Tier One, Tier Two and OPSRP: what's the difference?
Your group depends on when you started a PERS job. Tier One started before 1996, Tier Two from 1996 to August 28, 2003, and OPSRP on August 29, 2003 or later. Tier One and Tier Two have a richer formula and an extra way to figure your pension called Money Match. Everyone has an IAP account.
Side by side
| Tier One | Tier Two | OPSRP | |
|---|---|---|---|
| Started a PERS job | Before January 1, 1996 | January 1, 1996 to August 28, 2003 | August 29, 2003 or later |
| Full benefit, general service | 58, or 30 years | 60, or 30 years | 65, or 58 with 30 years |
| Full benefit, police and fire | 55, or 50 with 25 years | 55, or 50 with 25 years | 55, or 53 with 25 years |
| Formula, general service | 1.67% per year | 1.67% per year | 1.5% per year |
| Formula, police and fire | 2.0% per year | 2.0% per year | 1.8% per year |
| Other ways PERS figures it | Money Match, and Formula Plus Annuity for some | Money Match | Formula only |
Sources: PERS: Benefit component comparisons and PERS: Tier One/Tier Two benefit calculation.
How the Full Formula works
Your pension is your formula rate times your years of service times your average pay. Average pay is your three best years (for OPSRP, three years in a row). For example, a Tier Two teacher with 28 years and $81,000 average pay gets 1.67% × 28 × $81,000 = $37,876 a year, about $3,156 a month, at full-benefit age.
Since 2020, pay above a yearly limit doesn't count. PERS lists the limit as $245,724 a year (PERS: salary limit).
What is Money Match?
Tier One and Tier Two members also have a member account built from contributions made before 2004. Money Match takes that balance, doubles it (your employer matches it), and turns it into a monthly payment using PERS's factor for your age: account × 2 × age factor. PERS pays whichever method gives you more (PERS).
- Tier One member accounts are credited PERS's assumed earnings rate, currently 6.9% a year.
- Tier Two accounts earn actual investment returns, which can go up or down. PERS says Money Match is rarely the higher amount for Tier Two members.
Formula Plus Annuity is a third method for Tier One members who made contributions before August 21, 1981.
The IAP: everyone's savings account
Since 2004, members' own contributions go into the Individual Account Program (IAP) instead of the member account. Members of all three groups have one. When you retire you can take it as a lump sum, in installments over 5, 10, 15 or 20 years, or over your expected lifetime (PERS: What is the IAP?).
Estimate your pension with the right formula for your group, including Money Match.
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