PERS REPORT NO. 2 POLICY AND FISCAL IMPLICATIONS OF THE PROPOSED OPTIONS

Prepared for the
Committee on Public Employee
Retirement Systems

May 13, 1998

TABLE OF CONTENTS

1. Executive Summary
Introduction and Background
Costs and Benefits to Members
Costs of Plan Changes
Policy Considerations, Analysis of Change in Fiscal and Legal
Obligations to Participants
Decision Points

2. Analysis of Cost and Benefits to PERS Members
Benefit Illustrations for Selected Members
New Member
Mid-Career Member with Low Pay
Mid-Career Member with Average Pay
Member with Early Retirement Benefit
Member with Long Service and Retirement Eligible
Life Events
Termination
Disability
Death
Transfer
Conversion of Sick Leave Policy

3. Analysis of Cost and Benefits to Employers
Liabilities for Proposed Changes

4. Analysis of Policy and Fiscal Effects
Policy Effects and Issues
Fiscal Effects on Plan Administrators
Impact on Legal and Financial Obligations to Current PERS Members

5. CPERS Decision Points

Appendix

A Summary of Provisions under Retirement Option Plan
B Historical Rates of Return (1970 - 1990)
C Crediting Rates of Money Purchase Plan