This PERS Update explains the new Individual Account Program and changes to
      the variable account as of January 1, 2004. It also includes information
         about the variable earnings for 2003 and the process for requesting a
         One-Time Variable Transfer. This email was sent only to Tier One PERS
         members.
         Individual Account Program
         Effective January 1, 2004, the six percent employee contribution (paid by
         the UO) will be paid into your new Individual Account Program (IAP), instead
         of your current PERS regular account and variable account (if you have one.)
         The IAP will be invested by the Oregon Investment Council. At retirement,
         in addition to your PERS retirement benefit, you can also take your IAP as a
         lump sum amount or have it paid to you over 5, 10, 15 or 20 years.
         Because the six percent employee contribution will no longer be paid into
         your current PERS account after January 1, 2004, you will not be able to
         invest any future employee contributions in your variable account. However,
         any money you currently have in your variable account will remain in the
         variable account and continue to earn at the variable rate.
         Variable Account Earnings
         As of the end of October, the variable account earned 27.13%. You can
         review the variable earnings on the PERS web site at:
         http://www.pers.state.or.us/Numbers/CurrentEarnings/vedf.html
         Until the deficit is erased, the only way Tier One PERS accounts can
         increase in value is if you have money in the variable account and you leave
         your money in the variable account. Remember, regular account earnings will
         not be added to your current Tier One PERS account as long as there is a
         deficit. PERS expects the deficit to last around three years. However, if
         the market rebounds, the deficit may be erased in less time.
         One-Time Variable Transfer
         If you are eligible and decide you want to transfer your variable account
         back to your regular PERS account, you can request a One-Time Variable
         Transfer. According to PERS, the statue now allows a Tier One member to
         transfer out of the variable account into the regular account at any time
         prior to retirement if age and eligibility requirements are met
         (requirements are shown below.) Previously, an earnings test was also
         applied to determine if the transfer could be made. This test no longer
         applies. The transfer request is effective January 1 following the year in
         which PERS receives your request. The One-Time Variable Transfer will
         continue to be available to PERS members.
         When the One-Time Variable Transfer occurs, PERS will calculate what the
         member's account balance would have been if the member's variable
         contributions and interest had been in the regular account for the same time
         period. If a negative result is found, the member's monthly retirement
         allowance will be decreased by the actuarial value of the difference at
         retirement. This applies to Full Formula retirement calculations but not to
         Formula Plus Annuity and Money Match.
         Age and eligibility requirements for the One-Time Variable Transfer:
         General service members (UO employees) must have attained age 50 or must
         have completed 25 or more years of PERS-creditable service to be eligible
         for the one-time transfer.
         You can find the One-Time Variable Transfer form on the PERS web site at:
         http://www.pers.state.or.us/CSC_Online/CSC_PDF_forms/354W_Variable_Election.
         pdf
         PERS asks that you mail your forms directly to: PERS, P.O. Box 23700,
         Tigard, OR 97281-3700. Your election is effective January 1, 2004, if PERS
         receives the form (must be physically received) by December 31, 2003. Any
         elections received on or after January 1, 2004, will not be effective until
         January 1, 2005. Keep in mind mail is slower during the holidays so it is
         best if you mail your form no later than December 18. You may also fax your
         form to PERS in Tigard at 1-503-598-0561. Please make sure your fax
         transmission is completed.