The Oregon Public Employees Retirement System (PERS) provides retirement benefits to most state and local government employees in Oregon. It combines a defined benefit pension with an individual investment account, offering both stability and flexibility in retirement income.
Your benefits depend on when you first began working in a PERS-qualifying position.
PERS Membership Tiers
PERS has three main membership tiers. Each has its own formula for calculating retirement benefits.
Tier | Hire Date | Plan Type |
|---|---|---|
Tier One | Before January 1, 1996 | Defined Benefit |
Tier Two | January 1, 1996 – August 28, 2003 | Defined Benefit |
OPSRP (Oregon Public Service Retirement Plan) | On or after August 29, 2003 | Defined Benefit + Defined Contribution (IAP) |
Tier One & Tier Two Benefits
Tier One and Tier Two members participate in the traditional defined benefit pension plan. Your benefit is calculated using several possible formulas, and PERS pays you the highest result at retirement.
Common Formulas
- Full Formula: 1.67% × years of service × final average salary (2.0% for police and firefighters)
- Formula + Annuity: Available to certain Tier One members with contributions before August 21, 1981
- Money Match: Compares your account value (with interest) to your employer match
Tier One accounts are credited with a board-set assumed earnings rate (currently 6.9%), which PERS uses for actuarial calculations. Investment earnings are not guaranteed.
Tier Two members follow similar rules but do not receive the historical guaranteed earnings assumption that applied to Tier One.
OPSRP (Oregon Public Service Retirement Plan)
Employees hired on or after August 29, 2003, are members of the OPSRP plan. The pension formula is simpler but still provides a secure lifetime benefit.
Benefit Formula
- General Service: 1.5% × years of service × final average salary
- Police and Fire: 1.8% × years of service × final average salary
You become vested in your pension after five calendar years with at least 600 hours of work each year. The years do not have to be consecutive, but there cannot be a break in qualifying employment longer than five years. Members also vest immediately at age 65 while actively employed.
At retirement, you’ll choose a payment option that determines whether and how a beneficiary will receive benefits after your death.
The Individual Account Program (IAP)
Since January 1, 2004, all PERS members have contributed 6% of their salary to the Individual Account Program (IAP). This portion functions like a personal investment account and grows based on market performance.
Key IAP Features
- Default investment in an age-based target-date fund
- Ability to choose a different target-date fund through Online Member Services
- 100% immediate vesting for employee contributions
Note for high earners: Under Senate Bill 1049, part of the 6% contribution may be redirected to the Employee Pension Stability Account (EPSA) once salary exceeds a certain threshold. This helps manage pension costs while maintaining benefit security.
Cost-of-Living Adjustments (COLA)
To help your pension keep pace with inflation, PERS provides annual cost-of-living adjustments (COLAs) based on the West Region Consumer Price Index (CPI-W).
- Service before October 1, 2013: Up to 2% per year
- Service after October 1, 2013: Blended rate with lower caps when CPI exceeds 2%
COLAs take effect July 1 each year and appear in the August 1 benefit payment. The timing of your first COLA depends on your retirement date and may be prorated.
Key Takeaways
- PERS combines a pension (lifetime monthly benefit) with an investment account (IAP).
- Your benefit tier depends on your original hire date.
- Vesting occurs after five qualifying years or at age 65 while active.
- Annual COLAs help your pension maintain purchasing power over time.
Learn More
For the most current details, visit the official Oregon PERS website. If you’d like help understanding how your PERS benefits fit into your overall retirement strategy, our advisors can guide you through income planning, tax coordination, and investment alignment.
