Employer notices keep employers informed of current contribution rate related issues. These notices will be posted periodically, kept current, and removed when no longer applicable.
Advisory Actuarial Valuation Reports as of December 31, 2012
The individual employer reports will also be sent by e-mail to every contact in the EDX PERS contact list.
· Web Administrators: Please review and update the EDX contact list as soon as possible.
Valuations for even-numbered years are advisory only and do not change rates. The 2012 valuation will include the impacts from the 2013 Regular Legislative Session and PERS Board decisions made through September 27, 2013. It will also include earnings for 2012, which were above assumptions.
Briefly, the 2013 decisions are:
· Senate Bill 822 (SB 822) reduced the retiree benefit cost-of-living adjustment (COLA) and stopped the “tax remedy”—a benefit increase intended to partially offset Oregon income taxes paid—for non—Oregon-residents. Under the legislature’s direction, the PERS Board also deferred up to 1.9%of scheduled 2013-15 employer rate increases in addition to the reduction from SB 822. The combined rate reduction from SB 822 and the rate deferral has been implemented effective July 1, 2013.
· The actuarial method used to estimate pension liabilities and project future benefit costs was changed from projected unit credit (PUC) to entry age normal (EAN).
· The long-term investment return assumption was lowered from 8% to 7.75%.
· The rate collar range was shifted. The point at which the rate collar begins to widen was moved to a lower employer funded percentage.
· All accumulated Tier 1/Tier 2 unfunded actuarial liability (UAL) was re-amortized over 20 years.
System wide, the effects of the above changes and actual investment earnings for 2012 reduced the UAL from $16.3 billion (12/31/2011 pre-SB 822) to $13.2 billion (12/31/2012) without employer side accounts. With side accounts, the system-wide UAL is $7.7 billion. The impact of these changes on individual employer rates and UALs will vary.
Actual 2015-17 employer rates will be calculated in the December 31, 2013 valuation, and adopted by the PERS Board in September 2014.