75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
Enrolled
House Bill 3401
Sponsored by Representative HUNT; Representatives BARTON, D
EDWARDS, JENSON, SPRENGER, Senators MORRISETTE, NELSON
CHAPTER ................
AN ACT
Relating to public employee retirement; creating new provisions;
amending ORS 238.229 and 238.660; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 238.229 is amended to read:
238.229. (1) If a participating public employer is grouped with
any other public employer for the purpose of computing employer
contributions under ORS 238.225 and the individual public
employer makes a lump sum payment that is in addition to the
normal { + employer + } contribution of the public employer, the
Public Employees Retirement Board shall adjust the amount of
{ + employer + } 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 by ORS 238.227
and 238A.220 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 { + employer + }
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
this subsection if the payment is equal to the full amount of the
individual public employer's accrued unfunded liabilities under
this section and ORS chapter 238A.
(2) The board shall establish a separate account within the
Public Employees Retirement Fund for each lump sum payment made
under this section by an individual public employer. The board
shall credit to each account all interest and other income
received from investment of the account funds during the calendar
year. Except as provided in subsection (3) of this section, the
board may not collect any administrative expense or other charge
from the account or from earnings on the account. { + Except as
provided in subsections (5) and (6) of this section, + } the
account shall be used to offset contributions { + to the
system + } that the public employer would otherwise be required
to make for the liabilities against which the lump sum payment is
applied.
(3) The board may charge a participating public employer
expenses for administration of an account established under
Enrolled House Bill 3401 (HB 3401-A) Page 1
subsection (2) of this section in an amount not to exceed $2,500
for the calendar year in which the account is established and for
the immediately following two calendar years, and in an amount
not to exceed $1,000 per year for all subsequent years.
(4) 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 under ORS 238.227, whether under this
section or pursuant to board rule, any lump sum payment made
under this section must be applied first against those
liabilities, with the oldest liability being paid first. Any
amounts remaining after application under this subsection must be
deposited in a separate account established under subsection (2)
of this section.
{ + (5) Except as provided in subsection (6) of this section,
if the board determines at any time after an actuarial study that
the amounts in an account established under subsection (2) of
this section exceed the amounts necessary to fund the employer's
actuarial liabilities under the system, upon request of the
employer, the board shall apply the excess amounts to offset
contributions to the individual account program that the employer
has agreed to pay under ORS 238A.335 or 238A.340. The board may
apply excess amounts to offset contributions to the individual
account program under this subsection only to the extent that the
application will not result in the balance in the account being
reduced to less than the outstanding principal balance owed on
the bonds issued to fund the account. If the request is made by a
school district, the school district must attach to the request a
copy of a resolution adopted by the district school board for the
district authorizing the request. The board shall adopt rules
governing offsets under the provisions of this subsection.
(6) The board shall apply any excess amounts in an account
established under subsection (2) of this section to offset
contributions to the individual account program pursuant to
subsection (5) of this section only if the board has determined
that applying the excess amounts does not cause the system or the
Public Employees Retirement Fund to lose qualification 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. ORS 238.660 is amended to read:
238.660. (1) The Public Employees Retirement Fund is declared
to be a trust fund, separate and distinct from the General Fund,
for the uses and purposes set forth in this chapter and ORS
chapter 238A and ORS 237.950 to 237.980, and for no other use or
purpose, except that this provision shall not be deemed to amend
or impair the force or effect of any law of this state
specifically authorizing the investment of moneys from the fund.
Interest earned by the fund shall be credited to the fund. Except
as otherwise specifically provided by law, the Public Employees
Retirement Board established by ORS 238.630 is declared to be the
trustee of the fund. Consistent with the legislative intent
expressed in ORS 238.601, and to the extent it is consistent with
the board's fiduciary duties, the board shall give equal
consideration to the interests of participating public employers
and the interests of members. Nothing in this subsection shall be
construed to impose a fiduciary duty on the board to consider the
interests of public employers, and the board shall consider the
interests of public employers only with respect to matters
unrelated to the board's fiduciary duties as trustee of the fund.
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(2) Until all liabilities to members and their beneficiaries
are satisfied, assets of the fund may not be diverted or
otherwise put to any use that is not for the exclusive benefit of
members and their beneficiaries. This subsection does not limit
return of employer contributions for health benefits in the
manner provided by ORS 238.410, 238.415 and 238.420 upon
satisfaction of all liabilities for health benefits under those
sections.
(3) The State of Oregon and other public employers that make
contributions to the fund have no proprietary interest in the
fund or in the contributions made to the fund by them. The state
and other public employers disclaim any right to reclaim those
contributions and waive any right of reclamation they may have in
the fund. This subsection does not prohibit alteration or refund
of employer contributions if the alteration or refund is
authorized under this chapter or ORS chapter 238A and is due to
erroneous payment or decreased liability for employer
contributions under the system. { + This subsection does not
prohibit the offset of contributions to the individual account
program under ORS 238.229 (5). + }
(4) The board may accept gifts of money or other property from
any source, given for the uses and purposes of the system. Money
so received shall be paid into the fund. Money or other property
so received shall be used for the purposes for which received.
Unless otherwise prescribed by the source from which the money or
other property is received, the money shall be considered as
income of the fund and the other property shall be retained,
managed and disposed of as are investments of the fund.
(5) All moneys paid into the fund shall be deposited with the
State Treasurer, who shall be custodian of the fund and pay all
warrants drawn on it in compliance with law. No such warrant
shall be paid until the claim for which it is drawn is first
approved by the director or designee and otherwise audited and
verified as required by law. Monthly, each beneficiary's gross
benefit shall be calculated; applicable deductions made for
taxes, insurance and other withholdings; and the net amount paid
to the beneficiary, by check or by electronic funds transfer
(EFT) to the beneficiary's bank. A deduction summary shall be
made, by type, and a check issued for the aggregate of each type
for transmittal to the appropriate taxing jurisdiction, vendor or
institution. A voucher shall be prepared and transmitted to the
Oregon Department of Administrative Services for reimbursement of
the checking account, and the department shall draw a warrant on
the State Treasurer, payable to the Public Employees Retirement
System, for the amount thereof.
(6) Any warrant, check or order for the payment of benefits or
refunds under the system out of the fund issued by the board
which is canceled, declared void or otherwise made unpayable
pursuant to law because it is outstanding and unpaid for a period
of more than two years, may be reissued by the board without bond
if the payee is located after such warrant, check or order is
canceled, declared void or otherwise made unpayable pursuant to
law.
(7) All references in this chapter to checks or warrants are
subject to the provisions of ORS 291.001.
(8) The board shall provide for an annual audit of the
retirement fund and for an annual report to the Legislative
Assembly and to all members of, retirees of, and all employers
participating in, the system. The annual report must contain
financial statements prepared in accordance with generally
Enrolled House Bill 3401 (HB 3401-A) Page 3
accepted accounting principles. The financial statements must
include the report of any independent auditor.
(9) The board may review legislative proposals for changes in
the benefits provided under this chapter and ORS chapter 238A and
may make recommendations to committees of the Legislative
Assembly on those proposed changes. In making recommendations
under this subsection, the board acts as a policy advisor to the
Legislative Assembly and not as a fiduciary. In making
recommendations under this subsection on the Oregon Public
Service Retirement Plan established by ORS chapter 238A, the
board shall seek to maintain the balance between benefits and
costs, and the relative risk borne by employers and employees
with respect to investment performance, reflected in ORS chapter
238A as in effect on January 1, 2004.
(10) The board shall appoint a committee to advise the board on
legislative proposals for changes in the benefits provided under
this chapter and ORS chapter 238A. The committee must have an
equal number of members representing labor and management. No
costs of reviewing legislative proposals and making
recommendations under this subsection may be charged to the fund.
Any member of the committee who is an active member of the system
shall be released by the participating public employer who
employs the member for the purpose of conducting the official
business of the committee, and the wages or salary of the member
may not be reduced by the employer during periods that the member
is released from duty for the purpose of conducting the official
business of the committee.
SECTION 3. { + As soon as possible after the effective date of
this 2009 Act, the Public Employees Retirement Board shall seek a
ruling from the Internal Revenue Service on whether the
application of excess amounts in an account established under ORS
238.229 (2) to offset contributions to the individual account
program pursuant to ORS 238.229 (5) would cause the system or the
Public Employees Retirement Fund to lose qualification 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. { + This 2009 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2009 Act takes effect on its
passage. + }
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Enrolled House Bill 3401 (HB 3401-A) Page 4
Passed by House June 26, 2009
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 29, 2009
...........................................................
President of Senate
Enrolled House Bill 3401 (HB 3401-A) Page 5
Received by Governor:
......M.,............., 2009
Approved:
......M.,............., 2009
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2009
...........................................................
Secretary of State
Enrolled House Bill 3401 (HB 3401-A) Page 6