Benefits Remain Safe for Current Retirees
2019 Legislative Session Update:
In the face of recent PERS reform legislation, current retirees can rest easy that their benefits will not be impacted by the passage of Senate Bill 1049.
Senate Bill 1049 entered the spotlight during the 2019 legislative session in an effort to address the rising cost of the public employee pension system. The bill diverts a percentage of employee Individual Account Program (IAP) contributions – 2.5% for active Tier 1 and Tier 2, and 0.75% for active Tier 3 and Tier 4 – to go towards paying down the PERS pension debt. The first $30,000 is exempted for all public employees, with those earning less than $30,000 exempted from the contribution. The bill also capped the Final Average Salary at $195,000 and eliminated the ‘1039’ rule. The bill narrowly passed the both the Senate and the House with the bare minimum of votes necessary in both chambers. Governor Kate Brown signed the bill into law on June 11th.
The passage of Senate Bill 1049 does not affect current retiree benefits. Changes to benefits only impact current public employees and future retirees.
Current retirees should note that while SB 1049 eliminated the ‘1039’ rule for retirees, it requires public employers to continue making PERS payments for re-hired retirees and prohibits re-hired retirees from collecting additional PERS benefits.