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Third tier PERS members now equal Tiers 1 & 2
Updated On: Aug 28, 2014

A look at the latest system demographics from the Oregon Public Employee Retirement System shows that PERS has reached a landma

A look at the latest system demographics from the Oregon Public Employee Retirement System shows that PERS has reached a landmark point in its existence. The Oregon retirement system recently released its annual "PERS By The Numbers" report, and for the first time since the third tier was created in 2003, there's an equal number of working public employees in Oregon in that tier as there are in the upper two tiers combined.

 

PERS members who began their public service careers before Jan. 1, 1996 are in Tier 1. Those who began on or after that date, but before Aug. 1, 2003, are in Tier 2. Those hired on or after Aug. 1, 2003 are in what called the Oregon Public Service Retirement Plan, or OPSRP, but for all practical purposes, OPSRP is simply a Tier 3 of PERS.

 

Tier 1 members have a higher retirement payout formula than those in Tier 2, and Tier 3 is another cut below Tier 2, so correspondingly PERS is in better actuarial shape as Tier 1 and 2 members leave the system. Given that the 2003 Oregon Legislature created a much bigger drop between Tier 2 and Tier 3 than there is between Tiers 1 and 2, having more workers in Tier 3 is financially healthier for the system.

 

The numbers have jumped dramatically in just 12 months. The 2013 edition of "PERS By The Numbers" showed 46,882 Tier 1 members (27 percent of active members), 49,130 in Tier 2 (29 percent) and 74,960 in OPSRP/Tier 3 (44 percent). Ergo, as recently as last year, Tier 1 and 2 combined had a 56-44 percent majority over Tier 3.

 

This year, the numbers are virtually even. Tier 1 is down to 37,585 (23 percent), Tier 2 is at 44,297 (27 percent), and Tier 3 is up to 80,303 (50 percent). This trend will of course continue, which means that when the 2015 report is issued, a true majority of all working members in PERS will be in Tier 3/OPSRP. That fact could have some impact at bargaining tables, as most agencies will proportionately have less employees in the higher tier systems.

 


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