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By not providing this information, the member delays payment of their benefits if they die before retirement. The benefits can end up going to their estate, which causes issues for the decedent’s family if they want to receive the benefit and do not plan on having an appointed personal representative for their estate.
Therefore, inform your PERS members that they need to submit preretirement beneficiary forms to PERS. If they experience a life change, such as a divorce, marriage, or new child, they need to submit a new form (or forms if Tier One/Tier Two) to ensure PERS has the most up-to-date information.
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Tips
- A change in marital status invalidates the IAP beneficiary designation. Members need to submit a new IAP designation form after a divorce or marriage.
- When filling out the forms, members should provide as much contact information about their beneficiaries as possible. This helps PERS reach them even if their phone number or email changes.
Excerpt from IAP Pre-Retirement Beneficiary Designation form
Designating preretirement beneficiaries (for active and inactive members)
To access instructions for Tier One, Tier Two, and Oregon Public Service Retirement Plan (OPSRP) members plus links to open the online forms, go to the new Designating a Preretirement Beneficiary webpage for employers.
Submitting the forms
Members should print and sign the form(s). Have the IAP form notarized. Submit to PERS by mail, fax, or drop-off. Attention: PERS Member Services.
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Mail
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PO Box 23700, Tigard OR 97281-3700
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Fax
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503-598-0561
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Drop-off
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11410 SW 68th Parkway Tigard, Oregon 97223
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For human resources professionals
Puzzled by purchases?
Tier One and Tier Two members who qualify can buy certain types of “service time” (aka retirement credit). The purchase gives them additional service time that can increase their pension size and even allow them to retire earlier.
Only Tier One and Tier Two members can purchase service time. Learn more about how they can qualify to make purchases on the Tier One/Tier Two Purchases webpage.
The two pieces in the purchases puzzle: time and money
Types of purchases
There are many types of purchases, which are listed on the Tier One/Tier Two Purchases webpage. The most popular types are wait time and forfeited time.
Wait time
Wait time is the six months an employee must work in a qualifying position before becoming a PERS member. Tier One and Tier Two members do not receive service credit for wait time at retirement, but they can purchase it. Oregon Public Service Retirement Plan (OPSRP) members automatically receive service credit for their wait time.
Forfeited time
This time is due to a prior membership withdrawal. Within guidelines, a Tier One/Tier Two active or inactive member can restore service time by paying back the withdrawn amount plus 7.5% interest compounded annually from refund to retirement date.
Cost of purchases
To find the estimated cost of their purchase, the member needs to request a written benefit estimate from PERS by submitting one of the forms linked below under “written benefit estimate forms.” (The member must be within two years of retirement to request a written benefit estimate.)
A Tier One/Tier Two written benefit estimate provides an approximate calculation of the member’s future pension. In addition, it automatically includes the purchase cost of the member’s wait time and forfeited time (if the member is eligible to purchase them).
The cost of each type of purchase is calculated differently. An example of a wait-time purchase is shown below.
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Example: Purchasing wait time
For Employee Jo, the cost of a wait time purchase is the sum of:
Contributions that would have been made to their regular account.
On a Tier One or Tier Two member annual statement, this is called a Tier Balance. It is used to help fund the member’s pension. The member contribution is usually 6%, so let’s multiply 6% x salary Jo made per month during wait time x six months of wait time.
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0.06 x ($4,000 x 6)
= $1,400
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Contributions that would have been made to their pension.
That is, contributions the employer would have paid on Jo's salary for those six months if Jo had already been a member. The calculation is whatever your organization’s contribution rate was that year multiplied by the amount Jo earned in those six months. Say the employer had a 20% contribution rate at that time and Jo earned $4,000/month.
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0.20 x ($4,000 x 6)
= $4,800
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=
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Jo’s total wait-time purchase price
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$6,240
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Written benefit estimate forms
Filling out a Tier One/Tier Two written benefit estimate form
Instructions are on the Filling Out a Tier One/Tier Two Written Benefit Estimate Form webpage for employers.
Receiving the estimate
When PERS sends the written estimate to the member, we include a purchase letter that lists the cost of the purchase and the amount that the purchase will increase the member’s pension benefit.
Paying for the purchase
Purchases must be made within 90 days before the employee’s PERS retirement date. The member can pay for the purchase by writing a check to PERS, transferring funds from their deferred compensation (457) or tax-sheltered annuity (403(b)) plan, or a combination of both. They cannot use their IAP funds or an IRA to make a purchase. Trustee-to-trustee transfer funds can be used toward service credit purchases, but they cannot be used toward a Police and Fire unit purchase.
For more information on paying for purchases, members can contact Member Services at
888-320-7377.
At retirement
The wait time purchase amount quoted in the purchase letter typically doesn’t change at retirement. The estimated forfeited-time purchase amount can change if the member changes their retirement date from what they put on the form. Other purchase amounts could be higher or lower than the estimate.
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Effect of wait-time purchase on education employees’ service credit
(Tier One/Tier Two only)
A Tier One/Tier Two education employee who purchases their wait time can earn service credit for their whole first year. Here’s how.
Education employees earn service credit for the year like this (and shown in the image below): If a typical academic employee (e.g., a teacher) is hired before September 15 (September 26 for higher education) and works through December 16, they earn service credit for July, August, and all of December. If they work January 7 through May 26, they earn credit for all of May and June. They must have no leave of absence lasting longer than 11 working days in a month (not including winter or spring break).
Therefore, if an employee was hired in September and successfully served their six-month wait time, they became a member in March of that first school year. Because they became a member in March, they began earning service credit in March. However, if they purchase their wait time at retirement, they would receive service credit going back to September of their first year, which would also earn them credit for that July, August, and all of December. If they worked through May 26, they already got credit for May and June. Thus, they would earn service credit for the whole year.
If their wait time included unpaid breaks (like winter or spring break), it may have lasted longer than six months. Also, other educational employees can have different wait-time periods based on their hire date. However, employees who had longer wait times can still earn service credit by purchasing all their available service time.
Click image to view full-size version.
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For human resources professionals
Reminder: July 1 was the OPSRP membership start date for December hires
Hired on or after December 2
All employees hired into a qualifying position between December 2 and 31, 2023, became Oregon Public Service Retirement Plan (OPSRP) members on July 1, 2024 (if they met all membership requirements).
Normally, a new employee’s first day of membership, called their contribution start date, lands on the first business day after their six-month period ends (if they don’t take any leaves of absence). For those who start working close to the end of the year, however, the wait time always lands on July 1 of the following year.
For these employees, you will submit contributions on their salary earned as of the first full pay period after July 1. For instructions on reporting wages for an employee in a qualifying position, refer to employer reporting guide 9, Reporting Wages for a Qualifying Employee.
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For all employers
Thank you for taking the employer satisfaction survey
A big thank you to everyone who took the 2024 PERS Employer Satisfaction Survey in May. Your feedback is extremely important for benchmarking, measuring the success of improvements we’ve made, and prioritizing future improvements.
If you would like to see the results of the survey, PERS staff will present them to the PERS Board at the board’s October 4, 2024, meeting.
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Need help?
Contact the Employer Service Center to ask questions and get one-on-one reporting help.
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