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PERS director: Tier 5 rollout on schedule; employers to provide member contact and DC data to Empower Retirement
Summary
Director Greg Higgins told lawmakers that tier 5's hybrid design remains set for March 1 implementation, that Empower Retirement is the recommended DC third-party administrator, and that employers are being asked to collect member contact and tax information for implementation and cybersecurity purposes.
Greg Higgins, PERS director, told a Senate committee the tier 5 hybrid retirement plan enacted last year is on schedule and that PERS and the board are working through implementation tasks, including selecting a defined-contribution third-party administrator.
Higgins said the board recommended Empower Retirement as the DC provider and that, as part of implementation, employers are being asked to supply members' contact details, marital status and payroll tax information to support account setup, communication and cybersecurity requirements. "We recommended the board approved Empower Retirement as a third party administrator," Higgins said.
Committee members asked why employers and staff are collecting additional contact information. Higgins said those steps are necessary for "good business reasons" including communication, cybersecurity and taxation implications tied to the DC portion of the hybrid plan, and that PERS staff are working with employers to collect the required data.
Senator England pressed whether PERS had analyzed an alternate plan proposed by MRPEA; Higgins replied the board had reviewed earlier alternatives, observed some had similar projected funded ratios at certain points in time but different risk profiles, and ultimately did not endorse the pure-DB alternative the MRPEA discussed.
Higgins reiterated that many implementation details are set by statute and board regulations but that the state (as plan sponsor) controls plan design. He asked employers to help communicate to members what the implementation steps mean and noted PERS will provide more outreach materials.
The committee requested PERS provide clearer public messaging about which elements are statutory mandates and which are implementation steps so constituents can distinguish legislative choices from administrative actions. The hearing closed after a procedural motion to rise and report.
