Oregon State Treasury

Tobias Read OREGON STATE TREASURER

IAP Information

INVESTING SMARTLY: REDUCING INVESTMENT RISK AS YOU AGE  

The Individual Account Program, the account-based benefit of PERS, was converted to a Target Date Fund format at the beginning of 2018. This conversion reflects an investment best practice and will better protect older workers from potential losses as they approach and enter retirement

IAP TFD glide path.png

KEEPING YOU INFORMED -- FACT SHEETS

A general fact sheet from Treasury about the new Target Date Fund lineup available at Oregon IAP Funds Profile​.
  

Quarterly performance information for Target Date Funds. (Note: Since annual IAP account returns are only credited by PERS at calendar year-end, these fact sheets will not reflect realized Target Date Fund performance for the period ending Dec. 31, 2018 until April 2019.)



WHICH TARGET DATE FUND AM I IN?

PERS-covered workers receive an annual IAP account deposit equal to 6 percent of salary. Before 2018, all IAP accounts had exactly the same investment risk, independent of participants’ unique age and retirement horizon profiles. This uniform approach was not consistent with fiduciary standards and investment best practices.

The new Target Date Fund structure gradually reduces investment risk as participants age. This “glidepath” methodology is embedded in each, separate Target Date Fund. Younger workers take on more investment risk in exchange for higher, long-term growth potential. Decades later, the glidepath methodology protects those very same workers from adverse market volatility as they approach and enter retirement.

Your specific fund is based on your birth year. See the chart below:



CAN I CHOOSE A DIFFERENT OPTION OR TARGET-DATE FUND FUND?

Since the IAP’s inception in 2004, individual account balances had been invested the same way, for every person, at every age. As described above, the new, smarter Target Date Fund structure is now the default for all IAP participants. Before this year’s Target Date Fund conversion, participants did not have the option to select a different investment approach. That has not changed. Currently, “participant choice” is not available in the new Target Date Fund structure.

House Bill 4159 (2018) would have provided limited member choice among Individual Account Program (IAP) investments starting January 1, 2019.

However, following a review mandated by HB 4159, Oregon State Treasury has determined that if implemented as originally drafted, this legislation would violate legal and fiduciary standards. Accordingly, the legislation will require further modification to prudently enable member choice within IAP.

Working with its advisers, employee groups, and other partners, PERS will draft a revised IAP choice bill for consideration during the 2019 legislative session. In the interim, members will remain invested in age-based IAP Target-Date Funds until the legal and fiduciary constraints are resolved and appropriate beneficiary protections -- such as essential investor disclosures -- are in place.


HOW CAN I LEARN MORE?

Check out the 2017 news release​ and a quick two-page primer about the recent Target Date Fund conversion.

In addition, Treasury prepared a lengthy list of "Questions and Answers" in advance of the switch. You can see that information here

I HAVE QUESTIONS ABOUT MY OWN IAP ACCOUNT

Visit www.oregon.gov/pers to learn more about your retirement benefits. You may also view your IAP account through iap.voya.comQuestions about retirement benefits may be directed to PERS Member Services at 888-320-7377. Representatives are available Monday–Friday 8:30 a.m. to 5:00 p.m. (Pacific Time).


I HAVE QUESTIONS ABOUT TREASURY AND THE IAP PROGRAM GENERALLY

Please contact Treasury about IAP and related matters at IAP.comments@ost.state.or.us​