Public Defined Contribution (DC)

Oregon Public Employees Retirement System

Roger Smith
Oregon Savings Growth Plan (OSGP) Program Manager
  • Plan(s)
    mandatory DC; three DB plan tracks; voluntary 457(b)
  • Total Plan Assets
    $2.5B in 457(b) plan
  • Number of Participants
    34,434 in 457(b) plan
  • Participation Rate
    Not reported
  • Average Deferral Rate
    Not reported
  • Default Deferral Rate
    Not reported
  • Default Investment
    Not applicable
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    Not reported
  • Provider(s)
    Not applicable
  • Financial Wellness Educator(s)
    Voya Financial

More than 1,000 PERS members registered to attend PERS Expo 2019 within the first 24 hours that registration was open.

Oregon’s public pension system ranks as the second most complicated public pension system in North America, according to global consulting firm CEM Benchmarking in Toronto. That complexity can make it hard for public employees to fully understand their retirement benefits.

The Oregon state legislature controls the benefit structure and has made 80 changes to it since the 1946 founding of the Tigard, Oregon-based Oregon Public Employees Retirement System (PERS), says PERS Director Kevin Olineck. “Whenever they make a change, it increases the complexity.” The system now has three defined benefit (DB) plan tracks, depending on an employee’s start date. And PERS includes a mandatory defined contribution (DC) plan that requires employees to contribute 6% of their salary annually.

The system also has a voluntary 457(b) deferred compensation plan, the Oregon Savings Growth Plan (OSGP), which was created in 1981. Saving in that plan is especially important for the two-thirds of current employees in the pension plan’s third tier—those who started after August 28, 2003. They get a lower defined benefit—about 45% of final average salary after a 30-year career, versus 50% for longer-tenured employees—in retirement, and they likely need to save in the OSGP to meet their expectations for their retirement income, Olineck says.

So the agency has launched an effort to reach a broader spectrum of employees—not just near-retirees—with its education and communications. The goal is to help all plan participants understand their complex PERS retirement benefit, and the importance of saving in the voluntary plan. For its PERS Expo last October, the PERS staff worked to attract a diverse crowd of employees, and 25% of the 3,000 who attended were under age 50. PERS also revamped the participant OSGP website and added new custom videos depicting a younger employee joining the voluntary plan. And PERS has plans to launch targeted communications soon.

The annual PERS Expo, launched in 2016, brings information about all of a public employee’s retirement benefits together under one roof for a day. There to share it are representatives of the PERS pension plan, the retiree medical plan, OSGP, and Social Security and Medicare. “We try to get members to look at their retirement holistically,” says OSGP Program Manager Roger Smith. “We want it to be less daunting for our members, so we set it up almost like a carnival.” That included interactive games.

To understand more about their retirement benefits, PERS Expo attendees went to hour-long presentations about each of their different retirement benefits. They were encouraged to pick one of three tracks—early career, midcareer or late career—and attend sessions for that career stage through the day. “We want them to learn about their retirement benefits across the spectrum, in one day,” Smith says.

PERS utilizes the Expo in part as a mechanism for integrating the OSGP plan into employees’ holistic retirement picture, Smith says. “Many don’t even know they’re eligible for the 457 plan,” he says. “We want our members to understand that they need to save more, because it’s not your grandfather’s PERS anymore.” Last October, OSGP had 413 new enrollments—a big jump from the 147 monthly average.

Oregon PERS now plans to improve its outreach to new state employees to encourage them to participate in the voluntary plan. “The state just put in a new HR [human resources] information system, and we’re working with them to identify new employees and then do direct marketing to them,” Olineck explains. “We’re hoping this new system will help us get to new employees quicker. Then we can really target them, because it makes sense to get someone in the deferred compensation plan quickly.”

—Judy Ward

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