About the Individual Account Program

When employers join PERS, they choose one of three different IAP contribution types:  

1. Member paid after-tax (MPAT): Employers withhold the 6% contribution from their employees’ pay after taxes.
2. Member paid pre-tax (MPPT): Employers withhold the 6% contribution from their employees’ pay before taxes.
3. Employer paid pre-tax (EPPT): Employers increase their employees’ salaries by 6% to cover the 6% contribution withheld from employees’ pay before taxes.

Employees become vested in their IAP as soon as their PERS membership begins (i.e., after their six-month membership wait time). This means that the member is guaranteed to receive the money in their IAP, subject to earnings and losses,* as soon as they or their employer start contributing to it.  

However, they can’t withdraw it until retirement or until their PERS-covered employment is terminated. If they do withdraw IAP funds, they forfeit their PERS membership.  

Vesting in optional employer accounts may have different rules.  

*When a member withdraws their IAP, earnings are credited as of the first day of the calendar month in which the IAP funds are distributed.  

EPSAs were introduced in 2020 as a way to help ease employers’ rising contribution rates. Passed by the Legislature with Senate Bill 1049 (2019), EPSAs work like this: Employees who earn over a certain amount per month (called the member redirect salary threshold) have a portion of their 6% IAP contribution redirected into their EPSA. When they retire, that money is used to help fund their pension.

Tier One and Tier Two members contribute a higher percentage of their 6% IAP contribution than OPSRP members.

If an employee withdraws from PERS or for another reason will not receive their pension, the money in the EPSA goes to them or their beneficiaries.

The member redirect salary threshold changes every year in accordance with the Consumer Price Index to keep pace with inflation.

Learn more: Go to About the EPSA.

To learn about the PERS pension, read About the PERS Pension. To learn about vesting in the pension, go to What Is PERS? section “About PERS Membership.”

Changing your organization’s contribution type cannot be retroactive; it only applies going forward.  

Process for changing contribution type

Important: Do not begin reporting IAP contributions in a different field on Detail 2 records until your organization completes these steps.  

1. Among your leadership and all parties involved, agree upon a new contribution method for a group of employees (or all employees) going forward.
2. You may request from your ESC account representative a “template” of an official document authorizing a method contribution for all employees or a specific class of employees.
3. Email the Employer Service Center a copy of the official document authorizing the new method of contribution. The official document can be an employment policy established by statute, charter, ordinance, administrative rule, executive order, collective bargaining agreement, or other written employment policy or agreement that meets the requirements of OAR 459-009-0200.
   On the document, include the date on which you want to begin using the new contribution method. It must be a future date that allows time for your organization’s approval process and ESC’s acceptance.
4. When ESC receives your official document, they email you to confirm that they have accepted the change and noted the new contribution type and effective date in your EDX account.
5. As of the start date you chose, your employer reporters begin reporting IAP contributions for qualifying positions on Detail 2 wage records using the new contribution method.
6. Your ESC representative will check to make sure your employer reporters are reporting IAP contributions correctly.

These steps must be repeated each time the method of member account contribution changes for any employee group. Employers should allow sufficient time for the submission and approval process prior to the effective date of the contribution type change.  

Changing from MPAT or MPPT to EPPT

The employment policy must specify that:  

• The required PERS employee contribution is deemed to be “picked up” (i.e., paid for by the employer) for purposes of Internal Revenue Code (IRC) Section 414(h)(2).
• The employees do not have the option of receiving the assumed amount directly.
• Employee compensation may not be reduced, and the employer shall provide the additional amounts necessary to make the employee contributions.

The employment policy or agreement cannot be retroactive.  

Changing from MPAT or EPPT to MPPT

The employment policy must specify that:  

• The employees do not have the option of receiving the contribution amount directly.
• Employee compensation will be reduced by the amount necessary to make the employee contributions.

Important: A Detail 2 record must report only one type of IAP contribution. Enter IAP data in only ONE field (i.e., only fill in MPPT, MPAT, or EPPT). Do not put data in more than one IAP contribution field.  

Reporting wages for an employee who has more than one IAP contribution type

If your employee works in two different positions requiring two different contribution types to be reported, you need to submit two wage records: one for each position with the applicable wages, hours, and IAP contribution.  

Having different IAP contribution types for different groups of employees

You are allowed to have a policy or agreement apply to some of your employees, but it must apply uniformly to employees who are similarly situated, such as:  

• The chief executive officer or administrative head of a public employer.
• Management personnel, as defined by the public employer, who are not otherwise covered by a collective bargaining agreement.
• Confidential personnel, as defined by the public employer, who are not otherwise covered by a collective bargaining agreement.
• Administrative personnel, as defined by the public employer, who are not otherwise covered by a collective bargaining agreement.
• Personnel covered by a collective bargaining agreement.
• Other personnel — whether full-time, part-time, temporary, or substitutes — who are not covered by a collective bargaining agreement.
• Personnel hired on or after a date established or agreed upon by the employer.