MEMBERS

Background

All PERS members who have worked in a qualifying position after January 1, 2004, have two components to their PERS retirement: a monthly benefit [your Tier One, Tier Two, or Oregon Public Service Retirement Plan (OPSRP) pension] and an account-based benefit [your Individual Account Program (IAP)]. The monthly benefit (pension) can be paid for your lifetime (and for a beneficiary’s life, if you choose to add one), and the account-based benefit (IAP) is paid either all at once or in installments.

Curious what your Tier One, Tier Two, or OPSRP pension benefit could be at retirement?

Use the Online Member Services (OMS) benefit estimator or request a written estimate (Tier One/Tier Two, OPSRP) to see if you are on track to meet your retirement goals. The OMS benefit estimator uses data supplied by your employer(s) in a secure environment. The estimator does not include your IAP balance, but you can use the IAP Disbursement Forecaster to estimate your IAP retirement distribution. Your 2016 member annual statement lists your IAP account balance (if applicable) as of December 31, 2016.

If you are close to retirement or want to know the basics about your retirement program, PERS offers education sessions (Tier One/Tier Two, OPSRP) throughout the state, our website outlines the key steps to retire (Tier One/Tier Two, OPSRP), and our Member Services team is happy to answer any additional questions. Online Pre-Retirement Guides (Tier One/Tier Two, OPSRP) also include step-by-step information to help you retire.

 

Tier One/Tier Two FAQs

​All Tier One and Tier Two members who have worked in a qualifying position after January 1, 2004, have both a Tier One/Tier Two monthly benefit and an Individual Account Program (IAP) benefit. The balance in your Regular Account shown on your statement will be used to pay for a portion of your monthly benefit; if you chose to contribute to the Variable Account, that balance will also be used and could affect the amount of your monthly benefit. If you participate in the Variable Annuity Program, see "How does my variable account balance impact my monthly Tier One or Tier Two benefit payment?" below. Your Tier One or Tier Two monthly benefit can be paid for your lifetime, and for a beneficiary’s life as well if you choose to add one.

Your IAP account balance is also listed on your annual statement. Your PERS contributions (6 percent of your salary, whether paid by you or your employer) from January 1, 2004, forward have gone into your IAP (contributions you made before 2004 went into your Tier One or Tier Two account). The IAP is then subject to investment earnings and losses and has no guaranteed investment return. At retirement, the distribution you will receive is based on your account balance, which you may choose to roll over into a qualified plan or choose to have the balance paid in installments over various time periods.

​PERS uses three methods to calculate a Tier One monthly benefit amount and two methods to calculate a Tier Two monthly benefit amount; members receive the highest monthly benefit that results from these calculations.

​For Tier One and Tier Two members, the calculation methods are:

Full Formula Method

For general service members:

    1.67 percent × years of accrued service time × final average salary

​For police and firefighter members:

    2 percent × years of accrued service time × final average salary

Formula Plus Annuity Method (Tier One only, available to those who made contributions before August 21, 1981)

​This benefit uses a formula similar to the Full Formula Method to compute the employer portion of your benefit. For general service members, multiply 1 percent of your final average salary by your years of accrued service time. Legislators, police, and firefighters should multiply 1.35 percent of final average salary by years of accrued service time. The total of the calculation will be added to an annuity payment based on your member account balance and life expectancy of people your age.

Money Match

Your employer matches your member account balance by an equal amount. From that total, a monthly payment amount is then calculated based on life expectancy for people of your age.

Notes and definitions:

​Most Tier One/Tier Two members retire under the Full Formula Method. Tier Two members are unlikely to have Money Match result in their highest calculated benefit because their account balances are generally low (due to having fewer years of contributions into the member account before 2004, when contributions were diverted to the IAP).

Accrued service time (also called creditable service, retirement credit, or service credit) is the number of months and years you have worked in a PERS-qualifying position. A “qualifying” position is a position in which an employee performs 600 or more hours of service in a calendar year for a PERS-participating employer or employers. Hours worked with different participating employers in the same calendar year are combined to determine if the 600-hour standard has been met for that year. Under certain circumstances, if you are not employed for the full calendar year, you may earn service time for a partial year with fewer than 600 hours of employment.

One month of service time is earned for each major fraction of a month worked.

​Your final average salary is the greater of these amounts:

  1. your average gross salary earned over the three calendar years in which you received the largest total salary from one or more PERS-participating employers, even if one of those years was less than a full calendar year; or
  2. one-third of the total salary you received from one or more PERS-participating employers in the last 36 months of active membership.

​You can create an estimate online through your Online Member Services (OMS) account. The online benefit estimator will use the most recent data supplied by your employer(s) to produce an estimate for any future retirement date. You can produce multiple benefit estimates with different retirement dates. This could help you determine if you are on track to meet your retirement goals.

When you are within 24 months of the earliest date you are eligible to retire, you can request a written estimate by submitting an Estimate Request form to PERS. If you need a copy of this form mailed to you, contact Member Services.

Your written estimate will provide information on service time purchases available to you at retirement, which could increase your benefit or provide extra service time to allow you to retire sooner.

We encourage you to get at least one written estimate before your retirement date. Please note that OMS generally will not give purchase information unless a written estimate has been completed. Please also note that any information provided in the estimate is not guaranteed.​

These estimates only include your Tier One or Tier Two retirement benefit. You can use the IAP Disbursement Forecaster to estimate your IAP distribution at retirement.​

​Members who elected to participate in the Variable Annuity Program initially chose a percentage (25, 50, or 75 percent) of future contributions to be directed to their variable account. The variable account can have earnings or losses. Each person has a different proportion of his/her contribution into the variable account and therefore has a different level of earnings or losses over time. If you choose to remain in the Variable Annuity Program after retirement, the variable annuity portion of your retirement benefit will increase or decrease annually based on the performance of the variable fund.

As of January 1, 2004, you cannot contribute or transfer funds to the variable account, as contributions are now made into the IAP, and you cannot change the percentage of your past contributions.

​You can request a One-Time Variable Transfer to move all funds out of your variable account into your regular Tier One or Tier Two account before retirement by submitting the One-Time Variable Transfer: Active or Inactive Members form to PERS. You must meet age and eligibility requirements listed on the form, and PERS must receive your election form by December 31 of the year the request is made. The transfer becomes effective January 1 following the year in which PERS receives your request, regardless of when the form is received.

The election to transfer your variable account is irrevocable. If you make this transfer, you no longer participate in the variable account, and you will not receive a variable annuity at retirement.

You also will have the opportunity at retirement to transfer all the money in your variable account into your regular account. For more information, click here.

If you instead continue to participate in the Variable Annuity Program during retirement, PERS will adjust the variable portion of your monthly benefit every February 1. The adjustment is based on earnings or losses for the 12-month period ending October 31 of the prior year.​

​Earnings crediting for the previous year is usually determined in March of the following year. Tier One regular accounts receive the assumed earnings rate (7.5 percent for 2016). Tier Two and IAP accounts receive earnings based on investment returns minus administrative expenses. Tier Two and IAP accounts are subject to earnings or losses. For 2016 earnings crediting, click here.

​No. The Oregon PERS Fund (OPERF) is managed by the Oregon State Treasury under the direction of the Oregon Investment Council. OPERF investment returns are posted monthly. More information on the fund and a complete list of investment information is available under the Actuarial/Financial section of the PERS website.

​You can contact Member Services to confirm your beneficiary on file.

You can update your beneficiaries at any time by submitting new beneficiary forms to PERS. Any new designation form you submit will supersede your previous designation. To update your Tier One/Tier Two account beneficiary, please submit the Pre-Retirement Designation of Beneficiary form to PERS. If you have worked for a PERS-covered employer after January 1, 2004, please also submit the IAP Pre-Retirement Designation of Beneficiary form to PERS if you want to update your Individual Account Program (IAP) beneficiary.

​You may withdraw your PERS accounts if you:

  1. have stopped working for all PERS-covered employers for at least one calendar month following the month of your separation,

  2. are not eligible for PERS retirement, and

  3. submit a completed Member Account Withdrawal Application.

The amount of your withdrawal(s) will be the total of your Tier One/Tier Two and/or IAP account balance(s) at the time of withdrawal. You cannot withdraw just one account; you must withdraw them all and terminate your membership in PERS.

Withdrawals do not include an employer match of dollars. By withdrawing your account(s), you forfeit all membership rights and future benefits provided by PERS.

If you withdraw prior to reaching age 59 1/2, you may be subject to an additional income tax penalty.

If you are vested, withdrawing your member account(s) forfeits your eligibility for Tier One/Tier Two monthly benefits or a lump-sum payment at retirement.

For more information, see the Withdrawal/Inactive Member Information page of the PERS website.

​Our Member Services team is happy to answer any questions about your PERS retirement benefits and can be contacted via phone, Monday through Friday, 8:30 a.m. – 5 p.m., at 888-320-7377; online; or by email at Customer-Service.PERS@state.or.us.

PERS also offers group education sessions that provide information on membership, benefits, and retirement. These sessions are for members at any stage in their careers and are held around the state. Your employer can also request a group session to go over PERS benefits by contacting Member Services or the Employer Service Center. See the full schedule, including opportunities to attend presentations with financial planning information, on the Tier One/Tier Two Education Presentations page of the PERS website.

When you are within 90 days of retirement, you can also attend a Retirement Application Assistance Session (RAAS). This one-hour, one-on-one appointment with a PERS staff member provides an opportunity to have your retirement application reviewed and notarized at no cost. The staff member will answer any questions you have about the retirement process. Please note that a RAAS is not a counseling session to help you make a decision to retire.

 

Oregon Public Service Retirement Plan (OPSRP) FAQs

​You are an OPSRP member if you were first hired by a PERS employer after August 28, 2003.

OPSRP has two components: the Pension Program and the Individual Account Program (IAP).

Your Pension Program retirement benefit is a monthly benefit determined by your salary, how long you work for a PERS-covered employer(s), and a multiplier set by the Oregon Legislature (see "How is my retirement benefit calculated?" below). The OPSRP Pension Program is funded by your employer and provides a lifetime monthly benefit at retirement for eligible employees.

​The IAP is the second part of your retirement plan. Six percent of your salary (whether contributed by you or paid by your employer) goes into your IAP.

The distribution you will receive from your IAP is based on your account balance, which is credited with earnings or losses annually based on investment returns.

At retirement, you may be able to roll over your IAP balance into a qualified plan or take disbursements over various time periods.

​Vested status means you cannot lose your right to your retirement benefit unless you withdraw from the program.

​You become vested on the earliest date in which you complete at least 600 hours of service in a qualifying position in each of five calendar years. The years do not have to be consecutive, but there cannot be a gap in qualifying employment with a PERS employer for more than five years. You can also become vested if you are an active member at any time on or after reaching normal retirement age (age 65 for general service members and age 60 for police and firefighter members).

You are automatically vested in the IAP as soon as you begin contributions into your IAP account (typically six months after your hire date).

If you are vested in the OPSRP Pension Program and retire at normal retirement age, you can receive a monthly benefit for life. The pension benefit is calculated as follows:

For general service members:

    1.5 percent × years of retirement credit × final average salary

For police and firefighter members:

    1.8 percent × years of retirement credit × final average salary

Retirement credit (also called creditable service, accrued service time, or service credit) is the number of months and years you have worked in a PERS-qualifying position. A “qualifying” position is a position in which an employee performs 600 or more hours of service in a calendar year for a PERS-participating employer or employers. Hours worked with different participating employers in the same calendar year are combined to determine if the 600-hour standard has been met for that year. Under certain circumstances, if you are not employed for the full calendar year, you may earn retirement credit for a partial year with fewer than 600 hours of employment.

One month of retirement credit is earned for each major fraction of a month worked.

Your final average salary is the greater of these amounts:

  1. your average gross salary earned over the three consecutive calendar years in which you received the largest total salary from one or more PERS-participating employers, even if one of those years was less than a full calendar year; or
  2. one-third of the total salary you received from one or more PERS-participating employers in the last 36 months of active membership.

As an example, for a general service member with a 30-year career or a police and firefighter member with a 25-year career, the OPSRP pension benefit will provide 45 percent of the member’s final average salary at retirement, payable as a lifetime monthly pension. You can use the calculation method above to find the percent of your salary that will be payable as a lifetime pension for fewer years of service.

​You can produce an estimate online through your Online Member Services (OMS) account. The online benefit estimator will use the most recent data supplied by your employer(s) to produce an estimate for any future retirement date. You can produce multiple benefit estimates with different retirement dates. This could help you determine if you are on track to meet your retirement goals.

When you are within 24 months of the earliest date you are eligible to retire, you can request a written estimate by submitting the Oregon Public Service Retirement Plan (OPSRP) Estimate Request form to PERS. If you need a copy of the form mailed to you, contact Member Services.

These estimates only include your OPSRP pension benefit. You can use the IAP Disbursement Forecaster to estimate your IAP distribution at retirement.

​Naming a beneficiary is one of the most important things you should do as a PERS member.

If you haven’t already done so, please fill out an IAP: Pre-Retirement Designation of Beneficiary: Married or Single Applicant form to name someone to receive your benefits should you die before withdrawing your account or retiring. Sending in a new form with an updated beneficiary will supersede any previous forms. You can contact Member Services to find out your current IAP beneficiary on file.

​For your OPSRP Pension Program, if you die before retirement, PERS will only pay a death benefit to your spouse, your former spouse under a court judgment, or to any other person constitutionally required to be treated in the same manner as a spouse for the purpose of retirement benefits. No other beneficiary can be chosen before retirement. For more information, click here.

​There are slightly different criteria for being able to withdraw your IAP account or your OPSRP pension benefit.

Individual Account Program

You can withdraw your IAP account balance if you:

  1. have stopped working for all PERS-covered employers for at least one calendar month following the month of your separation,

  2. are not yet eligible for PERS retirement, and

  3. submit a completed Member Account Withdrawal Application.

It is a personal decision whether to leave your money in your IAP account if you are no longer working in a qualifying position with a PERS-covered employer. While you were employed, your IAP account received an annual contribution of 6 percent of your salary. Once you stop working, no additional contributions will be made to your account, and the balance will continue to be credited with earnings or losses, depending on investment returns. To learn about how the Oregon PERS Fund is managed and invested, visit the Actuarial/Financial section of the PERS website.

OPSRP Pension Program

You can withdraw your OPSRP pension benefit if you:

  1. have stopped working for all PERS-covered employers for at least one calendar month following the month of your separation,

  2. are not yet eligible for PERS retirement,

  3. the actuarial equivalent (a calculation based on the benefit earned so far and the life expectancy of people your age) of your pension benefit is $5,000 or less, and

  4. submit a completed Member Account Withdrawal Application.

If you withdraw your account and then return to work for a PERS-covered employer in a qualifying position, any retirement credit earned before you withdrew your account is lost. You will need to complete another waiting period to re-establish membership.​

If you withdraw prior to reaching age 59 1/2, you may be subject to an additional income tax penalty.

If you are vested and do not withdraw, you will be eligible for lifetime monthly benefit payments at retirement and distribution of the IAP.

For more information, see the Withdrawal/Inactive Member Information page of the PERS website.

​Our Member Services team is happy to answer any questions about your PERS retirement benefits and can be contacted via phone, Monday through Friday, 8:30 a.m. – 5 p.m., at 888-320-7377; online; or by email at Customer-Service.PERS@state.or.us.

PERS also offers group education sessions that provide information on membership, benefits, and retirement. These sessions are for members at any stage in their careers and are held around the state. Your employer can also request a group session to go over PERS benefits by contacting Member Services or the Employer Service Center. See the full schedule and opportunities to attend a presentation with financial planning information on the OPSRP Education Presentations page of the PERS website.

When you are within 90 days of retirement, you can also attend a Retirement Application Assistance Session (RAAS). This one-hour, one-on-one appointment with a PERS staff member provides you an opportunity to have your retirement application reviewed and notarized at no cost. The staff member will answer any questions you have about the retirement process. Please note that a RAAS is not a counseling session to assist you in making a decision to retire.

 

 Police Officer and Firefighter Unit FAQs (Tier One/Tier Two Only)

​P&F units are an additional benefit, separate from the Tier One/Tier Two pension and the IAP, that a Tier One or Tier Two police officer or firefighter (see A-Z guide, Police and Firefighter for eligibility) can purchase with after-tax dollars. After retirement, the unit account will provide a monthly income, usually for five years, which is partially paid by your employer as long as payments are received by age 65.

​Yes. Your account will be credited annually with the same earnings as your member regular account.

​You qualify if you are a Tier One or Tier Two member employed in a PERS-qualifying position that is classified as a police officer or firefighter (P&F) as defined in Oregon Revised Statutes Chapter 238. Your employer is responsible for accurately reporting your job classification to PERS.

Your annual statement should note your classification and provide a P&F account balance, 2016 contributions, and 2016 earnings.

​For other questions about P&F units, see the rest of this FAQ here and find other forms and information here.