72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
HA to HB 2004
 
LC 1669/HB 2004-11
 
                       HOUSE AMENDMENTS TO
                         HOUSE BILL 2004
 
       By COMMITTEE ON PUBLIC EMPLOYEES RETIREMENT SYSTEM
 
                           February 24
 
  On page 1 of the printed bill, after line 2, insert:
  ' Whereas the Public Employees Retirement Board has
long-standing authority under ORS 238.630 (3)(g) to establish
actuarial equivalency factors from time to time, and those
factors as established constitute part of the Public Employees
Retirement System; and
  ' Whereas actuarial equivalency factors are based on
assumptions and conditions that vary over time as the
demographics of a system's constituent population and the
expected performance of investments of the Public Employees
Retirement Fund change, so that the most reasonable expectation
is that such factors, by their very nature, must vary over time
to reflect those demographic and performance shifts; and
  ' Whereas the long-term stability and viability of the Public
Employees Retirement Fund depends on the ability of public
employers and taxpayers to pay the costs of the system; and
  ' Whereas the board is charged with giving equal consideration
to the interests of the public employer and the public employee
to the extent consistent with the board's fiduciary duties; and
  ' Whereas adjustments to actuarial equivalency factors must be
made as assumptions and conditions change to ensure that the
public employer's actual costs fairly match the actual
demographic and performance characteristics that then exist and
as reasonably anticipated with the system's fund and membership;
and
  ' Whereas based on the review by the Legislative Assembly of
the Public Employees Retirement System's plan as a whole, the
Legislative Assembly has concluded that the Public Employees
Retirement Board's administration of its authority to establish
actuarial equivalency factors from time to time does not (a)
ensure that the system is run on a sound actuarial basis, (b)
conform to the Legislative Assembly's intent that benefits paid
represent actuarial equivalencies, (c) sufficiently conform to
the Legislative Assembly's direction to balance the interests of
the public employer and the public employee and (d) constitute
the best process available that is consistent with the board's
fiduciary duties; and
  ' Whereas this 2003 Act is intended to redirect the board's
future administration of its authority to establish actuarial
equivalency factors, define the process by which actuarial
equivalency factors are to be reviewed and changed over time, and
set a benchmark for when and how those changes are to occur to
ensure that the system operates using accurate factors that fully
comply with the statutory requirements and, in addition, to
ensure that these factors continue to reflect future changes in
the fund and the system; now, therefore,'.
  Delete lines 6 through 26 and insert:
  '  { +  SECTION 2. + }  { + (1) Once every two calendar years,
the Public Employees Retirement Board shall adopt actuarial
equivalency factor tables for the purpose of computing the
payments to be made to members and their beneficiaries, alternate
payees and judge members and their spouses and beneficiaries. The
tables may be adopted in conjunction with the system evaluation
required by ORS 238.605. Tables adopted under this section must
use the best actuarial information on mortality available at the
time the board adopts the tables, as provided by the actuary
engaged by the board. Actuarial equivalency factor tables adopted
under this section become effective on January 1 of the calendar
year following adoption of the tables by the board. All
computations of payments must use the actuarial equivalency
factor tables that are in effect on:
  ' (a) The effective date of retirement for any member, judge
member or alternate payee;
  ' (b) The date that the first payment is due for any death
beneficiary; or
  ' (c) The date that the first payment is due for any
recalculation of payments that is not attributable to error,
including but not limited to recalculations under ORS 238.465
(2).
  ' (2) The board may not defer or delay implementation of the
actuarial equivalency factor tables adopted under this
section. + }
  '  { +  SECTION 3. + }  { + The Public Employees Retirement
Board shall first adopt actuarial equivalency factor tables under
section 2 of this 2003 Act to become effective January 1,
2005. + }
  '  { +  SECTION 4. + }  { + (1) Subject to subsections (2) and
(3) of this section, for the purpose of computing the service
retirement allowance of members and alternate payees with
effective dates of retirement on or after July 1, 2003, and
before January 1, 2005, the board shall use actuarial equivalency
factor tables that are based on the mortality assumptions adopted
by the Public Employees Retirement Board on September 10, 2002.
  ' (2) The service retirement allowance of any member or
alternate payee who has an effective date of retirement on or
after July 1, 2003, shall be the highest of the following
amounts:
  ' (a) An amount calculated under ORS 238.300 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; 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 an
account balance as of June 30, 2003, that includes all employee
contributions made by or on behalf of the member as of June 30,
2003. The board shall then credit earnings to the account through
June 30, 2003, 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 a service retirement allowance under ORS 238.300,
except that:
  ' (a) The board shall use the actuarial equivalency factor
tables in effect on June 30, 2003, for the purpose of determining
the refund annuity under ORS 238.300 (1); and
  ' (b) The board shall use the account balance established by
the board under this subsection for the member as of June 30,
2003, for the purpose of determining the refund annuity under ORS
238.300 (1).
  ' (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. + }
  '  { +  SECTION 5. + }  { + (1) Jurisdiction is conferred on
the Supreme Court to determine in the manner provided by this
section whether the implementation of actuarial equivalency
factor tables under section 2 or 4 of this 2003 Act violates any
constitutional provision, including but not limited to violation
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) Under the jurisdiction conferred in subsection (1) of
this section, any person aggrieved by the implementation of
actuarial equivalency factor tables under section 2 or 4 of this
2003 Act may petition the Supreme Court for review. The petition
must state the facts showing how the petitioner is aggrieved and
the constitutional grounds upon which the petition is based. The
Supreme Court shall give priority on its docket to a petition for
review filed under this section and shall expedite a decision on
the petition. Any and all petitions filed under this section
alleging a similar basis or bases of challenge may be
consolidated by the Supreme Court upon its own motion.
  ' (3) A person petitioning for review under this section is not
required to exhaust administrative remedies or file in any other
court prior to filing a petition for review under this section.
  ' (4) A petition for review under this section must be filed
before January 1, 2004.
  ' (5) A petition for review under this section must present a
justiciable controversy. The petitioner must serve a copy of the
petition on the Attorney General.
  ' (6) The petition for review provided for in this section is
in addition to any other remedy or procedure that may be
available to determine whether the implementation of actuarial
equivalency factor tables under section 2 or 4 of this 2003 Act
violates any constitutional provision. + } ' .
  In line 27, delete '5' and insert '6'.
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