72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
SA to A-Eng. HB 2003
LC 2553/HB 2003-A14
SENATE AMENDMENTS TO
A-ENGROSSED HOUSE BILL 2003
By COMMITTEE ON GENERAL GOVERNMENT
May 7
On page 1 of the printed A-engrossed bill, line 4, delete ' and
292.430' and insert ', 292.430 and 293.701 and section 4, chapter
__, Oregon Laws 2003 (Enrolled House Bill 2004)'.
On page 3, line 12, delete 'July 1, 2003' and insert ' January
1, 2004'.
On page 4, line 25, delete 'June 30' and insert 'December 31'.
On page 5, line 4, delete 'June 30' and insert 'December 31'.
On page 9, delete lines 3 through 31 and insert:
' { + SECTION 5. + } ORS 238.255, as amended by section 1,
chapter 3, Oregon Laws 2003 (Enrolled House Bill 2001), is
amended to read:
' 238.255. (1) The regular account for { - an active or
inactive member of the system - } { + members who established
membership in the system before January 1, 1996, as described in
ORS 238.430, and for alternate payees of those members, + }shall
be examined each year. If the 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 Public Employees
Retirement Board, the amount of the difference shall be credited
to the 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 deficit basis for a period
of more than five years. Earnings in excess of the assumed
interest rate for - } { + In + } years following the year for
which a charge is made to the reserve account { + , all earnings
on the regular accounts of members who established membership in
the system before January 1, 1996, as described in ORS 238.430,
and of alternate payees of those members, + }shall first be
applied to reduce or eliminate the amount of a deficit. { + Only
earnings on the regular accounts of members who established
membership in the system before January 1, 1996, as described in
ORS 238.430, and of alternate payees of those members, may be
used to reduce or eliminate the amount of a deficit.
' (2) Notwithstanding subsection (1) of this section, the board
may not credit any earnings to the regular accounts of members
who established membership in the system before January 1, 1996,
as described in ORS 238.430, or of alternate payees of those
members, in any year in which there is a deficit in the reserve
account established under subsection (1) of this section, or
credit any earnings to the regular accounts of those members, or
alternate payees, that would result in a deficit in that reserve
account. + }
' { - (2) - } { + (3) + } The regular account for { - an
active or inactive member - } { + members + } who established
membership in the system before January 1, 1996, as described in
ORS 238.430, { + and for alternate payees of those members, + }
may not be credited with earnings in excess of the assumed
interest rate until:
' { - (a) The reserve account established under subsection (1)
of this section no longer has a deficit; - }
' { - (b) - } { + (a) + } The reserve account established
under subsection (1) of this section is fully funded with amounts
determined by the board, after consultation with the actuary
employed by the board, to be necessary to ensure a zero 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; and
' { - (c) - } { + (b) + } The reserve account established
under subsection (1) of this section has been fully funded as
described in paragraph { - (b) - } { + (a) + } of this
subsection in each of the three immediately preceding calendar
years.
' { + SECTION 6. + } { + The amendments to ORS 238.255 by
section 5 of this 2003 Act apply only to the crediting of
earnings under ORS 238.255 for calendar years 2003 and
thereafter. The amendments to ORS 238.255 by section 5 of this
2003 Act do not affect the crediting of earnings to member
accounts for any member who retires before April 1, 2004, and the
board shall credit the accounts of those members in the manner
provided by ORS 238.255, and rules adopted by the Public
Employees Retirement Board to implement ORS 238.255, as in effect
immediately before the effective date of this 2003 Act. + } ' .
On page 10, line 3, delete 'February' and insert 'April'.
Delete lines 8 through 39 and insert:
' { + SECTION 10. + } { + (1) Notwithstanding ORS 238.360,
cost of living increases for that portion of a service retirement
allowance that is not attributable to a variable annuity under
ORS 238.260 and that is payable to or on account of members
described in subsection (5) of this section may be made only as
provided by this section.
' (2) The Public Employees Retirement Board shall calculate a
revised service retirement allowance for that portion of a
service retirement allowance that is not attributable to a
variable annuity under ORS 238.260 and that is payable to members
described in subsection (5) of this section. The revised service
retirement allowance shall be calculated as follows:
' (a) The board shall establish a member account balance for
the member as of the member's effective date of retirement,
determined as though the regular member account for the member
had been credited with 11.33 percent earnings in calendar year
1999.
' (b) The board shall calculate a service retirement allowance
for the member under ORS 238.300 as of the member's effective
date of retirement, using the member account balance established
under paragraph (a) of this subsection.
' (c) If the member elected an optional service retirement
allowance calculation under ORS 238.305, the board shall convert
the service retirement allowance calculated under paragraph (b)
of this subsection to the optional calculation elected by the
member.
' (d) The board shall adjust the revised service retirement
allowance calculated under paragraph (b) or (c) of this
subsection for each calendar year after the member's effective
date of retirement based on the cost of living adjustment
provided for in ORS 238.360.
' (3) The board shall calculate a fixed service retirement
allowance for members described in subsection (5) of this
section. The fixed service retirement allowance shall be the
amount that is not attributable to a variable annuity under ORS
238.260 and that is payable to or on account of the member on the
effective date of this 2003 Act. The fixed service retirement
allowance may not be adjusted under ORS 238.360.
' (4) The service retirement allowance payable to or on account
of members described in subsection (5) of this section shall be
the greater of the revised service retirement allowance
calculated under subsection (2) of this section or the fixed
service retirement allowance calculated under subsection (3) of
this section.
' (5) The provisions of this section apply to members who:
' (a) Established membership in the Public Employees Retirement
System before January 1, 1996, as described in ORS 238.430;
' (b) Receive a service retirement allowance calculated under
ORS 238.300 (2)(b)(A); and
' (c) Have an effective date of retirement that is on or after
April 1, 2000, and before April 1, 2004. + } ' .
On page 12, line 9, delete 'June 30' and insert 'December 31'.
In line 11, delete 'June 30' and insert 'December 31'.
Delete lines 14 through 21 and insert:
' (5)(a) The Public Employees Retirement Board shall establish
a transition account program for payments made under this
section. All assets of the program are held in trust for the
exclusive benefit of the members of the system. Except as
otherwise provided by law, the board is declared to be the
trustee of the assets of the transition account program.
' (b) The board shall keep a separate transition account for
each member of the system that makes payments under the
provisions of this section. Except as provided in subsection (9)
of this section, all earnings and losses on a transition account
shall be credited by the board to the transition account. If the
membership of the employee in the system is terminated under the
provisions of ORS 238.095, the board shall cease crediting of
earnings and losses to the transition account of the member.'.
Delete lines 35 through 37 and insert:
' (10) The board shall take all actions necessary to qualify
the transition account program as a tax-qualified governmental
retirement plan and trust under the Internal Revenue Code.'.
After line 39, insert:
' { + SECTION 13a. + } { + (1) The Transition Account Fund
is created as a trust fund, separate and distinct from the
General Fund, for the purpose of holding and investing moneys in
transition accounts created under section 13 of this 2003 Act.
Interest and any other earnings of the Transition Account Fund
shall be credited to the fund. Moneys in the fund may be used
only as provided in section 13 of this 2003 Act.
' (2) The assets of the Transition Account Fund may be invested
in the same manner as the assets of the Public Employees
Retirement Fund. + }
' { + SECTION 13b. + } { + Sections 13 and 13a of this 2003
Act become operative January 1, 2004. + } ' .
On page 32, after line 29, insert:
' { + SECTION 35a. + } ORS 293.701, as amended by section 9,
chapter 6, Oregon Laws 2002 (third special session), is amended
to read:
' 293.701. As used in ORS 293.701 to 293.820, unless the
context requires otherwise:
' (1) 'Council' means the Oregon Investment Council.
' (2) 'Investment funds' means:
' (a) Public Employees Retirement Fund referred to in ORS
238.660;
' (b) Industrial Accident Fund referred to in ORS 656.632;
' (c) Consumer and Business Services Fund referred to in ORS
705.145;
' (d) Employment Department Special Administrative Fund
referred to in ORS 657.822;
' (e) Insurance Fund referred to in ORS 278.425;
' (f) Funds under the control and administration of the
Division of State Lands;
' (g) Oregon Student Assistance Fund referred to in ORS
348.570;
' (h) Moneys made available to the Commission for the Blind
under ORS 346.270 and 346.540 or rules adopted thereunder;
' (i) Forest rehabilitation bonds sinking fund referred to in
ORS 530.280;
' (j) Oregon War Veterans' Fund referred to in ORS 407.495;
' (k) Oregon War Veterans' Bond Sinking Account referred to in
ORS 407.515;
' (L) World War II Veterans' Compensation Fund;
' (m) World War II Veterans' Bond Sinking Fund;
' (n) Savings and loan association funds in the hands of the
Director of the Department of Consumer and Business Services;
' (o) Funds in the hands of the State Treasurer that are not
required to meet current demands;
' (p) State funds that are not subject to the control and
administration of officers or bodies specifically designated by
law;
' (q) Funds derived from the sale of state bonds;
' (r) Social Security Revolving Account referred to in ORS
237.490;
' (s) Investment funds of the State Board of Higher Education
lawfully available for investment or reinvestment;
' (t) Local Government Employer Benefit Trust Fund referred to
in ORS 657.513;
' (u) Elderly and Disabled Special Transportation Fund
established by ORS 391.800;
' (v) Education Stability Fund established by ORS 348.696;
' (w) Deferred Compensation Fund established under ORS 243.411;
and
' (x) Trust for Cultural Development Account established under
ORS 359.405.
' { + (y) Transition Account Fund established by section 13a
of this 2003 Act. + }
' (3) 'Investment officer' means the State Treasurer in the
capacity as investment officer for the council.'.
Delete lines 39 through 43 and insert:
' { + SECTION 37. + } (1) Jurisdiction is conferred on the
Supreme Court to determine in the manner provided by this section
whether the provisions of this 2003 Act breach any contract
between members of the Public Employees Retirement System and
their employers or violate any constitutional provision,
including but not limited to impairment of contract rights of
members of the Public Employees Retirement System under section
21, Article I of the Oregon Constitution, or clause 1, section
10, Article I of the United States Constitution.
' (2) A person who is adversely affected by this 2003 Act or
who will be adversely affected by this 2003 Act may institute a
proceeding for review by filing with the Supreme Court a petition
that meets the following requirements:'.
On page 33, after line 19, insert:
' { + SECTION 40. + } If House Bill 2004 becomes law, section
4, chapter __, Oregon Laws 2003 (Enrolled House Bill 2004), is
amended to read:
' { + Sec. 4. + } (1) Subject to subsections (2) and (3) of
this section, for the purpose of computing the retirement
allowance of members and alternate payees with effective dates of
retirement on or after July 1, 2003, and before January 1, 2005,
the Public Employees Retirement Board shall use actuarial
equivalency factor tables that are based on the mortality
assumptions adopted by the board on September 10, 2002.
' (2) The retirement allowance of any member or alternate payee
who has an effective date of retirement on or after July 1, 2003,
shall be the higher of the following amounts:
' (a) The amount calculated for the retirement allowance
selected by the member under ORS 238.300, 238.305, 238.320 or
238.325 determined as of the member's or alternate payee's
effective date of retirement using actuarial equivalency factor
tables in effect on the effective date of retirement for the
purpose of all calculations using actuarial equivalency factor
tables; or
' (b) The amount calculated under subsection (3) of this
section.
' (3) For each member or alternate payee described in
subsection (2) of this section, the board shall establish
{ + years of service, + } an account balance { + and a final
average salary + } as of June 30, 2003. { + Years of service for
the member as of June 30, 2003, shall include all creditable
service of the member determined as of June 30, 2003, including
any retirement credit acquired by the member under ORS 238.105 to
238.175 before July 1, 2003. + }The account balance shall
include all employee contributions made by or on behalf of the
member as of June 30, 2003, and earnings on those contributions
as of June 30, 2003, credited in the manner provided by board
rules in effect on the effective date of this 2003 Act governing
crediting of earnings upon retirement of a member. The board
shall then calculate the retirement allowance selected by the
member under ORS 238.300, 238.305, 238.320 or 238.325, except
that:
' (a) The board shall use the actuarial equivalency factor
tables in effect on June 30, 2003, for the purpose of all
calculations using actuarial equivalency factor tables; and
' (b) The board shall use the { + years of service, + }
account balance { + and final average salary + } established by
the board under this subsection for the member as of June 30,
2003.
' (4) The board need not perform the calculations described in
subsections (2) and (3) of this section for a member if the board
actuarially determines that one of the calculations described in
subsection (2) or (3) of this section necessarily provides the
highest amount.
' (5) Any monthly payments to be made to a death beneficiary
under ORS 238.390, 238.395 or 238.405 for a member who dies on or
after the effective date of this 2003 Act shall be calculated
using the actuarial equivalency factor tables that are in effect
on the date that the first payment is due to the death
beneficiary.'.
In line 20, delete '40' and insert '41'.
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