Calculating Actuarial Cost

 
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The cost for universal buy-in (UBI), parental leave, and nonpublic education service credit is based on an actuarial formula. An actuarial cost helps keep the pension fund healthy because it takes the eventual pension payout into consideration.

Your cost for each year purchased is a percentage of your highest previous school fiscal year earnings. That percentage is found in the Actuarial Cost Table below, and is based on your age and number of years of service. (Note: If you are a Basic or Basic 4% plan member, deduct the percentage noted at the bottom of the table from the percentage reflected in the table.)

Step 1.

Determine your highest previous school fiscal year earnings. The cost of actuarial credit is based on your highest wages on record earned during a school fiscal year (July 1 to June 30).

We will equate any part-time or partial year wages to a full-time, full-year wage for your service credit cost calculation. Click here to learn how you earn service.

On leave? If you don't have wages in the prior year because of a sabbatical or military leave of absence, you may be able to purchase UBI, parental, and nonpublic education service credit based on your highest previous school fiscal year earnings, or the earnings you normally would have earned during the period you were on leave for less than two years, you'll have to return to employment before you can initiate a purchase. Contact ORS if this applies to you.

Laid off? If you have been laid off a year or less, and you maintain an employer-employee relationship, you can purchase credit based on your highest previous school fiscal year earnings. A layoff of more than a year but less than two years requires an employer memo stating the employer-employee relationship is still in effect. 

Step 2.

Determine your years of service. Your years of service for cost calculation purposes includes all earned service, service already purchased, service that is purchased but is pending vesting, and service credit being purchased with tax-deferred payment (TDP) agreements as of July 1 of the year you are making the purchase. 

For instance, let's say as of July 1, 2013, you have worked a total of 7.5 years. You have already purchased 2 years of military service, and you have an ongoing TDP agreement for 1.5 years of parental leave. The total years of service used to determine the actuarial cost of your purchase is 11 years (7.5 plus 2.0 plus 1.5).

Step 3.

Determine your age. Use your age as of the beginning of the current school fiscal year. Remember, a school fiscal year runs from July 1 to June 30. 

Step 4.

Determine your actuarial percentage. In the Actuarial Cost Table, find the rate that applies to your age and years of service. If you're a Basic or Basic 4% plan member, deduct the percentage noted at the bottom of the table from that rate before going to the next step.

Step 5.

Do the math. Multiply the actuarial percentage rate by your highest previous school fiscal year earnings from Step 1. The result is your cost to purchase one year of service credit.

Highest Compensation x Actuarial % = Cost to Purchase 1 Year

Click here to learn how to get an exact cost from ORS, and how to proceed with a purchase of any or all service credit you're eligible to buy. 

Actuarial Cost Table:
Basic 4% and MIP 7% Members
1.5% Benefit Multiplier 
Effective January 1, 2014
     Actuarial Cost Table:
Basic and MIP Fixed/Graded/Plus Members 
1.25% Benefit Multiplier
Effective January 1, 2014
Age Years of Service   Age Years of Service
0-9.99 10-19.99 20 & over      0-9.99 10-19.99 20 & over
up to 24 15.63% 19.38% 23.25%      up to 24 13.29% 17.44% 22.09%
25 15.94% 19.69% 23.56%      25 13.55% 17.73% 22.39%
26 16.25% 20.00% 23.88%      26 13.81% 18.00% 22.69%
27 16.56% 20.31% 24.19%      27 14.08% 18.29% 22.98%
28 16.88% 20.63% 24.50%      28 14.35% 18.56% 23.28%
29 17.19% 20.94% 24.81%      29 14.61% 18.85% 23.58%
30 17.19% 20.94% 24.81%      30 14.61% 18.85% 23.58%
31 17.19% 20.94% 24.81%      31 14.61% 18.85% 23.58%
32 17.19% 21.25% 25.13%      32 14.61% 19.13% 23.88%
33 17.19% 21.56% 25.44%      33 14.61% 19.41% 24.16%
34 17.19% 21.88% 25.75%      34 14.61% 19.69% 24.46%
35 17.19% 22.19% 26.06%      35 14.61% 19.98% 24.76%
36 17.19% 22.75% 26.63%      36 14.61% 20.48% 25.30%
37 17.19% 23.31% 27.19%      37 14.61% 20.99% 25.83%
38 17.19% 23.88% 27.75%      38 14.61% 21.49% 26.36%
39 17.19% 24.44% 28.31%      39 14.61% 22.00% 26.90%
40 17.19% 24.69% 28.56%      40 14.61% 22.23% 27.14%
41 17.19% 24.88% 28.75%      41 14.61% 22.39% 27.31%
42 17.19% 24.88% 29.50%      42 14.61% 22.39% 28.03%
43 17.19% 24.63% 30.31%      43 14.61% 22.16% 28.80%
44 17.19% 24.19% 30.94%      44 14.61% 21.78% 29.39%
45 17.19% 23.50% 31.56%      45 14.61% 21.15% 29.99%
46 17.19% 22.88% 31.88%      46 14.61% 20.59% 30.29%
47 17.19% 22.19% 31.88%      47 14.61% 19.98% 30.29%
48 17.19% 21.44% 31.88%      48 14.61% 19.30% 30.29%
49 17.19% 20.63% 31.88%      49 14.61% 18.56% 30.29%
50 17.19% 19.75% 31.88%      50 14.61% 17.78% 30.29%
51 17.50% 19.25% 31.56%      51 14.88% 17.33% 29.99%
52 18.13% 19.00% 31.25%      52 15.41% 17.10% 29.69%
53 18.75% 19.06% 30.94%      53 15.94% 17.16% 29.39%
54 19.38% 19.38% 30.31%      54 16.48% 17.44% 28.80%
55 20.00% 20.00% 29.38%      55 17.00% 18.00% 27.91%
56 21.00% 21.00% 28.75%      56 17.85% 18.90% 27.31%
57 22.00% 22.00% 27.81%      57 18.70% 19.80% 26.43%
58 23.00% 23.00% 26.88%      58 19.55% 20.70% 25.54%
59 24.00% 24.00% 25.94%      59 20.40% 21.60% 24.64%
60 & over 25.00% 25.00% 25.00%      60 & over 21.25% 21.25% 21.25%
Note: Percentage rate for a Basic Plan member is 5.0 percentage points lower      Note:  Percentage rate for a Basic Plan member is 4.5 percentage points lower