How Much Do Oregon PERS Retirees Make?

The Oregon Public Employees Retirement System (PERS) operates as a defined benefit plan, providing a guaranteed monthly payment to eligible retirees for their lifetime. This pension is a foundational component of many public employees’ retirement security. The amount a retiree receives varies significantly based on individual career paths, salary histories, and chosen retirement options. This article explores the factors influencing these benefit amounts, from calculation methodologies to payment choices, and how individuals can access their personal retirement information.

Calculating Your Oregon PERS Benefit

The calculation of an Oregon PERS benefit hinges on several key factors: service credit, final average salary (FAS), and specific benefit multipliers, which differ based on a member’s employment tier. Service credit represents the total time an employee has worked in a PERS-covered position. One month of service credit is earned for each month an active member works in a qualifying position, typically requiring 600 or more hours in a calendar year.

Final Average Salary (FAS) is a crucial component, generally calculated as the average of an employee’s highest three consecutive years of gross salary, or the total gross salary over the last 36 months divided by the actual months worked. For Tier One and Tier Two members, FAS calculations can include lump-sum payments for accrued vacation time. For OPSRP members, payments must be made within 31 days of separation to be included in FAS, and lump-sum vacation payments are generally excluded.

The Oregon PERS system categorizes members into three tiers: Tier One, Tier Two, and the Oregon Public Service Retirement Plan (OPSRP). Tier One members began employment before January 1, 1996. Tier Two members started between January 1, 1996, and August 28, 2003. OPSRP members are those first employed on or after August 29, 2003, who were not previously members of Tier One or Tier Two.

For Tier One and Tier Two members, the pension benefit is typically the greater of two calculations: the Full Formula or the Money Match. The Full Formula multiplies years of service by final average salary and a set percentage, which is 1.67% for general service members and 2.0% for police and fire members. The Money Match calculation considers the member’s account balance, doubles it, and then multiplies it by an age factor.

OPSRP members’ pension benefits are calculated using a simpler formula. For general service members, the calculation is 1.5% of their final average monthly salary multiplied by their years of retirement credit. Police officers and firefighters under OPSRP receive a slightly higher multiplier of 1.8% multiplied by their final average salary and years of retirement credit.

Choosing Your PERS Benefit Payment Option

After the initial benefit amount is calculated, retirees must choose a payment option, which directly influences the monthly sum received. The Single Life Option provides the highest monthly payment to the retiree, with payments ceasing upon the retiree’s death.

Several Joint & Survivor Options allow a designated beneficiary to continue receiving payments after the retiree’s death. These options include variations such as 100% survivorship, where the beneficiary receives the same monthly amount, or 50% survivorship, where they receive half. Choosing a Joint & Survivor option typically results in a reduced monthly payment for the retiree, as the benefit is actuarially spread over two lives.

Cost-of-Living Adjustments (COLAs) may also affect the long-term value of pension payments. For benefits earned before October 1, 2013, the COLA has a maximum of 2% annually, tied to the Consumer Price Index for Portland. For service credit earned on or after October 1, 2013, the COLA is 1.25% on the first $60,000 of the annual benefit and 0.15% on any amount exceeding $60,000. These adjustments help to maintain the purchasing power of the pension over time.

Retiring before the established normal retirement age can also lead to a reduction in monthly benefits. Normal retirement ages vary by tier and job classification; for example, general service OPSRP members typically have a normal retirement age of 65, or age 58 with 30 years of service. Early retirement results in an actuarial reduction to the pension.

Average Oregon PERS Retirement Payments

Oregon PERS retirement payments vary widely among individuals due to differences in service length, final average salaries, chosen retirement dates, and the specific tier to which a member belongs. Aggregated data provides insight into general averages. For all retirees from 1990 through 2023, the average monthly retirement benefit was approximately $2,545, equating to about $30,543 annually.

More specifically, the median annual payout for all PERS retirees in 2022 was $27,156. For those who retired in 2023, the average annual retirement benefit equaled approximately 45% of their final average salary.

The Oregon PERS system publishes various reports, including annual reports and actuarial valuations, which contain aggregated data on retirement payments and demographic information. These reports often provide insights into average final average salaries, years of service, and the percentage of final salary replaced by pension benefits. For instance, the average final average salary for all retirees from 1990-2023 was $59,329 annually, while for 2023 retirees, it was $99,346 annually.

These averages do not include benefits from the Individual Account Program (IAP). The IAP provides a lump sum or installment payments based on contributions and investment earnings, supplementing the defined benefit pension.

Accessing Your Personal PERS Benefit Information

For current and former public employees in Oregon, accessing personal PERS benefit information is primarily through online resources and direct contact with the system. The Oregon PERS website provides online member accounts where individuals can view their service history, account statements, and estimated benefit projections. To access these personalized details, members need their Social Security Number and date of birth, or a Personal Identification Number (PIN).

Annual statements are mailed to members, providing a snapshot of their accumulated benefits and projected retirement amounts. These statements detail contributions, service credits, and growth within the Individual Account Program (IAP) and, for eligible members, the Employee Pension Stability Account (EPSA). While these statements offer valuable information, they generally do not include the precise monthly pension benefit amount.

Oregon PERS also offers online benefit estimators or calculators, enabling members to project their future retirement benefits. These tools can help individuals understand how different retirement dates or salary projections might impact their potential monthly payments.

If questions arise, members can contact Oregon PERS directly. The system provides customer service via phone, with a toll-free number available for inquiries. Email and mailing addresses are provided for written correspondence.