72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 3247
A-Engrossed
House Bill 3020
Ordered by the House May 6
Including House Amendments dated May 6
Sponsored by Representative KNOPP
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.
Provides rules for distribution of member account of member of
Public Employees Retirement System who dies before retiring.
Requires payment to personal representative or person filing
small estate affidavit if member has not designated
beneficiary. Provides that death benefits and other amounts under
system do not escheat to state.
Increases from $30 to $200 minimum amount that may be paid as
monthly payment to beneficiary of deceased member in lieu of lump
sum payment.
{ + Allows Public Employees Retirement Board to charge public
employer for administration of account for lump sum payments. + }
A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
and amending ORS 238.225, 238.305, 238.390, 238.395, 238.458
and 238.565.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 238.390 is amended to read:
238.390. (1) { - In the event that - } { + If + } 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 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) Husband or wife. - }
{ - (B) Children. - }
{ - (C) Father and mother. - }
{ - (D) Grandchildren. - }
{ - (E) Brothers and sisters. - }
{ - (F) Nieces and nephews. - }
{ - (b) Payment shall not be made to persons included in any
of 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. - }
{ + (2) If a member dies before retiring and has not
designated a beneficiary under subsection (1) of this section,
the Public Employees Retirement Board shall pay the amount of
money credited at the time of death to the member account of the
deceased member to a personal representative appointed for the
estate of the deceased member. If an affidavit has been filed
under ORS 114.505 to 114.560, and the amount of money credited to
the account does not exceed the maximum amount of personal
property for which an affidavit may be filed under ORS 114.505 to
114.560, the board shall pay the amount to the person who filed
the affidavit. + }
(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 as
long as such monthly payments are at least { - $30 - } { +
$200 + }.
{ - (4)(a) In the event that 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) Expenses of the funeral of the deceased. - }
{ - (B) Medical expenses of the last illness of the
deceased. - }
{ - (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) - } { + (4) + } 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 - } { + or as provided + } 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.
{ + (5) If a member dies before retiring and has designated a
beneficiary under subsection (1) of this section, but the
beneficiary dies before the member, or dies before distribution
is made under this section, the Public Employees Retirement Board
shall pay the amount of money that would otherwise have been paid
to the beneficiary to a personal representative appointed for the
estate of the deceased beneficiary. If an affidavit has been
filed under ORS 114.505 to 114.560, and the amount of money that
would have been paid to the beneficiary does not exceed the
maximum amount of personal property for which an affidavit may be
filed under ORS 114.505 to 114.560, the board shall pay the
amount to the person who filed the affidavit on behalf of the
estate of the beneficiary. + }
(6) Interest upon the member account of the member shall accrue
until the date that the amount in the member account is
distributed. Any balance in the variable account of the deceased
member is considered to be transferred to the regular account of
the member as of the date of death. The board shall establish
procedures for computing and crediting interest on the balance in
the member account for the period between the date of death and
date of distribution.
(7) { - Payments - } { + Payment + } 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 - }
{ + amounts in the manner provided by + } this section
{ - shall - } completely { - discharge - } { +
discharges + } the board and system on account of the death, and
shall hold the board and system harmless from any claim for
wrongful payment.
SECTION 2. ORS 238.458 is amended to read:
238.458. { + (1) + } A benefit that is owed to a member or
beneficiary of a member under the Public Employees Retirement
System shall be forfeited at the end of the system's plan year in
which the benefit becomes due if the Public Employees Retirement
Board is unable to locate the member or beneficiary. If the
member, beneficiary or any other person thereafter establishes a
right to the forfeited benefit, the board shall reinstate the
benefit. If the benefit is a periodic payment, the board shall
make a retroactive payment to the member, beneficiary or other
person in a lump sum for all amounts that would have been paid
before reinstatement of the benefit. No interest shall be paid on
the benefit for the period commencing when the benefit became due
and the date of the retroactive payment.
{ + (2) Death benefits and other amounts payable by reason of
the death of a member do not escheat to the state when the member
dies without heirs, devisees or beneficiaries designated under
ORS 238.390. If a beneficiary has not been designated under ORS
238.390, and a personal representative or a person filing an
affidavit under ORS 114.505 to 114.560 fails to make claim for
the benefits within one year after the member dies, the benefits
shall be forfeited to the Public Employees Retirement Fund in the
manner provided by subsection (1) of this section and are subject
to reinstatement only upon subsequent appointment of a personal
representative or the filing of an affidavit in the manner
provided by ORS 114.505 to 114.560. If benefits are paid to a
personal representative or a person filing an affidavit under ORS
114.505 to 114.560, the personal representative or person filing
the affidavit shall return to the board the amount that would
otherwise escheat to the state after payment of administrative
expenses and claims against the estate. Any amounts returned to
the board under this subsection shall be forfeited to the
fund. + }
SECTION 3. ORS 238.305, as amended by section 8, chapter 945,
Oregon Laws 2001, is amended to read:
238.305. (1) Not later than 60 days after the first benefit
payment is 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
(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
(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 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 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.
(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.
(B) The installment payments shall be paid once each year for
the number of consecutive years equal to the number of
installment payments elected.
(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 fund.
(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.
(E) A yearly installment payment shall be paid on the
anniversary of the date of the first installment payment.
(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.
(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) - } { + (4) + }.
(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.
(5) The designation of a beneficiary, the election of an option
or any other election or designation under subsection (1), (2),
(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.
(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.
(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.
(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.
(9) The service retirement allowance provided in subsection (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.
(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 4. ORS 238.395 is amended to read:
238.395. (1) In addition to any other benefits under this
chapter, a death benefit, provided by 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 amount in the member
account 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) - } { + (4) + } 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 as long as such monthly
payments, plus the monthly amount if elected under ORS 238.390
(3), are at least
{ - $30 - } { + $200 + }.
{ - (6) - } { + (5) + } 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) - } { + (6) + } { - Payments - }
{ + Payment + } 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 - } { + in the manner provided by
this section + } completely { - discharge - }
{ + discharges + } the board and system on account of the death,
and shall hold the board and system harmless from any claim for
wrongful payment.
SECTION 5. 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, { + the accrued
retirement allowance shall be paid + } 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) - } { + the accrued retirement allowance shall
be paid as provided in ORS 238.390 (2) + }.
(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 6. { + The amendments to ORS 238.390 and 238.565 by
sections 1 and 5 of this 2003 Act apply only to members of the
Public Employees Retirement System who die on or after the
effective date of this 2003 Act. + }
SECTION 7. { + The amendments to ORS 238.395 by section 4 of
this 2003 Act that increase from $30 to $200 the minimum amount
that may be paid monthly to the beneficiary of a deceased member
in lieu of a lump sum payment apply to a beneficiary designated
by a member of the Public Employees Retirement System only if the
member dies on or after the effective date of this 2003 Act. + }
SECTION 8. ORS 238.225, as amended by section 1, chapter 9,
Oregon Laws 2002, and section 1, chapter 5, Oregon Laws 2002
(third special session), is amended to read:
238.225. (1) A participating public employer shall, at
intervals designated by the Public Employees Retirement Board,
transmit to the board those amounts the board determines to be
actuarially necessary to adequately 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.
(2) For the purpose of the actuarial computation required under
subsection (1) of this section:
(a) The school districts of the state shall be grouped together
and regarded as a single employer; and
(b) All community college districts and the state shall be
grouped together and 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 purpose of the actuarial
computation required by subsection (1) of this section.
(8) If a public employer is grouped with any other public
employer for the purpose of the actuarial computation required
under subsection (1) of this section, and the individual public
employer makes a lump sum payment that is in addition to the
normal contribution of the public employer and that is designated
for application only against accrued unfunded liabilities
attributable to the employees of the individual public employer,
the board shall adjust the amount of contributions to be made by
the individual public employer to ensure that the benefit of the
lump sum payment accrues only to the individual public employer
making the payment. An individual public employer that makes a
lump sum payment under the provisions of this subsection shall
remain grouped with other public employers as provided in this
section for the purpose of all liabilities of the employer that
are not paid under this subsection. The board by rule may
establish a minimum lump sum payment that must be made by an
individual public employer before adjusting contributions under
this subsection. Notwithstanding any minimum lump sum payment
established by the board, the board must allow an individual
public employer to make a lump sum payment under the provisions
of this subsection if the payment is equal to the full amount of
the individual public employer's accrued unfunded liabilities.
(9) The board shall establish a separate account within the
fund for each lump sum payment made under subsection (8) of this
section or made by any other participating public employer that
is not grouped with other public employers under this section.
The board shall credit to each account all interest and other
income received from investment of the account funds during the
calendar year { - , less any amounts withheld from earnings for
administrative expenses under ORS 238.610 or paid into the
reserve account established under ORS 238.670 (1) - } .
{ + Except as provided in subsection (10) of this section, the
board may not collect any administrative expense or other charge
from the account or from earnings on the account. + } The account
shall be used to offset contributions that the public employer
would otherwise be required to make for the liabilities against
which the lump sum payment is applied.
{ + (10) The board may charge a participating public employer
expenses for administration of an account established under
subsection (9) of this section in an amount not to exceed $2,500
during the year in which the account is established and the
immediately following two calendar years, and in an amount not to
exceed $1,000 in all subsequent years. + }
{ - (10) - } { + (11) + } If a participating public
employer has any liabilities that are attributable to creditable
service by employees of the employer before the participating
public employer was grouped with other public employers, whether
under the provisions of this section or pursuant to board rule,
any lump sum payment made under subsection (8) of this section
must be applied first against those liabilities, with the oldest
such liability being paid first. Any amounts remaining after
application under this subsection must be deposited in a separate
account established under subsection (9) of this section.
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