The UAL Resolution Program, Employer Incentive Fund, and School Districts Unfunded Liability Fund were established by the Oregon Legislature to help PERS-participating employers reduce their contribution rates in the future. Details about these programs and other employer rate relief information are included below.
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Unfunded Actuarial Liability Resolution Program (UALRP)
As a required educational program for PERS-participating employers, the UALRP aims to provide technical expertise in the development of funding plans for employers to improve their funded status and manage projected contribution rate changes.
PERS will be sharing new information and resources to help employers improve:
- Their or their pool's funded status.
- Their understanding of their rates and what factors affect them.
- Their ability to budget and plan for PERS employer contributions.
In 2020 and 2021, PERS will be releasing new resources and tools as part of the UALRP. For more information, visit the UALRP webpage.
Amortization Options for Side Accounts
Employers who make a qualifying UAL lump-sum payment of $10 million or more into a new side account may select an amortization period of six, 10, or 16 years, instead of the default amortization period of 20 years.
The shorter amortization period is now available to any employer that:
Employers making lump-sum payments may defer their rate offset beyond one year, as long as their lump-sum payment, including earnings, is amortized within 20 years. The rate offset will start July 1 of the year the employer chooses.
Employer Incentive Fund (EIF)
For approved employers that made an eligible lump-sum payment of at least $25,000 establishing a new side account, or as an additional payment into an existing side account (including any lump-sum payment made since June 2, 2018), the EIF program matched 25% of that lump-sum amount, but not to exceed the greater of either 5% of an employer’s unfunded actuarial liability (UAL) or $300,000.
Despite a reduction in matching funds in the Second Special Session of the Oregon Legislature in August 2020, the EIF matched $64.75 million for 90 employers. In all, the EIF program brought in a total of $342.8 million in additional assets to the PERS Trust.
Due to the impact of COVID-19 on employer
budgets, the PERS Board approved extending the payment date for the first
full EIF application cycle to December 1, 2020, or
when all matching funds have been paid into employer side accounts. Any approved employer can change their payment date at least five days prior to their
current payment date by emailing Side.Account.Legislation@PERS.state.or.us.
For more information, visit the EIF webpage.
School Districts Unfunded Liability Fund
This is a pooled side account that would provide rate relief to all public school districts, public charter schools, and education service districts. At this time, PERS does not expect that employers would need to take any action to obtain rate relief from this fund; it will be automatic if the fund is sufficiently capitalized.
For additional information about employer rate relief programs, side accounts, and other actuarial/financial topics, please email Actuarial.Services@PERS.state.or.us.
Employers may also want to use PERS' Employer Rate Projection Tool to determine the potential impact of establishing a new side account.