Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Options Comparison – OPSRP & ORP Tier Three

Explore the unique features of the Optional Retirement Plan (ORP) and the Oregon Public

Service Retirement Plan (OPSRP) for employees hired between 8/29/2003 and 6/30/2014.

Disclaimer – Please read carefully

This Guide provides an overview of PERS/OPSRP and the ORP. The descriptions of

PERS and OPSRP in this Guide are based on Oregon Public Universities Retirement

Plans’ understanding of applicable legislation, as amended and as affected by judicial

decisions, as of the date of this guide. In addition, PERS regularly adopts administrative

rules to implement legislative and operational changes. The descriptions of OPSRP and

PERS are therefore subject to modification and/or clarification by new legislation, court

decisions, and PERS’ administrative rulemaking.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

This material is intended to assist in the administration of the plan, and it includes a

summary of common ORP Plan provisions. To obtain additional information contact your

campus benefits office for assistance with questions, transactions, or circumstances that

are not included in the Decision Making Guide.

In case of conflict between this Guide and the official plan documents of the ORP and

Oregon state law regulating PERS/OPSRP, the official plan documents, Oregon state law,

and federal regulations will govern. A copy of the ORP plan document is available

through your campus benefits office upon request or on the OPURP website.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Option Comparison – Tier Three Employees

Explore the unique features of the Optional Retirement Plan (ORP) and the Oregon Public

Service Retirement Plan (OPSRP) for those employees hired on or after August 29, 2003.

The Optional Retirement Plan (ORP) and the Oregon Public Service Retirement Plan (OPSRP)

are each intended to provide you with income during your retirement years. These plans share a

number of common attributes, but differ in important aspects. This guide provides an overview

of the key features of the ORP and OPSRP.

First, are you an OPSRP/ORP Tier Three eligible employee?

If you were hired in a qualifying position between August 29, 2003 and June 30, 2014, and have

never worked for another Oregon PERS employer, you are an OPSRP or ORP Tier Three

employee.

OPSRP is a program of the Public Employees Retirement System (PERS).

This document compares the OPSRP and Optional Retirement Plan (ORP) provisions that apply

to OPSRP/ORP Tier Three employees.

This material is designed for general service employees.

If you were a PERS member or enrolled in the ORP before August 29, 2003, your benefits are

described in the ‘Comparing Your Retirement Options’ brochure for Tier One and Tier Two

Employees (Guide #3). If you were first employed by the Oregon Public Universities on or after

July 1, 2014, your benefits are described in the brochure for Tier Four employees (Guide #5).

Tier One – If you were hired in a qualifying position before January 1, 1996, you are a Tier One

employee.

Tier Two – If you were hired in a qualifying position on or after January 1, 1996, you are a Tier

Two employee.

Tier Four – If you were hired on or after July 1, 2014, you are a Tier Four employee.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Option Comparison – Tier Three Employees

Attributes

OPSRP

ORP Tier Three

Who’s Eligible

Academic and administrative unclassified

and classified employees of Oregon Public

Universities (including EOU, OIT, OSU,

PSU, SOU, UO, WOU) who meet both of

the following criteria:

• Have completed a waiting period

of six full calendar months in a

qualifying position; AND

• Hold a qualifying position with

600 or more hours of service in a

calendar year.

Academic and administrative unclassified

employees of Oregon Public Universities

(including EOU, OIT, OSU, PSU, SOU,

UO, WOU) who meet both of the following

criteria:

• Have completed a waiting period

of six full calendar months in a

qualifying position; AND

• Hold a qualifying position, or

series of positions, that total the

equivalent of 600 hours in a year.

Qualifying positions may include:

• In a twelve (12) month fixed-term

appointment of at least 0.3 full-

time equivalent (FTE);

• In a nine (9) month fixed-term

appointment of at least 0.4 FTE;

• In a more than nine (9) month and

less than twelve (12) month fixed-

term appointment, or in a non-

fixed-term appointment, in which

the Employee performs 50 or

more hours of service during each

of such six (6) full calendar

months

In the event an Employee who is not

appointed to a 9-month 0.4 FTE or a

12-month 0.3 FTE does not work a full

50 hours due to an Employer’s or a

Participating Employer’s temporary

closure, the hours that the Eligible

Employee would have worked but for

the closure are counted as time served.

When

Participation

Begins

First of the month following six full

calendar months of employment in a

qualifying position.

First of the month following six full

calendar months of employment in a

qualifying position.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Employer

Contributions

Employer Contributions made by your

university in 2020 are based on a

percentage of the first $285,000 of annual

salary (calendar year). The salary limit is

adjusted as the cost of living increases.

The Employer Contribution rate for

OPSRP members is subject to change,

based on the rates periodically established

by PERS.

Employer Contributions made by your

university in 2020 are based on a

percentage of the first $285,000 of annual

salary (calendar year). The salary limit may

be adjusted as the cost of living increases.

The Employer Contribution rate for Tier

Three members is subject to change, based

on the rates periodically established by

PERS. By law, the Employer Contribution

to the ORP equals the Employer

Contribution to PERS.

From July 1, 2019 until June 30, 2021, the

Employer Contribution rate is 9.85%.

Retirement Option Comparison – Tier Three Employees

Attributes

OPSRP

ORP

Employee

Contributions

Currently, your university pays the

Employee Contribution on behalf of most

employees.

Employee Contributions are 6% of annual

salary based on the first $285,000 of annual

salary (calendar year). The salary limit may

be adjusted as the cost of living increases.

Total Employer and Employee

Contributions to the IAP may not exceed

$57,000 in a plan year.

All limits are as of the 2020 plan year, and

are indexed annually by the IRS.

Currently, your university pays the

Employee Contribution on behalf of most

employees.

Employee Contributions are 6% of annual

salary based on the first $285,000 of annual

salary (calendar year). The salary limit will

be adjusted as the cost of living increases.

The combined Employer and Employee

contributions may not exceed $57,000.

All limits are as of the 2020 plan year, and

are indexed annually by the IRS.

Rollovers

The Individual Account Program (IAP)

does not accept rollover contributions.

Accepts rollover contributions, subject to

fund sponsor restrictions, from:

• PERS member or IAP accounts

• Other employers’ qualified

retirement plans

• Governmental IRC 457(b) plans,

including the OSGP

• IRC 403(b) plans

• Individual retirement accounts

(IRA) – if funds are from a

previous employer’s qualified

plan.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Plans and Plan

Accounts

Two separate plans are maintained for

OPSRP members:

OPSRP Pension:

Employer Contributions fund and OPSRP

“defined benefit” pension plan.

IAP

Employee Contributions fund an Individual

Account Program (IAP) Employee Account

in a “defined contribution” plan.

Your ORP retirement account is made up

of your:

• Employer Contributions

• Employee Contributions

Participants invest their contributions in

mutual funds and/or annuities offered

through the Optional Retirement Plan

(ORP).

Employer and Employee Contributions,

plus investment returns over time, build the

retirement account balance.

Investment

Options

All investments for the pension and IAP are

selected and managed by the Oregon

Investment Council.

You may choose from a variety of

investments through the ORP Providers

offering fixed and variable annuities and

mutual funds.

ORP Providers include Fidelity

Investments and TIAA for new

participants.

Investment

Income

Actual investment returns are credited to

IAP accounts.

Actual investment returns are credited by

each mutual fund or annuity, which may

include a fixed annuity with guaranteed

investment returns.

When You may

Change

Investment

Options

Not required or permitted.

• You may change your ORP Provider

once a calendar year.

• You may change funds or transfer

balances among funds by contacting

your ORP Provider at any time, subject

to any restrictions or fees required by

your investment provider.

• You may transfer existing account

balances among ORP Providers at any

time, subject to any restrictions or fees

required by the provider.

Vesting

Employer

Contributions

and Earnings

OPSRP Pension

• 100% vested after being an active

member in a qualifying position

(600 hours minimum) in each of

five calendar years.

• 100% vested on reaching normal

retirement age while an employee

(65).

100% vested after receiving contributions

in each of 5 years or if you are age 50 or

older while an Oregon Public Universities

Employee.

Employee and

Rollover

Contributions

and Earnings

IAP Employee Account

• 100% vested immediately

100% vested immediately

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Option Comparison – Tier Three Employees

Attributes

OPSRP

ORP

How Benefits

are Determined

at Retirement

Your retirement benefit is the combination

of your Pension and your Individual

Account Program account balance.

OSPRP Pension – benefits are provided

under a Full Formula calculation. The

benefit amount is 1.50% of your Final

Average Salary (FAS) times your years of

qualified service.

Final average monthly salary is the greater

of these amounts, divided by 36 months:

• Your last 36 consecutive months

of salary, OR

• Your highest three consecutive

calendar year salaries during your

career in OPSRP-covered

employment.

IAP – benefits are the total of all IAP

account balances.

Benefits are equal to the value of your

Employee Account and, if vested, the value

of your Employer Account.

When

Retirement

Benefits are

Available

OPSRP Pension

• Normal retirement age 65

• Normal retirement age 58 with 30

years qualifying service

IAP

Employee Account is available on

termination.

Termination of employment, retirement,

death, disability or plan termination.

Early

Retirement

OPSRP members may retire any time after

reaching age 55. Your benefits will be

reduced compared to Normal Retirement

benefits.

Benefits become available when you leave

Oregon Public Universities’ employment.

How Benefits

are Paid at

Retirement

OPSRP Pension

A variety of payment options including life

annuity, joint and survivor option.

IAP

Account payments include lump sum

distributions and equal installments over 5,

10, 15, or 20 years.

Variety of payment options, including lump

sum payment of Employee and Employer

Accounts, subject to ORP Provider payout

provisions.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Option Comparison – Tier Three Employees

Attributes

OPSRP

ORP

Disability

Benefit

OPSRP Pension

OPSRP members with 10 or more years of

creditable service, or with a duty-related

disability, receive 45% of salary in effect as

of the last full month of pre-disability

employment, until commencement of

normal retirement pension benefits.

IAP

IAP accounts receive investment earning

and losses until withdrawn.

100% of your Employee Account balance

and the Employer Account balance as of

the date of disability.

Minimum

Required

Distributions

Generally, Internal Revenue Code requires

you to begin receiving benefits by April 1

of the year following the calendar year in

which you retire or reach age 70 ½,

whichever is later.

Generally, benefit payments begin any time

after becoming eligible, and on or before

April 1 of the calendar year following the

latter of calendar year the Participant a)

attains age 70 ½ or b) retires and terminates

employment.

Death Benefit

If You Die While

Employed

OPSRP Pension

If you are vested, 50% of what your

pension would have been is paid to your

spouse for life. For this purpose, your

spouse includes a person who is

constitutionally required to be treated as

your spouse.

IAP

Your IAP account balance is paid to your

beneficiary as a lump sum distribution.

100% of the value of your Employee

Account and Employer Account balance at

time of death is paid to your survivor(s).

Survivor Benefit

If You Die After

Retirement

Benefit is determined by payment option

you selected at the time you retired.

100% of value of your Employee Account

and Employer Account balance at time of

death is paid to your beneficiary(ies).

Cost of Living

Adjustment

(COLA) after

Retirement

Contact PERS directly for COLA

information.

No cost of living adjustment. Accounts

receive investment returns until withdrawn.

Retirement Options OPSRP/ORP Tier Three

Revised 1/2020

Oregon Public Service Retirement Plan & Optional Retirement Plan

Retirement Option Comparison – Tier Three Employees

Attributes

OPSRP

ORP

Loans

Not available

Health

Insurance

Coverage in a PERS or Public Employees’

Benefit Board (PEBB) group health and

dental insurance plan, if eligible.

PEBB-sponsored retiree health care

benefits are currently available for pre-

Medicare retirees to age 65.

Note: If you also have a PERS account

balance and are eligible to receive PERS

retirement benefits, you may be eligible for

PERS Retiree Health Care Benefits.