PERS Education and Retirement Planning

1. PERS Education and Retirement Planning Welcome ! The Oregon Public Service Retirement Plan (OPSRP) Updated: 4/22/08

2. Disclaimer • Information may change as the result of administrative, legislative or judicial decisions.

3. Today’s Agenda • OPSRP • Administration • Components • Membership • Retirement Eligibility • Individual Account Program • Member resources

4. OPSRP: Effective August 29,2003 • Established by legislature • For new employees hired “on or after” August 29, 2003

5. OPSRP Administration • Administered by the PERS Board • The Oregon Investment Council • Invests OPSRP assets as part of the PERS fund

6. Benefits: Two components of OPSRP • Pension Program: a defined benefit plan based on salary and service time AND • Individual Account Program: a defined contribution plan

7. OPSRP Pension Program • Funded by your employer • Employer must make contributions necessary to fund the Pension Program • Employer contribution rate determined by PERS

8. OPSRP Pension Program • At retirement, provides lifetime pension benefit • For general service member with 30 years of service (25 years for P & F) retiring at normal retirement age • Will provide approx. 45 percent of your final average salary at retirement

9. Membership Requirements • Hired into a qualifying position • Position that normally requires 600 hours of work in a calendar year • Completes six full calendar months of work in waiting time period • Waiting time period cannot be interrupted by more than 30 consecutive workdays • Membership is established

10. Your Responsibilities • Important that PERS has up-to-date accurate information to send you member annual statements • Throughout your career, it’s your responsibility to ensure your employer always has your correct personal information • Employer sends PERS this information

11. Vesting • Vested in pension when: • Member reaches normal retirement age, or • Member completes five years of qualifying service • Five years need not be consecutive • Before becoming vested… • Five consecutive years of less than 600 hrs/year causes loss of any prior vesting service

12. Active Member Benefits • Disability benefit • Death benefit

13. Disability Benefit • Duty disability • Job caused, no service time requirement • Non-duty disability • Requires a minimum of 10 years of retirement credit • Benefit amount • 45 percent of salary received on last full month of employment before disability

14. Death Benefit • Paid if member vested at time of death • Lifetime benefit paid to spouse • Benefit shall be actuarial equivalent of 50 percent of pension member would have received • Benefit determined by date of member’s death

15. Retirement Eligibility • Normal retirement age • General service members • Age 65, or • Age 58 with 30 years of creditable service time • Police and firefighter members • Age 60, or • Age 53 with 25 years of creditable service time

16. Retirement Eligibility • Early retirement age • General service members • Age 55 • Police and firefighter members • Age 50, if the prior five years were as P&F member • Age 55, if less than five years of P&F service time

17. Retirement Benefit Calculation • Defined benefit plan based on salary, service time and a factor • General service: Final average salary x years of service x 1.5 percent • P & F: Final average salary x years of service x 1.8 percent

18. Benefit Calculation Example • General service member (not P & F) • Final average monthly salary: $3750 • 30 years creditable service time • Single Life Option monthly benefit • $3750 x 30 yrs x 1.5 percent = $1687 • Above based on normal retirement age

19. Benefit Calculation Example • Police and Firefighter • Final average monthly salary: $3750 • 25 years creditable service time • Single Life Option monthly benefit • $3750 x 25 yrs x 1.8 percent = $1687 • Above based on normal retirement age

20. Final Average Salary • Final average salary is the greater of: • High three consecutive years, or • Salary earned in last 36 months of membership • Each of the above divided by 36 to obtain final average monthly salary

21. Years of Service • No credit for a year with less than 600 hours of service • Upon completion of waiting time, eligible employee becomes member, receives credit at that point for waiting time period

22. Retirement: Option Choices • Normal retirement benefit • Single Life Option • Paid in lifetime monthly installments • Early retirement benefit • Reduced pension

23. Survivorship Options • Pension for retired member’s lifetime and same amount for beneficiary’s lifetime • Pension for retired member’s lifetime and one-half that amount for beneficiary’s lifetime

24. Lump-sum payout • If monthly pension for member or beneficiary totals $200 or less • Paid as actuarial equivalent lump-sum

25. Working After Retirement • Pension benefits stop upon reemployment in a qualifying position • Qualifying position: 600 hours in a calendar year • Subsequent retirements • Member can choose any retirement option • The pension will be recalculated

26. Individual Account Program • Member must contribute 6% salary contribution whether employer “picks up” contribution or not • Oregon Investment Council provides investment oversight for IAP and OPSRP pension funds

27. IAP and Member Contributions • Contributions beginning January 1, 2004 to IAP • IAP member account has earnings/losses until last dollar paid out to inactive or retired member

28. IAP and Death Benefits • Member’s account paid to beneficiary • If married member • Must be paid to spouse • Unless otherwise designated with form • If no named beneficiary • Paid to spouse, or • Children, or • Estate

29. IAP Distributions • Inactive member (withdrawal) • Lump sum • OPSRP retiree (retirement) • Lump sum, or • Installments over 5-10-15-20 year periods, or • Anticipated Life Span Option • Can receive IAP distributions only after separation from OPSRP covered employment

30. Planning for the Future • Save more for retirement • 457 deferred compensation plans • The Oregon Savings Growth Plan • http://oregon.gov/PERS/OSGP • Other employer sponsored 457 plans • Qualified employer plans • 403(b) for education employees • 401(k) for some local government employees • Earnings accumulate tax-deferred

31. Member Resources • Websites and E-mail link for PERS website • PERS: http://oregon.gov/PERS • https://iap.csplans.com • Toll-free telephone number • PERS/OPSRP • 1-888-320-7377 or 503-598-7377

32. Questions?