Chapter 52
AN ACT
HB 2281
Relating to public employee retirement; amending ORS 238.105, 238.115,
238.265, 238.440, 238A.120 and 238A.375.
Be It Enacted by the People of
the State of
SECTION 1. ORS 238.265 is amended to read:
238.265. (1) Except as
otherwise provided in this section, a member of the Public Employees Retirement
System may withdraw from the Public Employees Retirement Fund the amount
credited to the member account, if any, for the member if:
(a) The member is separated
from all service with participating public employers;
(b) The 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 fund as a qualified
governmental retirement plan and trust;
(c) The member has not
attained earliest service retirement age; and
(d) The separation from
service is not by reason of death or disability.
(2) If a member wishes
to withdraw the member account, if any, of the member under this section, the
member must transmit to the Public Employees Retirement Board a withdrawal
request. The board shall deny the withdrawal, or shall take all reasonable
steps to recover withdrawn amounts, if:
(a) The board determines
that the separation is not a bona fide separation; or
(b) The member fails to
remain absent from the service of all employers described in subsection (1) of
this section for at least one calendar month following the month in which the
member separates from service.
(3) If a member has
contributed to the fund in each of five calendar years and has separated from
all service in the manner described in subsection (1) of this section before
reaching earliest service retirement age, the member may elect to withdraw the
member account of the member under this section at any time before reaching
earliest service retirement age. If the inactive member does not make an
election to withdraw under this section, the member shall be paid the benefits
or retirement allowances described in ORS 238.425.
(4) A member who is
vested in the pension program established under ORS chapter 238A and who is
eligible to withdraw from the pension program under ORS 238A.120 may withdraw a
member account under this section only if the member also withdraws from the
pension program. A member who has an individual account or accounts in the
individual account program established under ORS chapter 238A may withdraw a
member account under this section only if the member also withdraws all
individual accounts pursuant to ORS 238A.375. A member who has an account
established under ORS 238.440 may withdraw a member account under this section
only if the member also withdraws the account established under ORS 238.440.
[(4)] (5) Withdrawal of a member account under this section
cancels all membership rights in the system, including the right to claim
credit for any employment before withdrawal.
SECTION 2. ORS 238A.120 is amended to read:
238A.120. (1) A vested inactive
member may withdraw from the pension program if:
(a) The actuarial
equivalent of the member’s benefit under the pension program at the time of
withdrawal is $5,000 or less; and
(b) The inactive member
has separated from all service with participating public employers and 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 fund as a qualified governmental retirement plan and trust.
(2) Upon withdrawal
under this section, the Public Employees Retirement Board shall pay the
withdrawing member the actuarial equivalent of the member’s benefit in a lump
sum.
(3) If a vested inactive
member withdraws from the pension program under this section and is thereafter
reemployed by a participating public employer:
(a) The person may
reestablish membership in the pension program only for the purpose of service
performed after the person is reemployed; and
(b) Any service
performed before the withdrawal may not be credited toward the period of
service required by ORS 238A.100 or 238A.115 or toward the accrual of
retirement credit under ORS 238A.140, 238A.150 or 238A.155.
(4) A member who has
an individual account or accounts in the individual account program established
under ORS 238A.025 may withdraw from the pension program under this section
only if the member also withdraws all individual accounts pursuant to ORS
238A.375. A member who has a member account established under ORS chapter 238 may
withdraw from the pension program under this section only if the member also
withdraws that member account in the manner provided by ORS 238.265. A member
who has an account established under ORS 238.440 may withdraw from the pension
program under this section only if the member also withdraws the account
established under ORS 238.440.
[(4)] (5) For the purposes of this
section, the actuarial equivalent of a member’s benefit does not include any
value attributable to adjustments to the benefit under ORS 238A.210.
SECTION 3. ORS 238A.375 is amended to read:
238A.375. (1) An
inactive member of the individual account program may elect to receive a
distribution of the amounts in the member’s employee account, rollover account
and employer account to the extent the member is vested in those accounts under
ORS 238A.320 if the inactive member has separated from all service with
participating public employers and 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 fund as a qualified
governmental retirement plan and trust.
(2) If an inactive
member of the individual account program who is not vested in the employer
account receives a distribution under subsection (1) of this section, the
employer account of the member is permanently forfeited as of the date of the
distribution.
(3) A member may not
make an election under this section for less than all of the member’s
individual accounts described in ORS 238A.350 in which the member is vested.
(4) A member who is
vested in the pension program established under this chapter and who is
eligible to withdraw from the pension program under ORS 238A.120 may make an
election under this section only if the member also withdraws from the pension
program. A member who has a member account established under ORS chapter 238
may make an election under this section only if the member also withdraws that
member account in the manner provided by ORS 238.265. A member who has an
account established under ORS 238.440 may make an election under this section
only if the member also withdraws the account established under ORS 238.440.
[(3)] (5) If an inactive member receives a distribution under
subsection (1) of this section and is subsequently reemployed by a
participating public employer, any service performed before the date the member
became an inactive member may not be used toward the period of service required
for vesting in the employer account under ORS 238A.320.
SECTION 4. ORS 238.105 is amended to read:
238.105. (1)
Whenever, within five years after the employee is separated from all service
entitling the employee to membership in the system, an employee who has
withdrawn the amount credited to the member account of the member reenters the
service of an employer participating in the system, the employee’s rights in
the system that were forfeited by the withdrawal shall be restored upon
repaying to the board within one year after reentering the service of the
employer, the full amount so withdrawn together with the interest that would
have been accumulated on the sum had the amount not been withdrawn.
(2) Restoration of
rights under this section does not affect any forfeiture of rights of a person
by reason of:
(a) Withdrawal of an
account established under ORS 238.440;
(b) Withdrawal from the
pension program under ORS 238A.120; or
(c) Withdrawal of
individual accounts pursuant to ORS 238A.375.
SECTION 5. ORS 238.115 is amended to read:
238.115. (1)(a) A member
of the system who, after separation from all service entitling the employee to
membership in the system and withdrawal of the amount credited to the member
account of the member, reenters the service of an employer participating in the
system and serves as an active member of the system for 10 years after that
reentry, and who has not otherwise obtained restoration of creditable service
forfeited by the withdrawal, shall obtain restoration of one full month of
creditable service forfeited by the withdrawal for each three full months of
service as an active member after that reentry if the member, within 90 days
before the effective date of retirement of the member:
(A) Applies in writing
to the board for restoration of creditable service; and
(B) Pays to the board in
a lump sum for credit to the member account of the member the amount withdrawn
and interest on the amount withdrawn compounded annually for each year or
portion of a year after the date of the withdrawal and before the effective
date of retirement of the member. The interest shall be computed at the annual
rate of 7.5 percent.
(b) If a member who
obtains restoration of creditable service as provided in this subsection does
not obtain restoration of all creditable service forfeited by the withdrawal
pursuant to service after reentry, the payment under paragraph (a) of this
subsection shall be reduced proportionately to reflect the percentage of
creditable service restored.
(c) A member who obtains
restoration of creditable service as provided in this subsection is not
entitled to elect to receive the service retirement benefit described in ORS
238.305 (2) or (3).
(2) A member who
forfeited creditable service rendered to a public employer before March 27,
1953, because under ORS 237.976 (2) the employee withdrew contributions of the
employee to the Public Employees Retirement System established by chapter 401,
Oregon Laws 1945, and who did not obtain restoration of creditable service so
forfeited as provided in chapter 857, Oregon Laws 1977, shall, upon retirement,
receive restoration of creditable service so forfeited, if the member, before
the effective date of retirement of the member:
(a) Applies in writing
to the board for the restoration of the creditable service; and
(b) Pays to the board in
a lump sum for credit to the member account of the member an amount determined
by the board to be equal to the full amount of contributions so withdrawn and
the interest that would have accumulated to the regular account of the member
had those contributions not been withdrawn.
(3)(a) A member of the
Public Employees Retirement System who was a member of an association
established pursuant to ORS chapter 239 (1997 Edition), but separated from all
service entitling the employee to membership in the system of the association
and withdrew the amount credited to the member account of the employee in the
retirement fund of the association, and who, after that separation, entered the
service of an employer in the field of education participating in the Public
Employees Retirement System and served as an active member of that system for
10 years after that entry, and who has not otherwise obtained restoration of
all creditable service forfeited by the withdrawal, shall obtain creditable
service as a member of the Public Employees Retirement System equal to all
creditable service forfeited by the withdrawal if the member within 90 days
before the effective date of retirement of the member:
(A) Applies in writing
to the Public Employees Retirement Board for that creditable service; and
(B) Pays to the board in
a lump sum for credit to the member account of the member the amount withdrawn
and interest on the amount withdrawn compounded annually for each year or
portion of a year after the date of the withdrawal and before the effective
date of retirement or effective date of application of the member. The interest
shall be computed at the rate actually credited to regular accounts for that
period.
(b) This subsection
provides a method of obtaining creditable service for forfeited creditable
service described in this subsection that is in lieu of any application of
subsection (1) of this section for that purpose.
(4) Restoration of
creditable service under this section does not affect any forfeiture of rights
of a person by reason of:
(a) Withdrawal of an
account established under ORS 238.440;
(b) Withdrawal from the
pension program under ORS 238A.120; or
(c) Withdrawal of
individual accounts pursuant to ORS 238A.375.
SECTION 6. ORS 238.440 is amended to read:
238.440. (1) A police officer or firefighter who is a member of the
system may elect to make additional contributions to the fund to purchase
increased benefits between the date of retirement and age 65. The rate of
additional contribution shall be determined by the actuary, dependent upon the
age of the police officer or firefighter at the date of election, so as to
provide monthly payments on the basis of $10 per unit of benefits purchased. No
police officer or firefighter may elect to purchase more than eight units. For
each $10 unit purchased by the police officer or firefighter, the employer
shall purchase an equal $10 unit. A police officer or firefighter who is
retained until age 65 shall receive a lump sum refund of the additional
contributions made toward units purchased, plus interest thereon, but shall
receive no benefits from the additional contributions by the employer for such
units. If a police officer or firefighter retires after age 60 but prior to age
65, the units purchased by additional contributions shall provide increased
monthly benefits based on life expectancy, but the matching units purchased by
the employer shall not, regardless of age, exceed $10 per month per unit
purchased by the police officer or firefighter. If a police officer or
firefighter is absent from the employment of a participating employer for any
reason and because of such absence is unable to make monthly additional
contributions, the benefits provided under this section shall be actuarially
reduced upon the retirement of the police officer or firefighter. The Public
Employees Retirement Board shall establish an account for each member who
elects to make additional contributions under this section and shall credit all
contributions made by that member and interest on those contributions to the
account.
(2) Notwithstanding
subsection (1) of this section, a police officer or firefighter who retires
prior to age 60 may apply for and receive an actuarially reduced unit income
commencing at any date between the date of early retirement and age 60, with
monthly benefits payable for at least 60 months or any other monthly formula in
excess of 60 months but always terminating by age 65. Such a police officer or
firefighter may elect to pay in a lump sum within the 60 days immediately preceding early retirement the contribution that the police
officer or firefighter would have made to the [unit income] account had the police officer or firefighter worked
to age 60.
(3) Any police officer
or firefighter who elects to make additional contributions to purchase
increased benefits may elect at any time before termination to cancel such
election. Having once canceled such election, no police officer or firefighter
shall be again permitted to make additional contributions.
(4) [The additional contributions made by the
police officer or firefighter under this section shall be refunded to the
police officer or firefighter only when] A member may withdraw the
amounts credited to the account established for the member under this section
if:
(a) The member is
separated from all service with participating public employers; and
(b) The 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 fund as a qualified
governmental retirement plan and trust.
(5) A member who
withdraws the amounts credited to the account established for the member
pursuant to subsection (4) of this section may not thereafter make additional
contributions under this section.
[(5)] (6) A police officer or firefighter who has elected to
make additional contributions under this section and who transfers to
employment in which not entitled to make such additional contributions may
retain the account established under subsection (1) of this section for five
years immediately following such transfer by not requesting a withdrawal. If,
at the end of the five-year period, the police officer or firefighter has not
reached age 50, or has not returned to employment in which entitled to make
additional contributions under this section, the election shall be canceled and
the amount of the account established under subsection (1) of this section
shall be refunded to the police officer or firefighter.
[(6)] (7) Any election to make
additional contributions under this section and any cancellation of such
election shall be submitted to the employer and to the board in writing.
Approved by the Governor April 17, 2007
Filed in the office of Secretary of State April 17, 2007
Effective date January 1, 2008
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