• Payment Options

    You must choose your payment option when you apply for your pension. After your retirement effective date, you will not be able to change your election or your designated survivor beneficiary for any reason. Your pension is a lifetime benefit paid monthly and it cannot be cashed out once you retire.

    Read carefully, ask questions, estimate under various scenarios, talk with your family - but do it before you sign your application papers.

    Click on a topic below for more information:

    Remember, all pension calculations begin by figuring your straight life amount. Your straight life amount is then adjusted, depending on which plan or option you are choosing.

Options

Payment Options Alternate
Full Retirement / Straight Life

Your full retirement pension calculation begins by determining your straight life option amount. Every calculation for other payment options (survivor, equated, early reduced) begins with a calculation of your straight life pension.

The following describes straight life calculations for regular state employees, covered employees responsible for the care and supervision of prisoners, and conservation officers.

Straight Life Option / Regular

If you choose the straight life option, you receive the maximum monthly pension payable throughout your lifetime. No ongoing pension payments or insurance are provided to your survivors. 

Calculate your annual straight life pension by multiplying your FAC times your years of service credit times 1.5 percent (0.015). Divide the product by 12 to calculate your monthly straight life pension. 

Additional notes about the straight life option.

  • If you are married and choose a straight life option, your spouse must waive his or her right to your pension by signing the form in the presence of a notary public.   
  • Your spouse and other eligible dependents can enroll in state-sponsored insurance plans during your lifetime whether you choose the straight life or a survivor option.
  • No monthly pension payments or insurance benefits will continue to any beneficiary upon your death if you choose a straight life option.
  • You can name one refund beneficiary to receive a refund of personal contributions and interest remaining on account (from service prior to 1974, after March 31, 2012, or any service credit purchases and interest), if any, when you die. Go to Beneficiary/Death Benefits for more information.

Straight Life Option / Covered Employees

If you choose the straight life option, you receive the maximum monthly pension payable throughout your lifetime. No ongoing pension payments or insurance are provided to your survivors.

As a covered employee responsible for the care and supervision of prisoners, you qualify to receive a supplemental pension in addition to your straight life benefit until age 62. First figure your straight life pension using the Straight Life / Regular formula, then add it to your supplemental pension calculation.

Your supplemental pension is calculated as follows: Multiply your FAC times 0.5 percent (0.005) times your covered years of service.

After you calculate your straight life pension, you can go on to figure your pension under any of the survivor options. Note, however, that the supplemental portion of your pension is for your lifetime only and cannot be transferred to a survivor.

An employee in a covered position who retires under the early reduced retirement plan cannot also receive the supplemental pension.  

Please also see Additional rules about the straight life option under Straight Life Option / Regular.

Straight Life Option / Conservation Officers

If you choose the straight life option, you receive the maximum monthly pension payable throughout your lifetime. No ongoing pension payments or insurance are provided to your survivors.

The annual straight life calculation for a conservation officer is 60 percent (0.6) of the 2-year FAC.

After you calculate your straight life pension, you can go on to figure your pension under any of the survivor options and the equated plans. Because conservation officers qualify under special eligibility rules, you cannot choose the early reduced retirement.

Please also see Additional rules about the straight life option under Straight Life Option / Regular.

Survivor Options

If you elect a survivor option when you apply for retirement, you receive a reduced pension throughout your lifetime; however, upon your death your pension and health insurance benefits continue for the lifetime of your survivor pension beneficiary. You can name your spouse, child (including your adopted child), grandchild, sibling, or parent as survivor pension beneficiary.

If you elect the 100 percent survivor option, upon your death your survivor will receive the same monthly benefit you received (before any tax, insurance premium, or other deductions). If you elect the 75 percent option, your survivor receives 75 percent of your benefit amount; with the 50 percent option your survivor will be paid 50 percent of your monthly pension payment.

The monthly pension amount for a survivor option is based on actuarial tables that factor in life expectancies for you and your beneficiary. The Estimate Pension feature in miAccount has the full actuarial table.

Note: The actuarial tables only provide estimates. Percentages are rounded and are subject to change.

Additional notes about the survivor options.

  • If you are married and name someone other than your spouse as your beneficiary or elect any option other than the 100 percent survivor option, your spouse must waive his or her right to your full pension by signing the form in the presence of a notary public.
  • You cannot change your option or your survivor pension beneficiary for any reason after your retirement effective date.  
  • If you elect one of the survivor options, but then your pension beneficiary dies before you, your pension payment will increase to the straight life amount (either full or early reduced). 
  • Upon your death, insurance benefits continue for your designated survivor pension beneficiary. Your eligible dependents who were covered at the time of your death will also continue to receive insurance benefits only if you have chosen the survivor option.
  • Your survivor option choice has no bearing on insurance coverage for your dependents. If they are eligible, they have full coverage (not 75 percent or 50 percent coverage). 
  • If you get divorced after your pension begins, and your spouse is your pension beneficiary, you can change your survivor option to the straight life option only if ordered by the court.
  • If you take the early reduced pension and also choose a survivor option, your early reduced pension is calculated first. This amount then becomes the basis for figuring your survivor option payment.
  • If you qualify for a supplemental pension as a covered employee and also choose a survivor option, the supplemental portion of your pension will end when you reach age 62.
Early Reduced

If you are at least age 55, active (still working, not deferred), with at least 15 but fewer than 30 years of service credit, you may take an early reduced retirement. Be sure to verify you meet all requirements detailed in Qualifying for Your Pension before you terminate employment. Check with ORS ahead of time if you're not certain.

Calculate your straight life pension, and then reduce it by one-half of one percent (0.005) for each month and fraction of a month you take your pension before age 60 (6 percent per year).

Additional notes about the early reduced option.

  • The reduction in your pension is permanent. Expect to receive the same amount throughout your lifetime, with the exception of postretirement increases.
  • Choosing the early reduced retirement has no effect on insurance eligibility, coverage, or premium subsidy. Insurance benefits are the same whether you take a full retirement or early reduced retirement.
  • Your 3 percent postretirement increases will be based on the dollar amount of the early reduced pension you receive.  
  • The early reduced pension calculation is performed before determining your pension amount under a survivor option or the equated plan.
Equated Plan

Important Information:

Think of the equated plan as if you are borrowing against your pension until age 65.

Your pension is reduced at age 65 regardless of when you actually begin receiving your social security and regardless of how much it actually is.

This plan pays you a higher pension until you are age 65, and then your monthly pension is permanently reduced. You might choose to receive the equated plan if you want your overall income to remain fairly even both before and after social security begins. 

So that your income (pension only) before age 65 is close to your combined income (pension and social security) after age 65, the increased pension before age 65 is based on a portion of your projected social security benefit. When you apply for your pension, you provide us with an estimate of your full social security benefit. To obtain your estimate, you'll need to request a statement from the Social Security Administration website, documenting your estimated full retirement age social security benefit. We will convert this full benefit amount to the age 65 amount.

Because calculating your "before and after" pension involves so many variables, it's not possible to provide tables and worksheets here. However, our online pension estimator will do it for you simply and quickly. Obtain your social security estimate as noted above, and plug in your numbers using the Estimate Pension option in miAccount.

The equated plan can be confusing. It is important to have a full understanding of it, because you can't change your mind after your retirement effective date. 

When to choose the equated plan.

CONSIDER the equated plan if:

  • You believe you would be financially ahead by investing the pension "advanced" to you before age 65.
  • You want to receive as much as you can as soon as you can because your life expectancy is uncertain.
  • You prefer having a relatively even income throughout your retirement.

DON'T choose the equated plan if:

  • You don't want your pension permanently reduced at age 65.
  • You like the idea of having more monthly income when social security begins.
  • You don't want the higher pre-65 income to put you in a higher tax bracket (remember that extra IRS exemptions kick in at age 65).
  • You expect to live longer than the life expectancy tables say, and you believe that the permanent reduction will end up costing you money. 

Note: An employee in a covered position who retires under the early reduced retirement plan cannot also receive the supplemental pension.

As you can see in the illustration below, under the equated plan your pension amount goes down at age 65. 

Equated example.

Additional notes on the equated plan.

  • Your pension is reduced at age 65 regardless of when you actually begin receiving your social security and regardless of how much it actually is. 
  • If you are age 65 or older, eligible for a disability retirement, or qualify for a supplemental pension as a covered employee responsible for prisoners, you can't choose the equated plan. 
  • The equated plan has no bearing on postretirement increases, so you'll get the standard increase (3 percent, not to exceed $25 per month) that is based on the initial pension amount calculated before the advance.
  • Your "full retirement age" for social security benefits is later than age 65 if you were born after 1937. We adjust for this when we calculate your equated plan pension. (We determine your age 65 social security amount based on the "full retirement age" social security estimate you provide.)
  • Your pension payment reduction under the equated plan takes effect the month after your 65th birthday.
Equated and Survivor Options

You can choose any of the survivor options and can still choose the equated plan. These are known as the 100% equated, 75% equated, and 50% equated plan options.

To calculate your equated survivor benefit, we start with your applicable (100, 75, or 50 percent) survivor benefit amount. We then use that figure and your social security estimate at age 65 to determine your pre-65 and post-65 equated amount. 

If you are interested in creating a combined equated and survivor option pension estimate, log into miAccount and select the Estimate Pension tab to get started. 

Additional notes about the equated survivor option.

  • If your beneficiary should die before you, your benefit will revert to a straight life equated plan.
  • Upon your death, your survivor will receive the standard survivor amount calculated under a 100, 75, or 50 percent survivor benefit, as if the equated plan had not been chosen.

 

 

  • Recommended Resources For Help In Estimating Your Pension

    Recommended resources for help in estimating your pension

    Benefit Estimator:
    This handy online calculator lets you key in your age, wage, and service information, and quickly estimates your future monthly pension. 

    Preretirement Orientation Seminars:
    If you're within three to five years of retirement you may wish to attend a preretirement seminar. Experienced ORS representatives will fully explain the plan and the process before fielding questions from the audience.