The primary components and differences among the PERS Tier One and Tier Two programs, the Oregon Public Service Retirement Plan (OPSRP) pension program, and the Individual Account Program (IAP) are shown below. Tier One covers members hired before January 1, 1996; Tier Two covers members hired between January 1, 1996, and August 28, 2003; and OPSRP covers members hired after August 28, 2003. The IAP is an account-based benefit that includes member contributions plus annual earnings and losses, made on and after January 1, 2004.
Starting July 1, 2020, Senate Bill 1049 (2019) requires that members earning more than the current monthly salary threshold have a portion of their 6% IAP contributions redirected to a new Employee Pension Stability Account (EPSA). The money in each member’s EPSA is used to pay for part of their future pension benefit.
Benefit comparisons chart
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Tier One |
Tier Two |
OPSRP Pension |
IAP |
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58 (or 30 yrs.) P&F: age 55 or 50 w/ 25 yrs. |
60 (or 30 yrs.) P&F: age 55 or 50 w/ 25 yrs. |
65 (58 w/ 30 yrs.) P&F: age 60 (see P&F 5-year requirement below) or 53 w/ 25 yrs. |
Members retire from IAP when they retire from Tier One, Tier Two, or OPSRP. |
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55 (50 for P&F) |
55 (50 for P&F) |
55. 50 w/ 5 years of continuous service in a P&F position immediately preceding effective retirement date. |
Members retire from IAP when they retire from Tier One, Tier Two, or OPSRP. |
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Guaranteed assumed rate annually (currently 7.2%) |
No guarantee; market returns |
N/A; no account balance. Member contributions are held in the IAP account. |
No guarantee; market returns |
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Market returns on 100% global equity portfolio |
Market returns on 100% global equity portfolio |
N/A; no member account |
N/A |
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Money Match, Full Formula, or Formula + Annuity (if eligible) |
Money Match or Full Formula |
Formula |
Various account payouts or rollover |
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1.67 percent general |
1.67 percent general |
1.50 percent general |
N/A |
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1.00 percent general |
N/A |
N/A |
N/A |
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Payable to eligible benefit recipients who pay Oregon state income tax because they reside in Oregon. |
No tax remedy provided |
No tax remedy provided |
No tax remedy provided |
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Yes |
Yes |
No |
Yes for Tier One and Tier Two; no for OPSRP. |
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Yes |
No |
No |
N/A |
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Unused sick leave included in FAS* |
Yes, if employer participates in the sick leave program. |
Yes, if employer participates in the sick leave program. |
No |
N/A |
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Active member in each of 5 calendar years |
Active member in each of 5 calendar years |
5 calendar years with at least 600 hours qualifying service or normal retirement age |
Immediate upon receiving account contributions. |
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Up to 2% annually for service on or before October 1, 2013, and a blended COLA for subsequent service |
N/A; no COLA provided |
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P&F = police and firefighters; FAS = final average salary; COLA = cost-of-living adjustment; N/A = not applicable
Note: PERS uses three methods to calculate Tier One retirement benefits: Full Formula, Formula + Annuity (for members who made contributions before August 21, 1981), and Money Match. PERS uses two methods to calculate Tier Two retirement benefits: Full Formula and Money Match. PERS uses the method (for which a member is eligible) that produces the highest benefit amount. OPSRP Pension Program benefits are based only on a formula method.
*Beginning January 1, 2020, SB 1049 changed the definition of “salary” for PERS purposes and created new limitations on annual “subject salaries,” which may affect how PERS calculates a member’s pension and contributions.