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No change in assumed earnings rate

Every two years, the PERS Board reviews what’s known as the “assumed earnings rate” as part of an assessment of the PERS system’s financial health. The rate is used to credit Tier One regular accounts.

It’s called “assumed” because it represents the rate the Oregon PERS Fund (OPERF) is expected to earn in investment returns over 20 years.

The board voted to lower the assumed rate from 7.2% to 6.9% during its October 1, 2021, meeting. The 6.9% rate took effect on January 1, 2022.

On September 29, 2023, the board voted to keep the assumed rate at 6.9%.

Tier One and Tier Two members are affected by this change.

The change can impact Tier One members in particular because the assumed earnings rate is used to:

  • Credit Tier One regular accounts with annual earnings.
  • Credit prorated earnings to Tier One regular accounts upon retirement or withdrawal.

However, both Tier One and Tier Two members can be affected if they retire under Money Match or Formula Plus Annuity calculation methods. These calculations translate the member’s account value into regular, lifelong pension payments using actuarial equivalency factors (AEFs), which are influenced by changes in the assumed earnings rates and life expectancy. As such, when the board changes assumed earnings rates, it affects the monthly pension benefit payments determined by the calculations.

As for Tier One and Tier Two members retiring under the Full Formula calculation method, they can see an impact if they choose a survivorship benefit option. Basic Full Formula calculations without survivorship are based on final average salary, years of service, and a statutory factor set by law. When survivorship is selected, AEFs must be added into the calculation mix. It is through the AEFs that assumed earnings rate changes will impact members who choose a survivorship option, and therefore impact the pension payments that they will receive.

However, members who retire on or before December 1, 2021, will not be affected by the rate change. Their monthly benefit payment amounts will be calculated with the 7.2% rate, which remains in effect until December 31, 2021.

When the board reviews the assumed earnings rate, it looks at long-term forecasts by financial experts as to how much OPERF can be expected to earn in investment returns in the future. The forecasts are based on how the Oregon Investment Council has invested assets in OPERF and how related capital markets are expected to perform over time.

Based on these forecasts and factors, the board may choose to change the rate to support PERS’ future financial health and ensure it can continue to meet its obligations to members.

Yes. PERS posts AEF tables on its Actuarial/Financial Information webpage.

After the board changes the assumed earnings rate, it must vote on whether to adopt updated AEF tables from the PERS actuary*. Once adopted, the updated tables will be posted online and include the date they go into effect.

Note: Online and written benefit estimates will not be based on the new AEFs until they are programmed into the PERS software that calculates estimates. This process can take up to a few months to complete after the PERS Board votes to change the assumed earnings rate. Estimates created before the new AEFs are programmed may overestimate the monthly benefit payment a member could receive at retirement.

Besides the AEF tables, PERS posts current earnings, actual valuations, and other financial information about the retirement system on our actuarial webpage.

*An actuary is professional who analyzes and manages risk and uncertainty.

The example below shows how an assumed rate of 6.9%, instead of the current 7.2%, would affect a future retiree under the Money Match formula.
Assumptions used in this example:

  • Tier One general service member.
  • Age 59½.
  • $135,000 accumulated Tier One member contribution account balance as of June 30, 2021.

Retirement date

December 1, 2021

January 1, 2022

April 1, 2022

Assumed rate




Starting benefit




The example above illustrates why some members may wish to consider delaying retirement to reach the initial benefit level, as a results of assumed rate change.