INVESTING SMARTLY: REDUCING INVESTMENT RISK AS YOU AGE
The Individual Account
Program, the account-based benefit of PERS, was converted to a Target Date Fund
format at the beginning of 2018. This conversion reflects an investment best
practice and will better protect older workers from potential losses as they
approach and enter retirement.
KEEPING YOU INFORMED -- FACT SHEETS
Fact sheets from Treasury about the new Target Date Fund lineup are
available atOregon IAP Funds Profile
Starting in April 2018, you will have access
to a fact sheet describing performance and fee information for the specific
Target Date Fund assigned to your age group. (Note: Since annual IAP account
returns are only credited by PERS at calendar year-end, these fact sheets will
not reflect realized Target Date Fund performance for the period ending Dec.
31, 2018 until April 2019.)
WHICH TARGET DATE FUND AM I IN?
PERS-covered workers receive an annual IAP
account deposit equal to 6 percent of salary. Before 2018, all IAP accounts had
exactly the same investment risk, independent of participants’ unique age and retirement
horizon profiles. This uniform approach was not consistent with fiduciary standards
and investment best practices.
The new Target Date Fund structure gradually
reduces investment risk as participants age. This “glidepath” methodology is
embedded in each, separate Target Date Fund. Younger workers take on more investment
risk in exchange for higher, long-term growth potential. Decades later, the glidepath methodology protects those very same workers from adverse market
volatility as they approach and enter retirement.
Your specific fund is based on your birth year. See the chart below:
CAN I CHOOSE A DIFFERENT OPTION OR TARGET-DATE FUND FUND?
Since the IAP’s inception in 2004, individual
account balances had been invested the same way, for every person, at every
age. As described above, the new, smarter Target Date Fund structure is now the
default for all IAP participants. Before this year’s Target Date Fund
conversion, participants did not have the option to select a different
investment approach. That has not changed. Currently, “participant choice” is
not available in the new Target Date Fund structure.
Allowing members to choose a Target-Date Fund different from
their birth year assignment is under consideration. HB 4159 (2018) directs
Treasury to conduct a thorough and careful analysis of such participant choice
to make sure all related fiduciary and legal issues are identified and
evaluated. Treasury will provide an update on the feasibility of participant
choice when its analysis is complete.
HOW CAN I LEARN MORE?
In addition, Treasury prepared a lengthy list of "Questions and Answers" in advance of the switch. You can see that information here
I HAVE QUESTIONS ABOUT MY OWN IAP ACCOUNT
to learn more about your retirement benefits. You may also view your IAP account through iap.voya.com
. Questions about retirement benefits may be directed to PERS Member Services at 888-320-7377. Representatives are available Monday–Friday 8:30 a.m. to 5:00 p.m. (Pacific Time).
I HAVE QUESTIONS ABOUT TREASURY AND THE IAP PROGRAM GENERALLY
Please contact Treasury
about IAP and related matters at IAP.firstname.lastname@example.org