If you are an administrator or a faculty member at the University of Oregon, there are several retirement vehicles available to you. One of which is the Public Employees Retirement System (PERS). Understanding how PERS works is vital in planning for your retirement.
What is PERS?
The Public Employees Retirement System (PERS) of Oregon is a defined benefit (or pension) plan available to eligible university employees and other public employees in the state of Oregon. PERS was established to provide retirement, disability, and survivor benefits based on years of service, age, and salary.
How PERS Works for University of Oregon Faculty
PERS is funded through a combination of employee contributions (in many cases these are actually paid by the employer), employer contributions, and investment earnings. Here’s how it works:
- The University of Oregon puts money into PERS for you.
- You contribute (or your employer does on your behalf) a portion of your salary to PERS.
- PERS then invests the money it collects.
PERS has changed over time, creating different tiers that impact how your benefits are calculated:
- Tier 1: For those who were hired before January 1, 1996. Your benefits are calculated based on your highest salary and years of service.
- Tier 2: For those hired between January 1, 1996, and August 28, 2003. Your benefits are calculated based on your highest average salary, your total years of service, and a multiplier that determines how much of your salary you’ll receive in retirement.
- Tier 3/Oregon Public Service Retirement Plan (OPSRP): For those hired between August 29, 2003 and June 30, 2014. Your benefit is calculated using your highest three years of salary along with your years of service.
- Tier 4/OPSRP: For those hired after June 30, 2014. Your benefit is calculated using your highest three years of salary along with your years of service.
To become fully informed and plan for your retirement, you will need to determine which of the above tiers fits your starting date. Then, it is important to thoroughly understand the following areas:
- Eligibility: How long do you need to work before you are eligible to participate in your PERS plan?
- Vesting: How much time must you work to qualify for benefits?
- Investment Options: How will your money be invested? Generally, the PERS system invests the money for you, so you don’t have to choose investments.
- Benefits: When do you qualify to begin receiving retirement benefits? And what kind of disability benefits does your plan offer? The age or amount of service required varies by tier.
- Payment Options: How should you choose to receive your retirement benefits? Be sure to see what payment options are available for your tier. You can receive a fixed monthly benefit, various benefit payments that will continue to go to your spouse if you are deceased, payments for a fixed number of years, or partial or full rollover to an Individual Retirement Plan.
Another element of all these PERS plans is the Individual Account Program (IAP). All employee contributions (whether made by you or your employer) go into the IAP, and it is invested for you by PERS. The total value of this account is available to you at retirement.
Note that new employees can choose to participate in the Optional Retirement Plan (ORP) instead of being in the PERS system. Within ORP you can use either Teachers Insurance and Annuity Association (TIAA) or Fidelity to invest both the employer (ORP) and employee (Tax Deferred Investment (TDI)) contributions. The contributions you make to your TDI account will be matched up to 4% of your salary.
Be sure you learn how to maximize the retirement benefits you will receive through these programs. Remember that you can also contribute to a Deferred Compensation account which has some unique benefits.
Other Resources:
NEED HELP NAVIGATING YOUR PERS?
CONTACT US
Your may also enjoy:
- Are your employer retirement accounts professionally managed?
- Exploring retirement plans at the University of Oregon
- Saving for college: the 529 Savings Plan