72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 2401
Sponsored by COMMITTEE ON PUBLIC EMPLOYEES RETIREMENT SYSTEM
CHAPTER ................
AN ACT
Relating to payment of certain costs incurred by Public Employees
Retirement System; creating new provisions; and amending ORS
238.095, 238.157, 238.162, 238.175, 238.610 and 238.715.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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
member account 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 member
account of the former member from the date that membership is
terminated under subsection (2) of this section. { + Upon
request by the former member, + } the Public Employees Retirement
Board shall pay the amount in a member account 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
{ + Public Employees Retirement + } Fund as a qualified
governmental retirement plan and trust. { + The board may
deduct, from the amount paid to a former member under this
subsection, all reasonable costs incurred by the system in
locating the member. + }
SECTION 2. ORS 238.157 is amended to read:
238.157. (1) Any person who entered or reentered active service
in the Armed Forces of the United States after January 1, 1950,
for other than active duty for training, or who was in active
service in the Armed Forces of the United States on January 1,
Enrolled House Bill 2401 (HB 2401-INTRO) Page 1
1950, for other than active duty for training, and who, after
being other than dishonorably discharged therefrom, entered the
employ of an employer participating in the Public Employees
Retirement System, may acquire retirement credit for up to four
years of active service in the Armed Forces by paying in a lump
sum to the Public Employees Retirement Board within 90 days of
the member's effective date of retirement an amount determined by
the board to represent the full cost to the system of providing
the retirement credit to the member { + , including all
administrative costs incurred by the system in processing the
application for acquisition of the retirement credit + }.
(2) No person shall receive retirement credit under this
section for any period of service with the Armed Forces of the
United States for which that person receives credit under the
provisions of ORS 238.156 or for which the person is receiving or
entitled to receive a pension or retirement pay under a public
retirement system established by the United States for the
performance of service in the Armed Forces.
SECTION 3. ORS 238.162 is amended to read:
238.162. (1) A member of the Public Employees Retirement System
who is a teacher as described in subsection (3) of this section
is entitled to receive retirement credit as provided in
subsection (2) of this section if:
(a) The member was employed as a teacher in a public school in
another state before being employed in a position that entitled
the member to credit in the system; and
(b) The member makes the payment required by subsection (2) of
this section within the time specified by that subsection.
(2) Except as provided in subsection (4) of this section, a
member of the system employed as a teacher as described in
subsection (3) of this section and who meets the requirements of
subsection (1) of this section is entitled to receive retirement
credit for the period of the member's service with a public
school in another state, not to exceed a maximum of four years,
if the member within 90 days of the member's effective date of
retirement:
(a) Applies in writing to the Public Employees Retirement Board
for such retirement credit;
(b) Provides written verification to the board from the public
employer that employed the member in the other state, verifying
the period of time that the member served as a teacher in a
public school in the other state; and
(c) Pays to the board, in a lump sum, for each year of
retirement credit applied for under this section, an amount
determined by the board to represent the full cost to the system
of providing the retirement credit to the member { + , including
all administrative costs incurred by the system in processing the
application for acquisition of the retirement credit + }.
(3) The provisions of this section apply only to a licensed
teacher, as defined in ORS 342.120, who is employed by a common
school district, a union high school district or an education
service district.
(4) A member may not receive retirement credit under the
provisions of this section for any period of service with a
public school in another state if the member is entitled to a
pension or retirement allowance by reason of that service under a
public plan or system offered by the other state.
SECTION 4. ORS 238.175 is amended to read:
238.175. (1) A member of the Public Employees Retirement System
who receives a disability retirement allowance or disability
Enrolled House Bill 2401 (HB 2401-INTRO) Page 2
payments under ORS chapter 656 shall receive retirement credit
for the period during which the member receives the disability
retirement allowance or disability payments if the member
receives the allowance or payments by reason of injury or disease
sustained while in actual performance of duty and not
intentionally self-inflicted.
(2) A member of the Public Employees Retirement System who
receives a disability retirement allowance or disability payments
under ORS chapter 656 by reason of injury or disease that was not
sustained while in actual performance of duty and that was not
intentionally self-inflicted shall receive retirement credit for
all or part of the period during which the member receives the
disability retirement allowance or disability payments if the
member, within 90 days before the effective date of retirement of
the member, applies in writing to the Public Employees Retirement
Board for that retirement credit and pays to the board in a lump
sum an amount determined by the board to represent the full cost
to the system of providing the retirement credit to the
member { + , including all administrative costs incurred by the
system in processing the application for acquisition of the
retirement credit + }.
(3) A member may acquire retirement credit under the provisions
of this section for the purposes of calculating a service
retirement allowance only if the member returns to employment
with a participating public employer after the period of
disability.
(4) A member may not acquire retirement credit under the
provisions of this section for a period of time that is in excess
of the period of time used in calculating the disability
retirement allowance paid to the member under ORS 238.320 during
the period of disability for which the member seeks credit. For
the purposes of this subsection, the retirement credit that may
be acquired by a police officer or firefighter who elects to
receive the optional, service-connected disability retirement
allowance provided for under ORS 238.345 shall be determined as
though the police officer or firefighter had received a
disability retirement allowance calculated under ORS 238.320.
(5) Retirement credit acquired under this section may be used
for the purpose of establishing eligibility under ORS 238.115,
238.125 or 238.135 or any other provision of this chapter that
requires a specified number of years of creditable service.
(6) Retirement credit under this section may be acquired only
for periods occurring on or after January 1, 1985, during which a
member receives a disability retirement allowance or disability
payments under ORS chapter 656.
SECTION 5. ORS 238.610 is amended to read:
238.610. (1) The administrative expenses of the { + Public
Employees Retirement + } System shall be paid from interest
earned by the { + Public Employees + } Retirement Fund;
provided, that if such interest be insufficient the expense in
excess thereof shall be paid from the contributions which this
chapter requires participating employers to pay into the Public
Employees Retirement Fund. { + The Public Employees Retirement
Board by rule may establish procedures for recovering
administrative costs from members for services provided in
estimating retirement benefit amounts and processing payments if
the board determines that the services requested by an individual
member result in extraordinary costs to the system. + }
(2) In order to facilitate financing the establishment and
administration of the system the board may designate fiscal
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periods and may provide that extraordinary expenses incurred
during one such period, such as expenses for equipment and
actuarial studies, may, for purposes of equitably distributing
part of the burden of the expenses, be apportioned to subsequent
fiscal periods in such manner as to the board seems equitable.
(3) For each fiscal period designated by the board there shall
be deducted from the interest earned by the { - retirement - }
fund, the administrative expenses of the system for that period;
provided, that if such interest be insufficient for such purpose,
the excess expense shall be paid by deducting from the account of
each employer participating in the system that fraction of the
administrative expense of the system for that period which the
employer's total contribution to the fund for the period is of
the sum of all the employers' contributions to the fund for the
period.
(4) Amounts payable as refunds and retirement allowances shall
not for any purpose be deemed expenses of the board and shall not
be included in its biennial departmental budget.
SECTION 6. ORS 238.715 is amended to read:
238.715. (1) If the Public Employees Retirement Board
determines that a member of the { + Public Employees
Retirement + } System or any other person receiving a monthly
payment from the Public Employees Retirement Fund has received
any amount in excess of the amounts that the member or other
person is entitled to under this chapter, the board may recover
the overpayment or other improperly made payment by:
(a) Reducing the monthly payment to the member or other person
for as many months as may be determined by the board to be
necessary to recover the overpayment or other improperly made
payment; or
(b) Reducing the monthly payment to the member or other person
by an amount actuarially determined to be adequate to recover the
overpayment or other improperly made payment during the period
during which the monthly payment will be made to the member or
other person.
(2)(a) Any person who receives a payment from the Public
Employees Retirement Fund and who is not entitled to receive that
payment, including a member of the system who receives an
overpayment, holds the improperly made payment in trust subject
to the board's recovery of that payment under this section or by
a civil action or other proceeding.
(b) The board may recover an improperly made payment in the
manner provided by subsection (1) of this section from any person
who receives an improperly made payment from the fund and who
subsequently becomes entitled to receive a monthly payment from
the fund.
(c) The board may recover an improperly made payment by
reducing any lump sum payment in the amount necessary to recover
the improperly made payment if a person who receives an
improperly made payment from the fund subsequently becomes
entitled to receive a lump sum payment from the fund.
(3) Unless the member or other person receiving a monthly
payment from the fund authorizes a greater reduction, the board
may not reduce the monthly payment made to a member or other
person under the provisions of subsection (1) of this section by
an amount that is equal to more than 10 percent of the monthly
payment.
(4) Before reducing a benefit to recover an overpayment or
erroneous payment, or pursuing any other collection action under
this section, the board shall give notice of the overpayment or
Enrolled House Bill 2401 (HB 2401-INTRO) Page 4
erroneous payment to the person who received the payment. The
notice shall describe the manner in which the person who received
the payment may appeal the board's determination that an
overpayment or erroneous payment was made, the action the board
may take if the person does not respond to the notice and the
authority of the board to assess interest, penalties or costs of
collection.
(5) If the board determines that an overpayment or erroneous
payment was { + not + } caused by { - a fraudulent or
intentional act of the person who received the payment - } { +
the system or by a participating public employer + }, the board
may assess interest in an amount equal to one percent per month
on the balance of the improperly made payment until the payment
is fully recovered. The board may also assess to the member or
other person all costs incurred by the
{ - board - } { + system + } in recovering the payment,
including attorney fees. Interest and costs may be collected in
the manner prescribed in subsections (1) and (2) of this section.
The board may waive the interest and costs on an overpayment or
other improperly made payment for good cause shown.
(6) Notwithstanding ORS 293.240, the board may waive the
recovery of any payment or payments made to a person who was not
entitled to receive the payment or payments if the total amount
of the overpayment or other improperly made payments is less than
$50.
(7) A payment made to a person from the fund may not be
recovered by the board unless within six years after the date
that the payment was made the board has commenced proceedings to
recover the payment. For the purposes of subsection (1) of this
section, the board shall be considered to have commenced
proceedings to recover the payment upon mailing of notice to the
person receiving a monthly payment that the board has determined
that an overpayment or other improperly made payment has been
made.
(8) The remedies authorized under this section are supplemental
to any other remedies that may be available to the board for
recovery of amounts incorrectly paid from the fund to members of
the system or other persons.
(9) The board shall adopt rules establishing the procedures to
be followed by the board in recovering overpayments and erroneous
payments under this section.
SECTION 7. { + (1) The amendments to ORS 238.095 by section 1
of this 2003 Act apply only to payments made to former members of
the Public Employees Retirement System under ORS 238.095 on or
after the effective date of this 2003 Act.
(2) The amendments to ORS 238.157, 238.162 and 238.175 by
sections 2, 3 and 4 of this 2003 Act apply only to acquisitions
of retirement credit made on or after the effective date of this
2003 Act.
(3) The amendments to ORS 238.715 by section 6 of this 2003 Act
apply to all overpayments and erroneous payments, whether made
before, on or after the effective date of this 2003 Act. + }
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Enrolled House Bill 2401 (HB 2401-INTRO) Page 5
Passed by House March 19, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate May 2, 2003
...........................................................
President of Senate
Enrolled House Bill 2401 (HB 2401-INTRO) Page 6
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 2401 (HB 2401-INTRO) Page 7