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 3381
House Bill 3230
Sponsored by Representative BROWN (at the request of Blase
McDougal)
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 as
introduced.
Allows retired member of Public Employees Retirement System to
change designation of beneficiary under optional form of
retirement allowances at any time before member dies. Permits
only one change of beneficiary. Requires that Public Employees
Retirement Board adjust anticipated benefits that would be
payable to member and beneficiary to ensure that cost to system
of providing benefits to member and new beneficiary does not
exceed cost that system would have incurred to provide benefits
to member and original beneficiary. Requires spousal consent if
member was married on effective date of member's retirement.
A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
and amending ORS 238.305 and 238.462.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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).
(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) { + (a) + } 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 - } { + without adjustment to the anticipated
benefits by reason of the payments received + }.
{ + (b) Except as provided in subsection (10) of this
section, a retired member may change a designation of a
beneficiary under this section at any time before the member
dies. Only one change of beneficiary may be made by the member
under this paragraph. If a change of beneficiary is made 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.
(c) The designation of a beneficiary under Option 4 may be
changed by the member at any time before the member's death. Any
number of changes of beneficiary under Option 4 may be made under
this paragraph. + }
(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 2. { + The amendments to ORS 238.305 by section 1 of
this 2003 Act apply to all members of the Public Employees
Retirement System, whether retiring before, on or after the
effective date of this 2003 Act. + }
SECTION 3. ORS 238.462 is amended to read:
238.462. (1) A member of the Public Employees Retirement System
who is married on the effective date of member's retirement shall
receive a service retirement allowance in the form provided for
in Option 3 under ORS 238.305 (1) or a disability retirement
allowance in the form provided for in Option 3 under ORS 238.325
(1) unless the member provides proof of spousal consent to
receiving an allowance in the form provided by ORS 238.300 or
238.320, or in one of the optional forms provided for in ORS
238.305 and 238.325 other than Option 3.
(2) Except as provided in subsection (3) of this section, a
member of the system who is married on the effective date of the
member's retirement may not change the form in which a retirement
allowance is paid after an election has been made as to the form
of the retirement allowance { + , or make a change in
beneficiaries under ORS 238.305 (5)(b), + } unless the member
provides proof of spousal consent.
(3) A member of the system who is married on the effective date
of the member's retirement is not required to provide spousal
consent to a change in the form in which a retirement allowance
is paid if the spouse of the member dies after the effective date
of the member's retirement or disability and the change in the
form of the allowance is made within the time periods provided by
ORS 238.305 { + (5)(a) + } { - and - } { + or + }
238.325 { + (2) + }. A member seeking to change the form of a
retirement allowance without spousal consent under the provisions
of this subsection must provide a notarized statement to the
Public Employees Retirement Board that certifies to the board
that the spouse of the member is deceased.
(4) Any member of the system who is not married on the
effective date of the member's retirement must provide a
notarized statement to the Public Employees Retirement Board that
certifies to the board that the member is not married. No
retirement allowance may be paid to a member of the system who is
not married until the statement required by this subsection is
provided to the board.
(5) A member of the system who is married on the effective date
of the member's retirement must provide proof of spousal consent
for the purposes of this section by submitting a statement to the
board that:
(a) Contains the notarized signature of the member's spouse;
(b) Indicates the form in which the retirement allowance is to
be paid; and
(c) Contains a statement that the member's spouse consents to
the payment of the retirement allowance in the specified form.
(6) If a member of the system who is married on the effective
date of the member's retirement fails to provide proof of spousal
consent as required by this section, the board shall calculate
and pay to the member a retirement allowance in the form provided
for in Option 3 under ORS 238.305 (1) if the retirement is for
service, or a retirement allowance in the form provided for in
Option 3 under ORS 238.325 (1) if the retirement is for
disability. The allowance will be calculated based on the ages of
the member and the spouse, and the spouse will be designated as
the beneficiary for any survivor benefits that may thereafter
become payable.
(7) Proof of spousal consent under this section is not required
for, and cannot alter, the designation of any form of a
retirement allowance that is required under 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, that has
been received by the board in compliance with the requirements
prescribed by ORS 238.465.
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