The Employer Incentive Fund, UAL Resolution Program, and School Districts Unfunded Liability Fund are three programs 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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Employer Incentive Fund (EIF)
For any employer that makes 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 (this could include any lump-sum payment made since June 2, 2018), the EIF program will match 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.
In order to participate, the employer must apply for matching funds, cannot borrow the funds used to make the payment, and must participate in the UAL Resolution Program (UALRP).
Due to overwhelming interest, the first round of the Employer Incentive Fund (EIF) is now waitlist only. All eligible funds for the first EIF application cycle, which started at 10 a.m. on Monday, December 2, have been allocated to employers. By law, applications were approved in the order they were received.
The first full EIF application cycle will end at the earlier of either August 31, 2020, or when all matching funds have been paid into employer side accounts.
Employers interested in receiving matching funds from the EIF must submit an application providing the following information: intended lump-sum payment amount; the anticipated date of the lump-sum payment; verification that the lump-sum funds are not sourced from borrowed money; and completion of questions related to the UAL Resolution Program (UALRP)
For more information on the Employer Incentive Fund, the application process, and the UALRP, view this webpage.
Unfunded Actuarial Liability Resolution Program (UALRP)
The UALRP is a required program for all PERS-participating employers.
PERS will provide technical expertise to help all PERS-participating employers develop funding plans to manage employer contributions and funded status. Employers who apply for matching funds from the EIF must provide proof of participation in the UALRP, which is part of the application.
The program requires employers to navigate through the PERS Employer Rate Projection Tool, review their own actuarial report, consider consultation with peer groups, and review their budgetary balance between resources and expenditures.
For more information regarding the UALRP, view this webpage.
School Districts Unfunded Liability Fund
This is a pooled side account that will provide rate relief to all public school districts, public charter schools, and education service districts. Over the next several biennia, the fund will be capitalized with revenue from several sources specified by the Oregon Legislature. At this time, PERS does not expect that employers will need to take any action to obtain rate relief from this fund; it will be automatic when the fund is sufficiently capitalized.
Comments and questions about the School Districts Unfunded Actuarial Liability Fund can be emailed to Side.Account.Legislation@PERS.state.or.us.
Options for Lump-Sum Payments of $10 Million or More
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.
For additional information about this program, or to request an actuarial calculation, 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.