71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1520
B-Engrossed
Senate Bill 134
Ordered by the Senate June 11
Including Senate Amendments dated May 3 and June 11
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Joint Interim Judiciary
Committee)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Establishes principles for management of Public Employees
Retirement Fund. Specifies uses for certain reserve accounts in
fund. Specifies manner in which reserves are funded.
Changes composition of Public Employees Retirement Board.
Allows certain members of Public Employees Retirement System to
withdraw member account in system and matching amount contributed
by employer. Terminates all rights of member upon payment of
withdrawn amounts except as specified.
Allows certain participating public employers to elect to be
grouped with state for purposes of computing employer
contribution. Requires investment of public employer funds in
Variable Annuity Account. Provides that amount of investment be
equal to moneys invested on behalf of employees. Requires
crediting of earnings on Public Employees Retirement Fund to
public employer at same time that earnings are credited to
employee's account. Allows local governments to issue bonds for
purpose of paying public employer's pension liability.
Makes miscellaneous changes to laws governing Public Employees
Retirement System. Provides consistent definitions. Eliminates
obsolete provisions.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
amending ORS 237.410, 237.620, 238.005, 238.015, 238.035,
238.055, 238.068, 238.072, 238.078, 238.092, 238.095, 238.105,
238.115, 238.125, 238.135, 238.145, 238.156, 238.200, 238.205,
238.220, 238.225, 238.250, 238.255, 238.260, 238.265, 238.270,
238.280, 238.300, 238.305, 238.310, 238.315, 238.320, 238.325,
238.340, 238.360, 238.365, 238.375, 238.380, 238.385, 238.390,
238.395, 238.415, 238.420, 238.425, 238.465, 238.515, 238.545,
238.565, 238.575, 238.580, 238.585, 238.640, 238.660, 238.665,
238.670, 238.675, 238.685, 243.800 and 526.052 and section 10,
chapter 569, Oregon Laws 1995, section 2, chapter 575, Oregon
Laws 1995, and section 3, chapter 180, Oregon Laws 1997;
repealing ORS 238.150, 238.230 and 238.370; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
{ +
MANAGEMENT OF PUBLIC EMPLOYEES RETIREMENT FUND + }
SECTION 1. { + Section 2 of this 2001 Act is added to and made
a part of ORS chapter 238. + }
SECTION 2. { + The Legislative Assembly finds that the
maintenance of a solid, affordable public employees retirement
plan is essential to providing effective, efficient services to
the citizens of Oregon by allowing the state and political
subdivisions of the state to hire and retain employees who are
committed to providing those services. It is the intent of the
Legislative Assembly that the Public Employees Retirement Board,
in performing its duties as trustee of the Public Employees
Retirement Fund, recognize that the continued stability and
viability of the Public Employees Retirement System depends on
the ability of public employers and taxpayers to pay the costs of
the system. Consistent with this intent, the board shall
administer the system to create and maintain long-term stability
and viability in the system, and shall act to achieve full
funding for the benefits provided by the system, giving equal
consideration to the interests of the public employer and the
employee to the extent that treatment does not violate the
fiduciary duties of the board. + }
SECTION 3. ORS 238.660 is amended to read:
238.660. (1) The Public Employees Retirement Fund is declared
to be a trust fund, separate and distinct from the General Fund,
for the uses and purposes set forth in this chapter and ORS
237.950 to 237.980, and for no other use or purpose, except that
this provision shall not be deemed to amend or impair the force
or effect of any law of this state specifically authorizing the
investment of moneys from the fund. Interest earned by the fund
shall be credited to the fund. Except as otherwise specifically
provided by law, the Public Employees Retirement Board
established by ORS 238.630 is declared to be the trustee of the
fund. { + Consistent with the legislative intent expressed in
section 2 of this 2001 Act, and to the extent it is consistent
with the board's fiduciary duties, the board shall give equal
consideration to the interests of participating public employers
and the interests of members. + }
(2) Until all liabilities to members and their beneficiaries
are satisfied, assets of the fund may not be diverted or
otherwise put to any use that is not for the exclusive benefit of
members and their beneficiaries. This subsection does not limit
return of employer contributions for health benefits in the
manner provided by ORS 238.410, 238.415 and 238.420 upon
satisfaction of all liabilities for health benefits under those
sections.
(3) The State of Oregon and other public employers that make
contributions to the fund have no proprietary interest in the
fund or in the contributions made to the fund by them. The state
and other public employers disclaim any right to reclaim those
contributions and waive any right of reclamation they may have in
the fund. This subsection does not prohibit alteration or refund
of employer contributions if the alteration or refund is
authorized under this chapter and is due to erroneous payment or
decreased liability for employer contributions under the system.
(4) The board may accept gifts of money or other property from
any source, given for the uses and purposes of the system. Money
so received shall be paid into the fund. Money or other property
so received shall be used for the purposes for which received.
Unless otherwise prescribed by the source from which the money or
other property is received, the money shall be considered as
income of the fund and the other property shall be retained,
managed and disposed of as are investments of the fund.
(5) All moneys paid into the fund shall be deposited with the
State Treasurer, who shall be custodian of the fund and pay all
warrants drawn on it in compliance with law. No such warrant
shall be paid until the claim for which it is drawn is first
approved by the director or designee and otherwise audited and
verified as required by law. Monthly, each beneficiary's gross
benefit shall be calculated; applicable deductions made for
taxes, insurance and other withholdings; and the net amount paid
to the beneficiary, by check or by electronic funds transfer
(EFT) to the beneficiary's bank. A deduction summary shall be
made, by type, and a check issued for the aggregate of each type
for transmittal to the appropriate taxing jurisdiction, vendor or
institution. A voucher shall be prepared and transmitted to the
Oregon Department of Administrative Services for reimbursement of
the checking account, and the department shall draw a warrant on
the State Treasurer, payable to the Public Employees Retirement
System, for the amount thereof.
(6) Any warrant, check or order for the payment of benefits or
refunds under the system out of the fund issued by the board
which is canceled, declared void or otherwise made unpayable
pursuant to law because it is outstanding and unpaid for a period
of more than two years, may be reissued by the board without bond
if the payee is located after such warrant, check or order is
canceled, declared void or otherwise made unpayable pursuant to
law.
(7) All references in this chapter to checks or warrants are
subject to the provisions of ORS 291.001 (1).
(8) The board shall provide for an annual audit of the
retirement fund and for an annual report to the Legislative
Assembly and to all members of, retirees of, and all employers
participating in, the system. The annual report must contain
financial statements prepared in accordance with generally
accepted accounting principles. The financial statements must
include the report of any independent auditor.
{ +
FUNDING OF RESERVES + }
SECTION 4. ORS 238.255 is amended to read:
238.255. { - (1) As used in this section, 'individual account
' means the individual account for each active and inactive
member of the system in the Public Employees Retirement Fund
provided for under ORS 238.250, but not the individual account of
the employee in the Variable Annuity Account established by ORS
238.260. - }
{ - (2) - } The { - individual - } { + regular + }
account for an active or inactive member of the system shall be
examined each year. If the
{ - individual - } { + regular + } account is credited with
earnings for the previous year in an amount less than the
earnings that would have been credited pursuant to the assumed
interest rate for that year determined by the board, the amount
of the difference shall be credited to the { - individual - }
{ + regular + } account and charged to a reserve account in the
fund established for the purpose. A reserve account so
established may not be maintained on a { - deficiency - }
{ + deficit + } basis for a period of more than five years.
Earnings in excess of the assumed interest rate for years
following the year for which a charge is made to the reserve
account shall first be applied to reduce or eliminate the amount
of a { - deficiency - } { + deficit + }. { + The Public
Employees Retirement Board shall attempt to ensure that the
reserve account is funded with amounts adequate to leave a
positive balance in the account when all members who established
membership in the system before January 1, 1996, as described in
ORS 238.430, have retired. + }
SECTION 5. ORS 238.670 is amended to read:
238.670. (1) At the close of each calendar year { + in which
the earnings on the Public Employees Retirement Fund equal or
exceed the assumed interest rate established by the Public
Employees Retirement Board under ORS 238.255 + }, the board shall
set aside, out of interest and other income received through
investment of the Public Employees Retirement Fund during
{ - the - } { + that + } calendar year,
{ - such part of the income as the board may deem advisable,
not exceeding - } { + at least five percent but not more
than + } seven and one-half percent of the combined total of such
income, which moneys so segregated shall remain in the fund and
constitute therein a reserve account. { + The board shall
continue to credit the reserve account in the manner required by
this subsection until the board determines that the reserve
account is adequately funded for the purposes specified in this
subsection. + } Such reserve account shall be maintained and used
by the board to prevent any deficit of moneys available for the
payment of retirement allowances, due to interest fluctuations,
changes in mortality rate or, except as provided in subsection
(3) or (4) of this section, other unforeseen contingency. { + In
addition, the reserve account may be used by the board to:
(a) Prevent any deficit in the fund by reason of the insolvency
of a participating public employer;
(b) Pay any legal expenses or judgments that do not arise in
the ordinary course of adjudicating an individual member's
benefits or an individual employer's liabilities; and
(c) Provide for any other contingency that the board may
determine to be appropriate. + }
(2) At the close of each calendar year, the board shall set
aside, out of interest and other income received during the
calendar year, after deducting the amounts provided by law and to
the extent that such income is available, a sufficient amount to
credit to the reserves for pension accounts and annuities varying
percentage amounts adopted by the board as a result of periodic
actuarial investigations. If total income available for
distribution exceeds those percentages of the total accumulated
contributions of employees and employers, the reserves for
pensions and annuities shall participate in such excess.
(3) The board may set aside, out of interest and other income
received through investment of the fund, such part of the income
as the board considers necessary, which moneys so segregated
shall remain in the fund and constitute one or more reserve
accounts. Such reserve accounts shall be maintained and used by
the board to offset gains and losses of invested capital. The
board, from time to time, may cause to be transferred from the
reserve account provided for in subsection (1) of this section to
a reserve account provided for in this subsection such amount as
the board determines to be unnecessary for the purposes set forth
in subsection (1) of this section and to be necessary for the
purposes set forth in this subsection.
(4) The board may provide for amortizing gains and losses of
invested capital in such instances as the board determines that
amortization is preferable to a reserve account provided for in
subsection (3) of this section.
(5) At least 30 days before crediting any interest and other
income received through investment of the Public Employees
Retirement Fund to any reserve account in the fund, the board
shall submit a preliminary proposal for crediting to the
appropriate legislative review agency, as defined in ORS 291.371
(1), for its review and comment.
{ +
MEMBERSHIP OF PUBLIC EMPLOYEES RETIREMENT BOARD + }
SECTION 6. ORS 238.640 is amended to read:
238.640. (1) Members of the Public Employees Retirement Board
shall have the following qualifications:
(a) Each member shall be a citizen of the United States and a
resident of this state for at least two years immediately
preceding appointment to the board.
(b) { - Three - } { + Six + } public members shall not
{ - have been employed by a public employer during the two years
immediately preceding appointment to the board or be so employed
throughout the term of appointment and may not be retired members
of the system - } { + be members of the Public Employees
Retirement System. At least three of the public members must have
experience in investing or pension management + }.
(c) Two members shall be employees of a participating public
employer in a management position at the time of appointment and
throughout the term of appointment. At the time of appointment
and throughout the term of appointment, one of the two members
appointed under this paragraph shall be employed by a school
district and one shall be employed by the state.
(d) At the time of appointment and throughout the term of the
appointment, { - two members - } { + one member + } shall
hold an elective office, by election or appointment, in the
governing body of { - two different - } { + a + }
participating public { - employers - } { + employer + },
other than { + a + } school { - districts - }
{ + district + } or the state.
(e) { - Four - } { + Two + } members shall be public
employees, as defined in ORS 243.650, of a participating public
employer and be in an appropriate bargaining unit, as defined in
ORS 243.650, having an exclusive representative at the time of
appointment and throughout the term of appointment; but
membership on the board shall not itself affect the status of
such a member as a public employee as defined in ORS 243.650.
{ - At the time of appointment and throughout the term of
appointment, one of those four members shall be engaged in
teaching or other school activity, one shall be a police officer
or firefighter, one shall be an employee of the state in a
category other than teaching or other school activity or police
officer or firefighter, and one shall be an employee of a
political subdivision of the state in a category other than
teaching or other school activity or police officer or
firefighter. - }
(f) In lieu of one member appointed with the qualifications
specified in paragraph (c), (d) or (e) of this subsection, one
member shall be a retired member of the system at the time of
appointment and throughout the term of the appointment.
(g) The successor of a board member in any category shall have
the qualifications prescribed for that category.
(2) Any vacancy on the board shall be filled by appointment for
the unexpired term of the member replaced.
(3) Except as provided in subsection (4) of this section, a
member of the board is entitled to compensation and expenses as
provided in ORS 292.495 from the Public Employees Retirement
Fund.
(4) Any member of the board who is an active member of the
system shall be released by the participating public employer who
employs the member for the purpose of conducting the official
business of the board. The wages or salary of the member shall
not be reduced during periods that the member is released from
duty for the purpose of conducting the official business of the
board. The board shall reimburse a public employer for the cost
of continuing the wages or salary of the member while the member
is released from duty under this subsection. A member who
continues to receive wages or salary under the provisions of this
subsection shall not receive compensation under ORS 292.495, but
shall receive travel and other expenses provided for under ORS
292.495. The provisions of this subsection do not apply to any
person who is a member of the board and who holds another office
that is subject to the provisions of section 10, Article II of
the Oregon Constitution prohibiting the holding of more than one
lucrative office.
SECTION 7. { + The amendments to ORS 238.640 by section 6 of
this 2001 Act do not affect the term of any member serving on the
Public Employees Retirement Board on the effective date of this
2001 Act. Upon the next vacancy in a position of a member serving
on the board under ORS 238.640 (1)(d) (1999 Edition) after the
effective date of this 2001 Act, whether the position becomes
vacant by reason of completion of the term or for any other
reason, the Governor shall appoint a person meeting the
requirements of ORS 238.640 (1)(b) to fill the position. Upon the
next two vacancies in positions of members serving on the board
under ORS 238.640 (1)(e) (1999 Edition) after the effective date
of this 2001 Act, whether the positions become vacant by reason
of completion of the term or for any other reason, the Governor
shall appoint persons meeting the requirements of ORS 238.640
(1)(b) to fill the positions. + }
{ +
LUMP SUM WITHDRAWAL OF EMPLOYEE ACCOUNT + }
{ +
AND MATCHING EMPLOYER AMOUNT + }
SECTION 8. ORS 238.305, as amended by section 68 of this 2001
Act, is amended to read:
238.305. (1) Not later than 60 days after { - the date - }
the first benefit payment is { - issued - } { + made + } to a
retired member of the system, the member may elect to convert the
allowance described by ORS 238.300 as payable after retirement
into a service retirement annuity of equivalent actuarial value
of one of the optional forms named below. The election of Option
2, 2A, 3 or 3A shall be effective immediately upon the member's
retirement.
Option 1. (a) A life annuity (nonrefund) payable during the
member's life only, which shall be the actuarial equivalent of
accumulated contributions by the member and interest thereon
credited at the time of retirement (if death occurs before the
first payment is due, the member account shall be treated as
though death had occurred before retirement); (b) a life pension
(nonrefund) provided by the contributions of employers as
provided in ORS 238.300 (2); (c) an additional nonrefund pension
for prior service credit, including military service, credited to
the member at the time of first becoming a member of the system,
as elsewhere provided in this chapter, which pension shall be
provided by the contributions of the employer; or
Option 2. A reduced service retirement allowance payable during
the member's life, with the provision that it continue after
death for the life of the beneficiary the member nominates by
written designation duly acknowledged and filed with the Public
Employees Retirement Board at the time of election, should the
beneficiary survive the member; or
Option 2A. A reduced service retirement allowance payable
during the member's life which, unless modified under subsection
{ - (5) - } { + (6) + } of this section, continues after
death for the life of the beneficiary the member nominates by
written designation duly acknowledged and filed with the board at
the time of election, should the beneficiary survive the member;
or
Option 3. A reduced service retirement allowance payable during
the member's life, with the provision that it continue after
death at one-half the rate paid to the member and be paid for the
life of the beneficiary the member nominates by written
designation duly acknowledged and filed with the board at the
time of election, should the beneficiary survive the member; or
Option 3A. A reduced service retirement allowance payable
during the member's life which, unless modified under subsection
{ - (5) - } { + (6) + } of this section, continues after
death at one-half the rate paid to the member and is paid for the
life of the beneficiary the member nominates by written
designation duly acknowledged and filed with the board at the
time of election, should the beneficiary survive the member; or
Option 4. A reduced service retirement allowance payable during
the member's life, with the provisions that if the member dies
before a total of 180 monthly payments is made, the remainder of
the 180 monthly payments shall be paid monthly to the beneficiary
the member nominates by written designation duly acknowledged and
filed with the board at any time before the member's death; and
that if the member designates no beneficiary to receive the
monthly payments or no such beneficiary is able to receive the
monthly payments, an amount equal to the actuarial value, on the
date of the member's death, of the total of the monthly payments
not made to the member shall be paid according to ORS 238.390 for
disposal of an amount credited to the member account of a member
at the time of death; and that if the beneficiary receiving
monthly payments dies before the total number of monthly payments
to which the beneficiary is entitled is made, an amount equal to
the actuarial value, on the date of the beneficiary's death, of
the total of the monthly payments not made to the member and
beneficiary shall be paid according to ORS 238.390 for disposal
of an amount credited to the member account of a member at the
time of death and as if the beneficiary had been a member.
(2) Not later than 60 days after the { - date the - } first
benefit payment is { - issued - } { + made + } to a retired
member of the system, the member may elect, in lieu of the
allowance described by ORS 238.300 as payable after retirement, a
service retirement benefit consisting of:
(a) A refund of accumulated contributions by the member and
interest thereon credited at the time of refund; and
(b) A life pension (nonrefund) provided by the contributions of
employers as provided in ORS 237.147 (2) (1979 Replacement Part),
and an additional life pension (nonrefund) for prior service
credit as provided in ORS 238.300 (3). At the same time as making
the election under this subsection, the member may elect to
convert the pensions described by this paragraph into a service
retirement annuity of equivalent actuarial value of one of the
optional forms named as Option 2, 2A, 3 or 3A under subsection
(1) of this section.
{ + (3) Not later than 60 days after the first benefit
payment is made to a retired member of the system, the member may
elect in lieu of the allowance described by ORS 238.300 a refund
service retirement benefit consisting of:
(a) A refund of accumulated contributions by the member and
interest thereon credited at the time of retirement;
(b) An amount that matches the amount of accumulated
contributions by the member and interest thereon, provided by the
contributions of employers; and
(c) Interest on the amounts described in paragraphs (a) and (b)
of this subsection from the effective date of retirement until
the amounts are paid. + }
{ - (3) - } { + (4)(a) + } If the member elects to receive
the service retirement benefit described in subsection (2)
{ + or (3) + } of this section, the member shall elect at the
same time to receive the refund described in subsection (2)(a)
{ + or (3) + } of this section in one lump sum payment or in
more than one but not more than five installment payments. If the
member elects installment payments:
{ + (A) The amount to be paid by employer contributions under
subsection (3)(b) of this section shall be transferred to the
individual account of the member in the Public Employees
Retirement Fund as of the effective date of retirement. + }
{ - (a) - } { + (B) + } The installment payments shall be
paid once each year for the number of consecutive years equal to
the number of installment payments elected.
{ - (b) - } { + (C) + } The amount of each installment
payment shall be designated by the member at the time of making
the election, but the last installment payment shall be the
unrefunded balance remaining in the member account of the member
in the { - Public Employees Retirement - } fund.
{ - (c) - } { + (D) + } The member account of the member in
the fund shall be maintained until the last installment payment
is paid. The board shall establish procedures for computing and
crediting interest annually on the unrefunded balance of the
member account.
{ - (d) - } { + (E) + } A yearly installment payment shall
be paid on the anniversary of the date of the first installment
payment.
{ - (e) - } { + (F) + } The member is considered to have
elected to transfer any balance in the variable account of the
member to the regular account of the member.
{ - (f) - } { + (G) + } If the member dies before payment
of all installment payments, the unrefunded balance in the member
account of the member plus interest to date of disbursement is
payable as provided in ORS 238.390 (5).
{ + (b) If a member elects to receive the refund service
retirement benefit described in subsection (3) of this section,
and does not elect to receive those amounts in installments under
the provisions of this subsection, all rights of the member in
the system shall terminate upon the payment of the amounts
provided for in subsection (3) of this section, except as
provided in paragraph (c) of this subsection. If a member elects
to receive the refund service retirement benefit described in
subsection (3) of this section, and also elects to receive those
amounts in installments under the provisions of this subsection,
all rights of the member in the system shall terminate upon the
making of the first payment, except as provided in paragraph (c)
of this subsection.
(c) A member who elects to receive the refund service
retirement benefit described in subsection (3) of this section,
and any eligible spouse or dependent of the member, shall
continue to be eligible for insurance under ORS 238.410, and for
any premium payments the member may be entitled to under ORS
238.415 and 238.420. + }
{ - (4) - } { + (5) + } The designation of a beneficiary,
the election of an option or any other election or designation
under subsection (1), (2) { + , + } { - or - } (3) { + or
(4) + } of this section may be changed by the member within 60
days after the date of the first benefit payment, except that the
designation of a beneficiary under Option 4 may be changed by the
member at any time before the member's death.
{ - (5) - } { + (6) + } If a retired member has elected to
receive a service retirement allowance under Option 2A or Option
3A as provided in subsection (1) of this section, and if the
beneficiary under that option dies after the expiration of the
time within which the member could change the election of an
option or if the beneficiary is the spouse of the member and the
marriage relationship is terminated as provided by law after the
expiration of the time within which the member could change the
election of an option, the member may elect to receive, in lieu
of the optional form of allowance previously elected, the
allowance that the member would have received on the effective
date of retirement under Option 1 as provided in subsection (1)
of this section and adjusted by the actual amount of any cost of
living or other post-retirement adjustments made to the original
allowance since the effective date of retirement. Notice of
election under this subsection shall be in a form approved by the
board. Payment under Option 1 shall be effective for months
beginning on or after the date the board receives the election.
{ - (6) - } { + (7) + } Notwithstanding any other provision
of this section, any member of the system who retired before
October 3, 1989, and elected to receive a service retirement
allowance under either Option 2 or 3 as provided in subsection
(1) of this section shall be entitled to receive a service
retirement allowance equal to that which the member would have
received on the effective date of retirement under Option 1 as
provided in subsection (1) of this section and adjusted by the
actual amount of any cost of living or other post-retirement
adjustments made to the original allowance since the effective
date of retirement if:
(a) The member has attained 80 years of age;
(b) The person designated by the member as the member's
beneficiary has predeceased the member; and
(c) The member gives written notice to the board of the death
of the member's beneficiary.
{ - (7) - } { + (8) + } Notwithstanding any other provision
of this section, any member of the system who retired before
October 3, 1989, who elected to receive a refund of accumulated
employee contributions and a life pension or pensions under
subsection (2) of this section, and who elected to convert the
life pension or pensions provided for in subsection (2) of this
section into a service retirement annuity under Option 2 or 3
under subsection (1) of this section, shall be entitled to
receive a life pension or pensions equal to that which the member
would have received on the effective date of retirement under
subsection (2) of this section and adjusted by the actual amount
of any cost of living or other post-retirement adjustments made
to the original life pension or pensions since the effective date
of retirement if:
(a) The member has attained 80 years of age;
(b) The person designated by the member as the member's
beneficiary has predeceased the member; and
(c) The member gives written notice to the board of the death
of the member's beneficiary.
{ - (8) - } { + (9) + } The service retirement allowance
provided in subsection { - (6) or (7) - } { + (7) or (8) + }
of this section shall be applicable to the first full month after
the death of the member's beneficiary, or the first full month
after the member attains 80 years of age, whichever is later.
{ - (9) - } { + (10) + } The board may deny an election to
convert a service retirement allowance under this section, a
change of beneficiary under this section or a change in benefit
options under this section if that denial is required to maintain
the status of the system and the Public Employees Retirement Fund
as a qualified governmental retirement plan and trust under the
Internal Revenue Code and under regulations adopted pursuant to
the Internal Revenue Code.
SECTION 9. Section 3, chapter 180, Oregon Laws 1997, is amended
to read:
{ + Sec. 3. + } (1) If on { - the effective date of this
1997 Act - } { + October 4, 1997, + } a retired member is
eligible for the service retirement allowance provided by ORS
238.305 { - (6) or - } (7) { + or (8) + } { - , as amended
by section 1 of this 1997 Act, - } but was not eligible under
ORS 238.305 (1995 Edition):
(a) The member may give written notice of the member's
eligibility to the Public Employees Retirement Board at any time
after { - the effective date of this 1997 Act - } { + October
4, 1997 + }; and
(b) The service retirement allowance of the retired member
under ORS 238.305 { - (6) or - } (7) { + or (8) + } { - ,
as amended by section 1 of this 1997 Act, - } is first
applicable to the first full month after the death of the
member's beneficiary, or the first full month after the member
attained 80 years of age, whichever is later.
(2) As soon as possible after { - the effective date of this
1997 Act - } { + October 4, 1997 + }, the board shall calculate
and mail a check for the amount of any retroactive payment
required under subsection (1) of this section. The retroactive
payment shall represent the difference between the total of all
monthly amounts paid to the member before the first recalculated
monthly payment is made under subsection (1) of this section, and
the total of all monthly amounts that would have been paid to the
member if ORS 238.305, as amended by section 1 { - of this 1997
Act - } , { + chapter 180, Oregon Laws 1997, + } had been in
effect on and after October 3, 1989. In no event shall the
increased service allowance under ORS 238.305 { - (6) - } { +
(7) + }, { - as amended by section 1 of this 1997 Act, - } or
the increased life pension or pensions under ORS 238.305
{ - (7) - } { + (8) + }, be applicable to any monthly payment
that was made before the first full month following October 3,
1989, and no retroactive payment shall be made under this section
for any monthly payment that was made before the first full month
following October 3, 1989.
SECTION 10. ORS 238.078 is amended to read:
238.078. (1)(a) Any member of the system who is retired at any
time after having reached earliest service retirement age, and
who has been retired for more than six consecutive calendar
months, may be reemployed by any public employer even though such
retired member has been receiving retirement benefits.
(b) Any person reemployed as provided in this subsection shall
resume making contributions to the retirement fund, and the
employer shall make contributions on behalf of the person as
provided in ORS 238.225. Payments of retirement allowance
received by such person during separation from the service shall
not be repaid into the retirement fund after the person reenters
public employment except as provided in paragraph (c) of this
subsection; but the amount of such payment shall be deducted from
such employee's reserve in the retirement fund and the remainder
shall be credited pro rata to the funds from which it was
derived.
(c) Upon reentering public employment as provided in this
subsection, the former retirement of such person and any election
of option for payment of retirement benefits theretofore made by
the person shall be canceled; and thereafter upon retiring such
person may elect any option for payment of retirement benefits
authorized by this chapter, except that a person who elected to
receive lump sum payment of benefits pursuant to ORS 238.305 (2)
{ + or (3) + } at the time of former retirement may not elect
any other option at the time of subsequent retirement unless an
amount equal to the lump sum and the interest that would have
accumulated on the sum has been repaid by the employee to the
fund. Upon such subsequent retirement any prior service pension
due the employee shall be derived from the unused portion of the
prior service credit reserve and shall be calculated on the basis
of then attained age.
(2) Any member of the system who is retired at any time after
having reached earliest service retirement age, and who has been
retired for less than six consecutive calendar months, may be
reemployed by any public employer even though such retired member
has been receiving retirement benefits, only upon immediate
repayment in a lump sum by the member of the amount of retirement
benefits drawn { + . + } { - , after which repayment - } The
{ + member + } account of the member shall be reestablished just
as it was at the time of earlier retirement { + after the lump
sum repayment is made + }.
(3) If a member of the system who retired before August 21,
1981, is reemployed, as provided in this section, beginning on or
after August 21, 1981, the service retirement allowance received
upon subsequent retirement by the member shall be:
(a) For service before August 21, 1981, an allowance including
a current service pension computed on the basis of ORS 237.147
(2) (1979 Replacement Part).
(b) For service on or after August 21, 1981, an allowance
including a current service pension computed on the basis of ORS
238.300 (2).
SECTION 11. ORS 238.115, as amended by section 38 of this 2001
Act, is amended to read:
238.115. (1)(a) A member of the system who, after separation
from all service entitling the employee to membership in the
system and withdrawal of the amount credited to the member
account of the member, reenters the service of an employer
participating in the system and serves as an active member of the
system for 10 years after that reentry, and who has not otherwise
obtained restoration of creditable service forfeited by the
withdrawal, shall obtain restoration of one full month of
creditable service forfeited by the withdrawal for each three
full months of service as an active member after that reentry if
the member, within 90 days before the effective date of
retirement of the member:
(A) Applies in writing to the board for restoration of
creditable service; and
(B) Pays to the board in a lump sum for credit to the member
account of the member the amount withdrawn and interest on the
amount withdrawn compounded annually for each year or portion of
a year after the date of the withdrawal and before the effective
date of retirement of the member. The interest shall be computed
at the annual rate of 7.5 percent.
(b) If a member who obtains restoration of creditable service
as provided in this subsection does not obtain restoration of all
creditable service forfeited by the withdrawal pursuant to
service after reentry, the payment under paragraph (a) of this
subsection shall be reduced proportionately to reflect the
percentage of creditable service restored.
(c) A member who obtains restoration of creditable service as
provided in this subsection is not entitled to elect to receive
the service retirement benefit described in ORS 238.305 (2) { +
or (3) + }.
(2) A member who forfeited creditable service rendered to a
public employer before March 27, 1953, because under ORS 237.976
(2) the employee withdrew contributions of the employee to the
Public Employees Retirement System established by chapter 401,
Oregon Laws 1945, and who did not obtain restoration of
creditable service so forfeited as provided in chapter 857,
Oregon Laws 1977, shall, upon retirement, receive restoration of
creditable service so forfeited, if the member, before the
effective date of retirement of the member:
(a) Applies in writing to the board for the restoration of the
creditable service; and
(b) Pays to the board in a lump sum for credit to the member
account of the member an amount determined by the board to be
equal to the full amount of contributions so withdrawn and the
interest that would have accumulated to the regular account of
the member had those contributions not been withdrawn.
(3)(a) A member of the Public Employees Retirement System who
was a member of an association established pursuant to ORS
chapter 239 (1997 Edition), but separated from all service
entitling the employee to membership in the system of the
association and withdrew the amount credited to the member
account of the employee in the retirement fund of the
association, and who, after that separation, entered the service
of an employer in the field of education participating in the
Public Employees Retirement System and served as an active member
of that system for 10 years after that entry, and who has not
otherwise obtained restoration of all creditable service
forfeited by the withdrawal, shall obtain creditable service as a
member of the Public Employees Retirement System equal to all
creditable service forfeited by the withdrawal if the member
within 90 days before the effective date of retirement of the
member:
(A) Applies in writing to the Public Employees Retirement Board
for that creditable service; and
(B) Pays to the board in a lump sum for credit to the member
account of the member the amount withdrawn and interest on the
amount withdrawn compounded annually for each year or portion of
a year after the date of the withdrawal and before the effective
date of retirement or effective date of application of the
member. The interest shall be computed at the rate actually
credited to regular accounts for that period.
(b) This subsection provides a method of obtaining creditable
service for forfeited creditable service described in this
subsection that is in lieu of any application of subsection (1)
of this section for that purpose.
SECTION 12. { + (1) The amendments to ORS 238.305, 238.078 and
238.115 and section 3, chapter 180, Oregon Laws 1997, by sections
8, 9, 10 and 11 of this 2001 Act become operative on January 1,
2003.
(2) The amendments to ORS 238.305 by section 8 of this 2001 Act
apply only to members of the Public Employees Retirement System
whose effective date of retirement is on or after the effective
date of this 2001 Act. + }
{ +
POOLING OF LOCAL GOVERNMENT EMPLOYERS + }
SECTION 13. ORS 238.225 is amended to read:
238.225. (1) A { + participating + } public employer
{ - that is participating in the system - } shall, at intervals
designated by the { + Public Employees Retirement + } Board,
transmit to { - it such amounts as are actuarially computed to
be necessary, as determined by the board, - } { + the board
those amounts the board determines to be actuarially
necessary + } to adequately { - provide - } { + fund + } the
benefits to be provided by the contributions of the employer
under this chapter { + . From time to time, the board shall
determine the liabilities of the system and shall set the amount
of contributions to be made by participating public employers,
and by other public employers who are required to make
contributions on behalf of members, to ensure that those
liabilities will be funded no more than 40 years after the date
on which the determination is made. + } { - , including such
amounts as are actuarially determined to be necessary to amortize
within not less than 30 years after December 31, 1968, all
liabilities estimated by the actuary to accrue to the system on
account of the pensions to be provided by the contributions of
the employer, except as otherwise provided in this section. For
the purpose of such actuarial computation only, the school
districts of the state shall be regarded as constituting one
employer. - }
{ - (2) In addition each such employer shall transmit to the
board, at intervals which it designates, such amounts as are
actuarially determined, on the basis of an amount per month equal
to $6 for each year of prior service or major fraction thereof
for a period not exceeding 20 years for employees who last
retired prior to April 8, 1953, and prior to becoming eligible
for participation in the Old Age, Survivors and Disability
Insurance program and on the basis of an amount per month equal
to $4 for each year of prior service or major fraction thereof
for a period not exceeding 20 years for all other employees,
except as provided in subsection (4) of this section, to be
necessary to amortize within not less than 30 years after the
employer commences participating in the system or after December
31, 1968, whichever occurs last, all liabilities estimated by the
actuary to accrue to the system on account of service by the
employer's employees prior to the time it commences participating
in the system, and all prior service pension included in
retirement allowances shall be computed on the basis hereby
established; provided, however, that a political subdivision
other than a school district may elect not to alter the basis of
$2.50 or $4 per month established by its agreement made when it
began to participate in the system established by chapter 401,
Oregon Laws 1945, as amended. The 1961 amendment to this
subsection does not apply with respect to employees receiving
prior service pension on the basis of $6 per month for each year
of prior service credit allowed under the amendment to this
subsection by section 3, chapter 623, Oregon Laws 1959. - }
{ - (3) A political subdivision which had withdrawn prior to
January 1, 1956, from the Public Employees Retirement System may
elect to increase the benefits payable for prior service to it
from $2.50 to $4 per month for each year of prior service
allowed; provided, that the administrative head of the withdrawn
employer enters into an agreement with the Public Employees
Retirement Board, binding such political subdivision to (a)
transmit to the board, as hereinabove provided, payments
including the cost of increased benefits, (b) pay for such
increase of benefits for all its current employees with prior
service credit who have maintained membership in the Public
Employees Retirement System and for all its past employees who
have maintained such membership and who have prior service credit
for service to such withdrawn public employer, and (c) pay for
such increase of benefits for all annuitants who on the effective
date of the agreement are receiving payment for prior service to
such employer, the increase to be effective from and after the
date of executing the agreement. An agreement so executed shall
be irrevocable by the political subdivision, which shall be
liable thereon and subject to legal action therefor by the board
until all obligations of such agreement are fully discharged. - }
{ - (4) Subject to the rules of the board and except as this
chapter otherwise provides, credit shall be granted: - }
{ - (a) An employee of the state who is a member of the
system for continuous service, for a period not exceeding 20
years, to the state prior to July 1, 1946. - }
{ - (b) A school district employee who is a member of the
system for continuous service to all school districts of the
state as provided in subsection (6) of this section. - }
{ - (c) An employee of a public employer other than the state
or a school district who is a member of the system for continuous
service, on the basis of the formula agreed upon as provided in
this subsection, to that public employer prior to the time it
commences to participate in the system. - }
{ - Within 60 days after an employer becomes a participant in
the system the board shall issue the member entitled to such
credit a certificate of the aggregate of such credit to which the
member is entitled. The certificate shall be final unless the
board, for cause upon the motion of the member or board, modifies
the certificate. The board may arrange with a political
subdivision other than a school district, or with an agency
created by two or more such political subdivisions to provide
themselves governmental services, for determining, on the basis
of a formula agreed upon by the board and the governing body of
the subdivision or agency, the years of credit which an employee
of the subdivision or agency is to receive for service to it
prior to the time that it commences to participate in the system,
without limitation as to the number of years of such prior
service, and any such employee may be given credit for
accumulated seasonal employment for such subdivision or agency if
the employee has become a regular employee thereof. The
amendments to this subsection and to subsection (5) of this
section by section 5, chapter 640, Oregon Laws 1969, shall be
deemed to have been in effect since the inception of the
system. - }
{ - (5) When the formula referred to in subsection (4) of
this section has been agreed upon and the years of prior service
credit have been determined, a political subdivision or agency
created by two or more political subdivisions to provide
themselves governmental services which desires to increase such
credit to its employees may apply to the retirement board for a
revision of the formula within the limitations of this chapter.
If the board agrees to such revision, the cost incurred in
reviewing the records of such employer's employees and making any
actuarial computation required to effect an increase of prior
service credit shall be borne by the political subdivision or
agency. - }
{ - (6) Each school district employee who is a member of the
system shall be granted full credit, for a period not exceeding
20 years, for continuous service to all school districts of the
state prior to July 1, 1946. Each school district shall transmit
to the board, at intervals which it designates, such amounts as
are actuarially determined, on the basis stated in subsection (2)
of this section, to be necessary to amortize, within not less
than 30 years after December 31, 1968, all liabilities estimated
by the actuary to accrue to the system on account of service by
school district employees prior to July 1, 1946. - }
{ + (2) For the purpose of the actuarial computation required
under subsection (1) of this section:
(a) The school districts of the state shall be regarded as a
single employer; and
(b) All community college districts and the state shall be
regarded as a single employer.
(3) For the purpose of the actuarial computation required under
subsection (1) of this section, any participating public employer
may elect to be grouped with the state and all community college
districts and treated as a single employer for actuarial purposes
only. An election under this subsection may be made only by
participating public employers other than school districts and
community college districts. Any public employer that makes an
election under this subsection may not revoke the election.
(4) The computation of the contributions of a participating
public employer that makes an election under the provisions of
subsection (3) of this section shall be based only on the
liabilities of the employer that are incurred after the effective
date of the employer's election. The board shall separately
compute the contribution of the employer for the liabilities
incurred by the employer before the effective date of the
employer's election.
(5) A participating public employer may make an election under
subsection (3) of this section only by the adoption of a
resolution or ordinance by the governing body of the public
employer.
(6) Except as provided in subsection (2) of this section, the
board may not require that any participating public employer be
grouped with any other participating public employer for the
purpose of the actuarial computation required under subsection
(1) of this section. If two participating public employers merge
or otherwise consolidate, and one of the public employers has
made an election under subsection (3) of this section:
(a) The board may not require that the public employer that is
the product of the consolidation be grouped with the state and
all community college districts unless the public employer makes
an election under subsection (3) of this section; and
(b) The board may require that the public employer that is the
product of the consolidation make contributions based on the
group rate only for those members for whom contributions based on
the group rate were made before the consolidation.
(7) Except as provided in this section, the board may not group
participating public employers for the purposes of the actuarial
computation required by subsection (1) of this section. + }
SECTION 14. { + The amendments to ORS 238.225 by section 13 of
this 2001 Act do not affect any right to receive prior service
credit, or any obligation to provide prior service credit,
incurred under ORS 238.225 before the effective date of this 2001
Act. + }
SECTION 15. { + ORS 238.230 is repealed. + }
{ +
EMPLOYER PARTICIPATION IN + }
{ +
VARIABLE ANNUITY ACCOUNT INVESTMENTS + }
SECTION 16. { + Section 17 of this 2001 Act is added to and
made a part of ORS chapter 238. + }
SECTION 17. { + (1) The Public Employees Retirement Board, on
a regular basis, shall determine for each participating public
employer the total amount of all member accounts in the Variable
Annuity Account held by active or inactive members who are or
were employed by the employer. The board shall provide the total
amount for each employer so determined to the Oregon Investment
Council. The Oregon Investment Council shall invest moneys equal
to the amounts specified by the board in the same fund or funds
in which Variable Annuity Account moneys are invested.
(2) The moneys invested by the Oregon Investment Council under
this section shall be moneys of the Public Employees Retirement
Fund that are assets attributable to employer contributions and
earnings on those contributions, but that are not assets of the
reserve account established under ORS 238.255 or assets of member
accounts maintained under ORS 238.250 or 238.260. The board
shall credit or charge earnings and losses produced by
investments made under this section to each public employer,
based on the amount determined for the employer under subsection
(1) of this section, for the purpose of matching earnings
credited to the Variable Annuity Account on behalf of the active
and inactive members who are or were employed by the employer.
(3) Investments authorized under this section are not subject
to the limitations on investment imposed by ORS 293.726 (6).
(4) Nothing in this section shall be construed to convey to any
participating public employer any proprietary interest in the
Public Employees Retirement Fund or in the contributions made to
the fund by those employers. + }
{ + NOTE: + } Sections 18 and 19 were deleted by amendment.
Subsequent sections were not renumbered.
{ +
CREDITING OF EARNINGS TO EMPLOYERS + }
{ +
UPON DEATH OR RETIREMENT OF MEMBER + }
SECTION 20. { + Section 21 of this 2001 Act is added to and
made a part of ORS chapter 238. + }
SECTION 21. { + Upon the death or retirement of a member of
the Public Employees Retirement System, the Public Employees
Retirement Board shall credit earnings to the participating
public employer or employers that employed the member. The board
shall credit earnings to the amounts charged to each employer by
reason of the death or retirement. The earnings rate used by the
board shall be the same rate that the board uses for crediting
member accounts at the time the charge is made. + }
{ +
BONDING OF LOCAL GOVERNMENT + }
{ +
UNFUNDED PERS LIABILITIES + }
SECTION 22. { + Sections 23, 24, 25, 26 and 27 of this 2001
Act are added to and made a part of ORS chapter 238. + }
SECTION 23. { + As used in sections 23 to 27 of this 2001 Act:
(1) 'Governmental unit' has the meaning given that term in ORS
288.150, and includes an agency created by two or more political
subdivisions pursuant to ORS 190.003 to 190.130 or 190.265.
(2) 'Pension liability' means:
(a) Monetary obligations of a participating public employer for
which the employer is or will be required to transmit amounts to
the Public Employees Retirement Board under the provisions of ORS
238.225, including any obligations arising out of an integration
contract under ORS 238.680, or any other liability of a
governmental unit that is attributable to an obligation to pay
pensions or other retirement benefits to officers or employees of
the governmental unit, whether active or retired; and
(b) Monetary obligations of a public employer arising out of an
integration contract under ORS 238.680 for which the employer is
required to transmit amounts to the Public Employees Retirement
Board.
(3) 'State agency' means any officer, board, commission,
department, division or institution in the administrative branch
of state government. + }
SECTION 24. { + (1) The Legislative Assembly finds that
authorizing issuance of limited tax bonds or revenue bonds to
finance pension liabilities may reduce the cost of public
pensions to taxpayers and that the reduction of those costs to
taxpayers is a matter of statewide concern.
(2) Notwithstanding any limitation on indebtedness or borrowing
under state or local law, for the purpose of obtaining funds to
pay the pension liability of a governmental unit, the governing
body of a governmental unit may authorize and cause the issuance
of limited tax bonds as defined in ORS 288.150, revenue bonds
authorized by charter or pursuant to ORS 288.805 to 288.945, or
any combination of those bonds. The governing body of a
governmental unit may pledge the full faith and credit and taxing
power of the governmental unit to the payment of the principal
and interest on bonds issued under sections 23 to 27 of this 2001
Act, and any premium on those bonds.
(3) Limited tax bonds authorized under this section must be
issued in the manner prescribed by ORS chapters 287 and 288 for
the issuance of limited tax bonds. A county may not issue limited
tax bonds under this section for an amount that exceeds five
percent of the real market value of the taxable property within
the boundaries of the county.
(4) Revenue bonds authorized under this section need not comply
with the procedure specified in ORS 288.815.
(5) A governmental unit that issues limited tax bonds or
revenue bonds under this section may also issue limited tax bonds
or revenue bonds for the purpose of refunding the bonds.
(6) A governmental unit may enter into indentures or other
agreements with trustees or escrow agents for the issuance,
administration or payment of bonds authorized under this section.
(7) The state may not issue bonds under the provisions of this
section. + }
SECTION 25. { + (1) Governmental units may enter into
intergovernmental agreements for the collective issuance,
administration or payment of bonds authorized under section 24 of
this 2001 Act. An agreement for collective issuance,
administration or payment of bonds under this subsection may
provide for the contribution and pooling of the assets of the
governmental units as security for the bonds, and may make
provisions for such other matters as the governmental units
determine convenient. Notwithstanding ORS 190.080, any
intergovernmental entity created by governmental units under this
section shall have the power to issue bonds as described in
section 24 of this 2001 Act. The bonds may be issued and sold as
parity bonds, issued and sold individually or issued and sold in
such combinations or forms as determined to be appropriate by the
governmental units.
(2) Proceeds of bonds sold under an intergovernmental agreement
entered into under this section, and any other funds or assets of
a governmental unit, together with interest or earnings on the
proceeds, funds and assets, may be consolidated into one or more
funds or accounts and may be pledged to the holders of the bonds.
(3) Governmental units may enter into indentures or other
agreements with trustees or escrow agents for the issuance,
administration or payment of bonds pursuant to an
intergovernmental agreement entered into under this section.
(4) The State Treasurer may cooperate with, assist and provide
recommendations to governmental units, and any intergovernmental
entity created by governmental units under this section, relating
to all matters involved in the issuance, administration and
payment of bonds. Any expenses incurred by the State Treasurer in
providing assistance to governmental units under this section may
be paid as an administrative expense of the governmental unit
from the proceeds of the bonds issued with the assistance of the
State Treasurer. + }
SECTION 26. { + (1) A governmental unit, or a group of
governmental units that enter into an intergovernmental agreement
under section 25 of this 2001 Act, may establish a debt service
trust fund for the purpose of paying the principal and interest
on bonds issued under sections 23 to 27 of this 2001 Act. The
trustee of the debt service trust fund shall hold the moneys paid
into the trust fund solely for the purpose of paying the
principal and interest on bonds issued under sections 23 to 27 of
this 2001 Act and for paying the administrative costs of the
trust fund.
(2) Moneys held in a debt service trust fund are subject to the
limitations on investment imposed by ORS 294.033 and 294.035.
(3) A governmental unit, or a group of governmental units that
enter into an intergovernmental agreement under section 25 of
this 2001 Act, that has established a debt service trust fund
under this section may not divert or pledge any moneys paid into
the trust fund for any purpose other than the purpose specified
in subsection (1) of this section until the total amount of
principal and interest on bonds issued by the governmental unit
or under the intergovernmental agreement, and any premium on
those bonds, is paid. + }
SECTION 27. { + (1) A governmental unit, or a group of
governmental units that enter into an intergovernmental agreement
under section 25 of this 2001 Act, that receives funds from any
state agency may enter into a funds diversion agreement with the
state agency for the purpose of paying the principal and interest
on bonds issued under sections 23 to 27 of this 2001 Act, and any
premium on those bonds. A diversion agreement entered into under
this section must provide that:
(a) Moneys payable to the governmental unit or governmental
units by the state agency from appropriations from the General
Fund or any other source of moneys will be paid directly to a
debt service trust fund established under section 26 of this 2001
Act in amounts equal to the debt service owed by the governmental
unit or governmental units;
(b) The state agency must pay the amounts required under the
funds diversion agreement to the debt service trust fund
established under section 26 of this 2001 Act pursuant to the
schedule specified in the agreement before paying any other
amounts to the governmental unit or governmental units;
(c) The agreement is irrevocable; and
(d) The agreement will remain in effect until all the bonds
issued by the governmental unit or under the intergovernmental
agreement are mature or redeemed.
(2) If for any reason a state agency that has entered into a
funds diversion agreement is not able to pay moneys to a debt
service trust fund as contemplated by the agreement, the state
agency shall give notice to the governmental unit or governmental
units within 30 days after the state agency is aware that the
moneys will not be paid.
(3) Nothing in this section, or in any funds diversion
agreement entered into by a state agency under this section, may
in any manner obligate the state or any state agency:
(a) To pay any amount to a governmental unit that the
governmental unit is not otherwise entitled to receive under law;
or
(b) To pay any principal or interest on bonds issued under
sections 23 to 27 of this 2001 Act. + }
{ +
MEMBER ACCOUNTS + }
SECTION 28. ORS 237.410 is amended to read:
237.410. As used in ORS 237.420 to 237.520, unless the context
requires otherwise:
(1) 'Public agency' or 'political subdivision' means the State
of Oregon, any city, county, municipal or public corporation or
any political subdivision of the State of Oregon or any
instrumentality thereof, or any school district, or any agency
created by two or more political subdivisions { - referred to
in ORS 238.005 (9) - } to provide themselves governmental
services, the employees of which constitute a coverage group. For
purposes of ORS 237.420 to 237.520, such agency created by two or
more political subdivisions is a governmental instrumentality and
a legal entity with power to enter into contracts, hold property
and sue and be sued.
(2) 'Coverage group' has the meaning given that term by the
provisions of section 218 of title 2 of the federal Social
Security Act, and amendments thereto, and applicable federal
regulations adopted pursuant thereto.
SECTION 29. ORS 238.005 is amended to read:
238.005. For purposes of this chapter:
(1) { - The term - } 'Annuity' means payments for life
derived from contributions made by a member as provided in this
chapter.
{ + (2) 'Board' means the Public Employees Retirement
Board. + }
{ - (2) - } { + (3) + } { - The term - } 'Calendar year'
means 12 calendar months commencing on January 1 and ending on
December 31 following.
{ - (3) - } { + (4) + } { - The term - } 'Continuous
service' means service not interrupted for more than five years,
except that such continuous service shall be computed without
regard to interruptions in the case of:
(a) An employee who had returned to the service of the employer
as of January 1, 1945, and who remained in that employment until
having established membership in the Public Employees Retirement
System.
(b) An employee who was in the armed services on January 1,
1945, and returned to the service of the employer within one year
of the date of being otherwise than dishonorably discharged and
remained in that employment until having established membership
in the Public Employees Retirement System.
{ - (4) - } { + (5) + } { - The term - } 'Creditable
service' means any period of time during which an active member
is being paid a salary by a participating public employer and
contributions are being made to the system either by or on behalf
of the member. For purposes of computing years of 'creditable
service,' full months and major fractions of a month shall be
considered to be one-twelfth of a year and shall be added to all
full years. 'Creditable service ' includes all retirement credit
received by a member.
{ + (6) 'Earliest service retirement age' means the age
attained by a member when the member could first make application
for retirement under the provisions of ORS 238.280. + }
{ - (5) - } { + (7) + } { - The term - } 'Employee'
includes, in addition to employees, public officers, but does not
include:
(a) Persons engaged as independent contractors.
(b) Seasonal, emergency or casual workers whose periods of
employment with any public employer or public employers do not
total 600 hours in any calendar year.
(c) Persons, other than workers in the Oregon Industries for
the Blind under ORS 346.190, provided sheltered employment or
made-work by a public employer in an employment or industries
program maintained for the benefit of such persons.
(d) Persons employed and paid from federal funds received under
the Emergency Job and Unemployment Assistance Act of 1974 (Public
Law 93-567) or any other federal program intended primarily to
alleviate unemployment. However, any such person shall be
considered an 'employee' if not otherwise excluded by paragraphs
(a) to (c) of this subsection and the public employer elects to
have the person so considered by an irrevocable written notice to
the board.
(e) Persons who are employees of a railroad, as defined in ORS
824.020, and who, as such employees, are included in a retirement
plan under federal railroad retirement statutes. This paragraph
shall be deemed to have been in effect since the inception of the
system.
{ + (8) 'Final average salary' means whichever of the
following is greater:
(a) The average salary per calendar year paid by one or more
participating public employers to an employee who is an active
member of the system in three of the calendar years of membership
before the effective date of retirement of the employee, in which
three years the employee was paid the highest salary. The three
calendar years in which the employee was paid the largest total
salary may include calendar years in which the employee was
employed for less than a full calendar year. If the number of
calendar years of active membership before the effective date of
retirement of the employee is three or fewer, the final average
salary for the employee is the average salary per calendar year
paid by one or more participating public employers to the
employee in all of those years, without regard to whether the
employee was employed for the full calendar year.
(b) One-third of the total salary paid by a participating
public employer to an employee who is an active member of the
system in the last 36 calendar months of active membership before
the effective date of retirement of the employee.
(9) 'Firefighter' does not include a volunteer firefighter as
defined in subsection (23) of this section, but does include:
(a) The State Fire Marshal, the chief deputy fire marshal and
deputy state fire marshals; and
(b) An employee of the State Forestry Department who is
certified by the State Forester as a professional wildland
firefighter and whose primary duties include the abatement of
uncontrolled fires as described in ORS 477.064. + }
{ - (6) - } { + (10) + } { - The term - } 'Fiscal year'
means 12 calendar months commencing on July 1 and ending on June
30 following.
{ + (11) 'Fund' means the Public Employees Retirement
Fund. + }
{ - (7)(a) - } { + (12)(a) + } { - The term - } 'Member'
means a person who has established membership in the system and
whose membership has not been terminated as described in ORS
238.095. 'Member' includes active, inactive and retired members.
(b) 'Active member' means a member who is presently employed by
a participating public employer in a position that meets the
requirements of ORS 238.015 (4), and who has completed the
six-month period of service required by ORS 238.015.
(c) 'Inactive member' means a member who is absent from the
service of all employers participating in the system, whose
membership has not been terminated in the manner described by ORS
238.095, and who is not retired for service or disability. '
Inactive member' includes a member who would be an active member
except that the person's only employment with a participating
public employer is in a position that does not meet the
requirements of ORS 238.015 (4).
(d) 'Retired member' means a member who is retired for service
or disability.
{ + (13)(a) 'Member account' means the regular account and
the variable account.
(b) 'Regular account' means the account established for each
active and inactive member under ORS 238.250.
(c) 'Variable account' means the account established for a
member who participates in the Variable Annuity Account under ORS
238.260.
(14) 'Normal retirement age' means:
(a) For a person who establishes membership in the system
before January 1, 1996, as described in ORS 238.430, 55 years of
age if the employee retires at that age as a police officer or
firefighter or 58 years of age if the employee retires at that
age as other than a police officer or firefighter.
(b) For a person who establishes membership in the system on or
after January 1, 1996, as described in ORS 238.430, 55 years of
age if the employee retires at that age as a police officer or
firefighter or 60 years of age if the employee retires at that
age as other than a police officer or firefighter. + }
{ - (8) - } { + (15) + } { - The term - } 'Pension'
means annual payments for life derived from contributions by one
or more public employers.
{ + (16) 'Police officer' includes:
(a) Employees of institutions defined in ORS 421.005 as
Department of Corrections institutions whose duties, as assigned
by the Director of the Department of Corrections, include the
custody of persons committed to the custody of or transferred to
the Department of Corrections and employees of the Department of
Corrections who were classified as police officers on or before
July 27, 1989, whether or not such classification was authorized
by law.
(b) Employees of the Department of State Police who are
classified as police officers by the Superintendent of State
Police.
(c) Employees of the Oregon Liquor Control Commission who are
classified as enforcement officers by the administrator of the
commission.
(d) Sheriffs and those deputy sheriffs or other employees of a
sheriff whose duties, as classified by the sheriff, are the
regular duties of police officers or corrections officers.
(e) Police chiefs and police personnel of a city who are
classified as police officers by the council or other governing
body of the city.
(f) Parole and probation officers employed by the Department of
Corrections and parole and probation officers who are transferred
to county employment under ORS 423.549.
(g) Police officers appointed under ORS 276.021 or 276.023.
(h) Employees of the Port of Portland who are classified as
airport police by the Board of Commissioners of the Port of
Portland.
(i) Employees of the State Department of Agriculture who are
classified as livestock police officers by the Director of
Agriculture.
(j) Employees of the Department of Public Safety Standards and
Training who are classified by the department as other than
secretarial or clerical personnel.
(k) Investigators of the Criminal Justice Division of the
Department of Justice.
(L) Corrections officers as defined in ORS 181.610.
(m) Employees of the Oregon State Lottery Commission who are
classified by the Director of the Oregon State Lottery as
enforcement agents pursuant to ORS 461.110.
(n) The Director of the Department of Corrections.
(o) An employee who for seven consecutive years has been
classified as a police officer as defined by this section, and
who is employed or transferred by the Department of Corrections
to fill a position designated by the Director of the Department
of Corrections as being eligible for police officer status.
(p) An employee of the Department of Corrections classified as
a police officer on or prior to July 27, 1989, whether or not
that classification was authorized by law, as long as the
employee remains in the position held on July 27, 1989. The
initial classification of an employee under a system implemented
pursuant to ORS 240.190 does not affect police officer status.
(q) Employees of a school district who are appointed and duly
sworn members of a law enforcement agency of the district as
provided in ORS 332.531 or otherwise employed full-time as police
officers commissioned by the district.
(r) Employees at the MacLaren School, Hillcrest School of
Oregon and other youth correction facilities and juvenile
detention facilities under ORS 419A.050, 419A.052 and 420.005 to
420.915, who are required to hold valid Oregon teaching licenses
and who have supervisory, control or teaching responsibilities
over juveniles committed to the custody of the Department of
Corrections or the Oregon Youth Authority.
(s) Employees at youth correction facilities as defined in ORS
420.005 whose primary job description involves the custody,
control, treatment, investigation or supervision of juveniles
placed in such facilities.
(t) Employees of the Oregon Youth Authority who are classified
as juvenile parole and probation officers. + }
{ - (9) - } { + (17) + } { - The term - } 'Public
employer' means the state, one of its agencies, any city, county,
municipal or public corporation, any political subdivision of the
state or any instrumentality thereof, or an agency created by two
or more such political subdivisions to provide themselves
governmental services. For purposes of this chapter, such agency
created by two or more political subdivisions is a governmental
instrumentality and a legal entity with power to enter into
contracts, hold property and sue and be sued.
{ + (18) 'Prior service credit' means credit provided under
section 75 of this 2001 Act or under ORS 238.225 (2) to (6) (1999
Edition). + }
{ - (10) - } { + (19) + } { - The term - } 'Retirement
credit' means a period of time that is treated as creditable
service for the purposes of this chapter.
{ - (11)(a) - } { + (20)(a) + } { - The term - }
'Salary' means the remuneration paid an employee in cash out of
the funds of a public employer in return for services to the
employer, plus the monetary value, as determined by the Public
Employees Retirement Board, of whatever living quarters, board,
lodging, fuel, laundry and other advantages the employer
furnishes the employee in return for services.
(b) 'Salary' includes but is not limited to:
(A) Payments of employee and employer money into a deferred
compensation plan, which are deemed salary paid in each month of
deferral;
(B) The amount of participation in a tax-sheltered or deferred
annuity, which is deemed salary paid in each month of
participation; and
(C) Retroactive payments made to an employee to correct a
clerical error or pursuant to an award by a court or by order of
or a conciliation agreement with an administration agency charged
with enforcing federal or state law protecting the employee's
rights to employment or wages, which shall be allocated to and
deemed paid in the periods in which the work was done or in which
it would have been done.
(c) 'Salary' or 'other advantages' does not include:
(A) Travel or any other expenses incidental to employer's
business which is reimbursed by the employer;
(B) Payments for insurance coverage by an employer on behalf of
employee or employee and dependents, for which the employee has
no cash option;
(C) Payments made on account of an employee's death;
(D) Any lump sum payment for accumulated unused sick leave;
(E) Any accelerated payment of an employment contract for a
future period or an advance against future wages;
(F) Any retirement incentive, retirement severance pay,
retirement bonus or retirement gratuitous payment;
(G) Payments for periods of leave of absence after the date the
employer and employee have agreed that no future services
qualifying pursuant to ORS 238.015 (3) will be performed, except
for sick leave and vacation;
(H) Payments for instructional services rendered to
institutions of the Department of Higher Education or the Oregon
Health Sciences University when such services are in excess of
full-time employment subject to this chapter. A person employed
under a contract for less than 12 months is subject to this
subparagraph only for the months to which the contract pertains;
or
(I) Payments made by an employer for insurance coverage
provided to a domestic partner of an employee.
{ + (21) 'School year' means the period beginning July 1 and
ending June 30 next following.
(22) 'System' means the Public Employees Retirement System. + }
{ - (12) - } { + (23) + } { - The term - } 'Volunteer
firefighter' means a firefighter whose position normally requires
less than 600 hours of service per year.
{ - (13) The term 'school year' means the period beginning
July 1 and ending June 30 next following. - }
{ - (14) The term 'police officer' includes: - }
{ - (a) Employees of institutions defined in ORS 421.005 as
Department of Corrections institutions, whose duties, as assigned
by the director, include the custody of persons committed to the
custody of or transferred to the Department of Corrections and
any other employee of the Department of Corrections who was
classified as a police officer on or before July 27, 1989,
whether or not such classification was authorized by law. - }
{ - (b) Employees of the Department of State Police who are
classified as police officers by the Superintendent of State
Police. - }
{ - (c) Employees of the Oregon Liquor Control Commission who
are classified as enforcement officers by the administrator of
the commission. - }
{ - (d) Sheriffs and those deputy sheriffs or other employees
of a sheriff whose duties, as classified by the sheriff, are the
regular duties of police officers or corrections officers. - }
{ - (e) Police chiefs and police personnel of a city who are
classified as police officers by the council or other governing
body of the city. - }
{ - (f) Parole and probation officers employed by the
Department of Corrections and parole and probation officers who
are transferred to county employment under ORS 423.549. - }
{ - (g) Police officers appointed under ORS 276.021 or
276.023. - }
{ - (h) Employees of the Port of Portland who are classified
as airport police by the Board of Commissioners of the Port of
Portland. - }
{ - (i) Employees of the State Department of Agriculture who
are classified as livestock police officers by the Director of
Agriculture. - }
{ - (j) Employees of the Department of Public Safety
Standards and Training who are classified by the department as
other than secretarial or clerical personnel. - }
{ - (k) Investigators of the Criminal Justice Division of the
Department of Justice. - }
{ - (L) Corrections officers as defined in ORS 181.610. - }
{ - (m) Employees of the Oregon State Lottery Commission who
are classified by the Director of the Oregon State Lottery as
enforcement agents pursuant to ORS 461.110. - }
{ - (n) The Director of the Department of Corrections. - }
{ - (o) An employee who for seven consecutive years has been
classified as a police officer as defined by this section, and
who is employed or transferred by the Department of Corrections
to fill a position designated by the director as being eligible
for police officer status. - }
{ - (p) An employee of the Department of Corrections
classified as a police officer on or prior to July 27, 1989,
whether or not that classification was authorized by law, so long
as the employee remains in the position held on July 27, 1989.
The initial classification of an employee under a system
implemented pursuant to ORS 240.190 will not affect police
officer status. - }
{ - (q) Employees of a school district who are appointed and
duly sworn members of a law enforcement agency of the district as
provided in ORS 332.531 or otherwise employed full-time as police
officers commissioned by the district. - }
{ - (r) Employees at the MacLaren School, Hillcrest School of
Oregon and other youth correction facilities and juvenile
detention facilities under ORS 419A.050, 419A.052 and 420.005 to
420.915, who are required to hold valid Oregon teaching licenses
and who have supervisory, control or teaching responsibilities
over juveniles committed to the custody of the Department of
Corrections or the Oregon Youth Authority. - }
{ - (s) Employees at youth correction facilities as defined
in ORS 420.005 whose primary job description involves the
custody, control, treatment, investigation or supervision of
juveniles placed in such facilities. - }
{ - (t) Employees of the Oregon Youth Authority who are
classified as juvenile parole and probation officers. - }
{ - (15) The term 'final average salary' means whichever of
the following is greater: - }
{ - (a) The average salary per calendar year paid by one or
more participating public employers to an employee who is an
active member of the system in three of the calendar years of
membership before the effective date of retirement of the
employee, in which three years the employee was paid the highest
salary. The three calendar years in which the employee was paid
the largest total salary may include calendar years in which the
employee was employed for less than a full calendar year. If the
number of calendar years of active membership before the
effective date of retirement of the employee is three or less,
the final average salary for the employee is the average salary
per calendar year paid by one or more participating public
employers to the employee in all of those years, without regard
to whether the employee was employed for the full calendar
year. - }
{ - (b) One-third of the total salary paid by a participating
public employer to an employee who is an active member of the
system in the last 36 calendar months of active membership before
the effective date of retirement of the employee. - }
{ - (16) The term 'firefighter' does not include a volunteer
firefighter as defined in subsection (12) of this section, but
does include: - }
{ - (a) The State Fire Marshal, the chief deputy fire marshal
and deputy state fire marshals; and - }
{ - (b) An employee of the State Forestry Department who is
certified by the State Forester as a professional wildland
firefighter and whose primary duties include the abatement of
uncontrolled fires as described in ORS 477.064. - }
{ - (17) 'Earliest service retirement age' means the age
attained by a member when the member could first make application
for retirement under the provisions of ORS 238.280. - }
{ - (18) The term 'normal retirement age' means: - }
{ - (a) For a person who establishes membership in the system
before January 1, 1996, as described in ORS 238.430, 55 years of
age if the employee retires at that age as a police officer or
firefighter or 58 years of age if the employee retires at that
age as other than a police officer or firefighter. - }
{ - (b) For a person who establishes membership in the system
on or after January 1, 1996, as described in ORS 238.430, 55
years of age if the employee retires at that age as a police
officer or firefighter or 60 years of age if the employee retires
at that age as other than a police officer or firefighter. - }
SECTION 30. ORS 238.015 is amended to read:
238.015. (1) No person may become a member of the system unless
that person is in the service of a public employer and has
completed six months' service uninterrupted by more than 30
consecutive working days during the six months' period. Every
employee of a participating employer shall become a member of the
system at the beginning of the first full pay period of the
employee following the six months' period. All public employers
participating in the Public Employees Retirement System
established by chapter 401, Oregon Laws 1945, as amended, at the
time of repeal of that chapter, and all school districts of the
state, shall participate in, and their employees shall be members
of, the system, except as otherwise specifically provided by law.
(2) Any active member of the Public Employees Retirement System
who, through the annexation of a political subdivision employing
the member or by change of employment, becomes the employee of
another political subdivision which is participating in the
Public Employees Retirement System and has also a separate
retirement system for its employees, shall remain an active
member of the Public Employees Retirement System unless, within
60 days after the effective date of the annexation or change of
employment or April 8, 1953, the member shall by written notice
to the Public Employees Retirement Board and to the
administrative body of the new public employer elect to
relinquish membership in the Public Employees Retirement System
and become a member of the separate retirement system of the
employer, if eligible for membership in that retirement system,
and the member shall be so carried by the new employer.
Immediately upon such annexation of any political subdivision or
such change of employment, the new public employer shall inform
such employee in writing of the right of the employee to exercise
an election as in this section provided.
(3) A political subdivision (other than a school district) not
participating in the retirement system established by chapter
401, Oregon Laws 1945, as amended, which employs one or more
employees, each of whose position requires 600 hours of service
per year, or an agency created by two or more political
subdivisions to provide themselves governmental services, which
employs one or more employees, each of whose position requires
600 hours of service per year, may, through its governing body,
notify the board in writing, that it elects to include its
employees in the system hereby established. Such public employer
may request the board to make a study and estimate of the cost of
including it and its eligible employees, other than volunteer
firefighters, in the system, which the board thereupon shall
cause to be made and the cost of which the employer shall bear.
Upon completion of the study and estimate the employer may apply
for admission to the system, whereupon it shall begin to
participate therein and its eligible employees other than
volunteer firefighters shall become members of the system. If the
employer is an agency created by two or more political
subdivisions to provide themselves governmental services and
ceases thereafter to transmit to the board { - current
service - } contributions for any of its eligible employees, the
benefits based upon employer { - current service - }
contributions to which such employees would otherwise be entitled
shall be reduced accordingly.
(4) Except as subsection (7) of this section provides otherwise
with reference to volunteer firefighters, no employee whose
position with one public employer or concurrent positions with
two or more public employers normally require less than 600 hours
of service per year may become a member of the system.
(5) No inmate of a state institution or an alien on a training
or educational visa working for any participating employer, even
though the inmate or alien received compensation from a
participating employer, shall be eligible to become a member of
the system. No person employed by a participating employer and
defined by such employer as a student employee is eligible to
become a member of the system for such student employment.
(6) A person holding an elective office or an appointive office
with a fixed term or an office as head of a department to which
the person is appointed by the Governor may become a member of
the system by giving the board written notice of desire to do so
within 30 days after taking the office or, in the event that the
officer is not eligible to become a member of the system at the
time of taking the office, within 30 days after becoming so
eligible. Membership so established shall not be discontinued
during the appointive or elective term of the officer except upon
separation of the officer from service.
(7) A public employer employing volunteer firefighters may
apply to the board at any time for them to become members of the
system. Upon receiving the application the board shall fix a wage
at which, for purposes of this chapter only, they shall be
considered to be employed and which shall be the basis for
computing the amounts of the contributions which they pay into,
and of the benefits which they and their beneficiaries receive
from, the fund; and if the wage so fixed is satisfactory to the
employer, shall include the firefighters in the system.
(8)(a) In the event that an employee enters the service of a
public employer which is participating in or later begins to
participate in the system and in the event that at the time of
entering that service or at the time that the employer begins to
participate in the system the employee has commenced to purchase
and is continuing to purchase a retirement annuity, if the
employer deems the annuity adequate for the purposes of this
chapter { + , + } it may enter into an agreement with the
employee and the board pursuant to which the employee may be
exempted from contributing to the Public Employees Retirement
Fund, and, if no public funds are being used to purchase the
annuity or a corresponding pension, the employer, in lieu of the
contributions which it otherwise would make to the fund on
account of the employee, may make contributions toward the cost
of purchasing the annuity. Such employee otherwise shall be
subject to the provisions of this chapter, except that neither
the employee nor any person claiming under the employee shall
receive any payments from the retirement fund as service or
disability allowance.
(b) An employee who enters into an agreement under paragraph
(a) of this subsection may elect at any time thereafter to start
to participate in the system by giving written notice of desire
to participate to the board and to the employer. The employee
shall receive no retirement credit for the period during which
the employee was exempted from contributing to the fund under the
agreement, but the employee shall be considered to have completed
the six months' service required for membership in the system.
When the employee starts to participate in the system the
employer shall start to contribute to the fund on { - the - }
account of the employee in the same manner as the employer
contributes on { - the - } account of other employees who are
active members of the system and the employer shall stop making
contributions toward the cost of purchasing the retirement
annuity.
(9)(a) All new appointees in the Federal Cooperative Extension
Service or in any other service in which participation in the
Federal Civil Service retirement program is mandatory, who
receive a federal appointment on or after July 1, 1955, may
participate in the Public Employees Retirement System only by
giving written notice of their election to so participate to the
Public Employees Retirement Board within six months after the
effective date of their appointment.
(b) All persons employed by the Federal Cooperative Extension
Service or by any other service in which participation in the
Federal Civil Service retirement program is mandatory, who are
under federal appointment as of July 1, 1955, and who are members
of the state retirement system, shall continue such membership
unless, prior to February 1, 1956, they give written notice to
the Public Employees Retirement Board of their desire to cancel
their membership.
(c) Any person who is an active member of the Public Employees
Retirement System, who, on or after July 1, 1955, is employed by
the Federal Cooperative Extension Service or by any other service
in which participation in the Federal Civil Service retirement
program is mandatory, and who is given a federal appointment,
shall continue such membership in the Public Employees Retirement
System unless, within six months after the effective date of the
appointment, the person gives written notice to the Public
Employees Retirement Board of the desire to cancel membership.
(d) A cancellation of membership under paragraph (b) or (c) of
this subsection terminates membership in the Public Employees
Retirement System and cancels the right to any benefits from, or
claims against, that system. Such cancellation prevents the
withdrawing member from claiming thereafter any retirement credit
for any period of employment before the cancellation. Upon
receipt of a notice of cancellation, the Public Employees
Retirement Board shall refund { - to - } { + the member
account of + } the withdrawing member, regardless of { + the + }
age { - , the account balance of the employee in the retirement
fund - } { + of the withdrawing member + }.
(10) Managers and other employees of foreign trade offices of
the Economic and Community Development Department who live and
perform services in foreign countries under the provisions of ORS
285A.090 (13) shall not be members of the system. However, any
person who is an active member of the system immediately before
becoming a manager or employee of a foreign trade office shall
continue to be a member of the system during the period of time
the person serves as a manager or employee of the foreign trade
office.
(11) An employee who is an employee of the Oregon Health
Sciences University may not be an active member of the Public
Employees Retirement System if that employee is participating in
an alternative retirement program established by the university
pursuant to ORS 353.250.
SECTION 31. ORS 238.035 is amended to read:
238.035. (1) A public employer that is not participating in the
system may, by application to the board, designate any class of
employees of the public employer to become members of the system
at the time of entering the system.
(2) The board shall consider an application received under this
section to be an application to become a participating employer
under this chapter, but only to the extent of providing
membership for the class of employees designated in the
application.
(3) The board, upon such terms as are set forth in a contract
between the board and the employer, shall allow every employee in
the designated class to become members of the Public Employees
Retirement System in accordance with this chapter. A contract
entered into under this section shall require the public employer
to agree to eventually contract to provide membership to all of
the employees who do not become members of the system at the time
that the employer becomes a participating employer.
(4) All employees who have completed the period of service with
the public employer that is required under ORS 238.015 shall
become members of the system on a date specified by the board.
All other employees in the designated class shall become members
upon completion of the required period of service.
(5) The contract provided for in subsection (3) of this section
may be in addition to or in lieu of a contract of integration
under ORS 238.680.
(6) An employer entering into a contract under subsection (3)
of this section may at any time thereafter enter into a contract
with the board to provide membership to all or part of the
employees who do not become members of the system at the time
that the employer becomes a participating employer. Except as may
be provided for prior service { - under ORS 238.225 - } { +
credit + }, or under a contract of integration under ORS 238.680,
employees shall receive no retirement credit for the period
during which the employee was exempted from contributing to the
fund under the agreement, but the employee shall be considered to
have completed the six months' service required for membership in
the system if the employee has served with the employer for at
least six months. When the employee starts to participate in the
system the employer shall start to contribute to the fund on
{ - the - } account of the employee in the same manner as the
employer contributes on { - the - } account of other employees
who are members of the system.
SECTION 32. ORS 238.055 is amended to read:
238.055. (1) On August 1, 1991, all judges receiving retirement
pay from the Judges' Retirement Fund and all surviving spouses of
judges receiving a pension from the Judges' Retirement Fund shall
be retired members of the Public Employees Retirement System,
except that:
(a) The amount of retirement pay or pension payable to the
judge or surviving spouse of a judge and the terms and conditions
of eligibility to receive retirement pay or a pension shall be as
established by ORS 1.314 to 1.380 (1989 Edition); and
(b) The right of any person to receive any benefit as a result
of the death of a judge by reason of the provisions of ORS 1.314
to 1.380 (1989 Edition) shall solely be as provided by ORS 1.314
to 1.380 (1989 Edition).
(2) After August 1, 1991, any judge who would have become
eligible to receive retirement pay from the Judges' Retirement
Fund shall, upon retirement, be a retired member of the Public
Employees Retirement System, except that:
(a) The amount of retirement pay or pension payable to the
judge or the surviving spouse of the judge and the terms and
conditions of eligibility to receive retirement pay or a pension
shall be as established by ORS 1.314 to 1.380 (1989 Edition); and
(b) The right of any person to receive any benefit as a result
of the death of the judge by reason of the provisions of ORS
1.314 to 1.380 (1989 Edition) shall solely be as provided by ORS
1.314 to 1.380 (1989 Edition).
(3) On August 1, 1991, the Judges' Retirement Fund shall cease
to exist as a separate fund and the assets and earnings of the
Judges' Retirement Fund shall be paid into the employer reserves
for judge members of the Public Employees Retirement Fund. The
Public Employees Retirement Board shall continue to keep a
separate { - member - } { + regular + } account for any
person who may become eligible to receive a retirement benefit
under subsection (2) of this section and for any person whose
child or children may become entitled to a benefit under ORS
1.346 (1989 Edition).
(4) Upon deposit of the assets and earnings of the Judge's
Retirement Fund as provided under subsection (3) of this section,
the Public Employees Retirement Board shall cause to be deposited
from the employer reserves for judge members to the retired
reserves of the Public Employees Retirement Fund, the amount
actuarially determined to be necessary to fund the retirement pay
and pensions of those judges and surviving spouses of judges who
were receiving retirement pay or a pension from the Judges'
Retirement Fund on August 1, 1991.
(5) The amount of retirement pay or pension payable to a judge
or spouse of a retired judge who previously received retirement
pay or a pension from the Judges' Retirement Fund, or who would
have received retirement pay or a pension from the Judges'
Retirement Fund, shall not be recalculated or affected in any way
based on the provisions of ORS chapter 238, nor shall the
eligibility of a judge or surviving spouse of a judge to receive
retirement pay or a pension be affected by ORS chapter 238.
(6) The provisions of ORS 238.390, 238.395, 238.400 and 238.500
to 238.585 do not apply to a judge or surviving spouse of a judge
who received retirement pay or a pension from the Judges'
Retirement Fund prior to August 1, 1991, or to a judge who
retires as a member of the Public Employees Retirement System
under subsection (2) of this section.
SECTION 33. ORS 238.068 is amended to read:
238.068. (1) Notwithstanding ORS 238.015, any person who is a
member of the Legislative Assembly at any time on or after
September 13, 1975, and before January 1, 1988, regardless of
whether the person has reached the age of 65 years, may become a
member of the Public Employees Retirement System by giving the
Public Employees Retirement Board, before January 1, 1990,
written notice of desire to do so. The written notice shall take
effect on the first day of the month following the date of
receipt thereof by the board or upon the person's completion of
six months' service, whichever occurs last.
(2) Notwithstanding any other provision of this chapter, any
person who is a member of the Legislative Assembly and a member
of the system, and any person who is not a member of the
Legislative Assembly but was a member thereof before January 11,
1987, upon payment to the board before July 1, 1991, of the total
amount of the employee contributions the person would have made
to the Public Employees Retirement Fund for all periods of
service as a member of the Legislative Assembly before the date
of that payment for which the person was not a member of the
system, is entitled to retirement credit for those periods served
as a member of the Legislative Assembly, including those periods
after reaching the age of 65 years, that the person would have
been entitled to had the person been a member of the system for
those periods. Employee contributions to be paid by a person
under this subsection may be paid at the option of the person in
a lump sum or in installments. If the person is a member of the
Legislative Assembly, upon request by the person in writing to
the state official authorized to disburse funds in payment of the
salary of the person as a member of the Legislative Assembly, the
state official shall deduct monthly from that salary the amount
of money indicated in the request for payment of employment
contributions under this subsection and shall pay amounts so
deducted to the board.
(3) Notwithstanding any other provision of this chapter, any
person who is a member of the Legislative Assembly and a member
of the system, and any person who is not a member of the
Legislative Assembly but was a member thereof before January 9,
1989, who previously had been employed by an employer
participating in the system, but had separated from all service
with that employer entitling the employee to membership in the
system and withdrawn the amount credited to the
{ - employee's - } { + member + } account { + of the
member + }, may have all of the rights in the system which were
forfeited by the withdrawal restored by repaying to the board by
July 1, 1991, the full amount so withdrawn together with the
interest that would have accumulated on the sum had the amount
not been withdrawn.
SECTION 34. ORS 238.072 is amended to read:
238.072. An employee shall not be considered to have ceased to
be a member of the system under ORS 238.095 (2) by reason of any
year in which the employee is employed by the Legislative
Assembly or either house thereof, or by a committee of the
Legislative Assembly or either house thereof, for periods
aggregating eight months or more during the year, whether or not
contributions are made to the fund by or on behalf of the
employee for those periods of employment, unless the employee
withdraws the amount credited to the { + member + } account of
the { - employee in the fund - } { + member + }.
SECTION 35. ORS 238.092 is amended to read:
238.092. (1) Notwithstanding any other provision of this
chapter:
(a) A retired member of the system who has retired as other
than a member of the Legislative Assembly and who thereafter
becomes a member of the Legislative Assembly and elects to become
an active member of the system as a member of the Legislative
Assembly may also elect, by giving the board written notice of
desire to do so, to receive the pension and annuity provided by
this chapter for service as other than a member of the
Legislative Assembly, and be an active member of the system as a
member of the Legislative Assembly for the period the member
holds office as a member of the Legislative Assembly. The notice
provided for in this paragraph shall be given within 30 days
after the retired member takes office as a member of the
Legislative Assembly.
(b) A member of the Legislative Assembly who is a member of the
system as a member of the Legislative Assembly and who becomes
eligible to retire by reason of service as other than a member of
the Legislative Assembly, without regard to when that service was
performed, may elect, by giving the board written notice of
desire to do so, to retire and receive the pension and annuity
provided by this chapter for service as other than a member of
the Legislative Assembly, and to continue, for the period the
member holds office as a member of the Legislative Assembly, as
an active member of the system as a member of the Legislative
Assembly.
(c) Upon receipt of the notice provided for in paragraphs (a)
and (b) of this subsection, the board shall determine that
portion of the accumulated contributions of the member and
interest thereon attributable to service as other than a member
of the Legislative Assembly, which shall be used in determining
the amount of the annuity the member shall receive for that
service. The portion of the accumulated contributions of the
member and interest thereon attributable to service as a member
of the Legislative Assembly shall remain in the
{ - individual - } { + member + } account of the member and,
together with subsequent contributions and interest thereon, be
used in determining the amount of the additional annuity the
member shall receive for that service upon ceasing to hold office
as a member of the Legislative Assembly.
(2) Notwithstanding any other provision of this chapter, a
person who has reached the age of 65 years, whether or not
previously employed by a public employer and whether or not a
retired member of the system, may be employed by the Legislative
Assembly, either house thereof or the Oregon State Police for all
or any part of a regular or special session of the Legislative
Assembly. A person employed under this subsection:
(a) Unless an active member of the system continuing in
employment past the age of 65 years, shall not be permitted to
make contributions to the retirement fund, nor shall the employer
make contributions on behalf of the person.
(b) If a retired member of the system, is entitled, during the
period of such employment, to any pension or annuity provided by
this chapter.
SECTION 36. ORS 238.095 is amended to read:
238.095. (1) An employee shall cease to be a member of the
Public Employees Retirement System if the employee withdraws the
{ - employee - } { + member + } account { - balance - }
{ + of the member + } in the manner provided by ORS 238.265.
(2) Except as provided in subsection (3) of this section, an
employee shall cease to be a member of the system if the employee
is absent from the service of all employers participating in the
system for a total of more than five consecutive years after the
employee becomes a member of the system.
(3) A school district employee shall not cease to be a member
of the system under subsection (2) of this section if:
(a) After completing a school year, the member is absent from
the service of all employers participating in the system for the
next following five school years; and
(b) The member either returns to school employment at the
beginning of the sixth school year, or reaches earliest service
retirement age before the beginning of the sixth school year.
(4) Interest shall not accrue on the amount in the
{ - employee - } { + member + } account of the former member
from the date that membership is terminated under subsection (2)
of this section. The Public Employees Retirement Board shall pay
the amount in { - an employee - } { + a member + } account
{ - for - } { + to + } a former member upon the termination of
the membership of the former member under subsection (2) of this
section if the { + former + } member is separated from all
service with employers who are treated as part of a participating
public employer's controlled group under the federal laws and
rules governing the status of the system and the fund as a
qualified governmental retirement plan and trust.
SECTION 37. ORS 238.105 is amended to read:
238.105. Whenever, within five years after the employee is
separated from all service entitling the employee to membership
in the system, an employee who has withdrawn the amount credited
to the { - employee's account - } { + member account of the
member + } reenters the service of an employer participating in
the system, the employee's rights in the system { - which - }
{ + that + } were forfeited by the withdrawal shall be restored
upon repaying to the board within one year after reentering the
service of the employer, the full amount so withdrawn together
with the interest that would have been accumulated on the sum had
the amount not been withdrawn.
SECTION 38. ORS 238.115 is amended to read:
238.115. (1)(a) A member of the system who, after separation
from all service entitling the employee to membership in the
system and withdrawal of the amount credited to the
{ + member + } account of the { - employee in the fund - }
{ + member + }, reenters the service of an employer
participating in the system and serves as an active member of the
system for 10 years after that reentry, and who has not otherwise
obtained restoration of creditable service forfeited by the
withdrawal, shall obtain restoration of one full month of
creditable service forfeited by the withdrawal for each three
full months of service as an active member after that reentry if
the member, within 90 days before the effective date of
retirement of the { - employee - } { + member + }:
(A) Applies in writing to the board for restoration of
creditable service; and
(B) Pays to the board in a lump sum for credit to the
{ + member + } account of the { - employee in the fund - }
{ + member + } the amount withdrawn and interest on the amount
withdrawn compounded annually for each year or portion of a year
after the date of the withdrawal and before the effective date of
retirement of the { - employee - } { + member + }. The
interest shall be computed at the annual rate of 7.5 percent.
(b) If { - an employee - } { + a member + } who obtains
restoration of creditable service as provided in this subsection
does not obtain restoration of all creditable service forfeited
by the withdrawal pursuant to service after reentry, the payment
under paragraph (a) of this subsection shall be reduced
proportionately to reflect the percentage of creditable service
restored.
(c) { - An employee - } { + A member + } who obtains
restoration of creditable service as provided in this subsection
is not entitled to elect to receive the service retirement
benefit described in ORS 238.305 (2).
(2) { - An employee who is - } A member { - of the
system, - } who forfeited creditable service rendered to a
public employer before March 27, 1953, because under ORS 237.976
(2) the employee withdrew contributions of the employee to the
Public Employees Retirement System established by chapter 401,
Oregon Laws 1945, and who did not obtain restoration of
creditable service so forfeited as provided in chapter 857,
Oregon Laws 1977, shall, upon retirement, receive restoration of
creditable service so forfeited, if the { - employee - } { +
member + }, before the effective date of retirement of the
{ - employee - } { + member + }:
(a) Applies in writing to the board for the restoration of the
creditable service; and
(b) Pays to the board in a lump sum for credit to the
{ + member + } account of the { - employee in the fund - }
{ + member + } an amount determined by the board to be equal to
the full amount of contributions so withdrawn and the interest
that would have accumulated to the { + regular + } account of
the { - employee in the fund - } { + member + } had those
contributions not been withdrawn.
(3)(a) A member of the Public Employees Retirement System who
was a member of an association established pursuant to ORS
chapter 239 (1997 Edition), but separated from all service
entitling the employee to membership in the system of the
association and withdrew the amount credited to the { + member
+ }account of the employee in the retirement fund of the
association, and who, after that separation, entered the service
of an employer in the field of education participating in the
Public Employees Retirement System and served as an active member
of that system for 10 years after that entry, and who has not
otherwise obtained restoration of all creditable service
forfeited by the withdrawal, shall obtain creditable service as a
member of the Public Employees Retirement System equal to all
creditable service forfeited by the withdrawal if the member
within 90 days before the effective date of retirement of the
member:
(A) Applies in writing to the Public Employees Retirement Board
for that creditable service; and
(B) Pays to the board in a lump sum for credit to the
{ + member + } account of the member { - in the Public
Employees Retirement Fund - } the amount withdrawn and interest
on the amount withdrawn compounded annually for each year or
portion of a year after the date of the withdrawal and before the
effective date of retirement or effective date of application of
the member. The interest shall be computed at the rate actually
credited to { - member - } { + regular + } accounts for that
period.
(b) This subsection provides a method of obtaining creditable
service for forfeited creditable service described in this
subsection that is in lieu of any application of subsection (1)
of this section for that purpose.
SECTION 39. ORS 238.125 is amended to read:
238.125. A member of the system who has a combined total of 10
years or more of creditable service in the system and prior
service credit { - under ORS 238.225 - } at the time of
retirement, and who was required to complete one or more periods
of six months or less in the service of an employer participating
in the system before becoming a member of the system, shall
receive retirement credit for those periods of six months or less
if the member, within 90 days before the effective date of
retirement of the member, applies in writing to the board for
that retirement credit and pays to the board in a lump sum an
amount determined by the board to be equal to:
(1) The total amount of employee contributions to the fund by
or on behalf of the employee that would have been required for
the six months' period if the employee had been a member of the
system during that period, which amount shall be credited to the
{ + regular + } account of the { - employee in the fund - }
{ + member + }; and
(2) The total amount of employer contributions to the fund the
employer of the employee would have been required to make in
respect to the employee if the employee had been a member of the
system during the six months' period, which amount shall be
credited to the reserve for pension accounts in the fund.
SECTION 40. ORS 238.135 is amended to read:
238.135. (1) A member of the system who has 10 years or more of
creditable service in the system at the time of retirement, and
who served for less than six months working full-time in a
seasonal position with a public employer participating in the
system before becoming a member of the system, shall receive
retirement credit for those periods of less than six months if
the member, within 90 days before the effective date of
retirement of the member, applies in writing to the board for
that retirement credit and pays to the board in a lump sum an
amount determined by the board to be equal to:
(a) The total amount of employee contributions to the fund by
or on behalf of the employee that would have been required for
the six months' period if the employee had been a member of the
system during that period, plus interest at the rate of eight
percent per annum from the date the contributions would have been
made, which amount shall be credited to the { + regular + }
account of the { - employee in the fund - } { + member + };
and
(b) The total amount of employer contributions to the fund the
employer of the employee would have been required to make in
respect to the employee if the employee had been a member of the
system during the six months' period, plus interest at the rate
of eight percent per annum from the date the contributions would
have been made, which amount shall be credited to the reserve for
pension accounts in the fund.
(2) As used in this section, 'seasonal position' means an
apprenticeship, internship or entry level role in the employ of a
participating public employer that is served by a person before
being employed in a technical or professional position with that
public employer.
(3) No retirement credit shall be allowed under this section
for any period of employment for which retirement credit is
acquired under ORS 238.125.
SECTION 41. ORS 238.145 is amended to read:
238.145. (1) A member of the system employed as a police
officer or firefighter shall be entitled to receive retirement
credit as provided in subsection (3) of this section if:
(a) The member was employed by a public employer as a police
officer or firefighter prior to becoming a member of the system;
(b) The public employer that had previously employed the member
was not a participant in the system at the time the member was in
the service of that public employer; and
(c) The public employer that had previously employed the member
was located in this state.
(2) In addition to the requirements of subsection (1) of this
section, if the member first becomes a member of the system on or
after January 1, 2000, as described in subsection (5) of this
section, the member must have been a member of the system for at
least 60 calendar months at the time the purchase is made.
(3) Except as provided in subsection (4) of this section, a
member of the system employed as a police officer or firefighter
who meets the requirements of this section shall be entitled to
receive retirement credit for the period of employment with a
previous public employer as described in subsection (1) of this
section up to a maximum of 10 years' retirement credit if the
member:
(a) Applies in writing to the Public Employees Retirement Board
for such retirement credit; and
(b) Pays to the board, in a lump sum, an amount representing
the contributions the member and the member's employer would have
made for the years for which the member seeks retirement credit
calculated as though the member had received a salary for each of
those years equal to the salary received by the member in the
first full calendar year of employment as a police officer or
firefighter within the system. In addition, the member shall pay
the interest that would have accrued had the contributions been
paid in the years for which the member seeks retirement credit,
compounded annually. The interest shall be computed at the annual
rate of eight percent. Payment of the lump sum shall be made on
or before the effective date of retirement for the member. The
amounts representing the contributions the member would have made
and the interest on those amounts shall be credited to the
{ + regular + } account of the { - employee in the fund - }
{ + member + }. The amounts representing the contributions the
employer would have made and the interest on those amounts shall
be credits to the account of the member's current participating
employer.
(4) If a person first becomes a member of the system on or
after January 1, 2000, as described in subsection (5) of this
section, the person may not acquire more than five years of
credit under this section in combination with any credit acquired
under ORS 526.052 for periods of service with another employer
that entitle the employee to retirement credit under a retirement
plan offered by the other employer. If a person subject to
limitation imposed by this subsection also is eligible for credit
under ORS 526.052, the total years of credit that may be acquired
under this subsection and ORS 526.052 may not exceed five years.
(5) A person becomes a member of the system before January 1,
2000, for the purposes of this section if:
(a) The person is a member of the system on January 1, 2000; or
(b) The person was a member of the system before January 1,
2000, ceased to be a member of the system under the provisions of
ORS 238.095, 238.265 or 238.545 before January 1, 2000, but
restores part or all of the forfeited creditable service from
before January 1, 2000, under the provisions of ORS 238.105 or
238.115 after January 1, 2000.
SECTION 42. ORS 238.156 is amended to read:
238.156. (1) Notwithstanding any other provision of this
chapter, but subject to subsection (4) of this section, an
employee who leaves a position that meets the requirements of ORS
238.015 (4) for the purpose of performing service in the
uniformed services is entitled to receive contributions, benefits
and service credit for the period under rules adopted by the
Public Employees Retirement Board pursuant to subsection (2) of
this section.
(2) The board shall adopt rules establishing contributions,
benefits and service credit for any period of service in the
uniformed services by an employee described in subsection (1) of
this section. For the purpose of adopting rules under this
subsection, the board shall consider and take into account all
federal law relating to contributions, benefits and service
credit for any period of service in the uniformed services.
Contributions, benefits and service credit under rules adopted by
the board pursuant to this subsection may not exceed
contributions, benefits and service credit required under federal
law for periods of service in the uniformed services.
(3) Subject to subsection (4) of this section, an employee who
leaves a position that meets the requirements of ORS 238.015 (4)
for the purpose of entering or reentering active service in the
Armed Forces shall acquire retirement credit for the period
during which the employee served in the Armed Forces if:
(a) The employee returns to the service of the employer who
employed the employee immediately before commencing service in
the Armed Forces in a position that meets the requirements of ORS
238.015 (4);
(b) The employee returns to that employment within one year
after being otherwise than dishonorably discharged from the Armed
Forces and within five years after the date that the employee
entered or reentered active service in the Armed Forces; and
(c) After returning to employment and before retirement, the
employee pays to the Public Employees Retirement Board in a lump
sum the total amount of contributions the employee would have
made throughout the period of military service in the Armed
Forces based on the employee's salary rate at the time the
employee entered or reentered the Armed Forces, as though the
employee had remained in the employment of the employer. Any lump
sum contribution made under this paragraph shall be added to the
employee's { + regular + } account { - in the retirement
fund - } and in all respects shall be considered as though made
by payroll deduction.
(4) An employee may not receive benefits under both subsections
(1) and (3) of this section for the same period of service in the
Armed Forces or uniformed services. If an employee is entitled to
benefits under both subsections (1) and (3) of this section by
the terms of those provisions, the employee shall receive
benefits under the subsection that provides the greater benefit.
(5) For the purposes of this section, 'Armed Forces' means the
Army, Navy, Air Force, Marine Corps and Coast Guard.
SECTION 43. ORS 238.200 is amended to read:
238.200. (1)(a) { - Each employee who is - } An active
member of the system shall contribute to the fund and there shall
be withheld from salary of the { - employee - }
{ + member + } six percent of that salary.
(b) Notwithstanding paragraph (a) of this subsection, an
employee who is an active member of the system on August 21,
1981, shall contribute to the fund and there shall be withheld
from salary of the { - employee, so - } { + member, as + }
long as the employee continues to be { - a - } { + an
active + } member of the system, four percent of that salary if
the salary for a month is less than $500, or five percent of that
salary if the salary for a month is $500 or more and less than
$1,000. Notwithstanding subsection (2) of this section, for the
purpose of computing the percentage of salary to be withheld
under this paragraph from { + a member who is + } an employee of
a school district or of the State Board of Higher Education whose
salary is based on an annual agreement, the agreed annual salary
of the { - employee - } { + member + } shall be divided into
12 equal installments, and each installment shall be considered
as earned and paid in separate, consecutive months, commencing
with the first month that payment is actually made under the
terms of the salary agreement.
(2) The contributions of each { - employee - }
{ + member + } as provided in subsection (1) of this section
shall be deducted by the employer from each payroll and
transmitted by the employer to the board, which shall cause them
to be credited to the { + member + } account of the
{ - employee in the fund - } { + member + }. Salary shall be
considered earned in the month in which it is paid. The date
inscribed on the paycheck or warrant shall be considered as the
pay date, regardless of when the salary is actually delivered to
the
{ - employee - } { + member + }.
(3) An active member who is concurrently employed by more than
one participating public employer, and who is a member of or
entitled to membership in the system, shall make contributions to
the fund on the basis of salary paid by each employer.
SECTION 44. ORS 238.205 is amended to read:
238.205. Notwithstanding any other provision of this chapter,
and subject to the provisions of this section, a public employer
participating in the system may agree, by a written employment
policy or agreement in effect on or after July 1, 1979, to '
pick-up,' assume or pay the full amount of contributions to the
fund required of all or less than all active members of the
system employed by the employer. If a public employer so agrees:
(1) The rate of contribution of each active member of the
system employed by the employer who is covered by such policy or
agreement shall uniformly be six percent of salary regardless of
the amount of monthly salary.
(2) The full amount of required employee contributions assumed
or paid by the employer on behalf of its employees shall be
considered 'salary { + , + } ' { - within the meaning of - }
{ + as defined in + } ORS 238.005 { - (11) - } { + , + }
only for the purpose of computing a member's ' final average
salary { + , + } ' { - within the meaning of - } { + as
defined in + } ORS 238.005 { - (15) - } , and shall not
constitute additional 'salary ' or 'other advantages { + , + } '
{ - within the meaning of - } { + as defined in + } ORS
238.005 { - (11) - } { + , + } for any other purpose.
(3) The full amount of required employee contributions '
picked-up' by the employer on behalf of its employees shall be
considered 'salary { + , + } ' { - within the meaning of - }
{ + as defined in + } ORS 238.005 { - (11) - } { + , + } for
the purpose of calculating the amount of the contribution, for
the purpose of computing a member's 'final average
salary { + , + } ' { - within the meaning of - } { + as
defined in + } ORS 238.005 { - (15) - } { + , + } and for all
other purposes.
(4) The full amount of required employee contributions '
picked-up,' assumed or paid by the employer on behalf of its
employees shall be added to the { - individual account
balances - } { + member accounts + } of the { - employees - }
{ + members + } for their annuities and shall be considered
employee contributions for all other purposes of this chapter.
(5) For the purposes of this section:
(a) Employee contributions are 'picked-up' if the written
employment policy or agreement described in subsection (1) of
this section provides that employee compensation will be reduced
to generate the funds needed to make the employee contributions;
and
(b) Employee contributions are 'assumed or paid' by an employer
if the written employment policy or agreement described in
subsection (1) of this section provides that additional amounts
shall be paid by the employer for the purpose of making the
employee contributions, and employee compensation will not be
reduced for the purpose of generating the funds needed to make
the employee contributions.
(6) A participating public employer must give written notice to
the Public Employees Retirement Board at the time that a written
employment policy or agreement described in subsection (1) of
this section is adopted or changed. The notice must indicate
whether the employer will 'pick-up' or 'assume or pay' the
employee contributions as described in subsection (5) of this
section. Any change in the manner in which employee contributions
are to be paid applies only to employee contributions made on and
after the date the notice is received by the board.
SECTION 45. ORS 238.220 is amended to read:
238.220. (1) The Public Employees Retirement Board may, at its
discretion, accept rollover contributions from an active member.
The board may accept rollover contributions under this section
only if the amounts contributed qualify for pretax rollover
treatment under the federal income tax laws governing qualified
retirement plans.
(2) If the board accepts a rollover contribution under this
section, the contribution shall be paid into the Public Employees
Retirement Fund and credited to an individual rollover account in
the name of the member who made the contribution. The rollover
account must be kept separate from the { - individual - } { +
member + } account
{ - maintained for the employee under ORS 238.250 and any
account maintained for the employee in the Variable Annuity
Account under ORS 238.260, - } { + of the member + } and must
be invested separately from all other moneys in the Public
Employees Retirement Fund. All earnings on the rollover account
shall be credited by the board to the rollover account. If the
membership of the employee in the Public Employees Retirement
System is terminated under the provisions of ORS 238.095, the
board shall cease investment of the amounts in the rollover
account and, after the effective date of the termination, shall
no longer credit earnings and losses to the rollover account.
(3) Except as provided in subsection (2) of this section,
amounts in a rollover account established under this section
shall be invested in the same manner as funds in { - the
individual account maintained for an employee under ORS
238.250 - } { + regular accounts + }. However, ORS 238.255
does not apply to rollover accounts.
(4) Rollover contributions shall not be considered in
determining whether a member has contributed in each of five
calendar years for purposes of ORS 238.265 and 238.425 or for the
purpose of any other provision in this chapter relating to
employee contributions.
(5) Amounts held in a rollover account under this section shall
be distributed to the member within 90 days after the member's
effective date of retirement under this chapter, or within 90
days after termination of the person's membership in the system
under ORS 238.095.
(6) Distribution from a member's rollover account shall be made
in a single lump sum payment. Distribution from a member's
rollover account shall not affect the calculation of any other
service or disability retirement allowance, death benefit or
other benefit payable to a member under this chapter.
(7) The board shall adopt rules and establish procedures for
determining whether a member will be allowed to make a rollover
contribution under this section. Rules and procedures adopted by
the board must ensure that the rollover contributions do not
adversely affect the status of the system and the Public
Employees Retirement Fund as a qualified governmental plan and
trust under federal income tax law.
(8) The board shall by rule establish a maintenance fee for
rollover accounts established under this section. The fee may be
collected out of earnings on rollover accounts or, if there are
no earnings, from the principal amounts paid into the
{ + rollover + } accounts. The fee shall be in an amount
determined by the board to be adequate to pay the full cost to
the system of maintaining rollover accounts under this section.
SECTION 46. ORS 238.250 is amended to read:
238.250. The board shall provide for { - an individual - }
{ + a regular + }account for each active and inactive member
of the system. The { + regular + } account shall show the
amount of the member's contributions to the fund and the interest
which they have earned. The board shall furnish a written
statement thereof upon request by any member or beneficiary of
the system.
SECTION 47. ORS 238.260 is amended to read:
238.260. (1) The purpose of this section is to establish a well
balanced, broadly diversified investment program for certain
contributions and portions of { - account balances of employees
who are members of the system - } { + the member accounts + }
so as to provide retirement benefits for { - those
employees - } { + members of the system + } that will fluctuate
as the value and earnings of the investments vary in relation to
changes in the general economy. It is anticipated that investment
of those contributions and portions of
{ - account balances - } { + the member accounts + } in
equities will result in the accumulation of larger deposit
reserves for those { - employees - } { + members + } during
their working years, tend to preserve the purchasing power of
those reserves and the retirement benefits provided thereby and
afford better protection in periods of economic inflation.
(2) There is established in the Public Employees Retirement
Fund an account, separate and distinct from the General Fund, to
be known as the Variable Annuity Account. Interest earned by the
account shall be credited to the account.
(3) { - An employee - } { + A member + } may elect at any
time to have 25, 50 or 75 percent of contributions by the
{ - employee - } { + member + } to the fund on and after the
effective date of the election paid into the Variable Annuity
Account, credited to { - the - } { + a variable + } account
{ - of the employee therein - } { + , + } and reserved for the
purchase of a variable annuity. { - An employee - } { + A
member + } who has elected to have a percentage of contributions
so paid, credited and reserved may elect at any time thereafter
to have an additional 25 or 50 percent of contributions by the
{ - employee - } { + member + }, but not to exceed a maximum
of 75 percent, so paid, credited and reserved. An election shall
be in writing on a form furnished by the board and be filed with
the board. An election shall be effective on January 1 following
the filing thereof.
(4) { - An employee - } { + A member + } who has elected to
have contributions paid into the Variable Annuity Account under
subsection (3) of this section may thereafter cause the
contributions to cease being paid into the { + member's
variable + } account by filing a request in writing on a form
furnished by the board and filed with the board. The
contributions shall cease being paid into the { + member's
variable + } account after December 31 following the filing of
the request. Contributions paid into the { + member's
variable + } account before the effective date of the request for
cessation shall remain in the { + member's variable + } account.
(5)(a) An employee who is a member of the system on January 1,
1968, and who thereafter files an election under subsection (3)
of this section, may elect at any time to have an amount equal to
10 percent per year, for not more than five years, of the balance
of the { + regular + } account of the { - employee - } { +
member + } in the fund on the effective date of an election filed
under subsection (3) of this section, transferred from the
{ + regular + } account { + of the member + } { - in the
fund - } to the Variable Annuity Account, credited to the { +
member's variable + } account { - of the employee therein - }
{ + , + } and reserved for the purchase of a variable annuity.
An election shall be in writing on a form furnished by the board
and be filed with the board. An election is final and irrevocable
upon the filing thereof. The first transfer pursuant to an
election shall be made on July 1 following the filing of the
election, but may be made, in the discretion of the board, on an
earlier date.
(b) If the transfers elected by { - an employee - } { + a
member + } under this subsection have not been completed at the
time of retirement, a transfer equal to one annual transfer shall
be made pursuant to an election by the { - employee - }
{ + member + } made and filed as provided in this subsection.
(c) No transfer shall be made under this subsection after the
first payment { - on account - } of the service retirement
allowance of the member becomes normally due.
(6) Moneys in the Variable Annuity Account may be invested in
investments authorized by law for investment of moneys in the
Public Employees Retirement Fund; but, notwithstanding any other
general or specific law, moneys in the account shall be invested
primarily in equities, including common stock, securities
convertible into common stock, real property and other recognized
forms of equities, whether or not subject to indebtedness. Not
more than five percent of the amortized value of all the
investments of the { + Variable Annuity + } Account and of
moneys in the account immediately available for investment may be
invested in the obligations of or equities in a single, primary
obligor or issuer. A pro rata share of the administrative
expenses of the system shall be paid from interest earned by the
Variable Annuity Account.
(7)(a) Except as provided in subsection (8) of this section,
the policy-making investment authority for the Public Employees
Retirement Fund shall enter into contracts with one or more
persons whom the authority determines to be qualified, whereby
the persons undertake to invest and reinvest moneys in the
Variable Annuity Account available for investment and acquire,
retain, manage and dispose of investments of the account in
accordance with subsections (1) and (6) of this section and to
the extent provided in the contracts.
(b) Performance of functions under contracts so entered into
shall be paid for out of the gross interest or other income of
the investments with respect to which the functions are
performed, and the net interest or other income of the
investments after that payment shall be considered income of the
Variable Annuity Account.
(c) The policy-making investment authority may require a person
contracted with to give to the state a fidelity bond in a penal
sum as may be fixed by law or, if not so fixed, as may be fixed
by the authority, with corporate surety authorized to do business
in this state.
(d) Contracts so entered into and functions performed
thereunder are not subject to the State Personnel Relations Law
or ORS 279.545 to 279.746.
(e) A person contracted with shall report to the policy-making
investment authority as often as the authority may require, but
at least annually, the earnings of the moneys invested during the
period covered by the report, the capital gains and losses of the
{ + Variable Annuity + } Account during the period, the changes
in the market value of the investments of the account during the
period and such other information as the authority may require.
(8) The policy-making investment authority for the Public
Employees Retirement Fund, for and on behalf of the Public
Employees Retirement System and Public Employees Retirement
Board, may enter into group annuity contracts with one or more
insurance companies authorized to do business in this state. In
lieu of any investment of moneys in the Variable Annuity Account
as provided in subsections (6) and (7) of this section, the
authority may pay, from time to time under contracts so entered
into, any moneys in that account available for investment
purposes. Contracts so entered into:
(a) May provide that annuities purchased thereunder be payable
in variable dollar amounts, but if that provision is made,
provision also shall be made that { - a person who is - } a
member of the system { - and - } who has { - an - } { + a
variable + } account { - in the Variable Annuity Account - } ,
upon retiring from service and before the first payment of
retirement allowance becomes normally due, may elect an option to
have the annuities payable to the member or the beneficiary of
the member in fixed or variable dollar amounts or both.
(b) May provide that payment of annuities purchased thereunder
may be made by the insurance company directly to persons entitled
thereto or to the Variable Annuity Account for payment therefrom
to those persons.
(c) Are not subject to ORS 279.545 to 279.746.
(9) Upon retiring from service but within 60 days after the
date of the first benefit payment, { - a person who is - } a
member of the system { - and - } who has { - an - } { + a
variable + } account { - in the Variable Annuity Account - }
may elect to transfer the balance in { - that - } { + the
variable + } account to the { + regular + } account of the
member { - in the Public Employees Retirement Fund - } , and by
that transfer the annuity shall be based on the { - account
balance in the Public Employees Retirement Fund - } { + amount
in the regular account of the member + } as otherwise provided in
this chapter and the member shall not receive a variable annuity
as provided in this section.
(10) When an annuity is payable under this chapter to { - a
person who is - } a member of the system { - and - } who has
{ - an - } { + a variable + } account { + , + } { - in the
Variable Annuity Account - } or { + is payable + } to a
beneficiary of that person, the portion of the annuity payable
from the Variable Annuity Account shall be proportionately
increased or decreased for a calendar year when, as of October 31
of the preceding calendar year, the balance of the { + member's
variable + } account { - of that person in the Variable Annuity
Account - } exceeds or is less than the current value of the
annuity, determined in accordance with the rate of interest and
approved actuarial tables then in effect.
(11) Notwithstanding subsection (10) of this section, the
board, in the event of extraordinary fluctuation in the market
value of investments of the Variable Annuity Account and in order
to avoid substantial inequities, may increase or decrease the
portions of annuities paid from the account for periods less than
a calendar year and determined as of dates other than October 31.
(12) Notwithstanding any other provision of this chapter, the
retirement allowance to which { - a person who is - } a member
of the system { - and - } who has { - an - } { + a
variable + } account { - in the Variable Annuity Account - }
or who made contributions on salary in excess of $4,800 per year
during the period January 1, 1956, through December 31, 1967, and
whose effective date of retirement is January 1, 1982, or later,
is otherwise entitled under this chapter shall be subject to the
following adjustment:
(a) The board shall determine the difference between the
{ - total - } { + member + } account of the member { - in
the system - } and what the
{ - total - } { + member + } account of the member would have
been had the member not participated in the variable annuity
program on or after January 1, 1982, plus the contributions made
on salary in excess of $4,800 per year during the period January
1, 1956, through December 31, 1967.
(b) If the { - total - } { + member + } account of the
member due to participation in the variable annuity program or
due to the contributions made on salary in excess of $4,800 per
year is greater, the monthly retirement allowance of the member
shall be increased by the value of the difference, using the
annuity tables applicable to the plan selected by the member.
(c) If the { - total - } { + member + } account of the
member due to participation in the variable annuity program or
due to the contributions made on salary in excess of $4,800 per
year is lesser, the monthly retirement allowance of the member
shall be decreased by the value of the difference, using the
annuity tables applicable to the plan selected by the member.
(13) Except as otherwise specifically provided in this section,
the rights and benefits under this chapter of an active or
retired member of the system or of a beneficiary of the member
are not affected by this section and the provisions of this
chapter applicable to { + regular + } accounts of active and
retired members of the system in the { - Public Employees
Retirement - } fund are also applicable to { - such - } { +
variable + } accounts { - in the Variable Annuity Account - } .
(14)(a) In addition to the transfer provided for in subsection
(9) of this section, a member of the system who has
{ - an - } { + a variable + } account { - in the Variable
Annuity Account - } may at any time prior to retirement elect to
transfer the balance in that account to the { + regular + }
account of the member in the { - Public Employees
Retirement - } fund if:
(A) The member is other than a police officer or firefighter
and has attained the age of 50;
(B) The member is a police officer or firefighter and has
attained the age of 45; or
(C) The member has a combined total of 25 years or more of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } .
(b) An election under paragraph (a) of this subsection is
irrevocable, and a member who has so elected may not thereafter
elect to make contributions to the Variable Annuity Account under
subsection (3) of this section.
{ - (c) An election under paragraph (a) of this subsection
shall be filed with the board, and shall be in such form as the
board may provide by rule. - }
{ - (d) - } { + (c) + } An election under paragraph (a) of
this subsection shall be in writing and shall be filed with the
board. The board { + by rule + } shall prescribe a form for the
purposes of application. An election so made shall be effective
on January 1 of the year following the year in which the election
is made, except that an election shall have no effect whatsoever
unless the { - member's total - } { + member + } account
{ + of the member + } { - in the system - } as of the
effective date of the election is greater than what the
{ - total - } { + member + } account of the member would have
been had the member not participated in the variable annuity
program on or after January 1, 1982, not including the
contributions made on salary in excess of $4,800 per year during
the period January 1, 1956, through December 31, 1967.
{ - (e) - } { + (d) + } As of the effective date of an
election under this subsection, the board shall credit all
earnings to the member's { + variable + } account { - in the
Variable Annuity Account - } based on the actual calendar year
variable earnings rate for the year in which the election is
made. This account balance shall:
(A) Be used by the board in determining whether the member's
election is effective under paragraph { - (d) - } { + (c) + }
of this subsection; and
(B) Be the account balance credited by the board to the { +
regular + } account of the member in the { - Public Employees
Retirement - } fund if the election is determined to be
effective.
{ - (f) - } { + (e) + } The annuity of a member who makes
an effective transfer under this subsection shall be based on the
{ - member's - } { + amount in the regular + } account
{ - balance - } { + of the member + } in the
{ - Public Employees Retirement - } fund as otherwise provided
in this chapter, and the member shall not receive a variable
annuity as provided in this section.
SECTION 48. ORS 238.265 is amended to read:
238.265. (1) Except as otherwise provided in this section, a
member of the Public Employees Retirement System may withdraw
from the Public Employees Retirement Fund the amount credited to
the
{ - employee - } { + member + } account for the member if:
(a) The member is separated from all service with participating
public employers;
(b) The member is separated from all service with employers who
are treated as part of a participating public employer's
controlled group under the federal laws and rules governing the
status of the system and the fund as a qualified governmental
retirement plan and trust;
(c) The member has not attained earliest service retirement
age; and
(d) The separation from service is not by reason of death or
disability.
(2) If a member wishes to withdraw the { - employee - } { +
member + } account { - balance - } { + of the member + }
under this section, the member must transmit to the Public
Employees Retirement Board a withdrawal request. The board shall
deny the withdrawal, or shall take all reasonable steps to
recover withdrawn amounts, if:
(a) The board determines that the separation is not a bona fide
separation; or
(b) The member fails to remain absent from the service of all
employers described in subsection (1) of this section for at
least one calendar month following the month in which the member
separates from service.
(3) If a member has contributed to the fund in each of five
calendar years and has separated from all service in the manner
described in subsection (1) of this section before reaching
earliest service retirement age, the member may elect to withdraw
the { - employee - } { + member + } account { - balance - }
{ + of the member + } under this section at any time before
reaching earliest service retirement age. If the inactive member
does not make an election to withdraw under this section, the
member shall be paid the benefits or retirement allowances
described in ORS 238.425.
(4) Withdrawal of { - the employee - } { + a member + }
account { - balance - } under this section cancels all
membership rights in the system, including the right to claim
credit for any employment before withdrawal.
SECTION 49. ORS 238.270 is amended to read:
238.270. Whenever { - an employee - } { + a person + } who
is past the earliest service retirement age separates from the
service of a public employer participating in the Public
Employees Retirement System and who thereafter, but before
applying to the Public Employees Retirement Board for retirement
benefits, is employed in a position { - which - }
{ + that + } entitles the { - employee - } { + person + } to
membership in another public { - employees' - }
{ + employees + } retirement system, either within or without
this state, the board, upon the written request of the
{ - employee - } { + person + } and if in conformance with the
provisions of law governing the other public { - employees' - }
{ + employees + } retirement system, may transfer the
{ + member + } account
{ - balance - } of the { - employee under the Public
Employees Retirement System - } { + person in the fund + } to
the other public { - employees' - } { + employees + }
retirement system. Such transfer shall cancel the right of the
{ - employee - } { + person + } to claim any future benefits
under the Public Employees Retirement System for service rendered
to a public employer in this state prior to the date of the
transfer.
SECTION 50. ORS 238.300 is amended to read:
238.300. Upon retiring from service at normal retirement age or
thereafter { + , + } { - a person who is - } a member of the
system shall receive a service retirement allowance which shall
consist of the following annuity and pensions:
(1) A refund annuity which shall be the actuarial equivalent of
accumulated contributions by the member and interest thereon
credited at the time of retirement, which annuity shall provide
an allowance payable during the life of the member and at death a
lump sum equal in amount to the difference between accumulated
contributions at the time of retirement and the sum of the
annuity payments actually made to the member during life shall be
paid to such person, if any, as the member nominates by written
designation duly acknowledged and filed with the board or shall
otherwise be paid according to the provisions of this chapter for
disposal of an amount credited to the { + member + } account of
a member at the time of death in the event the member designates
no beneficiary to receive the amount or no such beneficiary is
able to receive the amount. If death of the member occurs before
the first payment is due, the { + member + } account of the
member shall be treated as though death had occurred before
retirement.
(2)(a) A life pension (nonrefund) for current service provided
by the contributions of employers, which pension, subject to
paragraph (b) of this subsection, shall be an amount which, when
added to the sum of the annuity under subsection (1) of this
section and the annuity, if any, provided on the same basis and
payable from the Variable Annuity Account, both annuities
considered on a refund basis, results in a total of:
(A) For service as a police officer or firefighter, two percent
of final average salary multiplied by the number of years of
membership in the system as a police officer or firefighter
before the effective date of retirement.
(B) For service as a member of the Legislative Assembly, two
percent of final average salary multiplied by the number of years
of membership in the system as a member of the Legislative
Assembly before the effective date of retirement.
(C) For service as other than a police officer, firefighter or
member of the Legislative Assembly, 1.67 percent of final average
salary multiplied by the number of years of membership in the
system as other than a police officer, firefighter or member of
the Legislative Assembly before the effective date of retirement.
(b) A pension under this subsection shall be at least:
(A) The actuarial equivalent of the annuity provided by the
accumulated contributions of the member.
(B) For a member who made contributions before August 21, 1981,
the equivalent of a pension computed pursuant to this subsection
as it existed immediately before that date.
(c) As used in this subsection, 'number of years of membership'
means the number of full years plus any remaining fraction of a
year for which salary was paid and contributions to the Public
Employees Retirement System made. Except as otherwise provided in
this paragraph, in determining a remaining fraction a full month
shall be considered as one-twelfth of a year and a major fraction
of a month shall be considered as a full month. Membership of a
school district employee, an employee of the State Board of
Higher Education engaged in teaching or other school activity at
an institution of higher education or an employee of the State
Office for Services to Children and Families, the Oregon Youth
Authority, the Department of Corrections, the Mental Health and
Developmental Disability Services Division or the State Board of
Education engaged in teaching or other school activity at an
institution supervised by the office, authority, board,
department or division, for all portions of a school year in a
calendar year in which the district school, institution of higher
education or school activity at an institution so supervised in
which the member is employed is normally in session shall be
considered as a full one-half year of membership. The number of
years of membership of a member who received a refund of
contributions as provided in ORS 237.976 (2) is limited to the
number of years after the day before the date on which the refund
was received. The number of years of membership of a member who
is separated, for any reason other than death or disability, from
all service entitling the member to membership in the system, who
withdraws the amount credited to the { + member + } account of
the member in the fund during absence from such service and who
thereafter reenters the service of an employer participating in
the system but does not repay the amount so withdrawn as provided
in this chapter, is limited to the number of years after the day
before the date of so reentering.
(3) An additional life pension (nonrefund) for prior service
{ + credit + }, including military service, credited to the
member at the time of first becoming a member of the system, as
elsewhere provided in this chapter, which pension shall be
provided by the
{ - prior service - } contributions of the employer { - or,
in case the member is an employee of a school district, by a
uniform rate of contribution by all school districts - } .
SECTION 51. ORS 238.320 is amended to read:
238.320. (1) Whenever an employee who is a member of the system
is found, after being examined by one or more physicians selected
by the board, to be mentally or physically incapacitated for an
extended duration, as determined by medical examination, and
thereby unable to perform any work for which qualified, by injury
or disease sustained while in actual performance of duty and not
intentionally self-inflicted, the member shall receive a
disability retirement allowance consisting of:
(a) A disability retirement refund annuity based on the
contributions credited to the { + member + } account of the
member.
(b) A current service pension provided by the contributions of
employers equal to:
(A) For a police officer or firefighter, the pension to which
the member would have been entitled if the member had worked
continuously until attaining the age of 55, or if the member has
attained the age of 55, the pension which the member would
receive were the member to retire for service, as provided in
this chapter.
(B) For { - an employee - } { + a member + } other than a
police officer or firefighter, the pension to which the member
would have been entitled if the member had worked continuously
until attaining the age of 58, or if the member has attained the
age of 58, the pension which the member would receive were the
member to retire for service, as provided in this chapter.
(c) The same prior service pension the member would have
received had the member worked until normal retirement age.
(2) As used in subsection (1) of this section, 'injury ' means
bodily injury causing the disability directly and independently
of all other causes and effected solely through accidental means.
(3) Whenever an employee who is a member of the system and who
has been an employee for 10 years or more of an employer
participating in the system is found, after being examined by one
or more physicians selected by the board, to be mentally or
physically incapacitated for an extended duration, as determined
by medical examination, and thereby unable to perform any work
for which qualified, from cause other than injury or disease
sustained while in actual performance of duty or intentionally
self-inflicted, the member shall receive a disability retirement
allowance as provided in subsection (1) of this section.
(4) Payments under a disability retirement allowance provided
for in subsection (1) or (3) of this section for the first 90-day
period of incapacity shall be withheld until such 90-day period
has elapsed.
(5) An inactive member is not eligible for disability benefits
referred to in subsection (1) or (3) of this section unless the
member applies for such disability benefits within five calendar
years after the date of separation from service with a
participating public employer if the disability is continuous
from such separation date or within six months after the date of
such separation from service if disability occurs after such
separation date.
(6) In computing years of employment for the purpose of
subsection (3) of this section, the following schedule shall be
used: For employment before the employee established membership
in the Public Employees Retirement System, a member shall be
considered to have been employed for one year for each year of
prior service credit allowed, and for any minor fraction of a
year of continuous service as certified by the employer for which
no prior service credit was granted. After having established
membership in the Public Employees Retirement System a member
shall be considered to have been employed one year for each
12-month period or major fraction thereof during which time the
member received compensation for employment which entitled the
member to membership in the system, as evidenced by payroll
records. For the purpose of determining a member's eligibility
for disability benefits, no leave of absence after { - an
employee - } { + a member + } ceases to work for any
participating employer shall be considered other than accumulated
sick leave not in excess of 90 days. The effective date of the
disability shall not in any event be determined by the board as
prior to the last day for which the disabled member performed
services for a participating employer. No benefits may be paid
for any month in which the { - employee - } { + member + }
received salary or sick leave benefits from the participating
employer.
(7) For the purposes of subsections (1) and (3) of this
section, a member of the system shall be considered to be
mentally or physically incapacitated for an extended duration if
the mental or physical incapacity can be expected to result in
death or has lasted or can be expected to last for a continuous
period of not less than 90 days.
SECTION 52. ORS 238.325 is amended to read:
238.325. (1) At any time after establishing membership, but
before the expiration of 90 days after the board makes its
finding that the employee is disabled, an employee who is a
member of the system may elect to convert the disability
retirement allowance otherwise payable on the { + member + }
account of the { - employee - } { + member + } into a
disability retirement annuity of equivalent actuarial value, by
selecting one of the optional forms named below. The election of
Option 2, 2A, 3 or 3A shall be effective immediately upon the
effective date of the member's disability, and in the event of
death within the first 90-day period of incapacity, payment to
the beneficiary of the member shall be made in accordance with
the option selected.
Option 1. (a) A life annuity (nonrefund) payable during the
member's life only, which shall be the actuarial equivalent of
the accumulated contributions and interest thereon credited to
the member at the time the member retires (if death occurs before
the first payment is due, the { + member + } account { + of the
member + } shall be treated as though death had occurred before
retirement); (b) a life pension (nonrefund) provided by the
contributions of employers as provided in ORS 238.320 (1)(b); (c)
an additional nonrefund pension for prior service { +
credit + }, including military service, credited to the member at
the time the member first becomes a member of the system, as
elsewhere provided in this chapter, which pension shall be
provided by the { - prior service - } contributions of the
employer { - or, in case the member is an employee of a school
district, by a uniform rate of contribution by all school
districts - } ; or
Option 2. A reduced disability retirement allowance payable
during the period of incapacity, with the provision that after
death, if death shall occur after the effective date of the
disability and during the period of incapacity, it shall continue
for the life of the beneficiary whom the member has designated in
writing duly acknowledged and filed with the Public Employees
Retirement Board at the time of election, should the beneficiary
survive the member; or
Option 2A. A reduced disability retirement allowance payable
during the period of incapacity which, unless modified under
subsection (3) of this section, continues after death, if death
shall occur after the effective date of the disability and during
the period of incapacity, for the life of the beneficiary whom
the member nominates by written designation duly acknowledged and
filed with the board at the time of election, should the
beneficiary survive the member; or
Option 3. A reduced disability retirement allowance payable
during the period of incapacity, with the provision that after
death, if death shall occur after the effective date of the
disability and during the period of incapacity, such allowance
shall continue at one-half the rate paid to the member and be
paid for the life of the beneficiary whom the member has
designated in writing duly acknowledged and filed with the board
at the time of election, should the beneficiary survive the
member; or
Option 3A. A reduced disability retirement allowance payable
during the period of incapacity which, unless modified under
subsection (3) of this section, continues after death, if death
shall occur after the effective date of the disability and during
the period of incapacity, at one-half the rate paid to the member
and is paid for the life of the beneficiary whom the member
nominates by written designation duly acknowledged and filed with
the board at the time of election, should the beneficiary survive
the member; or
Option 4. A reduced disability retirement allowance payable
during the period of incapacity, with the provisions that if the
member dies during the period of incapacity and before a total of
180 monthly payments is made, the remainder of the 180 monthly
payments shall be paid monthly to the beneficiary the member
nominates by written designation duly acknowledged and filed with
the board at any time before the member's death; and that if the
member designates no beneficiary to receive the monthly payments
or no such beneficiary is able to receive the monthly payments,
an amount equal to the actuarial value, on the date of the
member's death, of the total of the monthly payments not made to
the member shall be paid according to ORS 238.390 for disposal of
an amount credited to the { + member + } account of a member at
the time of death; and that if the beneficiary receiving monthly
payments dies before the total number of monthly payments to
which the beneficiary is entitled is made, an amount equal to the
actuarial value, on the date of the beneficiary's death, of the
total of the monthly payments not made to the member and
beneficiary shall be paid according to ORS 238.390 for disposal
of an amount credited to the { + member + } account of a member
at the time of death and as if the beneficiary had been a member.
(2) The beneficiary designated by a member to receive any
benefit under this section shall be the same as designated under
ORS 238.390 (1). The designation of a beneficiary or the election
of an option may be changed by a member within 60 days after the
date of the first benefit payment, except that the designation of
a beneficiary under Option 4 may be changed by the member at any
time before the member's death.
(3) If a retired member has elected to receive a
{ - service - } { + disability + } retirement allowance under
Option 2A or Option 3A as provided in subsection (1) of this
section, and if the beneficiary under that option dies after the
expiration of the time within which the member could change the
election of an option or if the beneficiary is the spouse of the
member and the marriage relationship is terminated as provided by
law after the expiration of the time within which the member
could change the election of an option, the member may elect to
receive, in lieu of the optional form of allowance previously
elected, the allowance that the member would have received on the
effective date of retirement under Option 1 as provided in
subsection (1) of this section and adjusted by the actual amount
of any cost of living or other post-retirement adjustments made
to the original allowance since the effective date of retirement.
Notice of election under this subsection shall be in a form
approved by the board. Payment under Option 1 shall be effective
for months beginning on or after the date the board receives the
election.
(4) The cost to the retirement system of a disability
retirement allowance in any optional form shall not exceed the
cost to the retirement system of a nonrefund disability
retirement allowance payable to, and on account of, the member
making such election.
(5) The obligation for payment of any benefit in force prior to
April 8, 1953, shall not be altered by subsections (1) to (4) of
this section. However, the beneficiary of a retired member who
prior to July 1, 1953, elected an option but died prior to the
effective date of such election, shall have a right to repay,
before December 31, 1953, the amount of the lump sum refund made
in lieu of the monthly life benefit elected and receive payment
of such benefit, computed as of the date of the member's death
and payable from such date.
(6) If a member who would have qualified for disability
benefits makes preliminary application for such benefits but dies
prior to being found by the board to be disabled or prior to
electing a plan of benefit payments, and the records of the board
indicate that the member had designated the surviving spouse as
beneficiary under ORS 238.390 (1), such surviving spouse may, not
more than 90 days after the board makes its finding that the
member would have qualified for disability benefits if living:
(a) Elect to receive the amount referred to in ORS 238.395 if
such benefit would have been available if the member had not
applied for disability benefits; { - or - }
(b) If not eligible for benefits under ORS 238.395, elect to
receive benefits under ORS 238.390 (1); or
(c) Elect Option 2 or 3 under subsection (1) of this section
and designate the surviving spouse as beneficiary thereunder with
the same force and effect as if the election and designation had
been properly made by the deceased member.
(7) The board may deny an election to convert a disability
retirement allowance under this section, a change of beneficiary
under this section or a change in benefit options under this
section if that denial is required to maintain the status of the
system and the Public Employees Retirement Fund as a qualified
governmental retirement plan and trust under the Internal Revenue
Code and under regulations adopted pursuant to the Internal
Revenue Code.
SECTION 53. ORS 238.340 is amended to read:
238.340. When a member retired because of disability is
determined by the Public Employees Retirement Board to be not
incapacitated to the extent that the member is disabled from the
performance of any work for which the member is qualified, the
disability retirement shall be canceled forthwith, the member
shall be eligible for reemployment and the { - individual - }
{ + member + } account of the member shall be credited with the
amount { - which - } { + that + } stood to the credit in the
{ + member + } account of the member in the fund at the time of
retirement for disability. Any such person who for any reason is
not reinstated in the service of an employer participating in the
system shall receive separation benefits or service retirement
benefits as provided in this chapter.
SECTION 54. ORS 238.380 is amended to read:
238.380. (1)(a) Upon retirement of an employee who is a member
of the Public Employees Retirement System and computation of that
member's service retirement allowance under ORS 238.300, 238.305
or 238.425, or computation of any disability retirement allowance
under ORS 238.320, 238.325, 238.330, 238.345 or 238.425, the
Public Employees Retirement Board shall add to the amount of the
allowance, including amounts attributable to prior service credit
{ - acquired under ORS 238.225 - } and the amount of any refund
of accumulated employee contributions, the greater of the
percentage increase calculated under ORS 238.385 or a percentage
increase calculated under subsection (4) of this section. No
benefit shall be paid to a member or beneficiary under ORS
238.385 if the benefit payable to the member or beneficiary under
this section is larger than the benefit payable under ORS
238.385.
(b) The percentage increase provided for in this section shall
be adjusted by the board to reflect increases or decreases in a
member's retirement allowance that are attributable to the
member's participation in the Variable Annuity Account
established by ORS 238.260, that are attributable to a change in
the member's beneficiary or payment option under ORS 238.305 or
238.325, or that are attributable to corrections to the member's
retirement allowance calculation.
(c) The percentage increase provided for in this section shall
be applied to any lump sum payment made to a member or a
beneficiary of a member on or after January 1, 1991, that is
attributable to a retroactive correction or adjustment of the
amount payable to the member or beneficiary as a retirement
allowance or that is attributable to a retroactive correction or
adjustment to any other benefit that entitles a member or
beneficiary to an increased benefit under this section. The
percentage increase payable under this paragraph applies only to
the principal amounts included in the lump sum payment as a
retroactive correction or adjustment and does not apply to any
interest on the retroactive correction or adjustment paid as part
of the lump sum payment.
(2) The amount of any death benefit under ORS 238.390, 238.395,
238.400 or 238.405, including the amount of any monthly payments,
shall be increased by the greater of the percentage provided for
in ORS 238.385 or the percentage calculated under subsection (4)
of this section.
(3)(a) A member of the system who elects to receive a lump sum
in lieu of a retirement allowance or other benefit under ORS
238.315 shall receive an increase based on the greater of the
percentage provided for in ORS 238.385 or the percentage
calculated under subsection (4) of this section.
(b) A member of the system who withdraws the amount credited to
the { - employee's - } { + member + } account { + of the
member + } in the fund under the provisions of ORS 238.265, or
whose { + member + } account is returned to the employee after
the membership of the employee is terminated under the provisions
of ORS 238.095, shall receive an additional amount calculated by
multiplying the amount of the { - employee's - }
{ + member + } account { + of the member + } by the greater of
the percentage provided for in ORS 238.385 or the percentage
calculated under subsection (4) of this section. If a member
thereafter elects to obtain restoration of creditable service by
repaying the amount of the withdrawn { - employee - } { +
member + } account pursuant to the provisions of ORS 238.105, the
member must also repay all amounts paid under this section,
together with interest from the date of withdrawal at the same
rate as applied to the withdrawn { - employee - } { +
member + } account under ORS 238.105. If a member repays only
part of the withdrawn { - employee - } { + member + } account
pursuant to the provisions of ORS 238.115, the member must repay
that part of the amount paid under this section that is
proportionate to the portion of the withdrawn { - employee - }
{ + member + } account that is repaid under ORS 238.115,
together with interest from the date of withdrawal at the same
rate as applied to the withdrawn { - employee - } { +
member + } account under ORS 238.115. All amounts paid to the
member that are subsequently repaid under ORS 238.105 or 238.115
shall be deposited by the board to the employer reserve for
pension accounts in the fund.
(4)(a) The Public Employees Retirement Board shall calculate a
multiplier for the purposes of this section equal to the
percentage produced by the following formula:
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
1
_______________
1 -
the maximum Oregon
personal income tax rate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(b) Upon the retirement or death of a member of the system, the
board shall determine the fraction of the member's retirement
allowance or death benefit, including any refund or lump sum
payment, that is attributable to service rendered by the member
before October 1, 1991. The board shall then calculate a
percentage that is equal to that fraction multiplied by the
multiplier determined by the board under paragraph (a) of this
subsection. The percentage so calculated shall be used to
determine the amount of the increase in benefits provided to a
member, if any, under this section.
(5) For the purpose of determining that portion of a retirement
allowance or death benefit attributable to service rendered
before October 1, 1991, the board shall divide the number of
years of creditable service performed before October 1, 1991, by
the total number of years of creditable service during which the
pension income was earned. For the purposes of this subsection:
(a) The number of years of creditable service does not include
any period of employment for which a benefit is paid for prior
service { - under the provisions of ORS 238.225 - } { +
credit + }.
(b) Except as provided in subsection (8)(a) of this section,
the number of years of creditable service includes all retirement
credit of the member, and any retirement credit of a member that
is attributable to periods of service, employment or other
activity performed before October 1, 1991, shall be considered
creditable service performed before October 1, 1991.
(6) The increased benefits provided for in this section shall
be funded by employer contributions.
(7) If the maximum Oregon income tax rate is changed for any
taxable year, the board shall utilize the new rate for the
purposes of calculating the benefit provided for in this section
for all members of the system who retire or die after the change
in rates takes effect. In addition, the board shall recalculate
the benefits payable to all retired members of the Public
Employees Retirement System, or to the beneficiaries of those
members, using the new tax rate. The benefit so recalculated
shall be applicable to the first full month after the
recalculation is made, and be payable the first day of the month
immediately following. If by reason of the calculation or
recalculation of the benefit under this subsection the amount of
the benefit provided for in this section is decreased, any
benefits paid after the change in the tax rate takes effect and
before the calculation or recalculation is made shall not be
recoverable by the system, but the Public Employees Retirement
Board shall ensure that only the amount of the benefit so
calculated or recalculated shall be paid after the calculation or
recalculation is made.
(8)(a) The increased benefits provided by this section apply
only to members who establish membership in the Public Employees
Retirement System before July 14, 1995, and whose effective date
of retirement or date of death is on or after January 1, 1991.
The increased benefits provided by this section do not apply to
any creditable service or prior service { + credit + } acquired
by a member under the terms of a contract of integration entered
into pursuant to ORS 238.035, 238.680 or 238.690 on or after
October 1, 1991.
(b) The recalculation of benefits provided for in subsection
(7) of this section applies to all retired members, without
regard to the date of the member's retirement or death.
(9) If a member is entitled to receive an increased benefit
under the provisions of this section, and any portion of the
member's retirement allowance or other benefit payable under the
system is payable to an alternate payee under the provisions of
ORS 238.465, the increased benefits payable under this section
shall be divided between the member and the alternate payee in
proportion to the share of the total benefit received by each
person. If an alternate payee elects to begin receiving benefits
under ORS 238.465 (1) before the member's effective date of
retirement, the alternate payee may not begin receiving the
increased benefit provided for in this section until benefits are
first paid from the system on behalf of the member.
(10) A person establishes membership in the system before July
14, 1995, for the purposes of subsection (8) of this section if:
(a) The person is a member of the system, or a judge member of
the system, on July 14, 1995;
(b) The person was a member of the system before July 14, 1995,
ceased to be a member of the system under the provisions of ORS
238.095, 238.265 or 238.545 before July 14, 1995, but restores
part or all of the forfeited creditable service from before July
14, 1995, under the provisions of ORS 238.105 or 238.115 after
July 14, 1995; or
(c) The person performed any period of service for a
participating public employer before July 14, 1995, that is
credited to the six-month period of employment required of an
employee under ORS 238.015 before an employee may become a member
of the system.
SECTION 55. ORS 238.385 is amended to read:
238.385. (1)(a) Upon retirement of an employee who is a member
of the Public Employees Retirement System and computation of that
member's service retirement allowance under ORS 238.300, 238.305
or 238.425, or computation of any disability retirement allowance
under ORS 238.320, 238.325, 238.330, 238.345 or 238.425, the
Public Employees Retirement Board shall add to the amount of the
allowance, including amounts attributable to prior service credit
{ - acquired under ORS 238.225 - } and the amount of any refund
of accumulated { - employee - } { + member + } contributions,
an additional amount equal to the percentage increase provided in
subsection (4) of this section.
(b) The percentage increase provided for in this section shall
be adjusted by the board to reflect increases or decreases in a
member's retirement allowance that are attributable to the
member's participation in the Variable Annuity Account
established by ORS 238.260, that are attributable to a change in
the member's beneficiary or payment option under ORS 238.305 or
238.325, or that are attributable to corrections to the member's
retirement allowance calculation.
(c) The percentage increase provided for in this section shall
be applied to any lump sum payment made to a member or a
beneficiary of a member on or after January 1, 1991, that is
attributable to a retroactive correction or adjustment of the
amount payable to the member or beneficiary as a retirement
allowance or that is attributable to a retroactive correction or
adjustment to any other benefit that entitles a member or
beneficiary to an increased benefit under this section. The
percentage increase payable under this paragraph applies only to
the principal amounts included in the lump sum payment as a
retroactive correction or adjustment and does not apply to any
interest on the retroactive correction or adjustment paid as part
of the lump sum payment.
(2) The amount of any death benefit under ORS 238.390, 238.395,
238.400 or 238.405, including the amount of any monthly payments,
shall be increased by an amount equal to the percentage increase
provided in subsection (4) of this section.
(3)(a) A member of the system who receives a lump sum under ORS
238.315 in lieu of a retirement allowance or other benefit shall
receive an additional amount equal to the percentage increase
provided in subsection (4) of this section.
(b) A member of the system who withdraws the amount credited to
the { - employee's - } { + member + } account { + of the
member + } { - in the fund - } under the provisions of ORS
238.265, or whose { + member + } account is returned to the
employee after the membership of the employee is terminated under
the provisions of ORS 238.095, shall receive an additional amount
calculated by multiplying the amount of the
{ - employee's - } { + member + } account { + of the
member + } by the percentage increase provided for under
subsection (4) of this section. If a member thereafter elects to
obtain restoration of creditable service by repaying the amount
of the withdrawn { - employee - } { + member + } account
pursuant to the provisions of ORS 238.105, the member must also
repay all amounts paid under this section, together with interest
from the date of withdrawal at the same rate as applied to the
withdrawn { - employee - } { + member + } account under ORS
238.105. If a member repays only part of the withdrawn
{ - employee - } { + member + } account pursuant to the
provisions of ORS 238.115, the member must repay that part of the
amount paid under this section that is proportionate to the
portion of the withdrawn { - employee - } { + member + }
account that is repaid under ORS 238.115, together with interest
from the date of withdrawal at the same rate as applied to the
withdrawn { - employee - } { + member + } account under ORS
238.115. All amounts paid to the member that are subsequently
repaid under ORS 238.105 or 238.115 shall be deposited by the
board to the employer reserve for pension accounts in the fund.
(4)(a) The percentage increases provided for in this section to
the benefits payable to or on account of a member of the system
who is serving as other than a police officer or firefighter at
the time of death or retirement shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 20
years, one percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 25
years, two percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 30
years, three percent.
(D) For a member with a combined total of 30 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } , four percent.
(b) The percentage increases provided for in this section to
the benefits payable to or on account of a member of the system
who is serving as a police officer or firefighter at the time of
death or retirement shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 20
years, one percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 25
years, two and one-half percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } , four percent.
(c) The benefits payable to or on account of a member with less
than a combined total of 10 years of creditable service in the
system and prior service credit { - under ORS 238.225 - } at
the time of death or retirement shall not be increased under the
provisions of this section.
(5) The increased benefits provided for in this section shall
be funded by employer contributions.
(6) This section applies only to a member who establishes
membership in the Public Employees Retirement System before July
14, 1995, as described in ORS 238.380 (10), and whose effective
date of retirement or date of death is on or after January 1,
1991. The increased benefits provided by this section do not
apply to any creditable service or prior service { + credit + }
acquired by a member under the terms of a contract of integration
entered into pursuant to ORS 238.035, 238.680 or 238.690 on or
after October 1, 1991.
(7) If a member is entitled to receive an increased benefit
under the provisions of this section, and any portion of the
member's retirement allowance or other benefit payable under the
system is payable to an alternate payee under the provisions of
ORS 238.465, the increased benefits payable under this section
shall be divided between the member and the alternate payee in
proportion to the share of the total benefit received by each
person. If an alternate payee elects to begin receiving benefits
under ORS 238.465 (1) before the member's effective date of
retirement, the alternate payee may not begin receiving the
increased benefit provided for in this section until benefits are
first paid from the system on behalf of the member.
SECTION 56. ORS 238.390 is amended to read:
238.390. (1) In the event that { - a person who is - } a
member of the system dies before retiring, the amount of money
credited at the time of death to the { + member + } account of
the member in the fund shall be paid to the beneficiaries
designated by the member. For this purpose a member may designate
as a beneficiary any person or the executor or administrator of
the estate of the member or a trustee named by the member to
execute an express trust in regard to such amount. The withdrawal
from the fund of the amount in the { + member + } account of a
member pursuant to ORS 238.265 shall not invalidate a prior
designation of beneficiary in the event a member returns to
covered employment, regardless of whether the sum is repaid to
the fund pursuant to ORS 238.105.
(2) { + (a) + } In the event that { - a person who is - } a
member of the system dies before retiring and has not designated
a beneficiary under subsection (1) of this section, the amount of
money credited at the time of death to the { + member + }
account of the member in the fund shall be paid to the deceased's
estate if it is to be probated and, if not, then it shall be paid
directly without probate to the surviving next of kin of the
deceased or the guardian of the survivor's estate, share and
share alike, payment to be made to survivors in the following
groups in the order listed:
{ - (a) - } { + (A) + } Husband or wife { + . + } { - ,
or - }
{ - (b) - } { + (B) + } Children { + . + } { - , or - }
{ - (c) - } { + (C) + } Father and mother { + . + } { - ,
or - }
{ - (d) - } { + (D) + } Grandchildren { + . + } { - ,
or - }
{ - (e) - } { + (E) + } Brothers and sisters { + . + }
{ - , or - }
{ - (f) - } { + (F) + } Nieces and nephews.
{ + (b) + } { - No - } Payment shall { + not + } be made
to persons included in any of { - these - } { + the + }
groups { + listed in paragraph (a) of this subsection + } should
there be living at the date of payment persons in any of the
groups preceding it as listed. Payment to the persons in any
group, upon receipt from them of an affidavit upon a form
supplied by the board, that there are no living individuals in a
group preceding it, that the estate of the deceased will not be
probated and that the amount of money, to the full extent thereof
if necessary, will be used to pay the expenses of last illness
and funeral of the deceased, shall completely discharge the board
and system on account of the death.
(3) The beneficiary designated under subsection (1) of this
section may elect to receive the amount payable in actuarially
determined monthly payments for the life of such beneficiary
{ - so - } { + as + } long as such monthly payments are at
least $30.
(4) { + (a) + } In the event that { - a person who is - } a
member of the system dies before retiring, has not designated a
beneficiary under subsection (1) of this section, has no
surviving next of kin referred to in subsection (2) of this
section and whose estate will not be probated, the amount of
money credited at the time of death to the { + member + }
account of the member in the fund shall be paid directly without
probate for the following purposes in the order listed:
{ - (a) - } { + (A) + } Expenses of the funeral of the
deceased.
{ - (b) - } { + (B) + } Medical expenses of the last
illness of the deceased.
{ - (c) - } { + (C) + } Hospital expenses of the last
illness of the deceased.
{ + (b) + } Claims for payment of expenses under this
subsection shall be filed with the board within six months after
the date of death of the deceased. If no claims are filed within
the six-month period, the amount shall be credited to the fund as
are employer contributions. If a balance of the amount remains
after payment of valid claims filed within the six-month period,
the balance shall be credited to the fund as are employer
contributions. Payments under this subsection shall completely
discharge the board and system on account of the death.
(5) Accrued benefits due a retired member at the time of death
are payable to the designated beneficiary and, if none, to the
administrator or executor of the estate of the member. If the
estate will not be probated, they may be paid, upon receipt by
the board of the affidavit referred to in subsection
(2) { + (b) + } of this section, to the next of kin in the order
listed in subsection (2) { + (a) + } of this section. If the
estate will not be probated and if there is no beneficiary or
next of kin, accrued benefits or a balance due under a refund
annuity option shall be paid or credited for the purposes and in
the manner provided in subsection (4) of this section. For the
purpose of determining accrued benefits due a retired member at
the time of death, accrued benefits are considered to have ceased
as of the last day of the month preceding the month in which the
retired member dies; but if Option 2 or Option 3 under ORS
238.305 has been elected as provided in this chapter and the
beneficiary survives the retired member, the benefits to the
beneficiary shall commence as of the first day of the month in
which the retired member dies, and payment of benefits under
Option 2 or Option 3 shall cease with the payment for the month
preceding the month in which the beneficiary dies.
(6) Interest upon the { + member + } account of the member
shall accrue until the date that the { - amounts - }
{ + amount + } in the { + member + } account { - are - }
{ + is + } distributed. Any balance in the { + variable + }
account of the deceased member { - in the Variable Annuity
Account - } is considered to be transferred to the
{ - individual - } { + regular + } account of the member as of
the date of death. The board shall establish procedures for
computing and crediting interest on the balance
{ - of - } { + in + } the { + member + } account for the
period between the date of death and date of distribution.
(7) Payments by the Public Employees Retirement Board of
credits or accrued benefits pursuant to the beneficiary
designation on file with the board or any affidavit referred to
in subsection (2) { + (b) + } of this section shall completely
discharge the board and system on account of the death, and shall
hold the board and system harmless from any claim for wrongful
payment.
SECTION 57. ORS 238.395 is amended to read:
238.395. (1) In addition to any other benefits under this
chapter, a death benefit, provided by { - current service - }
contributions of the public employer under ORS 238.225, shall be
paid to the beneficiaries designated under ORS 238.390 (1) of a
person who is an active or inactive member of the system and who
dies as a result of injuries received while employed in the
service of the public employer or within 120 days after
termination from service with a participating public employer. A
member who is on a leave of absence without pay from employment
with a participating public employer has not terminated service
with that participating public employer for the purposes of this
section.
(2) The death benefit referred to in subsection (1) of this
section shall be an amount equal to the { - member's - }
{ + amount in the member + } account { - balance - } { + of
the deceased member + } at the time of death.
(3) In the event that a beneficiary has not been named as
provided in subsection (1) of this section and ORS 238.390 (1),
the death benefit referred to in subsection (1) of this section
shall be paid to the same person or persons and in the same
manner as provided for payment of money credited to the
{ + member + } account of the member in ORS 238.390 (2).
(4) In the event that a beneficiary has not been designated and
the deceased member has no surviving next of kin referred to in
ORS 238.390 (2) { + (a) + }, the death benefit referred to in
subsection (1) of this section shall be used for the same purpose
and in the same manner as provided for the use of money credited
to the { + member + } account of the member in ORS 238.390
(4) { + (a) + }.
(5) The beneficiary designated under subsection (1) of this
section and ORS 238.390 (1) may elect to receive the amount
payable in actuarially determined monthly payments for the life
of such beneficiary { - so - } { + as + } long as such
monthly payments, plus the monthly amount if elected under ORS
238.390 (3), are at least $30.
(6) Interest upon the death benefit provided by this section
shall accrue until the date that the benefit is distributed. The
board shall establish procedures for computing interest to be
credited on the benefit for the period between the date of death
and date of distribution.
(7) Payments by the Public Employees Retirement Board of
additional death benefits pursuant to the beneficiary designation
on file with the board or any affidavit referred to in ORS
238.390 (2) { + (b) + } shall completely discharge the board and
system on account of the death, and shall hold the board and
system harmless from any claim for wrongful payment.
SECTION 58. ORS 238.425 is amended to read:
238.425. In the event that an employee who is a member of the
system, who has made contributions to the fund during each of
five calendar years as established by this chapter, and who has
not attained earliest service retirement age, is separated, for
any reason other than death or disability, from all service
entitling the employee to membership in the system, the
{ + member + } account { + of the member + } shall remain to
the { - employee's - } { + member's + } credit in the fund
unless the { - employee - } { + member + } elects to withdraw
it and there shall be paid such death benefits as this chapter
provides; or a disability retirement allowance or, after
attaining earliest service retirement age, a service retirement
allowance, either of which shall consist of:
(1) An annuity which shall be the actuarial equivalent of the
{ - employee's - } { + member's + } accumulated contributions
and interest thereon credited to the { - employee - } { +
member + };
(2) A pension provided by the contributions of employers as
provided in ORS 238.300 (2), but actuarially reduced and computed
on the { - employee's - } { + member's + } then attained age;
and
(3) An additional life pension (nonrefund) for prior service
{ + credit + }, including military service, credited to the
{ - employee - } { + member + } at the time the
{ - employee - } { + member + } first becomes a member of the
system, as elsewhere provided in this chapter, which pension
shall be provided by the { - prior service - } contributions
of the employer { - or, in case the employee is an employee of
a school district, by a uniform rate of contribution by all
school districts; except that an employee who is entitled to
benefits under ORS 1.310 to 1.390 (1989 Edition) shall not also
be entitled to the prior service pension provided by this
subsection - } .
SECTION 59. ORS 238.515 is amended to read:
238.515. (1)(a) Each judge member shall contribute monthly to
the Public Employees Retirement Fund seven percent of the monthly
salary of the judge member. The contributions of a judge member
shall be credited to the { + member + } account of the judge
member { - in the fund - } .
(b) The state shall 'pick-up,' assume or pay the full amount of
contributions to the fund required of judge members. The full
amount of required judge member contributions 'picked-up, '
assumed or paid by the state on behalf of judge members shall be
considered 'salary' only for the purpose of computing a judge
member's 'final average salary' within the meaning of ORS 238.535
(2) and not for any other purpose. The full amount of required
judge member contributions 'picked-up,' assumed or paid by the
state on behalf of judge members shall be added to the
{ - individual account balances - } { + member account + } of
the judge members and shall be considered judge member
contributions for all other purposes of ORS 238.500 to 238.585.
(2) The state shall make employer contributions to the fund in
respect to judge members as provided in ORS 238.225 { - (1) - }
. For the purposes of actuarial computation and contributions of
the state based thereon under ORS 238.225 { - (1) - } , judge
members shall be considered a separate group of employees.
SECTION 60. ORS 238.545 is amended to read:
238.545. (1) Except as otherwise provided in this section, a
judge member may withdraw from the Public Employees Retirement
Fund the amount credited to the { - employee - } { +
member + } account { - for - } { + of + } the judge member
if:
(a) The judge member has made contributions to the Public
Employees Retirement System during each of five calendar years;
(b) The judge member is separated from all service with
participating public employers;
(c) The judge member is separated from all service with
employers who are treated as part of a participating public
employer's controlled group under the federal laws and rules
governing the status of the Public Employees Retirement System
and the Public Employees Retirement Fund as a qualified
governmental retirement plan and trust;
(d) The judge member has not attained 60 years of age; and
(e) The separation from service is not by reason of death or
disability.
(2) If a judge member wishes to withdraw the { - employee - }
{ + member + } account balance under this section, the judge
member must transmit to the Public Employees Retirement Board a
withdrawal request. The board shall deny the withdrawal, or shall
take all reasonable steps to recover withdrawn amounts, if:
(a) The board determines that the separation is not a bona fide
separation; or
(b) The judge member fails to remain absent from the service of
all employers described in subsection (1) of this section for at
least one calendar month following the month in which the judge
member separates from service.
(3) If a judge member who is eligible to withdraw as provided
in subsection (1) of this section does not elect to withdraw, the
{ + member + } account of the judge member { - in the
fund - } shall remain to the credit of the judge member, and the
judge member is entitled to such death benefits and disability
retirement allowance as ORS 238.500 to 238.585 provide. Before
attaining 60 years of age, a judge member who is eligible to
withdraw as provided in subsection (1) of this section but who
does not withdraw must elect in writing to retire under either
ORS 238.535 (1)(a) or (b). The election is irrevocable after the
judge member attains 60 years of age. Any inactive judge member
who fails to make the election provided for in this subsection
prior to attaining 60 years of age shall be retired under the
provisions of ORS 238.535 (1)(a). The service retirement
allowance of an inactive judge member who retires under ORS
238.535 (1)(a) shall be a reduced service retirement allowance
that is the actuarial equivalent of the service retirement
allowance provided for in ORS 238.535 (1)(a). An inactive judge
member who elects to retire under ORS 238.535 (1)(b) must meet
all other requirements imposed by ORS 238.535 for retirement
under ORS 238.535 (1)(b).
(4) If approved by the Chief Justice of the Supreme Court, an
inactive judge member who elects to retire under ORS 238.535
(1)(b) pursuant to the provisions of subsection (3) of this
section may commence to serve the pro tem service obligation
imposed by ORS 238.535 before the judge member's date of
retirement. If the Chief Justice determines, at any time after
the judge member commences performing the pro tem service
obligation, that the judge member has failed to perform the pro
tem services in the manner required by ORS 238.535 (1)(c), and
the judge member has not been relieved of the obligation to
perform those services in the manner provided by ORS 238.535
(1)(c), the Chief Justice shall notify the Public Employees
Retirement Board. If the judge member has not yet retired, the
board shall calculate the service retirement allowance of the
noncomplying judge member at the time of retirement in the manner
provided by ORS 238.535 (1)(a). If the judge member has retired,
the board shall recalculate the service retirement allowance of
the noncomplying judge member in the manner provided by ORS
238.535 (1)(a), and the noncomplying judge member shall receive
only that recalculated amount thereafter. An inactive judge
member may be relieved of the pro tem service obligation imposed
by ORS 238.535 (1)(c) in the same manner as provided in ORS
238.535 for retired judge members.
(5) Withdrawal of the { - employee - } { + member + }
account balance under this section cancels all membership rights
in the system, including the right to claim credit for any
employment before withdrawal.
(6) ORS 238.105 and 238.115 (1) apply to a former judge member
who has withdrawn the { - employee - } { + member + } account
balance under this section.
SECTION 61. ORS 238.565 is amended to read:
238.565. (1) For the purposes of this section, the beneficiary
of the judge member shall be any person, or the personal
representative of the estate of the judge member, or a trustee
named by the judge member to execute an express trust, whom the
judge member designates as a beneficiary by written designation
duly acknowledged and filed with the board before the death of
the judge member.
(2)(a) If a judge member who has six or more years of service
as a judge dies before retiring, and the judge member is not an
inactive judge member who is performing a pro tem service
obligation under the provisions of ORS 238.545 (4), the surviving
spouse of the judge member shall receive a life pension, payable
monthly, equal to two-thirds of the service retirement allowance
the judge member would have received under ORS 238.535 (1)(a) had
the judge member retired on the date of death.
(b) If a judge member who has six or more years of service as a
judge dies before retiring, and the judge member is an inactive
member who is performing a pro tem service obligation under the
provisions of ORS 238.545 (4), the surviving spouse of the judge
member shall receive a life pension, payable monthly, equal to
two-thirds of the service retirement allowance the judge member
would have received under ORS 238.535 (1)(b) had the judge member
retired on the date of death.
(c) If a surviving spouse receiving a pension under paragraph
(a) or (b) of this subsection dies and the total amount received
as pension by the surviving spouse is less than the amount
credited to the { + member + } account of the judge member in
the fund on the date of death of the judge member, the
beneficiary shall receive a lump sum amount equal to the
difference between the total amount received by the surviving
spouse and the amount so credited to the { + member + } account
of the judge member.
(d) If a judge member who has six or more years of service as a
judge dies before retiring and has no surviving spouse, the
beneficiary shall receive a lump sum amount equal to the amount
credited to the { + member + } account of the judge member in
the fund on the date of death of the judge member.
(e) If the surviving spouse of a judge member who dies before
retiring is not entitled to a pension under paragraph (a) or (b)
of this subsection, the surviving spouse shall receive a lump sum
amount equal to the amount credited to the { + member + }
account of the judge member in the fund on the date of death of
the judge member.
(3)(a) If a judge member dies after retiring, the surviving
spouse of the judge member shall receive a life pension, payable
monthly, equal to two-thirds of the retirement allowance the
judge member is receiving or is entitled to receive on the date
of death.
(b) If a surviving spouse receiving a pension under paragraph
(a) or (b) of this subsection dies and the total amount received
as retirement allowance by the retired judge member and as
pension by the surviving spouse is less than the amount credited
to the { + member + } account of the judge member on the date
of retirement of the judge member, the beneficiary shall receive
a lump sum amount equal to the difference between the total
amount received as retirement allowance and pension and the
amount so credited to the { + member + } account of the judge
member.
(c) If a judge member dies after retiring and has no surviving
spouse, and the total amount received as retirement allowance by
the retired judge member is less than the amount credited to the
{ + member + } account of the judge member on the date of
retirement of the judge member, the beneficiary shall receive a
lump sum amount equal to the difference between the total amount
received as retirement allowance and the amount so credited to
the { + member + } account of the judge member.
(4) At any time after becoming a judge member, but not later
than the date on which the first payment on account of retirement
is due, a judge member may elect to provide an addition to the
pension of the surviving spouse of the judge member under
subsection (3)(a) of this section by selecting a reduced
retirement allowance for the judge member. The additional pension
to the surviving spouse shall be the actuarial equivalent of the
reduction in the retirement allowance of the judge member and, in
no event, when added to the pension under subsection (3)(a) of
this section, shall it exceed the reduced retirement allowance
elected by the judge member.
(5) Any accrued retirement allowance due a retired judge member
that is unpaid at the time of death of the judge member shall be
paid to the surviving spouse of the judge member; or if there is
no surviving spouse, to the beneficiary of the judge member; or
if there is no surviving spouse or beneficiary, to the personal
representative of the estate of the judge member; or if there is
no surviving spouse or beneficiary and the estate of the judge
member will not be probated, for the purposes and in the manner
provided in ORS 238.390 (4) { + (a) + }.
(6) Notwithstanding any other provision of this section, a
judge member shall be considered to have died with no surviving
spouse if:
(a) The judge member has entered into a prenuptial or
antenuptial agreement with the spouse of the judge that provides
that the spouse shall have no right or claim to a surviving
spouse's pension; and
(b) The judge member has filed a copy of the prenuptial or
antenuptial agreement with the board before the death of the
judge member.
(7) The board shall not be liable for any payment made to a
beneficiary by reason of a prenuptial or antenuptial agreement
filed with the board under subsection (6) of this section unless
the board has actual knowledge that the agreement has been
revoked.
SECTION 62. ORS 238.580 is amended to read:
238.580. (1) ORS 238.005 { - (2) and (11) - } { + (3) and
(20) + }, 238.025, 238.078, 238.082, 238.092, 238.115 (1),
238.250, 238.255, 238.260, 238.350, 238.380, 238.410, 238.415,
238.420, 238.445, 238.458, 238.460, 238.465, 238.475, 238.600,
238.605, 238.610, 238.618, 238.630, 238.635, 238.645, 238.650,
238.655, 238.660, 238.665, 238.670 and 238.705 and the increases
provided by ORS 238.385 for members of the system who are serving
as other than police officers or firefighters apply in respect to
service as a judge member.
(2) This chapter applies in respect to persons described in ORS
238.505 (1) and in respect to service as a judge member only as
specifically provided in ORS 238.500 to 238.585.
SECTION 63. ORS 238.585 is amended to read:
238.585. (1) A judge member who has creditable service as other
than a judge member is entitled to the use of all creditable
service as a judge member for the purpose of establishing
eligibility under ORS 238.115, 238.125, 238.135 or any other
provision of this chapter that requires a specified number of
years of creditable service.
(2) A judge member who has creditable service as other than a
judge member is entitled to use of all creditable service as
other than a judge member for the purpose of establishing
eligibility under the provisions of ORS 238.385, 238.415, 238.420
or any other provision of this chapter that is applicable to a
judge member and that requires a specified number of years of
creditable service.
(3) A member of the system other than a judge member who
separates from all service entitling the { - employee - }
{ + person + } to membership in the system and who withdraws the
amount credited to the { + member + } account of the member in
the fund may restore all rights forfeited by the withdrawal in
the manner specified by ORS 238.105 if the { - member - }
{ + person + } becomes a judge member within five years after
the date that the { - employee - } { + person + } is
separated from all service entitling the { - employee - }
{ + person + } to membership in the system.
SECTION 64. ORS 238.665 is amended to read:
238.665. Contributions required by this chapter to be placed in
the retirement fund, and interest required to be allocated to the
{ + member + } accounts of members of the retirement system and
to participating employers, shall not be included in the biennial
departmental budget of the board.
SECTION 65. ORS 238.675 is amended to read:
238.675. (1)(a) Any benefit payment that is payable as the
result of the death of a member may be transferred by the Public
Employees Retirement Board to another account or reserve in the
fund if:
(A) The total benefit payable to the beneficiaries designated
by the deceased member is less than $250 in amount;
(B) Ten years have passed since the death of the member; and
(C) No claim has been made for the benefit payment.
(b) Amounts transferred under this section shall be credited to
accounts or reserves in the fund designated by the board in its
discretion.
(c) The board shall establish procedures for the filing of a
delayed claim by a beneficiary of a deceased member who would
otherwise be entitled to receive a benefit payment. Delayed
claims may be filed after the 10-year period provided for in
paragraph (a) of this subsection.
(2)(a) The Public Employees Retirement Board may transfer the
amount credited to the { + member + } account of { - an
employee - } { + a former member + } to another account or
reserve in the fund if:
(A) The total amount credited to the { + member + } account of
the
{ - employee - } { + former member + } is less than $250;
(B) The membership of the { - employee - } { + person + }
in the system has been terminated under the provisions of ORS
238.095 (2); and
(C) Ten years have passed since the { - employee - }
{ + former member + } ceased to be a member of the system and no
claim has been made for payment of the amount credited to the
{ + member + } account of the
{ - employee - } { + former member + }.
(b) Amounts transferred under this section shall be credited to
reserves or accounts in the fund designated by the board in its
discretion.
(c) The board shall establish procedures for the filing of a
delayed claim by a former member of the system who would
otherwise be entitled to receive amounts credited to the
{ - former member's - } { + member + } account { + of the
former member + }. Delayed claims may be filed after the 10-year
period provided for in paragraph (a) of this subsection.
SECTION 66. ORS 243.800 is amended to read:
243.800. (1) Notwithstanding any provision of ORS chapter 238
or ORS 243.910 to 243.945, the State Board of Higher Education
may establish and administer an optional retirement plan for
administrative and academic employees of the State System of
Higher Education who are eligible for membership in the Public
Employees Retirement System. The optional retirement plan must be
a qualified plan under the Internal Revenue Code, capable of
accepting funds transferred under subsection (7) of this section
without the transfer being treated as a taxable event under the
Internal Revenue Code, and willing to accept those funds.
Retirement and death benefits shall be provided under the plan by
the purchase of annuity contracts, fixed or variable or a
combination thereof, or by contracts for investments in mutual
funds.
(2) The State Board of Higher Education shall select at least
two life insurance companies providing fixed and variable
annuities and at least two investment companies providing mutual
funds, but not more than five companies in total, for the purpose
of providing benefits under the optional retirement plan
authorized by this section. The State Board of Higher Education
shall establish selection criteria for the purpose of this
subsection.
(3) An administrative or academic employee may elect to
participate in an optional retirement plan offered under the
provisions of this section in the following manner:
(a) An administrative or academic employee who is an active
member of the Public Employees Retirement System may make an
irrevocable election to participate in the plan within 180 days
after the plan's implementation date, effective as of the date of
election.
(b) An employee, as defined in ORS 243.910 (2), who is an
active member of the Public Employees Retirement System and who
has elected, and not canceled that election, to be assisted by
the State Board of Higher Education under ORS 243.940 may make an
irrevocable election to participate in the plan within 180 days
of the plan's implementation date, effective as of the date of
election.
(c) An administrative or academic employee who is hired after
the plan's implementation date may make an irrevocable election
to participate in the plan within the first six months of
employment, effective on the first of the month following six
full months of employment.
(4) Administrative or academic employees who do not elect to
participate in an optional retirement plan:
(a) Remain members of the Public Employees Retirement System if
they are members on the date the plan is implemented;
(b) Continue to be assisted by the State Board of Higher
Education under ORS 243.920 if they are being so assisted; or
(c) Become members of the Public Employees Retirement System in
accordance with ORS chapter 238, if they commence employment
after the optional plan is implemented.
(5) Except as provided in subsection (6) of this section,
employees who elect to participate in the plan are ineligible for
active membership in the Public Employees Retirement System or
for any assistance by the State Board of Higher Education under
ORS 243.920 as long as those employees are employed in the State
System of Higher Education and the plan is in effect.
(6)(a) An administrative or academic employee who elects to
participate in the optional retirement plan authorized by this
section and who has not made contributions to the Public
Employees Retirement System during each of five calendar years
shall be considered by the Public Employees Retirement Board to
be a terminated member under the provisions of ORS 238.095
effective as of the effective date of the election, and the
amount credited to the { + member + } account of the
{ - employee - } { + member + } { - in the Public Employees
Retirement Fund - } shall be transferred directly to the
optional retirement plan by the Public Employees Retirement Board
in the manner provided by subsection (7) of this section.
(b) An administrative or academic employee who elects to
participate in the optional retirement plan authorized by this
section and who has made contributions to the Public Employees
Retirement System during each of five calendar years shall be
considered to be an inactive member by the Public Employees
Retirement Board and shall retain all the rights, privileges and
options under ORS chapter 238 unless the employee withdraws the
amounts credited to the { + member + } account of the
{ - employee - } { + member + }
{ - in the Public Employees Retirement Fund - } pursuant to
ORS 238.265.
(7) Any withdrawals from the Public Employees Retirement Fund
under subsection (6) of this section, whether by termination
under subsection (6)(a) of this section or by elective withdrawal
under subsection (6)(b) of this section, shall be transferred
directly to the optional retirement plan by the Public Employees
Retirement Board and shall not be made available to the employee.
(8) An employee participating in the optional retirement plan
authorized by this section shall contribute monthly an amount
equal to the percentage of the employee's salary that the
employee would otherwise have contributed as an employee
contribution to the Public Employees Retirement System if the
employee had not elected to participate in the optional
retirement plan.
(9) The State Board of Higher Education shall contribute
monthly to the optional retirement plan authorized under this
section the percentage of salary of each employee participating
in the plan equal to the percentage of salary that would
otherwise have been contributed as an employer contribution on
behalf of the employee to the Public Employees Retirement System
if the employee had not elected to participate in the optional
retirement plan.
(10) Both employee and employer contributions to an optional
retirement plan authorized under this section shall be remitted
directly to the companies that have issued annuity contracts to
the participating employees or directly to the mutual funds.
(11) Benefits under the optional retirement plan authorized
under this section are payable to employees who elect to
participate in the plan and their beneficiaries by the selected
annuity provider or mutual fund in accordance with the terms of
the annuity contracts or the terms of the contract with the
mutual fund. Employees electing to participate in the plan agree
that benefits payable under the plan are not obligations of the
State of Oregon or of the Public Employees Retirement System.
SECTION 67. ORS 526.052 is amended to read:
526.052. (1) For purposes of this section, 'forest protective
association' or 'association' has the meaning for that term
provided in ORS 477.001.
(2) Subject to subsection (3) of this section, a person
employed by a forest protective association at a time when the
association was under contract or cooperative agreement with the
forester or State Board of Forestry by authority of ORS chapter
477 and this chapter, with specific reference to ORS 477.406 to
477.412, or predecessor statutes, shall receive the following
credits when transferring directly from association employment to
employment by the State Forestry Department:
(a) Sick leave accrual earned during employment as an
association employee.
(b) Rate of accumulating annual leave based on years of service
as an association employee.
(c) Credit for current service under the Public Employees
Retirement System equal to periods of service as an association
employee as determined by the Public Employees Retirement Board,
if the person, before the effective date of retirement of the
person as { - an employee - } { + a + } member of the system,
applies in writing to the retirement board for that credit or any
part thereof and pays to the retirement board in a lump sum for
credit to the { + member + } account of the { - person - }
{ + member + } { - in the Public Employees Retirement Fund - }
an amount determined by the retirement board to be equal to the
total amount of employee and employer contributions with interest
that would have accumulated had the person been a member of the
system as an employee of the State Forestry Department in a
position equivalent to that held by the person for the periods of
service or part thereof as an association employee.
(3) The credits granted by subsection (2) of this section shall
be granted if the employee makes an immediate transfer from
association employment to state employment, and if the person
earned employment credits as an association employee under
standards comparable to laws and rules of the State of Oregon
governing similar credits in state employment.
(4) Unless the employee transferring to employment with the
State Forestry Department first becomes a member of the Public
Employees Retirement System before January 1, 2000, as described
in subsection (6) of this section:
(a) The employee may acquire credit under subsection (2)(c) of
this section only after the employee has been a member of the
Public Employees Retirement System for at least 60 calendar
months; and
(b) The maximum number of years of retirement credit that a
person may acquire under subsection (2)(c) of this section is
five years.
(5) If a person subject to the limitation imposed by subsection
(4)(b) of this section is also eligible for credit under ORS
238.145, and the person is subject to the limitation imposed by
ORS 238.145 (4), the total years of credit that the person may
acquire under this section and under the provisions of ORS
238.145 may not exceed five years.
(6) A person becomes a member of the Public Employees
Retirement System before January 1, 2000, for the purposes of
this section if:
(a) The person is a member of the system on January 1, 2000; or
(b) The person was a member of the system before January 1,
2000, ceased to be a member of the system under the provisions of
ORS 238.095, 238.265 or 238.545 before January 1, 2000, but
restores part or all of the forfeited creditable service from
before January 1, 2000, under the provisions of ORS 238.105 or
238.115 after January 1, 2000.
{ +
CONVERSION TO OPTIONAL + }
{ +
SERVICE RETIREMENT CALCULATION + }
SECTION 68. ORS 238.305 is amended to read:
238.305. (1) { - At any time after establishing membership,
but within - } { + Not later than + } 60 days after the date
{ - of - } the first benefit payment { + is issued to a
retired member of the system + }, { - a person who is a - }
{ + the + } member { - of the system - } may elect to
convert the allowance described by ORS 238.300 as payable after
retirement into a service retirement annuity of equivalent
actuarial value of one of the optional forms named below. The
election of Option 2, 2A, 3 or 3A shall be effective immediately
upon the member's retirement.
Option 1. (a) A life annuity (nonrefund) payable during the
member's life only, which shall be the actuarial equivalent of
accumulated contributions by the member and interest thereon
credited at the time of retirement (if death occurs before the
first payment is due, the { + member + } account shall be
treated as though death had occurred before retirement); (b) a
life pension (nonrefund) provided by the contributions of
employers as provided in ORS 238.300 (2); (c) an additional
nonrefund pension for prior service { + credit + }, including
military service, credited to the member at the time of first
becoming a member of the system, as elsewhere provided in this
chapter, which pension shall be provided by the
{ - prior service - } contributions of the employer { - or,
in case the member is an employee of a school district, by a
uniform rate of contribution by all school districts - } ; or
Option 2. A reduced service retirement allowance payable during
the member's life, with the provision that it continue after
death for the life of the beneficiary the member nominates by
written designation duly acknowledged and filed with the Public
Employees Retirement Board at the time of election, should the
beneficiary survive the member; or
Option 2A. A reduced service retirement allowance payable
during the member's life which, unless modified under subsection
(5) of this section, continues after death for the life of the
beneficiary the member nominates by written designation duly
acknowledged and filed with the board at the time of election,
should the beneficiary survive the member; or
Option 3. A reduced service retirement allowance payable during
the member's life, with the provision that it continue after
death at one-half the rate paid to the member and be paid for the
life of the beneficiary the member nominates by written
designation duly acknowledged and filed with the board at the
time of election, should the beneficiary survive the member; or
Option 3A. A reduced service retirement allowance payable
during the member's life which, unless modified under subsection
(5) of this section, continues after death at one-half the rate
paid to the member and is paid for the life of the beneficiary
the member nominates by written designation duly acknowledged and
filed with the board at the time of election, should the
beneficiary survive the member; or
Option 4. A reduced service retirement allowance payable during
the member's life, with the provisions that if the member dies
before a total of 180 monthly payments is made, the remainder of
the 180 monthly payments shall be paid monthly to the beneficiary
the member nominates by written designation duly acknowledged and
filed with the board at any time before the member's death; and
that if the member designates no beneficiary to receive the
monthly payments or no such beneficiary is able to receive the
monthly payments, an amount equal to the actuarial value, on the
date of the member's death, of the total of the monthly payments
not made to the member shall be paid according to ORS 238.390 for
disposal of an amount credited to the { + member + } account of
a member at the time of death; and that if the beneficiary
receiving monthly payments dies before the total number of
monthly payments to which the beneficiary is entitled is made, an
amount equal to the actuarial value, on the date of the
beneficiary's death, of the total of the monthly payments not
made to the member and beneficiary shall be paid according to ORS
238.390 for disposal of an amount credited to the { + member + }
account of a member at the time of death and as if the
beneficiary had been a member.
(2) { - At any time after establishing membership, but
within - } { + Not later than + } 60 days after the date
{ - of - } the first benefit payment { + is issued to a
retired member of the system + }, { - a person who is a - }
{ + the + } member { - of the system - } may elect, in lieu
of the allowance described by ORS 238.300 as payable after
retirement, a service retirement benefit consisting of:
(a) A refund of accumulated contributions by the member and
interest thereon credited at the time of refund; and
(b) A life pension (nonrefund) provided by the contributions of
employers as provided in ORS 237.147 (2) (1979 Replacement Part),
and an additional life pension (nonrefund) for prior service
{ + credit + } as provided in ORS 238.300 (3). At the same time
as making the election under this subsection, the member may
elect to convert the pensions described by this paragraph into a
service retirement annuity of equivalent actuarial value of one
of the optional forms named as Option 2, 2A, 3 or 3A under
subsection (1) of this section.
(3) If the member elects to receive the service retirement
benefit described in subsection (2) of this section, the member
shall elect at the same time to receive the refund described in
subsection (2)(a) of this section in one lump sum payment or in
more than one but not more than five installment payments. If the
member elects installment payments:
(a) The installment payments shall be paid once each year for
the number of consecutive years equal to the number of
installment payments elected.
(b) The amount of each installment payment shall be designated
by the member at the time of making the election, but the last
installment payment shall be the unrefunded balance remaining in
the { - individual - } { + member + } account of the member
in the Public Employees Retirement Fund.
(c) The { - individual - } { + member + } account of the
member in the fund shall be maintained until the last installment
payment is paid. The board shall establish procedures for
computing and crediting interest annually on the unrefunded
balance of the { + member + } account.
(d) A yearly installment payment shall be paid on the
anniversary of the date of the first installment payment.
(e) The member is considered to have elected to transfer any
balance in the { + variable + } account of the member { - in
the Variable Annuity Account - } to the { - individual - }
{ + regular + } account of the member
{ - in the fund - } .
(f) If the member dies before payment of all installment
payments, the unrefunded balance in the { - individual - }
{ + member + } account of the member { - in the fund - } plus
interest to date of disbursement is payable as provided in ORS
238.390 (5).
(4) The designation of a beneficiary, the election of an option
or any other election or designation under subsection (1), (2) or
(3) of this section may be changed by the member within 60 days
after the date of the first benefit payment, except that the
designation of a beneficiary under Option 4 may be changed by the
member at any time before the member's death.
(5) If a retired member has elected to receive a service
retirement allowance under Option 2A or Option 3A as provided in
subsection (1) of this section, and if the beneficiary under that
option dies after the expiration of the time within which the
member could change the election of an option or if the
beneficiary is the spouse of the member and the marriage
relationship is terminated as provided by law after the
expiration of the time within which the member could change the
election of an option, the member may elect to receive, in lieu
of the optional form of allowance previously elected, the
allowance that the member would have received on the effective
date of retirement under Option 1 as provided in subsection (1)
of this section and adjusted by the actual amount of any cost of
living or other post-retirement adjustments made to the original
allowance since the effective date of retirement. Notice of
election under this subsection shall be in a form approved by the
board. Payment under Option 1 shall be effective for months
beginning on or after the date the board receives the election.
(6) Notwithstanding any other provision of this section, any
member of the system who retired before October 3, 1989, and
elected to receive a service retirement allowance under either
Option 2 or 3 as provided in subsection (1) of this section shall
be entitled to receive a service retirement allowance equal to
that which the member would have received on the effective date
of retirement under Option 1 as provided in subsection (1) of
this section and adjusted by the actual amount of any cost of
living or other post-retirement adjustments made to the original
allowance since the effective date of retirement if:
(a) The member has attained 80 years of age;
(b) The person designated by the member as the member's
beneficiary has predeceased the member; and
(c) The member gives written notice to the board of the death
of the member's beneficiary.
(7) Notwithstanding any other provision of this section, any
member of the system who retired before October 3, 1989, who
elected to receive a refund of accumulated employee contributions
and a life pension or pensions under subsection (2) of this
section, and who elected to convert the life pension or pensions
provided for in subsection (2) of this section into a service
retirement annuity under Option 2 or 3 under subsection (1) of
this section, shall be entitled to receive a life pension or
pensions equal to that which the member would have received on
the effective date of retirement under subsection (2) of this
section and adjusted by the actual amount of any cost of living
or other post-retirement adjustments made to the original life
pension or pensions since the effective date of retirement if:
(a) The member has attained 80 years of age;
(b) The person designated by the member as the member's
beneficiary has predeceased the member; and
(c) The member gives written notice to the board of the death
of the member's beneficiary.
(8) The service retirement allowance provided in subsection (6)
or (7) of this section shall be applicable to the first full
month after the death of the member's beneficiary, or the first
full month after the member attains 80 years of age, whichever is
later.
(9) The board may deny an election to convert a service
retirement allowance under this section, a change of beneficiary
under this section or a change in benefit options under this
section if that denial is required to maintain the status of the
system and the Public Employees Retirement Fund as a qualified
governmental retirement plan and trust under the Internal Revenue
Code and under regulations adopted pursuant to the Internal
Revenue Code.
{ +
DELETION OF OBSOLETE PROVISIONS + }
SECTION 69. ORS 238.365 is amended to read:
238.365. { - (1) In addition to any increase under ORS
238.360, first effective for the month of August 1981, payable
September 1, 1981, the monthly retirement allowance payable to or
on account of any person who has retired as a member of the
Public Employees Retirement System shall be increased by a
percentage based on the calendar year in which the person
retired, as set forth in the following table: - }
µ _____________________________________________________________ º
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
CalPercentage - }
{ -
of Increasen- }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
1980 4.00
1979 4.32
1978 4.76
1977 4.44
1976 4.72
1975 4.92
1974 5.28
1973 5.92
1972 6.20
1971 6.36
1970 6.60
1969 6.88
1968 7.20
1967 7.36
1966 7.56
1965 7.88
1964 8.12
1963 8.32
1962 8.56
1961 8.64
1960 8.76
1959 8.96
1958 9.08
1957 9.28
1956 9.68
1955 10.00
1954 10.04
1953 10.16
1952 10.56
1951 10.64
1950 or any 11.40o-s}year
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
µ _____________________________________________________________ º
{ - (2) In addition to any increase under ORS 238.360 and
subsection (1) of this section, first effective for the month of
July 1982, payable August 1, 1982, the monthly retirement
allowance payable to or on account of any person who has retired
as a member of the Public Employees Retirement System shall be
increased by a percentage based on the calendar year in which the
person retired. The percentage shall be four percent in respect
to a person who retired in the calendar year 1981. The percentage
in respect to a person who retired in a calendar year previous to
the calendar year 1981 shall be the applicable percentage in the
table set forth in subsection (1) of this section. - }
{ - (3) In addition to any increase under ORS 238.360, first
effective for the month of July 1985, payable August 1, 1985, the
monthly retirement allowance payable to or on account of any
person who has retired as a member of the Public Employees
Retirement System shall be increased by a percentage based on the
calendar year in which the person retired, as set forth in the
following table: - }
µ _____________________________________________________________ º
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
CalPercentage
of Retirement Increase - }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
1983 3.00
1982 3.01
1981 3.09
1980 3.24
1979 3.48
1978 3.80
1977 3.57
1976 3.77
1975 3.92
1974 4.17
1973 4.63
1972 4.82
1971 4.93
1970 5.09
1969 5.28
1968 5.49
1967 5.60
1966 5.73
1965 5.94
1964 6.09
1963 6.22
1962 6.37
1961 6.42
1960 6.50
1959 6.62
1958 6.70
1957 6.82
1956 7.06
1955 7.25
1954 or any p7.28o-s}year
µ _____________________________________________________________ º
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
{ - (4) In addition to any increase under ORS 238.360 and
subsection (3) of this section, first effective for the month of
July 1986, payable August 1, 1986, the monthly retirement
allowance payable to or on account of any person who has retired
as a member of the Public Employees Retirement System shall be
increased by a percentage based on the calendar year in which the
person retired. The percentage shall be three percent in respect
to a person who retired in the calendar year 1984. The percentage
in respect to a person who retired in a calendar year previous to
the calendar year 1984 shall be the applicable percentage in the
table set forth in subsection (3) of this section. - }
{ - (5) In addition to any increase under ORS 238.360, first
effective for the month of July 1989, payable August 1, 1989, the
monthly retirement allowance payable to or on account of any
person who has retired as a member of the Public Employees
Retirement System shall be increased by a percentage based on the
calendar year in which the person retired, as set forth in the
following table: - }
µ _____________________________________________________________ º
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
CalPercentage
of Retirement Increase - }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ -
1988 0
1987 0
1986 0
1985 0
1984 0
1983 0
1982 0
1981 0
1980 3
1979 11
1978 16
1977 3
1976 7
1975 15
1974 25
1973 14
1972 15
1971 0
1970 0
1969 4
1968 7
1967 0
1966 0
1965 0
1964 0
1963 1
1962 1
1961 2
1960 3
1959 3
1958 5
1957 9
1956 9
1955 7
1954 8
1953 8
1952 10
1951 19
1950 or any pre18o-s}year
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
µ _____________________________________________________________ º
{ - (6) - } { + (1) + } In addition to any increase under
ORS 238.360, first effective for the month of December 1990,
payable January 1, 1991, the monthly retirement allowance payable
to or on account of any person who has retired as a member of the
Public Employees Retirement System shall be increased by the
following percentages:
(a) If the member was serving as other than a police officer or
firefighter at the time of retirement, the percentage increase
shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 20
years, one percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 25
years, two percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 30
years, three percent.
(D) For a member with a combined total of 30 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } , four percent.
(b) If the member was serving as a police officer or
firefighter at the time of retirement, the percentage increase
shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 20
years, one percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } but less than a combined total of 25
years, two and one-half percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } , four percent.
(c) The monthly retirement allowance payable to or on account
of a member with less than a combined total of 10 years of
creditable service in the system and prior service credit
{ - under ORS 238.225 - } at the time of retirement shall not
be increased under the provisions of this subsection.
{ - (7) - } { + (2) + } In addition to any increase under
ORS 238.360, first effective for the month of December 1990,
payable January 1, 1991, the monthly retirement allowance payable
to or on account of any person who has retired as a member of the
Public Employees Retirement System shall be increased by a
percentage equal to the percentage calculated under ORS 238.380
(4), less any increase provided to the retired member under
subsection { - (6) - } { + (1) + } of this section.
{ - (8) - } { + (3) + } The increased allowance provided in
subsections
{ - (6) and (7) - } { + (1) and (2) + } of this section shall
be funded by employer contributions.
SECTION 70. ORS 238.375 is amended to read:
238.375. (1) Notwithstanding any other provision of sections 3
to 10, chapter 569, Oregon Laws 1995, the increased benefits
payable under ORS 238.365 { - (7) - } { + (2) + } and
238.380, including all increased benefits payable to judge
members by reason of the application of ORS 238.365 { - (7) - }
{ + (2) + } and 238.380 to judge members, and under section 10,
chapter 569, Oregon Laws 1995:
(a) Shall not be paid in any tax year in which retirement
benefits that are payable under the Public Employees Retirement
System and that are attributable to service rendered by the
member before September 29, 1991, are wholly exempt from Oregon
personal income taxation under Oregon law.
(b) Shall be reduced proportionately for any tax year in which
retirement benefits that are payable under the Public Employees
Retirement System and that are attributable to service rendered
by the member before September 29, 1991, are partially exempt
from Oregon personal income taxation under Oregon law.
(2) An overpayment of benefits that results from the operation
of subsection (1) of this section is not recoverable from the
recipient of the benefits, but the Public Employees Retirement
Board shall ensure that no additional overpayments are made.
(3) No member of the system or beneficiary of a member of the
system shall acquire a right, contractual or otherwise, to the
increased benefits provided by sections 3 to 10, chapter 569,
Oregon Laws 1995.
(4)(a) Notwithstanding any other provision of law, a class
action may not be commenced on or after July 14, 1995, based on a
claim for damages arising out of the subjecting of benefits paid
under this chapter to Oregon personal income taxation by act of
the Legislative Assembly.
(b) Notwithstanding any other provision of law, any court in
which there is pending on May 30, 1997, a class action that was
commenced before July 14, 1995, based on a claim for damages
arising out of the subjecting of benefits paid under this chapter
to Oregon personal income taxation, may at any time after May 30,
1997, reopen that class action if by act of the Legislative
Assembly there is a decrease in the benefit payable under ORS
238.365 { - (7) - } { + (2) + } or 238.380, or in the
benefits payable to judge members by reason of the application of
ORS 238.365 { - (7) - } { + (2) + } or 238.380 to judge
members, or in the benefits payable to any member, judge member
or beneficiary under section 10, chapter 569, Oregon Laws 1995,
without an equivalent decrease in the personal income tax imposed
under Oregon law on benefits paid under the system that are
attributable to service rendered before September 29, 1991. Upon
reopening the class action, the court may change the membership
of the classes and may grant such further relief as may be
warranted, including the entry of a judgment for damages or a
judgment for supplemental relief under ORS 28.080.
SECTION 71. ORS 238.575 is amended to read:
238.575. (1) Every monthly retirement allowance or pension
payable to a judge member or surviving spouse of a judge member
under ORS 238.500 to 238.585 shall be adjusted annually to
reflect the percentage increase or decrease in the cost of living
as provided in ORS 238.360.
(2) ORS 238.365 { - (4) to (8) apply in respect to a judge
member who retired in the calendar year 1984 or any calendar year
thereafter as provided in ORS 238.365 (4) to (8) - } { +
applies to judge members + }, and for that purpose the monthly
retirement allowance referred to in ORS 238.365 { - (4) to
(8) - } shall be the monthly retirement allowance payable to a
judge member or the monthly pension payable to the surviving
spouse of a judge member under ORS 238.565 (3)(a).
SECTION 72. { + The amendments to ORS 238.365 and 238.575 by
sections 69 and 71 of this 2001 Act and the repeal of ORS 238.150
and 238.370 by section 73 of this 2001 Act do not affect any
right accrued or obligation incurred under those statutes before
the effective date of this 2001 Act and do not affect any
increase in retirement benefits made under the provisions of
those laws before the effective date of this 2001 Act. + }
SECTION 73. { + ORS 238.150 and 238.370 are repealed. + }
{ +
PRIOR SERVICE CREDIT + }
SECTION 74. { + Section 75 of this 2001 Act is added to and
made a part of ORS chapter 238. + }
SECTION 75. { + (1) Subject to the rules of the Public
Employees Retirement Board, upon commencing participation in the
system a public employer that is not a school district may elect
to provide prior service credit for employees of the employer who
are employees of the employer on the date on which the employer
commences participation. Prior service credit may be provided
only for employees who are members of the system. Prior service
credit under this section may be provided for continuous service
by the employee to the public employer before the public employer
commenced participation in the system and for any accumulated
seasonal employment by an employee before the public employer
commenced participation in the system. The public employer and
the board shall enter into an agreement that will specify the
number of years of prior service credit that employees of the
employer will receive. Prior service credit under this section
shall be equal to $4 for each year of prior service or major
fraction of a year.
(2) If a public employer elects to provide prior service credit
under this section, the board shall issue a certificate to each
employee entitled to receive prior service credit. The
certificate shall show the amount of prior service credit that
the employee is entitled to receive under the agreement between
the board and the public employer. The certificate shall be final
unless the board, upon the motion of the member or upon the
board's own motion, modifies the certificate for cause.
(3) Prior service credit under this section shall be funded by
employer contributions in the manner provided by ORS 238.225. + }
SECTION 76. ORS 237.620 is amended to read:
237.620. (1) On or before July 1, 1973, all public employers of
police officers and firefighters who are not participants in the
Public Employees Retirement System shall become participants in
the system with respect to the police officers and firefighters
employed by them.
(2) All police officers and firefighters in the employ of the
public employer on the date the public employer becomes a
participant in the system under subsection (1) of this section
shall establish membership under the six-month service
requirement of ORS 238.015.
(3) The participation of the public employer in the system
under this section shall apply to services of its employee police
officers and firefighters on and after the effective date of the
public employer's participation in the system. The public
employer also shall provide a prior service pension for its
police officers and firefighters, within the limitations of ORS
238.225 (2) { + (1999 Edition) + }, for continuous service to
the public employer for a period not exceeding 20 years before
the effective date of the public employer's participation in the
system.
(4) Notwithstanding subsections (1) and (2) of this section, if
a public employer provides retirement benefits to its police
officers and firefighters which are equal to or better than the
benefits which would be provided to them under the system, as
determined at the expense of the public employer by the Public
Employees Retirement Board, the public employer shall not be
required to participate in the system with respect to its police
officers and firefighters. This exemption shall continue to apply
for only as long as the coverage remains substantially unchanged
under ORS chapter 238 but must be reexamined whenever substantial
changes are made therein.
SECTION 77. Section 2, chapter 575, Oregon Laws 1995, is
amended to read:
{ + Sec. 2. + } (1) Notwithstanding section 3 { + , chapter
575, Oregon Laws 1995 + } { - of this 1995 Act - } , or any
provision of ORS { - 237.007 to 237.315 - } { + chapter
238 + }, a member of the Public Employees Retirement System
described in subsection (2) of this section whose position was
transferred to the private, not-for-profit corporation known as
Oregon Public Broadcasting under the provisions of section 5,
chapter 208, Oregon Laws 1993, may receive imputed retirement
credit in the manner provided by this section for all continuous
service performed for Oregon Public Broadcasting on and after
July 1, 1995, and before July 1, 2005. In no event may a member
acquire imputed retirement credit under the provisions of this
section if that acquisition would provide the member with more
than a combined total of 30 years of creditable service in the
system and prior service credit { - under ORS 237.081 - } .
(2)(a) The provisions of this section apply only to members of
the system who have a combined total of 20 years or more of
creditable service in the system and prior service credit
{ - under ORS 237.081 - } on June 30, 1995.
(b) The provisions of this section apply only to continuous
service by a member on or after July 1, 1995. If a member
terminates service with Oregon Public Broadcasting, the member is
not entitled to any imputed retirement credit under the
provisions of this section after that termination even if the
member is subsequently reemployed by Oregon Public Broadcasting.
(3) For purposes of computing benefits attributable to the
imputed retirement credit provided under the provisions of this
section, the Public Employees Retirement Board shall use an
imputed salary for the member based on the salary paid to the
member by Oregon Public Broadcasting during the period for which
retirement credit is received.
(4) Oregon Public Broadcasting shall pay to the Oregon
Department of Administrative Services on or before March 1 of
each calendar year the actuarially determined present value of
the benefits determined by the board to be payable under the
provisions of this section that are attributable to service
performed for Oregon Public Broadcasting in the previous calendar
year. No imputed retirement credit shall be provided by the board
under the provisions of this section for service performed in a
calendar year if the payment required by this subsection is not
made. Upon receipt of the funds from Oregon Public Broadcasting
under this subsection, the Oregon Department of Administrative
Services shall transfer the funds to the Public Employees
Retirement Board pursuant to the appropriation made under
subsection (5) of this section.
(5) All funds payable to the Oregon Department of
Administrative Services under subsection (4) of this section are
continuously appropriated to the Public Employees Retirement
Board for the purpose of paying the benefits to members that are
attributable to the imputed retirement credit authorized under
the provisions of this section.
(6) Oregon Public Broadcasting may elect not to provide the
imputed retirement credit provided for in this section at any
time after { - the effective date of this 1995 Act - }
{ + July 14, 1995 + }. An election is only effective for those
years for which payment has not already been made under
subsection (4) of this section. The election must be in writing,
and is irrevocable. Upon receipt of the election, the board shall
provide no further imputed retirement credit beyond that already
funded under the provisions of subsection (4) of this section.
SECTION 78. ORS 238.280 is amended to read:
238.280. (1) A police officer or firefighter who is a member of
the system and attains the age of 50 or any other employee who is
a member of the system and attains the age of 55 shall be retired
upon written application by the member to the board on a reduced
service retirement allowance which shall be the actuarial
equivalent of the service retirement allowance provided for in
ORS 238.300 at the normal retirement age.
(2) Notwithstanding subsection (1) of this section and ORS
238.215 (2)(b)(B):
(a) A police officer or firefighter who is a member of the
system, attains the age of 50 and has a combined total of 25
years or more of creditable service in the system and prior
service credit { - under ORS 238.225 - } shall be retired upon
written application by the member to the board on a service
retirement allowance including, without actuarial reduction, the
same current service pension and prior service pension provided
for in ORS 238.300 at the normal retirement age.
(b) An employee who is a member of the system, has a combined
total of 30 years or more of creditable service in the system and
prior service credit { - under ORS 238.225 - } , and is not
eligible to retire under paragraph (a) of this subsection shall
be retired upon written application by the member to the board on
a service retirement allowance including, without actuarial
reduction, the same current service pension and prior service
pension provided for in ORS 238.300 at the normal retirement age.
SECTION 79. ORS 238.360 is amended to read:
238.360. (1) As soon as practicable after January 1 each year,
the Public Employees Retirement Board shall determine the
percentage increase or decrease in the cost of living for the
previous calendar year, based on the Consumer Price Index
(Portland area-all items) as published by the Bureau of Labor
Statistics of the U.S. Department of Labor for the Portland,
Oregon area. Prior to July 1 each year the allowance which the
member or the member's beneficiary is receiving or is entitled to
receive on August 1 for the month of July shall be multiplied by
the percentage figure determined, and the allowance for the next
12 months beginning July 1 adjusted to the resultant amount.
(2) Such increase or decrease shall not exceed two percent of
any monthly retirement allowance in any year and no allowance
shall be adjusted to an amount less than the amount to which the
recipient would be entitled if no cost of living adjustment were
authorized.
(3) The amount of any cost of living increase or decrease in
any year in excess of the maximum annual retirement allowance
adjustment of two percent shall be accumulated from year to year
and included in the computation of increases or decreases in
succeeding years.
(4) Any increase in the allowance shall be paid from
{ - current service - } contributions of the public employer
under ORS 238.225. Any decrease in the allowance shall be
returned to the employer in the form of a credit against
{ - current service - } contributions of the employer under ORS
238.225.
SECTION 80. ORS 238.415 is amended to read:
238.415. (1)(a) As used in this section, 'eligible retired
state employee' means:
(A) A retired member of the Public Employees Retirement System
who was a state employee at the time of retirement, is retired
for service or disability, is receiving a retirement allowance or
benefit under the system, had eight years or more of qualifying
service in the system at the time of retirement or is receiving a
disability retirement allowance including a pension computed as
if the member had eight years or more of creditable service in
the system at the time of retirement, and has attained earliest
service retirement age but is not eligible for federal Medicare
coverage; or
(B) A person who is a surviving spouse or dependent of a
deceased eligible retired state employee as provided in
subparagraph (A) of this paragraph at the time of death, who:
(i) Is receiving a retirement allowance or benefit under the
system; or
(ii) Was covered at the time of the eligible retired state
employee's death by the retired employee's health insurance
contracted for under ORS 238.410, and the employee retired on or
after September 29, 1991.
(b) For purposes of this section, 'qualifying service ' means
creditable service in the system and any periods of employment
with an employer participating in the system required of the
employee before becoming a member of the system.
(2) Of the monthly cost of coverage for an eligible retired
state employee under a health care insurance contract entered
into under ORS 238.410, an amount as determined under subsection
(3) of this section shall be paid from the Retiree Health
Insurance Premium Account established by subsection (4) of this
section, and any monthly cost in excess of the amount so
determined shall be paid by the eligible retired state employee
in the manner provided in ORS 238.410 (4). Any amount paid under
this subsection shall be exempt from all state, county and
municipal taxes imposed on the eligible retired member.
(3) On or before January 1 of each year, the Public Employees
Retirement Board shall calculate the average difference between
the health insurance premiums paid by retired state employees
under contracts entered into by the board under ORS 238.410 and
the health insurance premiums paid by state employees who are not
retired under contracts entered into by the Public Employees'
Benefit Board. For the purposes of subsection (2) of this
section, an eligible retired state employee shall be entitled to
receive toward the monthly cost of coverage under a health
insurance contract entered into under ORS 238.410:
(a) For an eligible retired state employee with eight years or
more of qualifying service in the system, but less than 10 years
of qualifying service in the system, 50 percent of the amount
calculated by the board under this subsection.
(b) For an eligible retired state employee with 10 years or
more of qualifying service in the system, but less than 15 years
of qualifying service in the system, 60 percent of the amount
calculated by the board under this subsection.
(c) For an eligible retired state employee with 15 years or
more of qualifying service in the system, but less than 20 years
of qualifying service in the system, 70 percent of the amount
calculated by the board under this subsection.
(d) For an eligible retired state employee with 20 years or
more of qualifying service in the system, but less than 25 years
of qualifying service in the system, 80 percent of the amount
calculated by the board under this subsection.
(e) For an eligible retired state employee with 25 years or
more of qualifying service in the system, but less than 30 years
of qualifying service in the system, 90 percent of the amount
calculated by the board under this subsection.
(f) For an eligible retired state employee with 30 years or
more of qualifying service in the system, 100 percent of the
amount calculated by the board under this subsection.
(4) The Retiree Health Insurance Premium Account is established
within the Public Employees Retirement Fund, separate and
distinct from the General Fund. Interest earned by the account
shall be credited to the account. All moneys in the account are
continuously appropriated to the Public Employees Retirement
Board and may be used only to pay costs of health care insurance
contract coverage under subsection (2) of this section, paying
the administrative costs incurred by the board under this section
and investment of moneys in the account under any law of this
state specifically authorizing that investment.
(5) The Retiree Health Insurance Premium Account shall be
funded by employer contributions. The state shall transmit to the
board { + those + } amounts { - as - } the board determines
to be actuarially necessary to fund the liabilities of the
account. The level of employer contributions shall be established
by the board using the same actuarial assumptions it uses to
determine employer contribution rates to the Public Employees
Retirement Fund. The amounts shall be transmitted at the same
time and in the same manner as contributions for pension benefits
are transmitted under ORS 238.225 { - (1) - } .
(6) The Public Employees Retirement Board shall, by rule,
establish a procedure for calculating the average difference
between the health insurance premiums paid by retired state
employees under contracts entered into by the board under ORS
238.410 and the health insurance premiums paid by state employees
who are not retired under contracts entered into by the Public
Employees' Benefit Board.
(7) As provided in section 401(h)(5) of the Internal Revenue
Code of 1986, upon satisfaction of all liabilities for providing
benefits described in subsection (2) of this section, any amount
remaining in the Retiree Health Insurance Premium Account shall
be returned to the state.
(8) No member of the system shall have an interest in the
Retiree Health Insurance Premium Account or in the benefits
provided under this section.
(9) For the purposes of this section:
(a) 'Board' means the Public Employees Retirement Board.
(b) 'System' means the Public Employees Retirement System.
SECTION 81. ORS 238.685 is amended to read:
238.685. (1) The school district, which is or expects to become
a party to a contract of integration described in ORS 238.680
(3), may provide for payment of all or any part of its unfunded
obligation for { - prior - } { + previous + } service costs
with respect to the association by any one or a combination of
the following methods:
(a) By agreeing to pay such portion of the obligation to the
Public Employees Retirement System over a period of not to exceed
{ - 30 - } { + 40 + } years, together with an appropriate
rate of interest as determined by the Public Employees Retirement
Board and the board of directors of the school district.
(b) By issuing one or more series of general obligation bonds
for the estimated amount of such portion of the obligation and
paying it from the proceeds or interest thereon. Except as
provided in subsection (2) of this section, the initial
authorization for the original issue of such bonds shall require
approval of the electors of the district and shall otherwise
conform to all requirements of law governing the issuance, sale,
redemption, refunding and refinancing of bonds by the school
district, the retention, segregation and use of bond proceeds and
the levy of taxes for their payment.
(c) By issuing other notes, contracts or evidences of
indebtedness for the estimated amount of such portion of the
obligation and paying it therewith or from the proceeds or
interest thereon. The interest rate on such notes, contracts or
evidences of indebtedness shall be such as the board of directors
of the school district finds is reasonably competitive with
interest rates on bonds which could be issued pursuant to
paragraph (b) of this subsection.
(d) By contracting with an insurance company authorized to
write annuity contracts in this state to assume and pay the
pensions of retired, active or former members of the association.
(2) Such agreement, bonds, notes, contracts or evidences of
indebtedness, or any part of them, may be issued or entered into
without an election, but in such case:
(a) To the extent the principal and interest on such agreement,
bonds, notes, contracts or evidences of indebtedness are paid
from operating taxes within the district's permanent tax rate
limit, the school district shall each year divide its operating
taxes into two portions, both within the district's permanent tax
rate limit, and one of such portions shall be the amount used to
pay the principal and interest on such agreement, bonds, notes,
contracts or evidences of indebtedness for such year and the
proceeds of such portion shall not be used for other purposes;
and
(b) To the extent the principal and interest on such agreement,
bonds, notes, contracts or evidences of indebtedness are paid
from revenues other than operating tax proceeds, the school
district need not divide its levy as provided in paragraph (a) of
this subsection and the principal and interest may be paid out of
such other revenues.
(3) Part or all of the agreement, bonds, notes, contracts or
evidences of indebtedness authorized by this section may be
issued prior to or after the execution of the contract of
integration. The validity or enforceability thereof shall not be
affected by the terms of the contract of integration or by
whether operating taxes are properly apportioned as provided in
subsection (2)(a) of this section.
{ +
CHANGE OF BENEFICIARY AFTER DIVORCE + }
SECTION 82. ORS 238.465 is amended to read:
238.465. (1) Notwithstanding ORS 238.445 or any other provision
of law, payments under this chapter of any pension, annuity,
retirement allowance, disability benefit, death benefit, refund
benefit or other benefit that would otherwise be made to a person
entitled thereto under this chapter shall be paid, in whole or in
part, by the { + Public Employees Retirement + } Board to an
alternate payee if and to the extent expressly provided for in
the terms of any court decree of annulment or dissolution of
marriage or of separation, or the terms of any court order or
court-approved property settlement agreement incident to any
court decree of annulment or dissolution of marriage or of
separation. Notwithstanding any other provisions of this
section, the total value of benefits payable to a member and to
an alternate payee under this section may not be greater than the
value of the benefits the member would otherwise be eligible to
receive. Any payment under this subsection to an alternate payee
bars recovery by any other person.
(2) A decree, order or settlement providing for payment to an
alternate payee under subsection (1) of this section may also
provide:
(a) That payments to the alternate payee may commence, at the
election of the alternate payee, at any time after the earlier
of:
(A) The earliest date the member would be eligible to receive
retirement benefits if the member separates from service; or
(B) The date the member actually separates from service due to
death, disability, retirement or termination of employment.
(b) That the alternate payee may elect to receive payment in
any form of pension, annuity, retirement allowance, disability
benefit, death benefit, refund benefit or other benefit, except a
benefit in the form of a joint and survivor annuity, that would
be available to the member under this chapter, or that would be
available to the member if the member retired or separated from
service at the time of election by the alternate payee, without
regard to the form of benefit elected by the member.
(c) That the alternate payee's life is the measuring life for
the purpose of measuring payments to the alternate payee under
the form of benefit selected by the alternate payee and for the
purpose of determining necessary employer reserves.
{ + (d) Except as provided in ORS 238.305 (9) and 238.325
(7), that any person designated by the member as a beneficiary
under ORS 238.300, 238.305 or 238.325 be changed, even though the
member has retired and has begun receiving a retirement
allowance. If a change of beneficiary is ordered under this
paragraph, the board shall adjust the anticipated benefits that
would be payable to the member and the beneficiary to ensure that
the cost to the system of providing benefits to the member and
the new beneficiary does not exceed the cost that the system
would have incurred to provide benefits to the member and the
original beneficiary. The decree, order or settlement may not
provide for any change to the option selected by the retired
member under ORS 238.300, 238.305, 238.320 or 238.325 as to the
form of the retirement benefit. + }
(3) The board shall adopt rules that provide for:
(a) The creation of a separate account in the name of the
alternate payee reflecting the decree's, order's or agreement's
distribution of the member's benefits under this chapter;
(b) The establishing of criteria to determine whether domestic
relations decrees, orders and agreements comply with this
section; and
(c) The definitions and procedures for the administration of
this section.
(4) If a decree, order or agreement awards an interest to an
alternate payee, and if the alternate payee predeceases the
member before the alternate payee has commenced receiving
benefits, the alternate payee shall be considered a member of the
system who died before retiring for the purposes of the death
benefits provided in ORS 238.390 and 238.395, but for purposes of
the death benefits provided in ORS 238.395, the alternate payee
shall be considered a member of the system who died before
retiring only if the member would have been eligible for death
benefits under ORS 238.395 had the member died at the same time
as the alternate payee. Payment of the death benefits to the
beneficiaries, estate or other persons entitled to receive the
benefits under ORS 238.390 and 238.395 shall constitute payment
in full of the alternate payee's interest under the decree, order
or agreement.
(5) Any increase in the retirement allowance provided to the
member shall increase the amounts paid to the spouse or former
spouse of the member in the same proportion, except that an
alternate payee is not entitled to receive cost of living
adjustments under ORS 238.360 or any other retirement allowance
increase until benefits are first paid from the system on behalf
of the member.
(6) An alternate payee under this section is not eligible to
receive the benefits provided under ORS 238.410, 238.415, 238.420
and 238.440 by reason of the provisions of this section.
(7) An alternate payee who elects to begin receiving payments
under subsection (1) of this section before the member's
effective date of retirement is not eligible to receive any
additional payment by reason of credit in the system acquired by
the member after the alternate payee begins to receive payments.
(8) Subsection (1) of this section applies only to payments
made by the board after the date of receipt by the board of
written notice of the decree, order or agreement and such
additional information and documentation as the board may
prescribe.
(9) Whenever the board is required to make payment to an
alternate payee under the provisions of this section, the board
shall charge and collect out of the benefits payable to the
member and the alternate payee actual and reasonable
administrative expenses and related costs incurred by the board
in obtaining data and making calculations that are necessary by
reason of the provisions of this section. The board may not
charge more than $300 for total administrative expenses and
related costs incurred in obtaining data or making calculations
that are necessary by reason of the provisions of this section.
The board shall allocate expenses and costs charged under the
provisions of this subsection between the member and the
alternate payee based on the fraction of the benefit received by
the member or alternate payee.
(10) As used in this section, 'court' means any court of
appropriate jurisdiction of this or any other state or of the
District of Columbia.
SECTION 83. { + The amendments to ORS 238.465 by section 82 of
this 2001 Act apply only to decrees, orders or settlements
entered on or after the effective date of this 2001 Act. Any
decree, order or settlement entered on or after the effective
date of this 2001 Act may provide for a change of beneficiary
under ORS 238.465, as amended by section 82 of this 2001 Act,
without regard to whether the member of the Public Employees
Retirement System retired before, on or after the effective date
of this 2001 Act. + }
{ +
LUMP SUM PAYMENT IN LIEU OF MONTHLY PAYMENTS + }
SECTION 84. ORS 238.315 is amended to read:
238.315. A member of the system who has separated from the
service of all participating employers, who retires for service
and whose total service retirement allowance on the effective
date of retirement, as computed by the board in accordance with
the nonrefund plan, is less than { - $30 - } { + $200 + } per
month, shall receive, in lieu of any and all retirement allowance
or other benefits under the system, a retirement benefit in the
form of a lump sum amount equal to the actuarial value, on the
effective date of retirement, of the retirement allowance
computed by the board in accordance with the nonrefund plan. A
member who receives a retirement benefit as provided in this
section is eligible to participate in insurance coverage under
ORS 238.410, and the board shall determine the manner in which
the cost of that coverage payable by the member shall be paid.
SECTION 85. ORS 238.310 is amended to read:
238.310. { + (1) + } Notwithstanding any other provision of
this chapter, the service retirement allowance { - , including
any increase pursuant to ORS 238.370, - } of a member who has 15
or more years of creditable service { - , - } shall be not less
than $100 a month, computed under the nonrefund plan:
{ - (1) - } { + (a) + } For a member who retires and begins
receiving a service retirement allowance before or on reaching
the age of 65 years, on the basis of retirement at the age of 65
years.
{ - (2) - } { + (b) + } For a member who retires and begins
receiving a service retirement allowance after reaching the age
of 65 years, on the basis of age reached at retirement.
{ + (2) Any member who receives a service retirement
allowance calculated under the provisions of this section shall
receive the retirement benefit in the form of a lump sum amount
as provided in ORS 238.315. + }
SECTION 86. { + The amendments to ORS 238.310 and 238.315 by
sections 84 and 85 of this 2001 Act apply only to members of the
Public Employees Retirement System whose effective date of
retirement is on or after the effective date of this 2001
Act. + }
{ +
CONFORMING AMENDMENTS + }
SECTION 87. Section 10, chapter 569, Oregon Laws 1995, as
amended by section 7, chapter 175, Oregon Laws 1997, is amended
to read:
{ + Sec. 10. + } (1)(a) On or before January 1, 1996, or as
soon as possible thereafter, the Public Employees Retirement
Board shall recalculate the benefits payable to a member of the
Public Employees Retirement System, or to the beneficiary of that
member, under the provisions of ORS 238.380 if the member retired
or died on or after January 1, 1991, and before the date on which
the first payment is made under the provisions of this
subsection. If the member or beneficiary of a member is entitled
to receive an increase in a retirement allowance or other monthly
payment, the board shall begin paying that increase in all
monthly payments made after the recalculation required by this
subsection is completed. The increased amount payable under this
section shall be calculated as though ORS 238.380 had been in
effect from January 1, 1991, and shall include all increases that
would have accrued under ORS 238.360 if ORS 238.380 had been in
effect from January 1, 1991.
(b) On or before January 1, 1996, or as soon as possible
thereafter, the Public Employees Retirement Board shall
recalculate the benefits payable to a retired member of the
Public Employees Retirement System who retired or died before
January 1, 1991, or to the beneficiary of that member, as
required by the amendments to ORS 238.365, 238.575 and 238.580
and section 14, chapter 796, Oregon Laws 1991, by sections 5, 6,
7 and 8, chapter 569, Oregon Laws 1995. The recalculated
retirement allowance or other monthly payment shall include all
increases that would have accrued under ORS 238.360 if the
increased benefits required by the amendments to ORS 238.365,
238.575 and 238.580 and section 14, chapter 796, Oregon Laws
1991, by sections 5, 6, 7 and 8, chapter 569, Oregon Laws 1995,
had been in effect from January 1, 1991.
(2)(a) If the effective date of retirement or death of a member
is on or after January 1, 1991, and the member or a beneficiary
of a member is entitled to an increase under ORS 238.380 for any
month or payment before the date on which the first increased
monthly payment is made under subsection (1) of this section, the
board shall calculate the increase owing for all months and
payments made before the date on which the first increased
payment is made under subsection (1) of this section, and shall
mail a check payable to the member or beneficiary of the member
for the additional amount as soon as possible after { - the
effective date of this 1997 Act - } { + May 30, 1997 + }.
(b) If a member withdrew the amount credited to the employee's
account in the fund under the provisions of ORS 238.265, or the
account of the member was returned to the employee after the
membership of the employee was terminated under the provisions of
ORS 238.095, and the withdrawal or termination occurred on or
after January 1, 1991, and before { - the effective date of
this 1997 Act - } { + May 30, 1997 + }, the board shall
calculate an additional amount equal to the amount that would
have been paid to the member had ORS 238.380 (3)(b) been in
effect on the date of the withdrawal or termination, and shall
mail a check payable to the member or beneficiary of the member
for the additional amount as soon as possible after { - the
effective date of this 1997 Act - } { + May 30, 1997 + }. No
additional payment shall be made under the provisions of this
paragraph if the amount withdrawn by the member is repaid under
the provisions of ORS 238.105 before { - the effective date of
this 1997 Act - } { + May 30, 1997 + }.
(c) Any additional amounts paid to a member or beneficiary of a
member under the provisions of this subsection must be reduced by
the amount of any benefit paid to the member or beneficiary of a
member under the provisions of chapter 796, Oregon Laws 1991.
(3)(a) As soon as possible after { - the effective date of
this 1997 Act - } { + May 30, 1997 + }, the board shall
calculate the additional amount that a member of the Public
Employees Retirement System who retired or died before January 1,
1991, or the beneficiary of that member, is entitled to receive
by reason of the amendments to ORS 238.365, 238.575 and 238.580
and section 14, chapter 796, Oregon Laws 1991, by sections 5, 6,
7 and 8, chapter 569, Oregon Laws 1995. The board shall mail
checks in payment of the additional amounts calculated under this
section as soon as possible after
{ - the effective date of this 1997 Act - } { + May 30,
1997 + }.
(b) Any additional amounts paid to a member or beneficiary of a
member under the provisions of this subsection must be reduced by
the amount of any benefit paid to the member or beneficiary of a
member under the provisions of chapter 796, Oregon Laws 1991.
(4) In addition to the amounts payable to a member or a
beneficiary of a member under subsections (2) and (3) of this
section, the board shall calculate and pay to the member or
beneficiary of the member any additional amounts that would have
been paid to the member or beneficiary of the member under the
provisions of ORS 238.360 if the additional payments provided for
in subsections (2) and (3) of this section had been made as
though ORS 238.380 and the amendments to ORS 238.365, 238.575 and
238.580 and section 14, chapter 796, Oregon Laws 1991, by
sections 5, 6, 7 and 8, chapter 569, Oregon Laws 1995, had been
in effect on January 1, 1991, and thereafter.
(5) In addition to the amounts calculated under subsections
(2), (3) and (4) of this section, the board shall calculate and
pay interest on all amounts payable under subsections (2), (3)
and (4) of this section at the rate of nine percent per annum,
beginning from the date the payments would have been made if ORS
238.380 and the amendments to ORS 238.365, 238.575 and 238.580
and section 14, chapter 796, Oregon Laws 1991, by sections 5, 6,
7 and 8, chapter 569, Oregon Laws 1995, had been in effect on
January 1, 1991, and thereafter, and ending with the date on
which the checks required by this section are mailed. If the
member or beneficiary is deceased, interest shall cease to accrue
on the date a check is issued to the person entitled to the
payment under the law, or 90 days after { - the effective date
of this 1997 Act - } { + May 30, 1997 + }, whichever is first.
No additional interest for periods of time after the date that
the check is mailed shall be calculated or paid if a subsequent
check is issued for any returned or uncashed check. Interest
under this subsection is simple interest.
(6) For the purposes of chapter 569, Oregon Laws 1995, any
judge who retires or dies after August 1, 1991, and whose
retirement pay or pension would have been paid from the Judges'
Retirement Fund except for the provisions of chapter 815, Oregon
Laws 1991, shall be considered to have received an increase in
the benefits payable to the judge or surviving spouse of the
judge under the provisions of ORS 238.385, and shall not be
considered to have received an increase in benefits under the
provisions of section 7, chapter 796, Oregon Laws 1991, or
section 26, chapter 815, Oregon Laws 1991. The benefit being paid
to the judge or the surviving spouse of the judge shall be
recalculated in the same manner as provided in this section for
the retirement allowances of other members of the system.
(7)(a) The amounts payable to a member or a beneficiary of a
member under subsections (2) and (3) of this section shall be
calculated based on the benefit payments actually made to the
member before the date on which the payment is made under
subsection (2) or (3) of this section, and shall not be
calculated based on the amount of the benefits that were payable
or owing to the member at any given time.
(b) For the purpose of calculating the amounts payable to a
member or a beneficiary of a member under subsections (2) and (3)
of this section, the board shall reduce any benefit payment that
entitled a member or a beneficiary to an increase under chapter
796, Oregon Laws 1991, by an amount calculated by dividing the
payment amount by a factor calculated by adding one and the
decimal that represents the percentage increase applicable to the
member or beneficiary under the provisions of chapter 796, Oregon
Laws 1991. The increased benefits provided for in subsections (2)
and (3) of this section shall be based on the amount calculated
under this paragraph. The recalculation provided for in this
paragraph does not apply to:
(A) Any benefit payment that entitled a member or a beneficiary
of a member to an increase under chapter 796, Oregon Laws 1991,
but that did not include the increase required by those laws at
the time the payment was made; or
(B) A payment made before { - the effective date of this 1997
Act - } { + May 30, 1997, + } as a retroactive adjustment of a
retirement allowance that was required by reason of an error in
calculating the value of the annuity portion of the retirement
allowance under the provisions of chapter 761, Oregon Laws 1981.
(c) Notwithstanding ORS 238.380 (1)(c), the amounts payable to
a member or a beneficiary of a member under subsections (2) and
(3) of this section shall be calculated based on the full payment
made to the member or beneficiary, including all interest paid on
amounts that were paid as retroactive corrections or adjustments
of the amount payable to the member or beneficiary.
(d) No increase shall be paid under subsection (2) or (3) of
this section for:
(A) Any amount that has been determined to be an overpayment or
improperly made payment; or
(B) A payment made under the provisions of section 13, chapter
796, Oregon Laws 1991.
(8) The increased benefits and interest required by this
section shall be funded by employer contributions.
Notwithstanding ORS 238.225, participating public employers shall
transmit to the board those amounts actuarially computed to be
necessary to amortize within not more than { - 30 - } { +
40 + } years all liabilities estimated by the actuary to accrue
to the system by reason of the increased benefits and interest
required to be paid under this section.
(9) If a member or a beneficiary of a member dies on or after
January 1, 1991, but before payments are made under the
provisions of this section, and the member or beneficiary would
have been entitled to receive a payment under the provisions of
this section, the payment required by this section, including all
interest, shall be made as follows:
(a) The payment shall be made by the board to the estate of the
decedent if probate proceedings are pending.
(b) If a small estate affidavit has been filed under ORS
114.505 to 114.560, the board shall make payment to the person
who filed the affidavit.
(c) If payment cannot be made under paragraph (a) or (b) of
this subsection, the board shall take all reasonable steps
necessary to locate the decedent's surviving next of kin. If
surviving next of kin can be located by the board, the board
shall give written notice to the surviving next of kin that the
board is holding the payment for the person entitled to the
payment under the law. The board shall issue a new check at any
time thereafter that the decedent's surviving next of kin or any
other person establishes a legal right to the payment.
SECTION 88. ORS 238.420 is amended to read:
238.420. (1) As used in this section, 'eligible retired member'
means:
(a) A retired member of the Public Employees Retirement System
who is retired for service or disability, is receiving a
retirement allowance or benefit under the system, had eight years
or more of qualifying service in the system at the time of
retirement or is receiving a disability retirement allowance
including a pension computed as if the member had eight years or
more of creditable service in the system at the time of
retirement, and is eligible for federal Medicare coverage; or
(b) A person who is a surviving spouse or dependent of a
deceased eligible retired member as provided in paragraph (a) of
this subsection at the time of death, who is eligible for federal
Medicare coverage and who:
(A) Is receiving a retirement allowance or benefit under the
system; or
(B) Was covered at the time of the retired member's death by
the retired member's health insurance contracted for under ORS
238.410, and the member retired before May 1, 1991.
(2) For purposes of subsection (1)(a) of this section, '
qualifying service' means creditable service in the system and
any periods of employment with an employer participating in the
system required of the employee before becoming a member of the
system.
(3) Of the monthly cost of coverage for an eligible retired
member under a health care insurance contract that provides
coverage supplemental to federal Medicare coverage entered into
under ORS 238.410, an amount equal to $60 or the total monthly
cost of that coverage, whichever is less, shall be paid from the
Retirement Health Insurance Account established by subsection (4)
of this section, and any monthly cost in excess of $60 shall be
paid by the eligible retired member in the manner provided in ORS
238.410 (4). Any amount paid under this subsection shall be
exempt from all state, county and municipal taxes imposed on the
eligible retired member.
(4) The Retirement Health Insurance Account is established
within the Public Employees Retirement Fund, separate and
distinct from the General Fund. Interest earned by the account
shall be credited to the account. All moneys in the account are
continuously appropriated to the Public Employees Retirement
Board and may be used only to pay costs of health care insurance
contract coverage under subsection (3) of this section, paying
the administrative costs incurred by the board under this section
and investment of moneys in the account under any law of this
state specifically authorizing that investment.
(5) The Retirement Health Insurance Account shall be funded by
employer contributions. Each public employer that is a member of
the system shall transmit to the board such amounts as the board
determines to be actuarially necessary to fund the liabilities of
the account. The level of employer contributions shall be
established by the board using the same actuarial assumptions it
uses to determine employer contribution rates to the Public
Employees Retirement Fund. The amounts shall be transmitted at
the same time and in the same manner as contributions for pension
benefits are transmitted under ORS 238.225 { - (1) - } .
(6) As provided in section 401(h)(5) of the Internal Revenue
Code of 1986, upon satisfaction of all liabilities for providing
benefits described in subsection (1) of this section, any amount
remaining in the Retirement Health Insurance Account shall be
returned to the employers participating in the retirement system
on an equitable basis as determined by the board.
(7) No member of the system shall have an interest in the
Retirement Health Insurance Account.
SECTION 89. ORS 238.465, as amended by section 82 of this 2001
Act, is amended to read:
238.465. (1) Notwithstanding ORS 238.445 or any other provision
of law, payments under this chapter of any pension, annuity,
retirement allowance, disability benefit, death benefit, refund
benefit or other benefit that would otherwise be made to a person
entitled thereto under this chapter shall be paid, in whole or in
part, by the Public Employees Retirement Board to an alternate
payee if and to the extent expressly provided for in the terms of
any court decree of annulment or dissolution of marriage or of
separation, or the terms of any court order or court-approved
property settlement agreement incident to any court decree of
annulment or dissolution of marriage or of separation.
Notwithstanding any other provisions of this section, the total
value of benefits payable to a member and to an alternate payee
under this section may not be greater than the value of the
benefits the member would otherwise be eligible to receive. Any
payment under this subsection to an alternate payee bars recovery
by any other person.
(2) A decree, order or settlement providing for payment to an
alternate payee under subsection (1) of this section may also
provide:
(a) That payments to the alternate payee may commence, at the
election of the alternate payee, at any time after the earlier
of:
(A) The earliest date the member would be eligible to receive
retirement benefits if the member separates from service; or
(B) The date the member actually separates from service due to
death, disability, retirement or termination of employment.
(b) That the alternate payee may elect to receive payment in
any form of pension, annuity, retirement allowance, disability
benefit, death benefit, refund benefit or other benefit, except a
benefit in the form of a joint and survivor annuity, that would
be available to the member under this chapter, or that would be
available to the member if the member retired or separated from
service at the time of election by the alternate payee, without
regard to the form of benefit elected by the member.
(c) That the alternate payee's life is the measuring life for
the purpose of measuring payments to the alternate payee under
the form of benefit selected by the alternate payee and for the
purpose of determining necessary employer reserves.
(d) Except as provided in ORS 238.305 { - (9) - }
{ + (10) + } and 238.325 (7), that any person designated by the
member as a beneficiary under ORS 238.300, 238.305 or 238.325 be
changed, even though the member has retired and has begun
receiving a retirement allowance. If a change of beneficiary is
ordered under this paragraph, the board shall adjust the
anticipated benefits that would be payable to the member and the
beneficiary to ensure that the cost to the system of providing
benefits to the member and the new beneficiary does not exceed
the cost that the system would have incurred to provide benefits
to the member and the original beneficiary. The decree, order or
settlement may not provide for any change to the option selected
by the retired member under ORS 238.300, 238.305, 238.320 or
238.325 as to the form of the retirement benefit.
(3) The board shall adopt rules that provide for:
(a) The creation of a separate account in the name of the
alternate payee reflecting the decree's, order's or agreement's
distribution of the member's benefits under this chapter;
(b) The establishing of criteria to determine whether domestic
relations decrees, orders and agreements comply with this
section; and
(c) The definitions and procedures for the administration of
this section.
(4) If a decree, order or agreement awards an interest to an
alternate payee, and if the alternate payee predeceases the
member before the alternate payee has commenced receiving
benefits, the alternate payee shall be considered a member of the
system who died before retiring for the purposes of the death
benefits provided in ORS 238.390 and 238.395, but for purposes of
the death benefits provided in ORS 238.395, the alternate payee
shall be considered a member of the system who died before
retiring only if the member would have been eligible for death
benefits under ORS 238.395 had the member died at the same time
as the alternate payee. Payment of the death benefits to the
beneficiaries, estate or other persons entitled to receive the
benefits under ORS 238.390 and 238.395 shall constitute payment
in full of the alternate payee's interest under the decree, order
or agreement.
(5) Any increase in the retirement allowance provided to the
member shall increase the amounts paid to the spouse or former
spouse of the member in the same proportion, except that an
alternate payee is not entitled to receive cost of living
adjustments under ORS 238.360 or any other retirement allowance
increase until benefits are first paid from the system on behalf
of the member.
(6) An alternate payee under this section is not eligible to
receive the benefits provided under ORS 238.410, 238.415, 238.420
and 238.440 by reason of the provisions of this section.
(7) An alternate payee who elects to begin receiving payments
under subsection (1) of this section before the member's
effective date of retirement is not eligible to receive any
additional payment by reason of credit in the system acquired by
the member after the alternate payee begins to receive payments.
(8) Subsection (1) of this section applies only to payments
made by the board after the date of receipt by the board of
written notice of the decree, order or agreement and such
additional information and documentation as the board may
prescribe.
(9) Whenever the board is required to make payment to an
alternate payee under the provisions of this section, the board
shall charge and collect out of the benefits payable to the
member and the alternate payee actual and reasonable
administrative expenses and related costs incurred by the board
in obtaining data and making calculations that are necessary by
reason of the provisions of this section. The board may not
charge more than $300 for total administrative expenses and
related costs incurred in obtaining data or making calculations
that are necessary by reason of the provisions of this section.
The board shall allocate expenses and costs charged under the
provisions of this subsection between the member and the
alternate payee based on the fraction of the benefit received by
the member or alternate payee.
(10) As used in this section, 'court' means any court of
appropriate jurisdiction of this or any other state or of the
District of Columbia.
SECTION 90. { + The amendments to ORS 238.465 by section 89 of
this 2001 Act become operative on January 1, 2003. + }
{ +
UNIT CAPTIONS + }
SECTION 91. { + The unit captions used in this 2001 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2001 Act. + }
{ +
EMERGENCY CLAUSE + }
SECTION 92. { + This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2001 Act takes effect on
its passage. + }
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