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. 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 PERS Retirement Eligibility

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 Remedy HB 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

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

21. 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

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

23. 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

24. 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

25. 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

26. 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

27. 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%

28. 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

29. 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

30. 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

31. 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

32. 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

33. Thank you for attending this presentation!