:
- Get an estimate request form.
- PERS processes request in the order of retirement date (not in the order requests are received). We recommend using the earliest retirement date possible.
- Here is information helpful to completing the form:
- Maximum vacation payout for an Unclassified employee is 180 hours.
- UO does participate in the PERS sick leave program.
- Retirement date is always the first of the month, regardless of last day worked.
- ORP members –
- use salary data from date last in a PERS position.
- use sick leave balance at the time membership changed from PERS to ORP (i.e., 1996).
- do NOT use a vacation balance because unused vacation (if applicable) was not paid out when you changed to the ORP pension program.
- Fax or mail form directly to PERS as directed on the form.
Meet with a Financial Advisor
Regardless of legislative action, a licensed financial advisor can assist and advise you with your specific retirement goals and needs. Visit the Find a Financial Advisor webpage for more information.
- Legality of PERS proposals - Legislative Counsel Committee, August 2016
- Oregon State Legislature website
- PERS Solutions Work Group website
- Presentation to the PERS Solutions Work Group (9/21/16)
Summary of 2017 Bills
Postdocs Employees: Changes to PERS
The legislature passed Senate Bill 214 that impacts postdocs and their PERS eligiblity. The passage of SB214 essentially means post docs hired on January 1, 2018 or later will no longer be eligible for PERS. It provides a provision for them to participate in the Optional Retirement Plan and receive up to 4% employer matching contribution when they contribute up to 4% of their earnings in the retirement plan.
Senate Bill 1068 - Introduced to the Joint Ways and Means Comittee
Diverts up to 4% of the 6% contribution currently made to each employee's Individual Account Program (IAP) into a separate "risk sharing" account. Initially, the risk sharing contribution rate would be 1% (effective July 1, 2018). Then increase to 2% (effective July 1, 2019). The exact percentage of future increases would be calculated biannually based on the cost of future pension benefits and the projected unfunded liability. The risk sharing contribution rate would not exceed 4%. The balance of the risk sharing account would be used to pay the costs of the pension or other retirement benefits payable upon retirement.
Visit the Oregon Legislative Information website for full text.
Senate Bill 559
Changes calculation of final average salary for purposes of Public Employees Retirement System to use five years of salary instead of three years, for salary paid on and after January 1, 2018 (see 5 Year Final Average Salary Report) for more information. Directs Public Employees Retirement Board to recalculate employer contribution rates to reflect savings attributable to Act. Provides for expedited review of Act by Supreme Court upon petition by adversely affected party. Declares emergency, effective on passage. [Full Formula or Full Formula+Annuity]
Affected groups: PERS Tier 1, Tier 2 and OPSRP
Visit the Oregon Legislative Information website for full text.
Senate Bill 560--Amendment added 4/17/2017
Redirects employee contributions made by member of system from individual account program to account to be used to pay for member's pension or other retirement benefits accrued on or after January 1, 2018. For years beginning in 2018, caps at $100,000 annual salary used to calculate final average salary for purposes of Public Employees Retirement System. Directs Public Employees Retirement Board to recalculate employer contribution rates to reflect savings attributable to Act. Provides for expedited review of Act by Supreme Court upon petition by adversely affected party. Declares emergency, effective on passage. Excludes Judges from the $100,000 limit. [Full Formula or Full Formula+Annuity]
Affected groups: PERS Tier 1, Tier 2, OPSRP and IAP accounts
The Preliminary Analysis Report offers information and insight into the details of this bill.
Senate Bill Amendments added 3.15.2017: reduces Tier 1 and 2 pension multiplier from 1.67% to 1.00%; Tier 1 - reduces "assumed rate" from 7.5% to 3.5%; Tier 1 and 2 - eliminates unused sick leave and/or vacation lump-sum payout from the calculation of average ending salary; OPSRP minimum retirement age increased to age 67 from age 65; New employees - increases "wait time" from 6 months to 12 months to become members; Current and new employees - changes definition of qualifying positions from 600 hours in calendar year to 1,000 hours in calendar year.
Senate Bill Amendment added 4.17.2017 would replace the original proposed bill and previous amendments:
- reduces Tier 1 and 2 pension multiplier to a "rate to be determined" from 1.67% for years of service on/after January 1, 2018;
- reduces OPSRP pension multiplier to a "rate to be determined" for service on/after January 1, 2018;
- All Tiers - Average Ending Salary - average to be used is 3 years for service before January 1, 2018 and to five years in the 5 years for service after January 1, 2018
The 5 Year Final Average Salary report provides helpful information about this proposed change;
- Tier 1, Average Ending Salary will exclude lump-sum payment for unused vacation that is accrued after January 1, 2018;
- Tier 1/2, Average Ending Salary will not include unused Sick Leave accrued on/after January 1, 2018;
- Tier 1 - Money Match Formula, annuity rate used will be the lesser of the rate determined by the board or the federal Pension Benefit Guaranty Corporation (this is effective for retirements on or after the effective date of this act - The act has an emergency clause stating it is effective upon passage);
- Employer cannot make the employee contributions after January 1, 2018 or expiration of bargaining agreement; creates a "member pension contribution account" (this is a additional account) that will be used to help fund the lifelong pension benefit;
- Board will set employee contribution rate for the "member pension contribution account" every 2 years - no rate is currently identified;
- employee can redirect contributions that were to be made to the IAP into the "member pension contribution account"; see the full text of the amendment for additional changes.
The Staff Measure Summary for Senate Bill 560 provides helpful information to better understand the bill and its amendments. It describes each amendment including the most recent addition, amendment 15 (see -15 in the Summary document).
Visit the Oregon Legislative Information website for full text of the bill and for full text of the amendments.
The following bills were introduced but received little attention:
Get Updates on Bills
To follow these bills and/or any of the other bills in the Legislature, visit the Oregon State Legislature website:
- From the bills main page (links provided above), select "e-Subscribe Email" in the upper right corner.
To search bills on the Oregon State Legislative website:
- In the "Search Bills" box (right hand side of page).
- enter "retirement."
- then refine search by selecting the bill.