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
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.