Inequity in ORP Contribution Rates

Date of Notice: 
Thu, 11/01/2012
Legislation, Resolution, or Policy Adoption: 
Current Status: 
Approved on 11/7/2012

The current employer contribution rate, which is valid in the period 7/2011–6/2013, for the members of the Optional Retirement Plan (ORP) Tier 3 members is 6.21%, whereas the employer contribution rate for Tier 1 and 2 members is 16.14%. This rate difference affects all faculty at the University of Oregon (and other public Oregon universities) who have chosen ORP which is a defined-contribution plan. Simply put, the faculty that joined the University of Oregon after August of 2003 are receiving less than 2/5 of the employer retirement contribution of those who were hired before this date.

An Oregon Senate Bill 242 directed the Oregon State Board of Higher Education to establish the committee to evaluate the optional retirement plan described in ORS 243,800 and make a report to the Legislative Assembly in 2012. A preliminary report by the ORP committee has been just made available which does not mention this issue.

Whereby the difference in University contributions to the ORP of faculty hired after 2003 is significantly less than those hired before 2003, and whereby this inequity amounts to a substantial difference in gross compensation (currently approximately 10%) between individuals hired before and after this date, we the senate urge the ORP committee to mention this important issue and propose a way of solving it in their report to be presented to the State Legislature.

Financial Impact: 
Cost neutral

Christopher Sinclair; Assistant Professor, Mathematics