74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
House Bill 2281
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for Public Employees Retirement System)
CHAPTER ................
AN ACT
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 Oregon:
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recover withdrawn amounts, if: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.
Enrolled House Bill 2281 (HB 2281-INTRO) Page 1
{ + (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
Enrolled House Bill 2281 (HB 2281-INTRO) Page 2
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
Enrolled House Bill 2281 (HB 2281-INTRO) Page 3
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
Enrolled House Bill 2281 (HB 2281-INTRO) Page 4
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.
Enrolled House Bill 2281 (HB 2281-INTRO) Page 5
(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.
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Passed by House February 20, 2007
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate March 27, 2007
...........................................................
President of Senate
Enrolled House Bill 2281 (HB 2281-INTRO) Page 6
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled House Bill 2281 (HB 2281-INTRO) Page 7