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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 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 Pension
Tier Two Pension
Normal retirement age
58 (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 P&F
5-year requirement below) or 53 w/ 25 yrs.

Members retire from IAP when they retire from Tier One, Tier Two, or OPSRP.
Early retirement age
55 (50 for P&F)55 (50 for P&F)
55. 50 w/5 years of continuous service in a P&F position immediately preceding effective retirement date.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 provided
No tax remedy provided
No 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.
VestingActive member in each of 5 calendar yearsActive member in each of 5 calendar years5 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 service
N/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.

*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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