The 411 on PERS
Tier I employees hired before 1996 receive a guaranteed return rate on investments based on a historic stock market performance of 10 percent. Reforms in 2003 capped the match at eight percent for employees in this tier who had not yet retired. The rate is adjusted every year, but before the reform the PERS Board often passed earnings on to members with a higher match during good years instead of putting it in reserves.
Additionally, though PERS uses a few methods to calculate retirement benefits, most retirees have used a money match, in which an employee's account balance is matched by the employer upon retirement. The employee also receives up to a two percent cost of living adjustment. Under this calculation, some employees have received benefits in excess of their final salary.
The normal age of retirement is 58 or 30 years of service. Police and firefighters can retire at age 55 or 50 with 25 years of service. Early retirement is age 55.
Tier II employees hired between Jan. 1, 1996, and Aug. 28, 2003, are not guaranteed a return rate, unlike Tier I employees. Their accounts simply earn market returns. Employees can still retire under a money match or choose another formula in which they get 1.67 percent of their salary for every year they have worked. Police and firefighters get 2 percent.
The normal age of retirement is 60 or 30 years of service. Police and firefighters can retire at age 55 or 50 with 25 years of service. Early retirement is age 55.
Tier III or Oregon Public Service Retirement Program employees hired since 2003 cannot retire under a money match and instead have a less-generous formula than Tier II employees. Employees get 1.5 percent of their salary for every year they have worked. Police and firefighters get 1.8 percent.
The normal age of retirement is 65 or 58 with 30 years of service. Police and firefighters can retire at age 60 or at age 53 with 25 years of experience. Early retirement is age 55.
Average system benefits from January 1990 through December 2009
Age at retirement: 60
Years of service: 23
Monthly benefit: $2,120 per month or about $25,436
Monthly benefit in 2008: $2,671 or about $32,052
Public employee salary at retirement: $43,859
Public employee salary at retirement in 2009: $59,522
Percentage of salary at retirement: 55 percent
Percentage of retirees who received more than 100 percent of salary at retirement: 7.9 percent
Retirement benefit for 30 years of service: 80 percent of final salary or about $3,420 per month
Retirement benefit for 30-year members in 2000: 100 percent of final salary or about $4,200 per month
NOTE: These numbers are based on a June 2010 PERS Replacement Ratio study and cover retirees who selected comparable monthly benefit options. These numbers do not include any Social Security or Individual Account Program distributions.