Oregon State Treasury


IAP Information


The switch to the Target-Date Fund framework is at the end of 2017.

See the new fact sheet from Treasury about the fund lineup.  

Good News regarding your IAP Account

See a news release​ and a quick two-page primer about the change.

Send us feedback! Comments about the new IAP Target Date Fund framework can be sent via this email.  


Changes to IAP program are based on investment best practices 

Thank you for visiting the Oregon State Treasury's information page to help you learn more about the proposed change to investments in the Individual Account Program (IAP), which is part of PERS. The envisioned changes will be based on investment best practices and will better protect workers from market losses as they approach retirement age.

How? The IAP accounts will shift from a one-size-fits-all management philosophy to customized "target-date funds," which will gradually reduce your investment risk profile as you get older. That way, you are less likely to experience losses as you approach retirement, when you will need your money. 

This change will be free and automatic, and you won't need to do a thing. It will not impact the pension part of your retirement, no matter which pension tier you are in.

The Oregon Investment Council approved the change at its Sept. 20, 2017, meeting. This site seeks to answer questions you might have about the investment of the IAP accounts. You also can obtain information about the IAP program from the Public Employees Retirement System.


Your Oregon PERS Retirement Benefits

The Individual Account Program (IAP) is an account balance-based benefit for all active Oregon PERS members. This benefit is in addition to your
Oregon PERS pension benefit (Tier One, Tier Two or Oregon Public Service Retirement Plan [OPSRP]). Currently, 6% of your salary (whether contributed by you or paid by your employer) goes into your IAP.

The IAP is just one part of your retirement. (Against that backdrop, you should consider whether you are investing and saving enough to meet your personal retirement needs, and potentially consider additional options beyond your pension benefit and the IAP.)

Since the inception of the IAP in 2004, the money in every IAP account had been invested the same way, for every person, at every age. That means people nearing retirement age have had the same investment risk profile as younger workers.

The Oregon Investment Council (OIC) is committed to providing an effective investment program to PERS members. Therefore, the OIC is moving forward with an investment change that will gradually reduce the market risk exposure in your IAP as you get closer to retirement.

On Jan. 2, 2018, Oregon PERS members will be invested in the new IAP Target-Date Funds. IAP accounts will shift from the current one-size-fits-all format to customized target-date funds that are designed for Oregon public employees. This enhanced approach will maintain the objective of the IAP program to achieve the highest total returns, while incurring an appropriate level of risk in addition to recognizing that risk levels should vary based on age. The change will be automatic and you don’t need to do a thing.

Money in your IAP will be shifted to a target-date fund that is chosen, based on your year of birth. For example, if you were born between 1973 and 1977, you will be in the IAP 2040 Target-Date Fund. Investments in each fund will adjust over time to reduce investment risk—and potential losses in market downturns. In your early working years, the emphasis is on growth in order to build your retirement account balance. As you move toward retirement, the investments in the fund gradually shift, becoming more conservative to help protect against market fluctuations.

As with your IAP investments today, investments in the Target Date Funds will not be guaranteed. Your account balance can be more, or less than the original amount you contributed.


Do you have questions about your own IAP account?

You may visit www.oregon.gov/pers to learn more about your retirement benefits. You may also access your IAP through iap.voya.comQuestions 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).

We welcome comments at Treasury about this change to better align your IAP risk and return profiles

The Oregon Investment Council and Oregon State Treasury are focused on securing sustainable risk-adjusted returns on behalf of beneficiaries. Treasury does not have information about individual account balances, but designed the overaching program reform to increase growth potential for younger workers and decrease the risk of losses for older workers.

The bottom line for participants: The risk of investment losses will decline gradually as they approach retirement, and during retirement.

A comment was made by the president of a public employee union, during the Oregon Investment Council meeting on Sept. 20, that some IAP participants would be interested in having the choice to personally opt out of the Target Date Fund framework, and keep their accounts invested under the current model. 

You can send the Oregon State Treasury feedback about new IAP Target Date Funds through this email.  

Thank you for visiting and taking an active interest in your retirement planning.

IAP TFD glide path.png

Questions and answers: The Individual Account Program is evolving to reduce risk exposure as workers age.


It aligns with “investment best practices,” which is great. And you won’t need to do a thing. That’s also great.


Hello and thank you for visiting. As you know, your future quality of life may depend on how prepared you are financially for your next chapter.

This page was created for Oregon public workers to answer any questions you may have to the investment format change approved for the PERS Individual Account Program (IAP). The IAP is part of your retirement benefit, and is separate from the pension portion.

We hope this page is a good resource for you. If you do not have an IAP account but are curious how this all works, we hope this is informative for you, as well.

It is important to us that PERS beneficiaries understand these changes and are comfortable with the logic. The bottom line is that IAP accounts will no longer be a one-size-fits-all format, and instead will get less risky as you age. Under the previous system, an older public employee had been exposed to the same exact investment risk as a young worker.

Going forward, you will be better protected in the event of a market downturn in the years as you approach retirement.

That’s what the Oregon Investment Council voted to adjust on Sept. 20, 2017. The Council is in charge of setting policies for the investment of all Oregon public trust funds.

Your IAP funds will shift to a new, risk-adjusted format based on your age. These are known as “target date funds.” Reducing risk exposure as the time approaches that you need your money is an investment best practice.

This change will be automatic. You won’t need to do a thing when it comes to your IAP change.

We are pleased about this strategic adjustment to the IAP because, as fiduciaries, we are committed to managing your retirement assets smartly, strategically, and sustainably for the long term. Your financial wellbeing matters. The new format for the IAP is consistent with our fiduciary obligation to you.

While you are here, you should also think about your own retirement. Are you saving smartly? It is likely that if you only have PERS and an IAP, you aren’t saving enough and you might want to consider an additional option to save more, such as the Oregon Savings Growth Plan, an IRA or other programs.

If you have questions that aren’t here, let us know at iap.comments@ost.state.or.us

If they are questions about the IAP, we will get back to you and maybe add them below!

One more thing: At Treasury we invest the Oregon Public Employees Retirement Fund, which is really big and diversified around the globe for the exclusive benefit of trust fund participants. We don’t have any of your personal information or information about your personal IAP balance.

If you want to know what your balance is, you can log in to the IAP portal at IAP.Voya.com, which is managed by Voya.

If you have questions that involve your personal account, those are best addressed to the Public Employees Retirement System[DC3] , which is a separate agency that is the plan “administrator.” 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 p.m. (Pacific Time).


Thanks again for visiting the Oregon State Treasury. 


Q: First of all, what is an IAP?

The Individual Account Program is part of your retirement benefit. All PERS members who have worked in a qualifying position after January 1, 2004, have two components to their “hybrid” PERS retirement.

Those are: 

·         A monthly pension benefit [Tier One, Tier Two, or Oregon Public Service Retirement Plan (OPSRP)]. These pension amounts are generally based on a formula; and

·         An account balance-based benefit [the Individual Account Program (IAP)] which is not guaranteed and returns are tied to market performance. This is the defined contribution part of your retirement. Your IAP balance is made up of member contributions plus investment earnings or losses over time.


Q: How does money get into my Individual Account?

Currently, 6 percent of your salary (whether contributed by you or paid by your employer) goes into your IAP. This will not change.


Q: Where did the IAP originate?

The IAP was created by the Legislature in 2003, and started in 2004. Until now, all the funds have been managed in the same manner for every worker, invested in the Oregon Public Employees Retirement Fund.

The Legislature’s idea for the IAP was to create a non-guaranteed investment vehicle like a 401(k) to help augment the pension benefit of public workers.


Q: Hold on a second. IAPs aren’t guaranteed?

That’s right. The returns on your IAP investments are based on the markets. In a “defined contribution” program like the IAP, the risk is on the participant.

That’s different from the pension part of your retirement.

The change to the IAP program won’t have any impact on your monthly pension benefit.


Q: So all IAP money has been invested the same way? How has the IAP money been invested, under the one-size-fits-all approach? 

A: It has all been invested in the Oregon Public Employees Retirement Fund (also called OPERF because we like long and confusing-sounding acronyms). That fund is global and diversified into lots of sorts of investment types like real estate and bonds and stocks. It also is rather large (as of now, about $74 billion) and has performed strongly compared to peer funds in other states.

OPERF is managed by the Oregon State Treasury under policies set by the Oregon Investment Council, and is managed on a 25-year horizon with the goal of strong returns to pay pension benefits.

While the fund has performed well, it is a trust fund for more than 350,000 PERS workers and retirees -- and it is not invested with the career trajectory of any single employee in mind. That means that it could experience losses in a downturn. That is OK for a large institutional fund that is built to ride out all market phases and capitalize on opportunities during recessionary cycles. It’s less OK for an individual on the eve of retirement.


Q: OK. So, how are IAPs going to change?

A: The program will be divided up so that workers will move into customized portfolios based on their current age, and years to expected retirement (estimated to be 65, but that’s a decision for every public worker). These will be known as “IAP Target Date Funds.”

 These are custom funds and they don’t even exist yet. They are being created specifically for you. Under the IAP Target date funds, at least half of your money will remain in the Oregon Public Employees Retirement Fund (or OPERF). Remember, it is a diversified and strong performing fund.

 The rest will go into either more conservative (less risky) or more aggressive, growth-oriented alternatives, based on your age.


Q: What’s a Target date Fund?

 A: A target date fund typically has a date in its name—this is called the fund’s “target date.” The target date is the approximate year when you expect to retire and begin withdrawing from your account. A target date fund adjusts its investments over time. It does not mean you will actually retire in that year.

 If you’re in your early working years, the emphasis of the fund is on growth to build savings. As you move toward retirement, the investments of the fund gradually evolve, becoming more conservative to help protect against market fluctuations—and it all happens automatically.


Q: What is the Oregon Investment Council?

 A: The Oregon Investment Council (OIC) is a public board and oversees the policies and asset allocation for several funds, including the Oregon Public Employees Retirement Fund (OPERF), the State Accident Insurance Fund, Oregon Short-Term Fund, and the Common School Fund.

 The council members have a fiduciary obligation to beneficiaries and must strive to ensure that the investments are managed for the sole and exclusive long-term benefit of beneficiaries. The council’s mandate is to achieve the highest “risk-adjusted return” possible on investments, including for the OPERF.


Q: What does the Oregon State Treasury do?

 The Oregon State Treasury is the state’s financial hub and helps Oregonians to improve their financial security and confidence. As part of that goal, Treasury manages Oregon’s public trust fund portfolio, following the policies and asset allocation targets set by the Oregon Investment Council.

 Treasury manages the investment of public employee retirement assets between the time the money is received, and when it is needed to pay for benefits. An estimated 73 cents of every dollar in retirement benefits comes from investment returns. The rest comes from contributions by employees and government employers.

 Treasury also helps to improve the financial literacy of Oregonians to help them make sound financial decisions. That includes encouraging people to plan for retirement and ensure they are saving enough.


Q: What does the Public Employees Retirement System do?

 A: The PERS agency is the administrator of the retirement system and your touch point when it comes to your retirement account. PERS collects the money, maintains records for each worker, and then is responsible for calculating and paying your retirement benefit. They also have a call center with very nice people who answer questions.

 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 p.m. (Pacific Time).


Q: When is the IAP switchover going to happen?

 On Sept. 20, 2017, the Oregon Investment Council made the decision to change the investment strategy of the IAP as of the end of 2017. Formally, the switch will take effect at the end of the workday on Dec. 29, 2017.

 Again, Treasury does not maintain records for individual accounts. You can track your individual balance through the PERS agency.


Q: What do I need to do as part of the IAP transition?

 A: Nothing! Really. We’ll handle it.


Q: I’m really nervous about my retirement funds, especially with all the negative news coverage these days. That makes me anxious that this change will somehow impact my pension or something.

 A: This has nothing to do with your pension. You will remain in the same pension tier. This strategic change only impacts the IAP to make it less risky as you age. Remember, the IAP is the PERS market-based account part of your pension.


Q: Can you say I won't lose money after this switch?

A: Like today, the IAP will continue to be a market-based account. That means the returns are based on what is happening in the markets, which sometimes go up and sometimes go down. But as history shows, they tend to go up more than they go down.

With this change, we can say that older workers will be less likely to lose money -- and as much money -- because their risk will be lower.


Q: You’re going to say “investment best practice” again, aren’t you?

A: Yes! It’s an investment best practice – also a fiduciary best practice -- to reduce risk as the target time approaches that you need your money.


Q: OK, got it. But who says that Target Date Funds are an investment best practice?

A: Target date funds are recognized by finance educators and regulators because they automatically adjust risk without any action needed by investors. They are noted as a preferred “qualified” option under federal law for some retirement plans, known as ERISA (another complicated acronym), for the Employee Retirement Income Security Act of 1974.


Q: Which IAP Target Date Fund I will automatically be invested in?

A: There are a series of 10 IAP Target date Funds. One of those is a Retirement Allocation Fund once you reach retirement age.

Each PERS Member with an existing IAP account will be invested in a single IAP Target date Fund based on a five-year range of birth years (see bottom of this page for a chart of birthdates and funds). Please note that the “target date” in no way dictates when you have to or will be eligible to retire (see normal retirement age eligibility for Tier One, Tier Two, and OPSRP members); the date is based on an approximate retirement age of 65.

Q: So I could be invested in a different Target Date Fund than my spouse, if he or she is a PERS employee, and coworkers?

A: Yes, unless you are in the same age range as all your coworkers and your spouse. Which seems unlikely. Your coworkers are different ages. And your spouse, if he or she is a PERS member, will be in the IAP that corresponds to his or her birth year. That’s even if he routinely fails to act his age at social gatherings.


Q: Can I be invested in more than one IAP Target Date Fund?

A: No. You will be invested in a single target date fund based on your birth year and an expected retirement age of 65.


Q: Are all owners of IAP accounts affected?            

A: Yes.


Q: How do you decide the investment strategy for each tier for IAP Target Date Funds?

A: The IAP funds are a custom target date framework that will only be available to public workers and will continue to have a substantial amount of assets in the Oregon Public Employees Retirement Fund. Again, OPERF is already diversified.

Younger workers will have some additional exposure to growth strategies. Older workers past the age of 50 will begin to see an age-appropriate shift that raises exposure to bonds and “fixed income” strategies, and reduces exposure to other investment types. 

The objective for each retirement fund is to achieve the highest total return over time combined with an appropriate level of risk that is consistent with its asset mix. Target date funds that are furthest away from their target dates invest primarily in stocks, emphasizing the growth potential you need to build wealth over the long term.

Q: What will my investment mix be at retirement? 

When your fund reaches its target date (approximate retirement age of 65), its investment mix is 60% defensively oriented strategies (such as core bonds, Treasury Inflation-Protection Securities (TIPS), and short duration) and 40% growth strategies (including stocks, private equity and real estate).

Q: How much of my money will stay in the Oregon Public Employees Retirement Fund? 

A: It depends on your target date fund, which is a function of your age. In working years, more than half of your assets will remain in OPERF. In retirement, it will be half.

Q: What if I’m like, really into risk, and I just want to stay fully exposed to OPERF and not do the target date thing, even though I know it will be less risky when I am younger and more risky when I approach retirement?

A: At this time, everybody is being shifted to the new format. But as you can tell from the chart above, every IAP investor will continue to have a substantial share of their balance in the Oregon Public Employees Retirement Fund. Again, OPERF is highly diversified. It just isn’t built with your individual needs and personal retirement date in mind. 


Q: When will performance data be available for the IAP Target Date Funds?

 A: You can check your IAP account balance any time at IAP.Voya.com, however, returns (earnings or losses) are applied to accounts once on an annual basis, typically in the spring of the following year. If you are curious and want to know more often the performance of the funds, quarterly fact sheets will be available as of the first quarter of 2018 on our website at www.oregon.gov/treasury.

Q: In addition to OPERF, what will the other funds in the IAP Target Date Funds be?

A: The funds will be from State Street Global Advisors. 

State Street Russell All Cap Index Fund

State Street Global All Cap Equity Ex U.S. Index Fund

State Street U.S. Bond Index Fund

State Street 1-10 Year U.S. Treasury Inflation Protected Securities (TIPS) Index Fund

State Street U.S. Short-Term Government/Credit Bond Index Fund

Q: I understand that Target Date Funds are good for older workers. But I’m a younger worker. How do they help me?

A: Target date funds that are furthest away from their target dates are primarily invested in growth-oriented strategies (including stocks, private equity, real estate and other alternatives) that emphasize the earnings potential needed to build your retirement account balance over the long term. For the IAP custom target date funds, workers who are younger than 45 will have exposure to OPERF plus additional stock funds, which will make their accounts more aggressive.

To use a baseball metaphor, earlier in your career you swing for the fences more often.

Q: How will the shift to IAPs impact my payment options at retirement?

A: All payment options will remain the same. When you retire, you can receive your IAP account balance as a lump-sum payment or installment payments over a 5, 10, 15, or 20-year period. The PERS agency can help you with questions about payment options.

Q: How will this change impact current retirees receiving IAP installment payments?

A: If you are currently receiving IAP installment payments, or choose to receive IAP installment payments at retirement, then under the new IAP TDF investment strategy, your IAP account balance will be placed in the “IAP Retirement Allocation Fund.” This fund is designed to help preserve existing account balances, which may lead to a more predictable payment stream.

The PERS agency can answer specific questions about IAP payments.

Q: Who is AllianceBernstein L.P. and what is their role in the IAP transition?

The Oregon State Treasury, under direction of the Oregon Investment Council, selected AllianceBernstein to help manage the custom series of target date funds. In this role, AllianceBernstein designs, monitors and adjusts the Fund’s asset mix. The money will not be invested in AllianceBernstein funds. The firm was selected because it specializes in target date fund development. It provides global perspective, independent research and investment discipline across all asset classes.

Q: How can I learn more about public trust fund investments?

You can visit the Oregon Treasury website at www.Oregon.gov/Treasury. In addition, you can read our twice-yearly newsletter, called “Invested for You.” 

You can access it at http://www.oregon.gov/treasury/Newsroom/Pages/Invested-for-You-newsletter.aspx

Thank you again for learning more about the changes to improve the risk profile of your IAP. If you have additional questions about investments, please contact us at the Oregon State Treasury