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Senate Bill 1049 (2019) – information and implementation for PERS employers

SB 1049, signed into law in 2019, made several adjustments to PERS to slow the increase in employer contribution rates. PERS divided the bill into six programs for implementation.

SB 1049 programs

  • UAL re-amortization: The PERS Board implemented a one-time re-amortization of the Tier One/Tier Two unfunded actuarial liability (UAL) over a closed 22-year period.

  • Employer Incentive Fund (EIF) and UAL Resolution Program (UALRP): The EIF program provides matching funds to employers who deposit funds into a new or existing side account. The UALRP educates employers about the factors that make up their contribution rates so they try to control or reduce them. The School Districts Unfunded Liability Fund (SDULF) is on hold until fully funded.

  • Work After Retirement: The PERS limitations on hours that a rehired retiree can work are lifted (restrictions apply for some early retirees and some retirees receiving Social Security benefits). Employer contributions are charged on the salary of rehired retirees.

  • Salary Limit: Starting January 1, 2020, Senate Bill 1049 set a limitation on subject salary used for PERS benefit calculations and contributions. The limit is updated to keep pace with inflation each January.

  • Member Redirect: Effective July 1, 2020, members whose gross pay in a month exceeds the monthly salary threshold will have a portion of their 6% Individual Account Program (IAP) contributions redirected to an Employee Pension Stability Account (EPSA). Each member’s EPSA will help fund their defined benefits under Tier One/Tier Two and OPSRP. For Tier One/Two members, the redirected amount is 2.5% of the 6% contributions; for OPSRP members, the amount is 0.75%.

  • Member Choice: Every September, nonretired PERS members have the option of changing how their IAP accounts are invested via Online Member Services (OMS). With Member Choice, members can choose to stay in the fund assigned to them based on their birth year or select a different target-date fund (TDF). The change goes into effect the following January.