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A message from the PERS Director
The Board of Trustees for the Public Employees Retirement System (PERS) is responsible for governing the administration of the Public Employees Retirement Fund and System. One of the most important duties the board undertakes is having the board actuary conduct actuarial valuations of the plan. Based on the actuarial valuation results, the actuaries calculate and set the employer contribution rates for the next biennium.
The board received the actuarial valuation results as of December 31, 2023, at their July 2024 board meeting and then, based on these results, approved employer-specific contribution rates for the 2025-27 biennium at their October board meeting.
As you receive your employer-specific contribution rate information from the PERS Actuarial Activities Section, I want to draw attention to the largest factors that led to the reduction in the overall funding status of the plan since the last rate-setting actuarial valuation and, therefore, the overall contribution rate increase.
Since the December 31, 2021, rate-setting valuation, the PERS Board adopted new assumptions and methods, including assuming greater future individual member salary increases. These higher salary growth assumptions led to other effects, including:
- Increasing the value of projected future benefits associated with past service (accrued actuarial liability). This effect was most pronounced for Oregon Public Service Retirement Plan (OPSRP) members.
- A cumulative system payroll increase of greater than 20% over the two-year period between rate-setting valuations. This included an active member headcount that increased about 8% during this period.
In addition to these factors, asset returns were significantly less than the long-term assumed rate of 6.90% per year. Cumulative 2022–2023 returns were +4.3% compared to the assumed two-year return of +14.3%.
When setting the contribution rates for the system, the board considers many priorities, which include providing employers with predictable and stable rates, protecting the overall funded status of the plan, and ensuring equitability across all generations of members.
When setting contribution rates, the board does understand and acknowledge the impact of increased contributions rates on employers. However, as fiduciaries of the plan, it is incumbent upon them to ensure the long-term sustainability of the plan.
— Kevin Olineck
For more information
More information and previous biennia contribution rates are on the Contribution Rates webpage.
Employers can refer to the Guide to Understanding Your Rate to understand the factors that go into calculating their contribution rates.
Employers can read the Guide to Understanding Your Valuation to understand each section of your actuarial valuation report.
You also may want to learn more about possible options for reducing your costs on our Rate-Relief Programs webpage or by emailing our Actuarial Activities staff at actuarial.services@pers.oregon.gov for support.
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