1. For Tier One, Tier Two & OPSRP members
Welcome!
PERS Update and
Overview of
Police & Fire Benefits
For Tier One, Tier Two & OPSRP members
Updated: 01/11/2016

2. Agenda PERS Programs Retirement Eligibility Benefit Calculations
Benefit Estimates
Additional Benefits
Resources

3. Disclaimer
Information in this presentation is subject to change as the result of administrative, legislative, or judicial decisions.

4. PERS Programs Tier One: hired before January 1, 1996
Tier Two: hired January 1, 1996 through August 28, 2003
OPSRP: hired on or after August 29, 2003
IAP: all active members since January 1, 2004

5. Retirement Eligibility Tier One/Tier Two
30 years total PERS creditable service time (any age) OR
Normal retirement age
58 – Tier One
60 – Tier Two
55 or years total service–police & firefighter members (P & F)
Early retirement age 55
50 – P & F

6. Retirement Eligibility OPSRP
Normal retirement age 65
58 with 30 years of retirement credit
60 or years of retirement credit-
police & firefighter members (P & F)
Early retirement age 55
50 – P & F
Age 50, if the five prior years were as P & F member
Age 55, if less than five years of P & F service time

7. Calculation Methods Tier One/Tier Two
Full Formula
Service time & final average monthly salary & a factor of (P & F .0200)
Money Match
Age factor & account balance x 2
Formula + Annuity (8/21/81)
Service time & final average monthly salary & a factor of (P & F .0135)
Age factor & account balance

8. P & F Split Service (if Relevant)
Applies to formula calculations if a member has both
P & F and General Service time
Benefit calculated for general service time, and added to benefit calculated for P & F time

9. Calculation OPSRP General Service
Final average monthly salary & years of retirement credit x 1.5
P & F
Final average monthly salary & years of retirement credit x 1.8

10. Benefit Estimates: Written estimate
Must be eligible to retire within two years
Provided for retirement dates that are within the next 24 months
Submit an Estimate Request Form
Tier One and Tier Two only
Waiting time and forfeited time purchase information is provided (if eligible)
Can request unit account information on the estimate request form, section G

11. Benefit Estimates: Online Member Services
Access and view activities related to your account
Produce unlimited estimates
Link directly to the PERS website to view handouts, FAQs, forms, and other information
After retirement use to:
View benefit payments, view and request tax information
Print paystubs and benefit confirmation letters
Change address

12. Active Member Benefits
Disability benefit
Death benefit
Tier One and Tier Two only
Units
Surviving Spouse Benefit

13. Disability benefits
Disability eligibility and benefits are the same for both
P & F and non-P & F members
Non-Duty disability: must have 10 years of service
Duty disability: no minimum service time required

14. Death Benefits Tier One/Tier Two OPSRP
Money Match calculation to chosen beneficiary
OPSRP
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

15. P & F Units – Tier One/Tier Two only
No COLA increases
Unit payment start date can be at or after PERS retirement date
Any amount in excess of $4000 is paid in a lump sum when unit payments begin

16. P & F Units – Tier One/Tier Two
Purchase (8 Units)
Employee cost = $4,000
Employer match = $4,000
Benefits
$80 per month from member account and
$80 per month from Employer. For a total monthly benefit of $160 per month for 60 months (8 Units)
Less if taken out in more than 60 months
Unit account must be depleted by age 65
Employer payment capped at $80 per month

17. Surviving Spouse Benefit - Tier One/Tier Two
25% of Refund Annuity benefit OR
25% of Option 1 benefit (Lump Sum options)
Beneficiary
Surviving spouse’s lifetime
Dependent children until age 18 (if no surviving spouse)

18. 2006 Federal Pension Protection Act
Allows eligible retired Public Safety officers to exclude from their income up to $3,000 of retirement benefits that are paid directly from their retirement plan to their insurance provider for Health and Long Term Care insurance premiums.
Members should discuss their eligibility for this deduction with their tax professional.
Information is also available on the IRS website at

19. Member Resources PERS website http://oregon.gov/PERS
includes Online Member Services which uses data provided by PERS employers and an IAP disbursement forecaster to estimate IAP payments
PERS Member Services:
IAP account:
PERS Health Insurance: or

20. Member Resources Attend additional PERS presentations
Tier One/Tier Two
Retirement Readiness ~ retiring in less than three years
Introduction to PERS Retirement ~ retiring in more than three years
OSPRP
All About OPSRP ~ OPSRP members in any stage of career
Register through PERS website
Pre-Retirement Guide
Retirement Application Assistance Session (RAAS)
Within the 90 days prior to retirement

21. Steven Patrick Rodeman Executive Director
PERS Update
A presentation to
Oregon Firefighters
Steven Patrick Rodeman Executive Director
January 11, 2016
oregon.gov/pers

22. Governor Earl Snell signed PERS into law on March 26, 1945
PERS: Historical Perspective
Governor Earl Snell signed PERS into law on March 26, 1945
Early 1940s: Public employers could not compete with private industry’s higher wages and the promise of retirement benefits in a wartime economy
At that time, less than 8% of public employees in Oregon were covered by a retirement system compared to 46% of public employees in other states
PERS was created in 1945 to attract qualified people to public service and provide fair retirement benefits for their service to Oregonians
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23. Who is PERS? Membership Tier One: 49,687 Tier Two: 57,945
STATE 57,654
Membership
Tier One: 49,687
Tier Two: 57,945
OPSRP: 98,612
(INCLUDES UNIVERSITIES )
RETIRED MEMBERS
132,950
LOCAL GOV’Ts 52,696
(CITIES, COUNTIES, COMMUNITY COL-LEGES, ETC. WHO ELECTED TO JOIN SLGRP)
SCHOOL DISTRICTS
80,104
INDEPENDENTS
15,799
As of

24. PERS Membership, Retirements, and Benefits
~7,300 retired in 2015; nearly 70,000 members are eligible to retire
Average age at retirement: 61
Average years of service at retirement: 22
Average annual benefit for all current retirees: $27,722
Average annual benefit for 2014 retirees: $28, (44% average replacement rate of final salary)
Average annual benefit for 2014 retirees with 30 years service: $44,964 (66% average replacement rate of final salary; majority with 30 years of service are Money Match)
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25. The PERS Funding Equation
At the end of each calendar year, the PERS actuaries calculate the system’s funded status using the following basic equation:
EARNINGS
future returns on invested funds
B = C + E
BENEFITS
present value of earned benefits
CONTRIBUTIONS
employer funds to pay pension benefits = +
Set by:
Oregon Legislature
Set by:
PERS Board
Managed by:
Oregon Investment Council
Every two years, the PERS Board adjusts contributions so that, over time, those contributions will be sufficient to fund the benefits earned, if earnings follow assumptions.
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26. Solving the Equation . . .
When setting employer contribution rates, the PERS Board has the following objectives:
Transparent process and inputs
Predictable and stable employer contribution rates
Protect funded status to secure future benefit payments
Equitable across generations of taxpayers funding the system
Actuarially sound – fully fund the system if assumptions are met
GASB compliant
Some of the objectives can conflict, particularly in periods with significant volatility in investment return or projected benefit levels. Overall system funding policies should seek an appropriate balance between conflicting objectives. 26

27. Dollars shown in billions
Problem: the “B” and “C+E” Don’t Align
TOTAL LIABILITY $81.0
ACCRUED LIABILITY $73.5
(Excludes Side Accounts, Contingency Reserve, and Tier One Rate Guarantee Reserve)
ASSETS $55.5
Dollars shown in billions
As of

28. Sources of 2014 UAL Increase
System Funded Status and UAL ($ in billions)
12/31/2013
12/31/2014
Actuarial liability
$62.6
$73.5
Assets (excluding side accounts)
$54.1
$55.5
UAL (excluding side accounts)
$ 8.5
$18.0
Funded status (excluding side accounts)
86%
76%
Side account assets
$ 5.9
UAL (including side accounts)
$ 2.6
$12.1
Funded status (including side accounts)
96%
84%
Sources of 2014 UAL Increase
UAL Increase
Expected UAL increase during 2014
$0.2 B
2014 actual investment performance below assumption
Moro adjustment to projected benefits
$5.1 B
Decrease in assumed return to 7.50%
$1.7 B
Update to mortality assumption
$1.8 B
All other assumption changes and actual experience
$0.5 B
Total
$9.5B
Milliman presentation; September 25, 2015 Board meeting

29. Projected Benefit Payments
Tier One/Tier Two expected benefit payments by status as of 12/31/2014
Milliman presentation; September 25, 2015 Board meeting

30. System-Wide Pension Rates
Excludes Retiree Health Care, IAP Contributions, Side Accounts
12/31/2013
Final
12/31/2014
Advisory
Payroll
Tier 1/ Tier 2
OPSRP
Weighted Average1
Tier 1/ Tier 2
Normal Cost
13.18%
7.79%
10.94%
15.41%
8.63%
12.30%
Tier 1/Tier 2 UAL
6.63%
13.68%
OPSRP UAL
0.61%
1.01%
Uncollared Rate
20.42%
15.03%
18.18%
30.10%
23.32%
26.99%
Increase
9.68%
8.29%
8.81%
Collar Limitation
(0.72%)
(6.25%)
Collared Base Rate
4.15%
2.76%
3.28%
1 Weighting based on the pool’s payroll levels (Tier 1/Tier 2, OPSRP) as of the valuation date.
Milliman presentation; September 25, 2015 Board meeting

31. 2017-19 Contribution Increase Estimates
($ millions)
Projected Payroll*
(A)
Projected Contribution
Projected Payroll*
(B)
Projected Contribution
(B) - (A)
Projected Contribution
Increase
State Agencies
$5,580
$575
$5,980
$800
$225
School Districts
$5,950
$560
$6,370
$850
$290
All Others
$7,350
$870
$7,870
$1,155
$285
Total
$18,880
$2,005
$20,220
$2,805
* Assumes payroll grows at 3.50% annually based on 12/31/2014 active member census, reflecting proportional payroll composition (Tier 1/Tier 2 vs. OPSRP) as of 12/31/2014
Projected contributions are determined by applying collared net advisory rates calculated in the 12/31/2014 valuation
Projections do not reflect the effects of actual 2015 investment returns
Milliman presentation; September 25, 2015 Board meeting

32. Collared System Average Base Contribution Rates
“Base” rates are system average Tier One/Tier Two/OPSRP contribution rates excluding IAP contributions, the effect of side accounts & pension obligation bond debt service, and contributions to the retiree healthcare programs
Rates for are based on the modeled returns for the three-year period ending 12/31/2017
Biennium
5th
16.4%
17.5%
21.4%
30.7%
43.6%
49.9%
51.9%
53.5%
55.2%
56.5%
57.2%
10th
20.9%
30.5%
42.4%
46.5%
48.4%
49.5%
50.7%
51.3%
52.0%
25th
29.3%
37.2%
40.0%
40.9%
41.7%
42.0%
42.6%
50th
20.8%
25.4%
30.9%
31.1%
30.4%
30.1%
29.5%
28.5%
75th
24.8%
22.9%
21.7%
19.9%
17.6%
15.5%
13.0%
9.9%
90th
20.7%
19.4%
13.7%
10.6%
6.6%
1.4%
0.0%
95th
16.0%
14.2%
10.5%
5.6%
Milliman presentation; November 20, 2015 Board meeting
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33. Steady Return Model Projections
If actual investment results are near assumption, employer contribution rate increases to begin to amortize unfunded liability are spread over three biennia
At assumed return, the rate eventually drifts downward due to new hire OPSRP members replacing retiring Tier One/Tier Two members
The steady rate model illustrates impact of consistently achieving the assumed 7.50% return and three alternative returns
Milliman presentation; November 20, 2015 Board meeting
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34. Steady Return Model Projections
Differences between the two sets of model results caused by reflecting Moro decision, assumption changes, and investment underperformance during 2015
Current year: reflects Moro decision, 12/31/2014 valuation, and investment results through October 2015
Prior year: pre-Moro, 12/31/2013 valuation, and investment results through October 2014
Milliman presentation; November 20, 2015 Board meeting
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35. Steady Return Model Projections
Funded status reaches 100% in 2033 when actual investment returns equal 7.50%
At 7.50% actual return, funded status declines in initial years, then stabilizes and ultimately improves as contribution rate increases take effect
Shows projected funded status under steady return projections
Milliman presentation; November 20, 2015 Board meeting
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36. DRAFT PERS Employer Profile by County in 2014
Total PERS Benefit Payments by County in 2014
DRAFT

37. Total PERS Benefit Payments by County in 2014
PERS benefits paid to Oregonians in 2014: $3.3 billion
Total increase in Oregon economic output: $3.9 billion in 2014 (compared to employer contributions of approximately $2 billion)
Oregon jobs supported: 35,999
Wages of Oregon jobs supported: $1.1 billion
Estimated state income taxes paid by PERS retirees in Oregon: $171.7 million