Chapter 54
AN ACT
HB 2286
Relating to deferred compensation; amending ORS 243.507.
Be It Enacted by the People of
the State of
SECTION 1. ORS 243.507 is amended to read:
243.507. (1)
Notwithstanding any other provision of law, deferred compensation under a
deferred compensation plan that would otherwise be paid by a public employer to
an eligible employee shall be paid, in whole or in part, to an alternate payee
if and to the extent expressly provided for in the terms of any judgment 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
judgment of annulment or dissolution of marriage or of separation. Any payment
under this subsection to an alternate payee bars recovery by any other person.
(2) A judgment, order or
agreement providing for payment to an alternate payee under subsection (1) of
this section may also provide:
(a) That payments to the
alternate payee may commence [on] earlier
than the date the employee [separates
from service or at such later date as may be allowed] would be eligible
to receive payments under the provisions of the deferred compensation plan.
(b) That the alternate
payee may elect to receive payment in any manner available to the employee
under the deferred compensation plan, without regard to the form of payment
elected by the employee.
(c) That the alternate
payee’s life is the measuring life for the purposes of measuring payments to
the alternate payee under the form of payment selected by the alternate payee.
(d) That all or a
portion of the deferred compensation account of the eligible employee be
segregated in an account in the name of and for the benefit of the alternate
payee, and that the alternate payee have the same rights and privileges as an
eligible employee only concerning the investment or deposit of funds under the
deferred compensation plan.
(3) Subsection (1) of
this section applies only to payments of deferred compensation made after the
date of receipt by the administrator of the deferred compensation plan of
written notice of the judgment, order or agreement and such additional
information and documentation as the plan administrator may prescribe.
(4)(a) Payment of
all or any part of deferred compensation to an alternate payee [under this section] who is a child or
dependent of the employee shall be reported for state and federal income
tax purposes as payment to the eligible employee. Any amount required to be
withheld for state or federal income tax purposes shall be withheld from the
payment to the alternate payee.
(b) Payment of all or
any part of deferred compensation to an alternate payee who is the spouse or
former spouse of the employee shall be reported for state and federal income
tax purposes as payment to the alternate payee. Any amount required to be
withheld for state or federal income tax purposes shall be withheld from the
payment to the alternate payee.
(5) If an eligible
employee transfers from a deferred compensation plan of a public employer to a
deferred compensation plan established by another public employer, the new
employer is not required to accept as part of the transfer any portion of the
eligible employee’s account with the former employer that is subject to
judgment, order or agreement requiring payment of that portion of the eligible
employee’s account to an alternate payee.
(6) If an eligible
employee transfers from a deferred compensation plan of a public employer to a
deferred compensation plan established by another public employer, the employee’s
previous employer shall not transfer to the plan established by the new
employer any portion of the eligible employee’s account that is subject to a
judgment, order or agreement requiring payment of that portion of the eligible
employee’s account to an alternate payee.
(7) The Public Employees
Retirement Board, or the plan administrator for any local government deferred
compensation plan, may adopt rules, policies or other regulations for the
purpose of maintaining compliance of a deferred compensation plan with section
457 of the Internal Revenue Code or any other provision of federal law that
affects the tax qualification of a deferred compensation plan. Rules, policies
or other regulations adopted under this subsection may vary from the express
language of this section if the rules, policies or other regulations are
required for the purpose of maintaining compliance of a deferred compensation
plan with section 457 of the Internal Revenue Code or any other provision of
federal law that affects the tax qualification of a deferred compensation plan.
(8) Any public employer
or deferred compensation plan that is required by the provisions of this
section to make a payment to an alternate payee shall charge and collect out of
the deferred compensation payable to the eligible employee and the alternate
payee actual and reasonable administrative expenses and related costs incurred
by the public employer or deferred compensation plan in obtaining data and making
calculations that are necessary by reason of the provisions of this section. A
public employer or deferred compensation plan may not charge more than $300 for
total administrative expenses and related costs incurred in obtaining data or
making calculations that are necessary by reason of the provisions of this
section. A public employer or deferred compensation plan that charges and
collects administrative expenses and related costs under the provisions of this
subsection shall allocate those expenses and costs between the eligible
employee and the alternate payee based on the fraction of the benefit received
by the member or alternate payee.
(9) As used in this
section:
(a) “Alternate payee”
means a spouse, former spouse, child or other dependent of a member.
(b) “Court” means any
court of appropriate jurisdiction of this or any other state or of the
(c) “Eligible employee”
means a state plan participant or local plan participant.
(d) “Public employer”
means the state or a local government that establishes a deferred compensation
plan.
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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