Optional Retirement Plan

Contribution Rates Update

February 7, 2004

Denise Yunker, M.S., SPHR

Benefits Director

OUS Human Resources

ORP and PERS: Statutorily Linked Contributions

ORS 243.800(9) The State Board of Higher Education shall contribute monthly to the optional retirement plan authorized under this section the percentage of salary of each employee participating in the plan equal to the percentage of salary that would otherwise have been contributed as an employer contribution on behalf of the employee to the Public Employees Retirement System if the employee had not elected to participate in the optional retirement plan.

Amortization Illustration

PERS Rate Components OPSRP Rate Components

Normal Cost (GS & PF) Normal Cost (GS & PF)

Retirement 12.15% Retirement 8.04%

Health Care 0.52

PERS Reform (1.36)

Pension Bond Deposit (6.60)

Amortization (7.44) Amortization (7.44)

Employer Contribution 4.71 % Employer Contribution 0.60% ?

Issues Resolution Pending

Determination of correct “add back” rate for ORP: rate relief or debt service

Rate protection for new ORP participants when OPSRP amortization resumes

ORP Notes

Break-in-Service

Break in service rules under development for PERS do not apply to the Optional Retirement Plan. PERS and OPSRP rules are progressing, and are expected to be final on Feb 13, 2004.

Vesting

ORP vesting after 5 years of service or on reaching age 50. OPSRP vesting requires 600 hours service in each of 5 years or on reaching age 65.