PREPARED BY - Oregon

PREPARED BY Department of Administrative Services

Chief Human Resources Office Classification & Compensation

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2020 Salary and Benefit Report | Summary

Summary Content

INTRODUCTION .................................................................................................................................................. 2 POLICY CHANGE ? PERS Employer Retirement Contribution.......................................................................... 2 REPORT METHODOLOGY ................................................................................................................................. 2

Labor Market ...................................................................................................................................................... 2 Matching Criteria ................................................................................................................................................ 3 Market Calculations ............................................................................................................................................ 3 Geographical Adjustments.................................................................................................................................. 3 Health Benefits.................................................................................................................................................... 4 Retirement Benefits ............................................................................................................................................ 4 Oregon Employees and Compensation Structures.............................................................................................. 4 Principal Executive/Manager Series ................................................................................................................... 4 Overall Report Summary .................................................................................................................................... 5 MARKET OVERVIEW ......................................................................................................................................... 5 State Market ........................................................................................................................................................ 5 County Market .................................................................................................................................................... 5 Other Public and Private Sector Employers (Purchased Market) ....................................................................... 7 KEY FINDINGS REGARDING EXECUTIVE BRANCH COMPENSATION................................................... 7 Overall Comparison by Base Salary and Salary Range Maximum .................................................................... 7 Comparison by Market Segment ........................................................................................................................ 8 2020 COMPENSATION BENFIT ANALYSIS SUMMARY............................................................................... 9 Health Benefits.................................................................................................................................................... 9 Medical Premiums ............................................................................................................................................ 10 Dental ................................................................................................................................................................ 11 Vision ................................................................................................................................................................ 12 Paid Time Off ................................................................................................................................................... 12 Optional Benefits .............................................................................................................................................. 14

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INTRODUCTION

2020 Salary and Benefit Report | Summary

The objectives of the 2020 State of Oregon Salary and Benefit Report for the Executive Branch are to:

? Provide the Governor with a snapshot of the Executive Branch's current competitive position in the labor market. ? Provide Executive Branch leadership with data to make compensation decisions and plan budgets. ? Provide collective bargaining teams and the employer with data for use in negotiations. ? Fulfill contractual obligations for specific market compensation studies.

The Executive Branch seeks to establish and maintain its status as a "market employer" whose employees earn, on average, between 95 and 105% of the compensation earned by similarly situated employees in comparable markets. Some of the job classifications that have a variance from the market are not necessarily misaligned. Factors such as performance, turnover, and longevity will impact actual salaries and may explain some of the differences between the State and market salaries for individual jobs.

The report covers approximately 360 Executive Branch job classifications populated by nearly 26,700 of the State's approximate 35,000 employees. The report does not include classifications exclusive to strike-prohibited bargaining units nor those in the Judicial Branch, Legislative Branch, Oregon Lottery, Oregon University System, or other public entities exempted by statute.

POLICY CHANGE ? PERS Employer Retirement Contribution

Effective February 1, 2019, compensation plan salary rates for Public Employees Retirement System (PERS) participating members increased by six and ninety-five one-hundredths percent (6.95%). As of that time, employees began to make their own six percent (6%) contributions to their PERS account or the Individual Account Program as applicable. Employees' contributions are treated as `pretax' contributions, pursuant to Internal Revenue Service Section 414(h)(2).

REPORT METHODOLOGY

It is the intent of the Department of Administrative Services (DAS) Chief Human Resources Office (CHRO) to use the best available data to compare the State's compensation costs with other employers in the labor market. This report compares state worker's compensation with that of other workers by measuring the employer's cost for providing salaries and common employee benefits. Adding the value of employee benefits to wages has a significant impact on the monthly total compensation costs for state employees. The report continues to use the report methodology as modified and outlined in the 2018 Salary and Benefit Report, with no additional modifications.

Labor Market The report uses relevant labor market data on salary and benefits to compare the State's compensation practices with three different employer groups:

Counties: ? Oregon's largest counties (representing the bulk of where the State's positions are located with the most comparable

work and reliable data): o Clackamas, Deschutes, Jackson, Lane, Marion, Multnomah, and Washington

? Washington state counties that are a significant source of applicants: o Clark, King, and Thurston

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2020 Salary and Benefit Report | Summary

States: ? Geographically neighboring and contiguous states:

o California, Idaho, Nevada, and Washington

Purchased: ? Public and private sector employers data purchased from commercially available salary and benefit sources:

o Milliman ? a large international independent actuarial and consulting firm o Willis Towers Watson ? a leading global advisory, broking, and solutions company o CompAnalyst ? provides on-demand compensation solutions as software-as-a-service

Data is collected effective as of July 1 of even-numbered calendar years. The purchased salary and benefit surveys provide data scoped to include only employers in the geographic areas of Oregon and/or the Pacific Northwest. A minimum of three separate data sources must be available for each market classification to meet the "sufficient" rule and be included in the report. Purchased survey information includes data from multiple organizations and therefore meet this requirement while appearing as only one data source.

Matching Criteria Comparison of job duties, responsibilities, reporting relationships, and education/experience requirements determine the matches between state classifications and market jobs.

The State's salary and benefit data is matched to market data sources for job classifications with similar duties, responsibilities, and requirements. Generally, the greater the number of market data sources found for each job classification, the truer the data reflects the current pay in the labor market. For some job classifications, there is insufficient amounts of market data available to either report a market figure or to base recommendations for adjusting salaries.

In accordance with standard compensation best practices, only those jobs that match at least 80% of the duties, responsibilities, and functions, as outlined in the benchmark job summary, are utilized.

Market Calculations This report reflects salary data in effect as of July 1, 2020. Comparisons for State jobs reflect with and without benefits included. The data analyzed contains three comparison points: ? Actual employee salaries ? Salary range minimum ? Salary range maximum

Market data is combined by calculating a weighted average, by the number of incumbents, for all data sources. Compa-ratio information illustrates how employees are paid in relation to the salary range midpoint of the market.

Geographical Adjustments Because wage and income levels differ across the nation and even within local labor markets, differentials that factor in economic variations are calculated and applied to data collected from employers outside Oregon. Geographic differentials were reviewed and updated to ensure the data is reflective of the State's labor market and economic conditions. Economic Research Institute (ERI) survey data was utilized to identify the appropriate geographic differences. The raw market salary data was geographically adjusted to reflect the State of Oregon labor market.

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2020 Salary and Benefit Report | Summary

Health Benefits Health insurance comparison rates are calculated using the employer's contribution rate for medical, dental, and vision benefits across four tiers (employee only, employee and spouse/partner, employee and children, and employee and family).

Social Security and Medicare cost earnings while employed with the state of Nevada are not covered under Social Security. In Nevada, the employer pays half of the Medicare tax (1.45% employer/1.45% employee).

Retirement Benefits The Oregon Public Employees Retirement System (PERS) serves the people of Oregon by administering public employee benefit trusts. The Oregon Legislature is the plan sponsor for the PERS system. The legislature determines the benefit structure for participating public employees. Those benefits have been modified over time, starting from the plan inception in 1945 with Tier 1, the creation of Tier 2 in 1996, and the Oregon Public Service Retirement Program (OPSRP) for employees that started work after August 28, 2003. The current employer pension contribution rate for PERS Tier 1 and 2 employees is 6.73% higher than it is for OPSRP employees.

Pension contribution rates compare employer contribution rates offered to new employees. Active members for both general service and police and fire rates are included. Neither the Oregon nor the market contribution rates include any additional administrative costs with no benefit to the employee such as, the cost of pension obligation bonds, side account offsets, or unfunded actuarial liability (UAL).

The State uses the third tier (OPSRP) to represent the retirement rates for state employees on this report, because the Executive Branch recruits and competes to retain employees at the OPSRP tier. The report compares the OSPRP rate to the retirement tier competitors offer to their new employees. Currently, 72% of Oregon's Executive Branch employees are OPSRP. An analysis of appointment and separation data from July 1, 2019, to June 30, 2020, was completed. During that time period, the State made 12,035 appointments; including both internal (promotion, transfer, etc.) and external appointments (new hires, re-employments, etc.). Of those appointments, 90% (10,872) were OPSRP employees. When looking at separations ? 73% of employees leaving State service were OPSRP (this data excludes retirements). This demonstrates that the State recruits and competes to retain employees at the OPSRP level. Tier 1/2 PERS benefits are no longer available to new employees, therefore, the State reflects the retirement plan at which it competes with other employers.

Oregon Employees and Compensation Structures Oregon data shows comparisons by union bargaining units, subtotaled by three groupings: ? Corrections (includes security and non-security representations at the Department of Corrections) ? Management (includes supervisory and non-supervisory management and executive service structures) ? Non-Corrections/Non-Management (includes all other unions and unrepresented structures)

An overall total for each state job classification is calculated for all representations. Compa-ratio information illustrates how employees are paid in relation to Oregon's salary range midpoint. Comparisons are calculated by dividing the Oregon employee data by the corresponding market data.

Principal Executive/Manager Series The majority of management positions throughout the Executive Branch are allocated within the Principal Executive/Manager (PE/M) classification series. The PE/M classification series ascends through 10 levels of management, A through J, with the J level being the highest. To establish benchmark job matches within each level of the PEM series, the State identifies positions consistently allocated to each PEM level, then matches to similar jobs

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