Portia Seely didn’t make the rules in Oregon’s Public Employees Retirement System. But like thousands of government workers who were on the job in Oregon decades ago, she hit the lottery when she started taking benefits last year.

Seely worked for just under 14 years as a government employee, with a high salary of $31,500 in 1985, state records show. But when she started receiving benefits on Dec. 1, her first monthly check was for $21,551, the equivalent of more than a quarter million dollars a year.

That’s 834% of her final average pay. She chose to receive her benefits under an annuity formula that provides a guaranteed payout over 15 years, so she or her beneficiary will be paid nearly $4.5 million between now and 2038.

Talk about golden years.

Seely, who went on to run a court reporting software company with her husband and now owns in a 9,200-square-foot waterfront home in Stuart, Florida, did not respond to requests for comment.

If all this sounds surprising, then perhaps you’ve never heard of PERS’ now infamous money match formula, a lucrative, market-based retirement calculation method that has been minting millionaires for decades. It’s a principal cause of PERS’ $30 billion deficit today, and why taxpayers are backstopping a system that, come July, will demand 27 cents in contributions from public employers for every dollar they spend on payroll.

State officials say the money match formula has been losing steam since 2003, when lawmakers made reforms to stanch the princely pensions and runaway liability growth it created. Public workers hired after August 2003 aren’t eligible. And benefits for most employees hired between January 1996 and August 2003 are typically more generous under a different retirement calculation that is based on final pay and years of service.

An analysis of nearly 6,000 retirees who started collecting benefits last year shows that only 13% were calculated under the money match formula. Their annual benefits from money match, on average, amounted to $32,632.

That represents real progress when you consider that in the year 2000, some 95% of career public employees were retiring under the money match, and, with the tailwind of a raging bull market that inflated their pensions, starting their golden years with benefits equal to 100% of their final pay.

Moreover, nearly 90% of the system’s 145,000 Tier One members, the cohort of employees hired before 1996 and most likely eligible for a big payout under the formula, have already retired. Benefits for Tier One employees are projected to peak in 2031 at close to $6 billion annually, then decline steadily to less than a third of that level over the following 25 years, according to Milliman Inc., the system’s actuary. That transition should eventually provide some relief to taxpayers and employers being sapped by high contribution rates today, though those rates are heavily dependent on the system’s investment returns, which have been poor of late.

But for now, the money match continues to crank out new whoppers for long-time employees retiring today or those who worked for government agencies years ago and are only now pulling the trigger on their benefits.

Jill Board, a former math teacher in the Springfield school district, started receiving the equivalent of $167,068 a year under money match, 344% of her final pay. She declined to comment.

The formula was also particularly kind to employees with relatively short stints in government who are now collecting benefits roughly equal to their salaries at the time, after adjusting for inflation.

Kaye Lawson, formerly an occupational therapist with the state hospital in Pendleton, is credited with seven years’ service and a high salary of $23,777 in 1984. Her benefit started at nearly $82,000 a year.

“That’s what you get when you leave it in there for 40 years,” she said of her retirement contributions.

Another worker spent four years as a public employee with final average pay of less than $16,000 in 1979. Her annual benefit is almost $72,000. And one spent just 37 months as a public employee with final average pay of $12,160 in 1979. She started collecting the equivalent of almost $44,000 a year in May.

The windfalls they and others saw from Oregon’s money match accumulated like this: Employee contributions – they were typically paid by their employers – were deposited in an account at PERS. Tier One employees were guaranteed a return on that money, typically 8%, and earned multiples of that in years when the system’s investment returns were strong. When they retired, their employer “matched” the balance in the account, then it was converted to an annuity based on actuarial life expectancies.

The guaranteed returns, plus the extra crediting in good years, was a win-win for employees, who saw their account balances mushroom through the 80s and 90s. Employers, meanwhile, never made contributions to cover the ballooning benefits that resulted, creating a deficit that spiked in years when investment performance was poor.

Most employees today will never see a comparable windfall. Lawmakers have since rejiggered the system to provide general service employees with benefits equal to 45% of their final salary after 30 years’ service.

Of the 5,947 individuals added to state’s public pension rolls in 2024, 87% were calculated under the system’s stingier full formula retirement method, based on final pay and years of service. In 2024, that formula yielded an average annual benefit of $31,352, or 38% of their final pay, after an average of 20 years’ service, the newsroom found. Contrast that with money match, which produced 71% of those retirees’ final pay after an average of only 14 years on the job.

The Oregonian/OregonLive has been receiving pension data and publishing it in an online database since 2012, after it reached a legal settlement with PERS to publicly release the records.

The median benefit for all 2024 retirees added to the database was $23,297. There were 176 retirees, 3% of the total, whose annual benefits exceed $100,000, and nearly 1,500, 25% of the total, whose benefits are less than $10,000 a year, the newsroom found.

The 2024 retiree with the largest benefit was Susan Tolle, who spent 42 years at Oregon Health & Science University, with a final average salary of $283,461. She retired in January 2024 as director of the university’s Center for Ethics in Health Care, with an annual benefit of nearly $324,312, also under the money match formula.

Tolle said it was a privilege to serve OHSU for more than four decades.

“I have always believed in the importance of giving back to the community in which we live and work,” she said in an email. “Now, thanks to my PERS retirement benefit, for which I’m extremely grateful, I am able to significantly increase my financial support of the vital work of the OHSU Center for Ethics in Health Care.”

A majority of the system’s top beneficiaries have been retired doctors or administrators at OHSU, and Tolle’s benefit, while large, only puts her at No. 17 on the overall list of 147,958 beneficiaries in the database who are actively collecting benefits. Joe Robertson, the former president of OHSU, is still the system’s top earner, with an annual benefit of $1,033,272.

As time goes on, fewer and fewer employees will be joining the top ranks of Oregon’s public pension beneficiaries. That’s because the Legislature has taken the rocket fuel out of the money match formula, while limiting the pensionable salaries that can be used in the full formula calculation.

But barring an astronomical runup in financial markets, defusing the financial time bomb that the money match lit and bringing the cost of Oregon’s public pension system back to Earth will be a decades-long demographic exercise.

According to Matt Larrabee, the system’s principal actuary at Milliman, the average life expectancy of a Tier One member retiring today is 88 or 89 years.

(http://www.autoadmit.com/thread.php?thread_id=5706964&forum_id=2#48824887)

Kaye Lawson, formerly an occupational therapist with the state hospital in Pendleton, is credited with seven years’ service and a high salary of $23,777 in 1984. Her benefit started at nearly $82,000 a year. “That’s what you get when you leave it in there for 40 years,” she said of her retirement contributions.

(http://www.autoadmit.com/thread.php?thread_id=5706964&forum_id=2#48824989)

Just do Boomer government employees making 100% of their pay for longer than their working years

(http://www.autoadmit.com/thread.php?thread_id=5706964&forum_id=2#48824993)

(http://www.autoadmit.com/thread.php?thread_id=5706964&forum_id=2#48825123)