The Individual Account Program (IAP) is an account-based benefit for all Tier One/Tier Two and Oregon Public Service Retirement Plan (OPSRP) members who have worked in a qualifying position after January 1, 2004.
If you are a Tier One or Tier Two member, you retained your existing Tier One or Tier Two regular and variable accounts, but as of January 1, 2004, no additional member contributions have been placed into those accounts. Instead, your 6 percent member contribution is now placed in your IAP account. Contributions
Effective January 1, 2004, 6 percent of your salary has been placed in your IAP account. The IAP can have earnings or losses and administrative fees are deducted from the fund's earnings as part of the annual crediting process. You are automatically vested in your IAP account when your account is established. Earnings
Earnings or losses are credited annually to member accounts. Your IAP account is subject to earnings or losses until you remove the funds.
PERS works with employers to ensure that member contributions are accurate and complete before allocating earnings on a year-end balance basis so members are not adversely affected by posting delays or corrections.
As of January 1, 2011, when you retire from the IAP you must also retire from Tier One, Tier Two, or OPSRP. If you retired from one of those plans prior to January 1, 2011, you can retire from the IAP at any time. There are several important factors to keep in mind when you apply for distribution of your IAP account:
- IAP accounts are credited with investment earnings and losses annually and will continue to be subject to loss exposure until you remove the funds.
- Unlike Tier One accounts, IAP accounts have no guaranteed rate of return.
- Beginning in 2018, all IAP participants are invested in new IAP Target-Date Funds, intended to reduce investment risk and volatility as members age. Read more at www.oregon.gov/IAP.
You have the option to roll over your IAP account into a traditional IRA, an eligible employer plan, a 457 deferred compensation plan, the Oregon Savings Growth Plan, or another qualified plan.
When you retire from the IAP, you can receive your IAP account balance as a lump-sum payment or in equal installments over 5, 10, 15, or 20 years, or over your expected lifetime.
You can find IAP retirement forms on the IAP forms page
If a retired member dies before all installment payments are completed, the beneficiary is entitled to receive the remaining installment payments and may choose to receive the remaining amount in a lump-sum payment.
IAP benefits are in addition to your pension benefits (Tier One, Tier Two, or OPSRP).
The Oregon Legislature created the IAP in 2003 to provide an individual account-based retirement benefit for new workers hired on or after August 29, 2003, and for Tier One/Tier Two members active on and after January 1, 2004. The IAP benefit is in addition to the member's pension benefit (i.e., Tier One, Tier Two, or OPSRP).
The IAP was established to receive member contributions on salary paid beginning January 1, 2004. All member contributions (6 percent of covered salary) have been deposited in the IAP since that date.