The Employee Pension Stability Account (EPSA) is an extra account required for some PERS members. EPSAs are a product of the Member Redirect program established by Senate Bill 1049 (2019) to help control rising employer rates. The program gives employers a “member redirect offset” on their invoice.
How it works
The purpose of an employee’s EPSA is to help fund their pension when they retire, thus reducing the employer’s responsibility in funding the employee’s pension.
The account is funded by redirecting a portion of an employee’s 6%-of-salary IAP contribution into their EPSA. The redirect occurs in compliance with these rules:
- The employee must earn equal to or above the monthly salary threshold in effect for that calendar year. The threshold is provided on the
Member Redirect webpage.
- The percent redirected depends on the employee’s PERS plan:
- Tier One and Tier Two: 2.5% of salary subject to IAP contributions* is deposited into the employee’s EPSA; 3.5% is deposited into the member’s IAP account.
- OPSRP: 0.75% of qualifying salary is deposited into the employee’s EPSA; 5.25% is deposited into the member’s IAP account. OPSRP: 0.75% is deposited into the employee’s EPSA; 5.25% is deposited into the member’s IAP account.
- Member Redirect is only in effect when the PERS system is less than 90% funded. (You can find PERS funded status in the annual report
PERS by the Numbers in the “System Funding Level and Status” section.
- The redirect happens automatically in the PERS system.
Members who earn enough to be making an EPSA contribution can choose to make an additional, after-tax contribution into their IAP that is equal to the exact amount being redirected into their EPSA: 2.5% for Tier One and Tier Two, 0.75% for OPSRP. This option is called a “voluntary contribution,” and it allows members to continue contributing a full 6% of salary subject to IAP contributions* into their IAP account. Employees can begin making voluntary contributions by choosing the option in the
Online Member Services (OMS) online tool.
PERS charges your organization for the voluntary contributions on your invoice. It is up to you to withdraw that amount from your employees’ paychecks to reimburse your organization.
How to Manage an Employee’s Voluntary Contribution
*Salary that is subject to PERS pension and IAP contributions and included in calculating PERS retirement benefits is categorized as “subject salary.” Payments that are not subject to PERS contributions nor used in benefits calculation are called “non-subject salary.” Refer to the Payment Categories chart to find how different types of payments are categorized.