Editor’s note: This is a weekly Q&A focused on the Oregon Public Employee Retirement System. Got a question? Submit it to firstname.lastname@example.org.
Q: How many PERS retirees are there?
That was at the end of 2017. People retire. People die. So, give or take.
Naturally, the vast bulk of those retirees – 88 percent – were so-called Tier 1 employees, hired before 1996.
Another 9 percent are Tier 2, hired between 1996 and Aug. 28, 2003. The remaining 3 percent were hired afterward. They’re members of the Oregon Public Service Retirement Plan. OPSRP for short. Or Tier 3.
So, what’s the difference?
Tier 1 is the most generous plan. From a benefits standpoint, these folks lived through the halcyon years, or at least the years when lawmakers and the PERS board were still trying to figure out how to increase benefits, not decrease them. Tier 1 members have the lowest normal retirement age: 58 or after 30 years of service. They also have guaranteed earnings on their pension accounts and the most retirement formulas.
For Tier 2, the normal retirement age is 60. The earnings guarantee disappeared, making the system’s lucrative money match formula less attractive. And the formulas weren’t quite as generous.
The OPSRP plan was adopted in 2003, after the system went through a financial crisis. The normal retirement age climbed to 65. Members’ pension accounts were eliminated altogether, replaced by a supplemental defined contribution plan. And pension formulas once again were made less generous.
One other breakdown: 43 percent of Oregon’s public employee retirees worked for school districts; 29 percent worked in state government; and 28 percent in local government.