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Welcome! The PERS Update

Welcome! The PERS Update. An Overview of PERS, OPSRP and the IAP Revised 11/24/09. Disclaimer. Information in this presentation may change as the result of administrative, legislative, or judicial decisions. Agenda. PERS/OPSRP members Individual Account Program

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Welcome! The PERS Update

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  1. Welcome! The PERS Update An Overview of PERS, OPSRP and the IAP Revised 11/24/09

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

  3. Agenda • PERS/OPSRP members • Individual Account Program • PERS Tier One and Tier Two • Oregon Public Service Retirement Plan • Member resources

  4. PERS/OPSRP Members • PERS members • Tier One: Hired before January 1, 1996 • Tier Two: Hired January 1, 1996 through August 28, 2003 • OPSRP members • Hired on or after August 29, 2003

  5. 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

  6. Individual Account Program • HB 2020 (effective date of change January 1, 2004) • Member contributions to Individual Account Program (IAP) • No contributions to PERS member account after this date

  7. Individual Account Program • By statute member must contribute 6% salary contribution whether employer “picks up” contribution or not • Oregon Investment Council provides investment oversight for IAP and PERS/OPSRP pension funds

  8. IAP and Member Contributions • Member contributions before January 1, 2004: to PERS member account • Contributions effective January 1, 2004 and after: to IAP • IAP member account has earnings/losses until last dollar paid out to inactive or retired member

  9. PERS/OPSRP Retirement • PERS retiree receives IAP benefit, and chooses between thirteen options for PERS pension benefit • OPSRP retiree receives IAP benefit, and chooses between five options for OPSRP pension benefit

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

  11. PERS Members • PERS members • Tier One: Hired before January 1, 1996 • Tier Two: Hired January 1, 1996 through August 28, 2003

  12. PERS Retirement Eligibility • 30 years PERS Total Creditable Service Time OR • Age • Normal retirement • 58 – Tier 1 • 60 – Tier 2 • 55, or 50 + 25 years total service – P&F • Early retirement • 55 • 50 – P&F

  13. The PERS Retirement Benefit • Calculation factors • Age • Service time • Final average salary • Account balance

  14. Calculation Methods • Full Formula • Service time x final average salary x .0167 • Money Match • Age factor x account balance x 2 • Formula + Annuity (August 21, 1981) • Service time x final average salary x .01 + Age factor x account balance

  15. Calculation Method Comparison • One of three calculation methods • Full Formula • Money Match • Formula + Annuity (only for those with service time prior to August 21, 1981) • Receive benefit based on highest calculation

  16. PERS Benefit Estimate Calculator • Tier One and Tier Two estimated benefit • Includes • Tax remedies • http://oregon.gov/PERS

  17. Tax RemedyHB 3349 or SB 656 • The greater of either... • HB 3349 • Benefit increase • Based on service time prior to October 1, 1991 • SB 656 • Based on total service time if hired prior to July 14, 1995 • Maximum 4% increase

  18. OPSRP: Effective August 29,2003 • Oregon Public Service Retirement Plan • Established by legislature • For new employees hired “on or after” August 29, 2003

  19. OPSRP • Two components of the plan • Pension Program: a defined benefit plan based on salary, retirement credit, and a factor • Individual Account Program: a defined contribution plan

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

  21. Vesting • Vested in pension when: • Active member reaches normal retirement age, or • Member completes five years of 600 hrs/year • Five years need not be consecutive • Before becoming vested • Five consecutive years of less than 600 hrs/year • Forfeit retirement credit • Membership terminated

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

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

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

  25. OPSRP Pension Program • Benefit determined by formula • General service: Final average salary x years of retirement credit x 1.5% • P & F: Final average salary x years of retirement credit x 1.8%

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

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

  28. Planning for the Future • Save more for retirement? • Educational employees • Eligible to participate in a 403(b)/TSA program or 457 deferred compensation plan • State of Oregon or participating local government employees • Eligible to participate in the Oregon Savings Growth Plan • A 457 deferred compensation plan • Earnings accumulate tax-deferred until withdrawal

  29. Member Education • Hired on or after January 1, 1996: • Early Career classes (PERS and OPSRP) • Within five years of retirement: • Group counseling classes (PERS only) • Within one year of retirement: • One-year Group classes (PERS only) • Retirement benefit estimates available through PERS • PERS and financial planning

  30. Member Resources • Websites and E-mail link for PERS website • PERS: http://oregon.gov/PERS • PERS Insurance: http://pershealth.com • IAP account: https://iap.csplans.com • Toll-free telephone number • PERS • 1-888-320-7377 or 503-598-7377 • PERS Insurance • 1-800-768-7377 or 503-224-7377 • PERS and financial planning • http://oregon.gov/PERS

  31. Thank you for attending this presentation!

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