payroll: BRP: FY24 Beginning Budget - PERS Side Account Information

[BAO Payroll Office News]

Sent on behalf of Budget and Resource Planning:

Dear Budget Partners

In calendar year 2022 the state of Oregon made available to PERS employers a 25% match for establishing a PERS side account. Investing in the side account pre-pays some portion of the employers PERS liability and increases the system's overall funded status. After careful evaluation the University of Oregon elected to invest in a PERS side account as an investment from the internal bank recognizing that the 25% state match and anticipated investment returns would yield a substantial net savings to the university. This side account will be drawn down over 20 years and will reduce the institutions annual PERS payments on behalf of employees. This investment was made during early FY23 and savings of 2.11% on PERS Tier I/II and OPSRP rates are included in the FY24 blended OPE calculations.

The blended OPE rates for FY24 and beyond include savings from a PERS Side Account that the university established during FY23. In order to fund this investment a portion of the savings realized by units across campus must be used to repay the Internal Bank. The savings generated by the PERS Side Account is in excess of this repayment amount, creating a net savings for all units because of this investment. All fund groups will have a new OPE like charge applied to all non-Student/GE salary and wages except for grant funds, restricted gifts and plant funds. The new OPE charge will be less than the savings generated from the PERS Side Account creating a net benefit to all impacted units. This amount for FY24 is 1.28% of non-Student/GE payroll.

Each month a JV will be executed charging each index with pay activity 1.28% beginning in FY24. For budgeting purposes please include this additional OPE in your FY24 planning, on account code 10906.

If you have any questions please let us know. We will discuss this in more detail at the March 1, 2023 Budget Partners meeting at 2 pm.

Cheers
Stuart


Stuart Laing
Director, Budget and Resource Planning
5239 University of Oregon
Thompson University Center
720 E 13th Ave, Suite 306
Eugene, OR 97403-5239
541.346.5838 (voice)
slaing at uoregon.edu<mailto:slaing at uoregon.edu>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.uoregon.edu/pipermail/payroll/attachments/20230225/4c00121b/attachment.html>