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 Western honey bee at Arrowhead Lavender Farm & Co. in Salem
Photo credit: PERS employee Jonathan Yost
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What’s going on
30-second newsletter summary
The 2025 legislative session ended in June. There were no major changes to PERS, but three bills are already helping employers and members with contribution rates, disability benefits hearings, and visibility of overtime used in retirement calculations. To help your staff learn about PERS, spread the word about PERS presentations happening statewide. Whether they are in the “What is PERS?” camp or the “How do I retire?” camp, your staff will get all their questions answered.
Another way PERS helps is by ensuring you are aware of all the opportunities available to help you control your costs. You may not be aware that the Average Overtime field on a new hire record is more than a number – it’s the result of a law established by the Legislature to ensure that employers’ pension costs stay within the expected amount. Learn what the number does and how to set it and change it. Lastly, make a note of two things: the PERS Expo will be on October 1; and a menu option for calling the Employer Service Center Call Center has changed.
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For human resources and agency heads
2025 legislative session highlights
Here are PERS-related highlights of the Oregon Legislature’s short session, which ran from January 21 through June 27, 2025.
Did not pass
Senate Bill (SB) 847
Updates to PERS Health Insurance Program (PHIP) to increase the subsidy, including expanding PHIP-related subsidies to cover Oregon Public Service Retirement Plan (OPSRP) members. Did not pass because of concerns that it would raise employer rates. May be reconsidered next year.
Passed
SB 849
Enabled the School Districts Unfunded Liability Fund (SDULF) to be applied to schools’ unfunded actuarial liability, reducing their contribution rates for 2025-27. For more information, read the article “New Contribution Rates Effective July 1,” section “School District Rates,” in the June 2025 Employer News.
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SB 588
Changes to disability-eligibility requirements for Police and Fire job classification members.
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For open disability benefit applications or for active periodic reviews that have not yet been referred for a contested case hearing: The bill redefines disability eligibility for Police and Fire members from a standard that considered members to be disabled if they are “unable to perform any work for which qualified” to a standard that considers the member to be disabled if they are “unable to perform the work the member performed at the time the member became disabled.”
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For Police and Fire members requesting a contested case hearing to dispute a final denial of an application for disability benefits on or after May 27, 2025: The PERS Board must refer the case for a hearing within 180 days unless the member requests an extension, in which case the case must be referred for hearing within 360 days.
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An OPSRP member receiving disability benefits can receive in any month “irregular or unpredictable” earned income of up to 10% of their previous monthly salary. If it exceeds 10%, their benefits will end.
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For specifics, read the bolded text in the bill.
House Bill (HB) 2728
Requires PERS to include the following two data points in a Notice of Entitlement (NOE):
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The number of overtime hours the person has for the relevant final average salary calculation period.
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The number of overtime hours PERS staff used to calculate their final average salary.
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For an explanation of NOE, go to employer announcement 104, Deadline to Make Changes to a Retiree’s Account, section “About the 240-Day Deadline.”
Learn more
For information on all 2025 bills affecting PERS, go to the Enacted 2025 PERS Legislation webpage. To read legislation for past years, go to the Legislation Impacting PERS webpage.
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For human resources and agency heads
Invite PERS to teach your staff about PERS
When it comes to explaining retirement, let the experts do it
Whether you have new employees who don’t yet understand what PERS is or you have a group with questions about retirement, let the experts do the talking.
PERS Member Education staff offer in-person and virtual presentations — right where you are. The team travels all over Oregon, year-round, and presents during the day, evenings, and on Saturday mornings. Their comprehensive sessions help your employees better understand their PERS retirement benefits so they can prepare for the future.
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FUN FACT
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Retirees who attend PERS education sessions report having a better retirement experience than those who do not. Plus, they often receive their first check sooner.
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About the PERS presentation
The session can be presented in person or as a webinar. Staff members can join a planned local session or, if you have a large group, you can request your own onsite or virtual session.
Your staff will get their PERS questions answered, such as:
What tier am I in?
What is a pension, when will I vest, how much could my pension be, and how is it determined?
When can I retire?
What is the Individual Account Program (IAP)?
How can I maximize my retirement benefits?
Learn more
To request a session or learn more, email the PERS Retirement Education Team Lead.
Questions about PERS membership? Refer employees to the PERS Members Top 10 Questions webpage.
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Sessions
PERS offers four types of education sessions year-round, all over the state, in-person and virtually. For three of the sessions, you can choose an option that includes information on financial planning.
To find the schedule and locations, go to the Appointment Scheduler webpage, scroll down, and click Next in the bottom right corner. Choose from the following four classes on the Select an Appointment screen. Select the arrow next to a class to open a list of locations.
All About OPSRP* — For OPSRP members at any stage in their career.
Introduction to PERS Retirement (Tier One/Tier Two)* — For Tier One and Tier Two members who are more than three years away from retirement.
Retirement Readiness (Tier One/Tier Two)* — For Tier One and Tier Two members who are within three years of retirement.
Retirement Application Assistance Session (all tiers) — A private session to ensure the member has filled out their retirement forms correctly.
*To find the financial planning option of this session, go to the OPSRP Education Presentations webpage or the Tier One/Tier Two Education Presentations webpage.
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How to request an employer presentation
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PERS also provides presentations for employer teams of web administrators, employer reporters, payroll, benefits, human resources, or finance specialists.
The presentation can be in person or virtual, and it can cover your choice of customized topics, such as EDX reporting, understanding your statement, controlling your rate, hiring and terminating employees, and more.
To learn more or request a presentation, email the Employer Service Center.
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For agency heads, finance, employer reporters
How average overtime protects your rate
Financial officers have two main levers for controlling increases in their organization’s contribution rates: a side account and payroll (with help from salary limit and average overtime, explained below).
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Side account.
How it affects your rate
Funds you deposit in a side account increase your assets and decrease your unfunded actuarial liability for the life of the account.
How PERS helps
The PERS Actuarial Activities Section assists employers in establishing and depositing funds into a side account. Learn how this works on the Employer Side Accounts webpage.
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Payroll.
How it affects your rate
When setting each organization’s contribution rate every other year, the PERS consulting actuaries currently apply a 3.4% annual increase in payroll for all employers. If your organization’s payroll increases more than that, your unfunded actuarial liability increases, which necessitates a rate increase for the next biennium.
How does payroll increase?
- Hiring more staff.
- Giving large raises (or bonuses or incentives that are subject salary).
- Paying a lot of overtime.
After a year when one or more of these occur, your organization may see an increase in your contribution rate.
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Did you know?
The law that established average overtime* originally stated that PERS should set employers’ average overtime limits. However, PERS gave employers the ability to set your own limits** — you understand the work your employees do and are best able to set an accurate average.
This rule** also states that each employer should maintain records of the average overtime hours for each employee class every calendar year and provide those records to PERS upon request.
*Oregon Revised Statute 238A.130(4)
**Oregon Administrative Rule 459-075-0030(2)
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How PERS governing rules help
The Legislature established these rules to ease employer rate increases.
Salary limit: Employers do not pay contributions on the amount of an employee’s salary that is equal to and above the annual limit. Salary higher than the limit is reported as non-subject to protect employers from paying large contributions on high salaries. The salary limit applies to all tiers. The limits for a full year and partial year are listed on the Partial-Year Salary Limits webpage.
Average overtime: Employers set an annual limit on the number of overtime hours that will be included in an OPSRP member’s final average salary (FAS) when the member retires or their membership ends. The employer establishes the normal amount of overtime not by individual but by “classes” of employees; for example, by position type, position classification, union representation, or management service. This only applies to OPSRP members.
Note: Average overtime does not limit the amount of overtime an employee can work nor the amount of overtime pay they can receive.
Why the average overtime number in a new-hire record is important
The average overtime number you set limits the amount of overtime pay included in an OPSRP employee’s FAS each year. It protects employers from paying higher-than-expected pensions that are intentionally spiked by employees working inordinate amounts of overtime in their final three years.
It ensures that pension benefits remain reasonable, and overtime pay stays within average expectations for each employee classification.
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Bottom line
Help your organization’s bottom line — instruct employer reporters to choose a meaningful and appropriate number in the Average Overtime field of a Detail 1 new-hire record. Help them understand the importance of the overtime limit and how to set it based on the average expected overtime hours worked by each employee class in the organization.
If expected average overtime hours are unclear, employers can base this amount on historical averages of overtime.
If your employer reporters realize the number they originally set is not correct — or if circumstances change and the overtime cap needs to change — reporters can ask PERS to change the average overtime number for a group of employees. For instructions, refer to employer guide 18, Reporting or Changing “Average Overtime.”
Lastly, inform your OPSRP employees of their average overtime limit so they are not surprised at retirement.
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All employers
Registration open for ‘Destination: Retirement,’ the annual PERS Expo
October 1, 2025
The entirely virtual PERS Expo will feature presentations and question-and-answer sessions about PERS retirement benefits.
Whether retiring in three months or 30 years, PERS members can learn about:
- Their retirement benefits.
- When to talk to PERS during their career.
- When and how to retire.
- PERS post-retirement health insurance.
- The Oregon Savings Growth Plan deferred-compensation program.
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All employers
New menu option for ESC Call Center
Call 888-320-7377. For ESC, select option 4 instead of 2.
PERS began upgrading its phone system in July. There were three main changes:
- Employer Service Center (ESC) callers have a different option for reaching the ESC Call Center. Instead of pressing 2 to reach ESC, callers now press 4.
- Member Services callers receive a callback offer after one minute on hold. Instead of waiting on hold, the caller can choose the callback option and hang up. When their turn comes up, the system calls them and connects them with a representative.
- Member Services representatives can take more calls per day, cutting wait times and improving the overall experience.
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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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