| Struck and Eugene - Tier One |
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What do the Strunk/Eugene cases mean for me?
For Tier One members, Strunk requires PERS to annually credit at least the assumed earnings rate (currently 8 percent) to member regular accounts. Account balance adjustments have been made for 2003 and 2004 to reflect the 8 percent earnings crediting that had not been previously credited due to PERS Reform legislation.
Strunkalso upheld the use of regularly updated actuarial factors (effective July 1, 2003) and the redirection of Tier One and Tier Two member contributions from regular and variable accounts into the Individual Account Program (IAP), effective for contributions made on or after January 1, 2004.
The Eugene case required that accounts had to be adjusted for every Tier One member with a regular account that received earnings crediting for 1999. The Eugene case required PERS to reallocate 1999 regular account earnings crediting at 11.33 percent (20 percent was originally credited). Tier Two members and Variable accounts were not affected.
PERS adjusted the 1999 earnings crediting from 20 percent to 11.33 percent for Tier One member regular accounts and provided 8 percent earnings crediting for 2003 and 2004.
Member annual statements for 2004 showed the recalculated regular account balance (including all Strunk and Eugene adjustments). These statements were mailed to Tier One members in January 2006.
Tier One 2005 member annual statements, including 8 percent earnings crediting for 2005, are scheduled for mid-2006.
The example below shows the affect of Strunk/Eugene on a Tier One member’s regular account and uses the following:
1. Beginning account balance of $75,000 as of 12-31-1998
2. Beginning salary of $50,000 annually as of 1999
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Pre-Strunk/Eugene |
Post-Strunk/Eugene |
| Year |
Salary (2%/Year Increase) ($) |
6% Member Contribution ($) |
Pre-Earnings Crediting Balance ($) |
Earnings Crediting Rate (%) |
Ending Account Balance ($) |
Pre-Earnings Crediting Balance ($) |
Earnings Crediting Rate (%) |
Ending Account Balance ($) |
| 1998 |
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75,000 |
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75,000 |
| 1999 |
50,000 |
3,000 |
78,000 |
20.00 |
93,600 |
78,000 |
11.33 |
86,837 |
| 2000 |
51,000 |
3,060 |
96,660 |
8.00 |
104,393 |
89,897 |
8.00 |
97,089 |
| 2001 |
52,020 |
3,121 |
107,514 |
8.00 |
116,115 |
100,210 |
8.00 |
108,227 |
| 2002 |
53,060 |
3,184 |
119,299 |
8.00 |
128,843 |
111,411 |
8.00 |
120,324 |
| 2003 |
54,122 |
3,247 |
132,090 |
0.00 |
132,090 |
123,571 |
8.00 |
133,457 |
| 2004 |
55,204 |
0 |
132,090 |
8.00 |
142,657 |
133,457 |
8.00 |
144,133 |
What is Strunk/Eugene?
Strunk/City of Eugene implementation memo
Strunk Supreme Court Decision
Eugene Supreme Court Decision
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