PERS 2019 updates

Public Employees’ Retirement System (PERS) Updates

This information is being provided to assist employees in researching, reviewing, and evaluating how proposed PERS reform and/or changes may impact their retirement benefits.  

Employees are responsible for researching, verifying, and evaluating how these changes and reform measures may impact their retirement benefits personally.

OSU is NOT providing legal interpretation of PERS reform and/or changes and cannot evaluate how these changes may impact an individual employee’s retirement benefits.

2019 PERS - Senate Bill 1049:

Senate Bill 1049 was approved by the Legislature during the 2019 session and signed by the Governor on June 11, 2019.  Detailed information about this bill can be found here:

Below is a brief summary of the changes this bill brings to PERS.  For more detailed information and updates please consult the resources mentioned above. 

  • Annual Salary Cap - Effective January 1, 2020.
    • Applies an annual salary cap of $195,000 (to be indexed annually) for Subject Salary and for the calculation of Average Ending Salary for years 2020 and after. 
    • For years beginning in 2020, the 6% employee contribution (currently "picked up" by OSU) will be applied to wages up to the annual salary cap.
    • The Final Average Salary associated with service earned before January 1, 2020 would be unaffected by the limit. 
    • More detailed information about this specific change is located at the website link here. Employees can find links to examples of how the annual salary cap interacts with unused sick leave and vacation leave payout for Tier 1 and Tier 2 members as well.
  • IAP Redirect –Effective July 1, 2020.
    • A portion of the 6% Employee Contribution (currently "picked up" by OSU) from the Individual Account Program (IAP) will be redirected into an Employee Pension Stability Account (EPSA).
    • The redirect will only apply to members who earn more than $2,500 gross salary/wages per month ($30,000 per year).
    • For Tier 1 and Tier 2 members, beginning with the July 2020 paycheck, 2.5% will be redirected into the EPSA and the remaining 3.5% will go into the IAP account. 
    • For OPSRP members, beginning with the July 2020 paycheck, 0.75% will be redirected into the Employee Pension Stability Account and the remaining 5.25% will go into the IAP account. 
  • Work After Retirement Hours Limitations* - Effective January 1, 2020.
    • Removes the hour’s limitation temporarily for PERS retirees, but requires employers to pay the employer contribution on the returning retiree's salary/wages.
    • Effective January 1, 2020 through December 31, 2024
    • For PERS purposes, a PERS retiree who retired on or after normal retirement age may work without a limitation on hours worked, if the administrative head of the public employer is satisfied that the employment is in the public interest.
    • For PERS purposes, a PERS retiree who retired earlier than normal retirement age, may work without a limitation on hours worked, if the date of employment is more than six months after the retirement date, and the administrative head of the public employer is satisfied that the employment is in the public interest.

*Note:  At this time OSU policy on work after retirement still limits hours to 1039 hours.

  • Member Choice for IAP Investments, effective January 1, 2021. This provision allows for members to choose a Target-Date fund for their Individual Account Program (IAP) investments that is different than the default fund currently in place that is based on the member’s birth year.  PERS will provide members information on this "optional choice window" in the fall of 2020. 

What if I am a member of the Optional Retirement Plan (ORP) with Valic (prior to 2007), Fidelity, or TIAA - Does this impact me?

  • The Oregon Public Universities Retirement Plan is currently reviewing the legislation to determine if there is any impact to ORP Tier 1, Tier 2, and Tier 3 members.  Additional information will be posted as it becomes available.
  • ORP members that have a PERS account are considered inactive PERS members.