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Benefit component comparisons

The primary components and differences among the PERS Tier One and Tier Two programs, the Oregon Public Service Retirement Plan (OPSRP) pension program, and the Individual Account Program (IAP) are shown below. Tier One covers members hired before January 1, 1996; Tier Two covers members hired between January 1, 1996, and August 28, 2003; and OPSRP covers members hired after August 28, 2003. The IAP is an account-based benefit that includes member contributions plus annual earnings and losses, made on and after January 1, 2004.

Starting July 1, 2020, Senate Bill (SB) 1049 (2019) requires that members earning more than the current monthly salary threshold have a portion of their 6% IAP contributions redirected to a new Employee Pension Stability Account (EPSA). The money in each member’s EPSA is used to pay for part of their future pension benefit.

Tier One PensionTier Two PensionOPSRP PensionIAP
Normal retirement age58 (or 30 yrs.); P&F: age 55 or 50 w/25 yrs.60 (or 30 yrs.); P&F: age 55 or 50 w/25 yrs.65 (58 w/ 30 yrs.); P&F: age 60 (see "For OPSRP P&F" below this chart) or 53 w/ 25 yrs.Members retire from IAP when they retire from Tier One, Tier Two, or OPSRP.
Early retirement age55 (50 for P&F)55 (50 for P&F)55. 50 for P&F (see "For OPSRP P&F" below this chart).Members retire from IAP when they retire from Tier One, Tier Two, or OPSRP.
Regular account earningsGuaranteed assumed rate annually (currently 6.9%)No guarantee; market returnsN/A; no account balance. Member contributions are held in the IAP account.No guarantee; market returns
Variable account earningsMarket returns on 100% global equity portfolioMarket returns on 100% global equity portfolioN/A; no member accountN/A
Retirement calculation methodsMoney Match, Full Formula, or Formula + Annuity (if eligible)Money Match or Full FormulaFormulaVarious account payout options or rollover
Full Formula benefit factor1.67% general; 2.00% P&F1.67% general; 2.00% P&F1.50% general; 1.80% P&FN/A
Formula + Annuity benefit factor1.00% general; 1.35% P&FN/AN/AN/A
Oregon state income tax remedy Payable to eligible benefit recipients who pay Oregon state income tax because they reside in Oregon. No tax remedy providedNo tax remedy providedNo tax remedy provided
IAP contributions are paid on lump-sum vacation payoutsYesYesNoYes for Tier One and Tier Two; no for OPSRP.
Are lump-sum vacation payouts included in FAS?*YesNoNoN/A
Unused sick leave included in FAS*Yes, if employer participates in the sick leave program.Yes, if employer participates in the sick leave program.NoN/A
VestingActive member in each of five calendar yearsActive member in each of five calendar years
Five calendar years w/ at least 600 hours qualifying service or normal retirement ageImmediate upon receiving account contributions.
COLA (after retirement)Up to 2% annually for service on or before October 1, 2013, and a blended COLA for subsequent serviceN/A; no COLA provided

P&F = police and firefighters; FAS = final average salary; COLA = cost-of-living adjustment; N/A = not applicable

Note: PERS uses three methods to calculate Tier One retirement benefits: Full Formula, Formula + Annuity (for members who made contributions before August 21, 1981), and Money Match. PERS uses two methods to calculate Tier Two retirement benefits: Full Formula and Money Match. PERS uses the method (for which a member is eligible) that produces the highest benefit amount. OPSRP Pension Program benefits are based only on a formula method.

For OPSRP P&F: To retire at the early or normal retirement age for a police officer or firefighter, the retirement credit in the last 60 months before you are eligible for P&F retirement (early or normal age) must be classified as P&F.

*Beginning January 1, 2020, SB 1049 changed the definition of “salary” for PERS purposes and created new limitations on annual “subject salaries,” which may affect how PERS calculates a member’s pension and contributions.

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