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.