Your personal contributions and employer contributions go into the reserve fund used to pay all monthly pensions,
but we keep a separate account of your personal contributions. We do this for a couple of reasons:
Taxability. Personal contributions you make on a tax-deferred basis will become taxable when you receive
pension payments. We need to be able to tell the IRS how much of your pension is taxable at retirement, and how much you've already paid taxes on.
Interest. Personal contributions earn interest, and different rates apply depending on the type and time of the contribution. Ordinarily, this will only be important if you terminate employment and take a refund of contributions.
Refunds. If you leave the retirement system before you're eligible for a pension, you can ask for a refund of your personal contributions, forfeiting all your rights to a monthly pension.
Because we keep detailed account balances and provide them to plan members, they often think that they'll get this amount over and above their calculated pension when they retire. This is not so. It is only when you leave the system before you're eligible for a pension that personal contributions could be refunded. For more details, see
Leaving School Employment
You earn interest on your personal contributions.
As your employer forwards your personal contributions to ORS, we credit your account. At the close of each school fiscal year, we also credit you with interest on
personal contributions on account for a full year. The interest rate on these contributions varies because it is statutorily determined each year based on the rate of investment return. To see a history of the interest rate MIP contributions have received, click here.
If you purchased service credit or have any post-tax contributions from years when the plan was contributory, we will keep track of those personal contributions separately. These funds earn 6 percent interest after they have been on account for a full year. As with MIP accounts, interest is posted at the end of each school fiscal year.