Chapter 238A —
Oregon Public Service Retirement Plan
ORS sections in this chapter were
amended or repealed by the Legislative Assembly during its 2012 regular
session. See the table of ORS sections amended or repealed during the 2012
regular session: 2012 A&R Tables
2011 EDITION
OREGON PUBLIC SERVICE RETIREMENT PLAN
PUBLIC OFFICERS AND EMPLOYEES
GENERAL PROVISIONS
238A.005 Definitions
238A.010 Computation
of hours of service
OREGON PUBLIC SERVICE RETIREMENT PLAN
238A.025 Oregon
Public Service Retirement Plan established
238A.030 Information
technology system
ADMINISTRATION
238A.050 Oregon
Public Service Retirement Plan part of Public Employees Retirement System
PARTICIPATION BY PUBLIC EMPLOYERS
238A.070 Participation
generally
PENSION PROGRAM
(Membership)
238A.100 Establishing
membership under pension program
238A.110 Termination
of membership
(Vesting)
238A.115 Vesting
(Withdrawal)
238A.120 Withdrawal
from pension program by vested inactive member
(Computation of Benefit)
238A.125 Amount
of pension; rules
238A.130 Final
average salary; rules
(Retirement Credit)
238A.140 Accrual
of retirement credit
238A.142 Accrual
by academic employees of community college
238A.145 Loss
of retirement credit
238A.150 Retirement
credit for service in uniformed services; rules
238A.155 Retirement
credit for periods of disability
(Retirement)
238A.160 Normal
retirement age; normal retirement date
238A.165 Earliest
retirement age; earliest retirement date
238A.170 Latest
retirement date; required minimum distributions; rules
(Pension)
238A.180 Normal
retirement benefit
238A.185 Early
retirement
238A.190 Survivorship
benefits
238A.195 Cash
out of small benefits
238A.200 Actuarial
equivalency factor tables
(Cost-of-Living Adjustment)
238A.210 Cost-of-living
adjustment
(Employer Contributions)
238A.220 Employer
contributions
(Death Benefit)
238A.230 Death
benefit; rules
(Disability Benefit)
238A.235 Disability
benefit
238A.240 Funding
of disability benefit
(Reemployment of Retired Members)
238A.245 Reemployment
after commencement of pension benefits
INDIVIDUAL ACCOUNT PROGRAM
(Membership)
238A.300 Establishing
membership under individual account program
238A.305 Persons
establishing membership in system before August 29, 2003
238A.310 Termination
of membership
(Vesting)
238A.320 Vesting
(Employee Contributions)
238A.330 Employee
contributions
238A.335 Employer
payment of employee contribution
(Employer Contributions)
238A.340 Employer
contributions
(Individual Accounts)
238A.350 Individual
accounts established
(Rollover Contributions)
238A.360 Rollover
contributions; rules
(Limitation on Contributions)
238A.370 Limitation
on contributions; rules
(Withdrawal by Inactive Member)
238A.375 Distribution
of accounts to inactive member
(Defined Contribution Benefit)
238A.400 Payment
of accounts at retirement; rules
238A.410 Death
benefits; rules
238A.415 Credit
for service in uniformed services; rules
DIRECT ROLLOVERS
238A.430 Direct
rollovers; rules
238A.435 Distribution
of death benefit as rollover distribution
RULES
238A.450 Rules
for Oregon Public Service Retirement Plan
CHANGES TO OREGON PUBLIC SERVICE
RETIREMENT PLAN
238A.460 Limitation
on powers of board, director and staff
238A.465 Legislative
intent relating to increased benefits
238A.470 Contract
rights under Oregon Public Service Retirement Plan
238A.475 Application
of legislative changes to legislators
GENERAL PROVISIONS
238A.005 Definitions.
For the purposes of this chapter:
(1)
“Active member” means a member of the pension program or the individual account
program of the Oregon Public Service Retirement Plan who is actively employed
in a qualifying position.
(2)
“Actuarial equivalent” means a payment or series of payments having the same
value as the payment or series of payments replaced, computed on the basis of
interest rate and mortality assumptions adopted by the board.
(3)
“Board” means the Public Employees Retirement Board.
(4)
“Eligible employee” means a person who performs services for a participating
public employer, including elected officials other than judges. “Eligible
employee” does not include:
(a)
Persons engaged as independent contractors;
(b)
Aliens working under a training or educational visa;
(c)
Persons, other than workers in the Industries for the Blind Program under ORS
346.190, provided sheltered employment or make-work by a public employer;
(d)
Persons categorized by a participating public employer as student employees;
(e)
Any person who is an inmate of a state institution;
(f)
Employees of foreign trade offices of the Oregon Business Development
Department who live and perform services in foreign countries under the
provisions of ORS 285A.075 (1)(g);
(g)
An employee actively participating in an alternative retirement program
established under ORS 353.250 or an optional retirement plan established under
ORS 341.551;
(h)
Employees of the Oregon University System who are actively participating in an
optional retirement plan offered under ORS 243.800;
(i)
Any employee who belongs to a class of employees that was not eligible on
August 28, 2003, for membership in the system under the provisions of ORS
chapter 238 or other law;
(j)
Any person who belongs to a class of employees who are not eligible to become
members of the Oregon Public Service Retirement Plan under the provisions of
ORS 238A.070 (2);
(k)
Any person who is retired under ORS 238A.100 to 238A.245 or ORS chapter 238 and
who continues to receive retirement benefits while employed; and
(L)
Judges.
(5)
“Firefighter” means:
(a)
A person employed by a local government, as defined in ORS 174.116, whose
primary job duties include the fighting of fires;
(b)
The State Fire Marshal, the chief deputy state fire marshal and deputy state
fire marshals; and
(c)
An employee of the State Forestry Department who is certified by the State
Forester as a professional wildland firefighter and whose primary duties
include the abatement of uncontrolled fires as described in ORS 477.064.
(6)
“Fund” means the Public Employees Retirement Fund.
(7)(a)
“Hour of service” means:
(A)
An hour for which an eligible employee is directly or indirectly paid or
entitled to payment by a participating public employer for performance of
duties in a qualifying position; and
(B)
An hour of vacation, holiday, illness, incapacity, jury duty, military duty or
authorized leave during which an employee does not perform duties but for which
the employee is directly or indirectly paid or entitled to payment by a
participating public employer for services in a qualifying position, as long as
the hour is within the number of hours regularly scheduled for the performance
of duties during the period of vacation, holiday, illness, incapacity, jury
duty, military duty or authorized leave.
(b)
“Hour of service” does not include any hour for which payment is made or due
under a plan maintained solely for the purpose of complying with applicable
workers’ compensation laws or unemployment compensation laws.
(8)
“Inactive member” means a member of the pension program or the individual
account program of the Oregon Public Service Retirement Plan whose membership
has not been terminated, who is not a retired member and who is not employed in
a qualifying position.
(9)
“Individual account program” means the defined contribution individual account
program of the Oregon Public Service Retirement Plan established under ORS
238A.025.
(10)
“Institution of higher education” means a public university listed in ORS
352.002, the Oregon Health and Science University or a community college, as
defined in ORS 341.005.
(11)
“Member” means an eligible employee who has established membership in the
pension program or the individual account program of the Oregon Public Service
Retirement Plan and whose membership has not been terminated under ORS 238A.110
or 238A.310.
(12)
“Participating public employer” means a public employer as defined in ORS
238.005 that provides retirement benefits for employees of the public employer
under the system.
(13)
“Pension program” means the defined benefit pension program of the Oregon
Public Service Retirement Plan established under ORS 238A.025.
(14)
“Police officer” means a police officer as described in ORS 238.005.
(15)
“Qualifying position” means one or more jobs with one or more participating
public employers in which an eligible employee performs 600 or more hours of
service in a calendar year, excluding any service in a job for which benefits
are not provided under the Oregon Public Service Retirement Plan pursuant to
ORS 238A.070 (2).
(16)
“Retired member” means a pension program member who is receiving a pension as
provided in ORS 238A.180 to 238A.195.
(17)(a)
“Salary” means the remuneration paid to an active member in return for services
to the participating public employer, including remuneration in the form of
living quarters, board or other items of value, to the extent the remuneration
is includable in the employee’s taxable income under Oregon law. Salary includes
the additional amounts specified in paragraph (b) of this subsection, but does
not include the amounts specified in paragraph (c) of this subsection,
regardless of whether those amounts are includable in taxable income.
(b)
“Salary” includes the following amounts:
(A)
Payments of employee and employer money into a deferred compensation plan that
are made at the election of the employee.
(B)
Contributions to a tax-sheltered or deferred annuity that are made at the
election of the employee.
(C)
Any amount that is contributed to a cafeteria plan or qualified transportation
fringe benefit plan by the employer at the election of the employee and that is
not includable in the taxable income of the employee by reason of 26 U.S.C. 125
or 132(f)(4), as in effect on December 31, 2010.
(D)
Any amount that is contributed to a cash or deferred arrangement by the
employer at the election of the employee and that is not included in the
taxable income of the employee by reason of 26 U.S.C. 402(e)(3), as in effect
on December 31, 2010.
(E)
Retroactive payments described in ORS 238.008.
(F)
The amount of an employee contribution to the individual account program that
is paid by the employer and deducted from the compensation of the employee, as
provided under ORS 238A.335 (1) and (2)(a).
(G)
The amount of an employee contribution to the individual account program that
is not paid by the employer under ORS 238A.335.
(H)
Wages of a deceased member paid to a surviving spouse or dependent children
under ORS 652.190.
(c)
“Salary” does not include the following amounts:
(A)
Travel or any other expenses incidental to employer’s business which is
reimbursed by the employer.
(B)
Payments made on account of an employee’s death.
(C)
Any lump sum payment for accumulated unused sick leave, vacation leave or other
paid leave.
(D)
Any severance payment, accelerated payment of an employment contract for a
future period or advance against future wages.
(E)
Any retirement incentive, retirement bonus or retirement gratuitous payment.
(F)
Payment for a leave of absence after the date the employer and employee have
agreed that no future services in a qualifying position will be performed.
(G)
Payments for instructional services rendered to public universities of the
Oregon University System or the Oregon Health and Science University when those
services are in excess of full-time employment subject to this chapter. A
person employed under a contract for less than 12 months is subject to this
subparagraph only for the months covered by the contract.
(H)
The amount of an employee contribution to the individual account program that
is paid by the employer and is not deducted from the compensation of the
employee, as provided under ORS 238A.335 (1) and (2)(b).
(I)
Any amount in excess of $200,000 for a calendar year. If any period over which
salary is determined is less than 12 months, the $200,000 limitation for that
period shall be multiplied by a fraction, the numerator of which is the number
of months in the determination period and the denominator of which is 12. The
board shall adopt rules adjusting this dollar limit to incorporate
cost-of-living adjustments authorized by the Internal Revenue Service.
(18)
“System” means the Public Employees Retirement System. [2003 c.733 §1; 2005 c.152
§1; 2005 c.332 §2; 2005 c.728 §4; 2007 c.804 §77; 2009 c.5 §1; 2009 c.762 §48;
2009 c.909 §1; 2010 c.1 §9; 2010 c.82 §1; 2011 c.7 §1; 2011 c.637 §75]
238A.010 Computation of hours of service.
For the purpose of computing hours of service under this chapter, an eligible
employee shall be credited with 40 hours of service for each calendar week in
which the employee was employed in a qualifying position unless otherwise shown
by records maintained by the participating public employer. [2003 c.733 §1a]
OREGON PUBLIC SERVICE RETIREMENT PLAN
238A.025 Oregon Public Service Retirement
Plan established. (1) The Oregon Public Service
Retirement Plan is established. The purpose of the Oregon Public Service
Retirement Plan is to provide career public employees with a secure and fair
retirement income at an affordable, stable and predictable cost to the
taxpayers. The Oregon Public Service Retirement Plan is composed of a pension
program and an individual account program. The pension program and the individual
account program are separate accounts for purposes of federal income tax
qualification, and the assets of each program must be held as part of the trust
established by ORS 238.660 for the exclusive benefit of the participants and
beneficiaries. It is the intent of the Legislative Assembly that pursuant to
section 414(k) of the Internal Revenue Code the individual account program be
established and maintained as a tax-qualified defined contribution governmental
plan for the purposes of sections 72(d) and 415 of the Internal Revenue Code.
The Public Employees Retirement Board may create separate accounts within the
Public Employees Retirement Fund for the pension program and the individual
account program.
(2)
Notwithstanding any provision of ORS chapter 238, any person who is employed by
a participating public employer on or after August 29, 2003, and who has not
established membership in the Public Employees Retirement System before August
29, 2003, is entitled to receive only the benefits provided under the Oregon
Public Service Retirement Plan for periods of service with participating public
employers on and after August 29, 2003, and has no right or claim to any
benefit under ORS chapter 238 except as specifically provided by this chapter.
(3)
Any person who is a member of the Public Employees Retirement System on August
28, 2003, is entitled to receive the benefits provided by ORS chapter 238 for
all service performed before, on and after August 29, 2003, unless the person’s
membership in the system is subsequently terminated under ORS 238.095. If the
person’s membership in the system is terminated under ORS 238.095 on or after
August 29, 2003, the person is entitled to receive the benefits provided under
the Oregon Public Service Retirement Plan for periods of service with
participating public employers after the termination of membership.
(4)
A person establishes membership in the system before August 29, 2003, for the
purposes of this section if:
(a)
The person is a member of the system, or a judge member of the system, on
August 28, 2003; or
(b)
The person performed any period of service for a participating public employer
before August 29, 2003, that is credited to the six-month period of employment
required of an employee under ORS 238.015 before an employee may become a
member of the system.
(5)
Except as provided in this chapter, ORS chapter 238 does not apply to the
Oregon Public Service Retirement Plan.
(6)
The provisions of this section do not apply to a person elected or appointed as
a judge as defined in ORS 238.500. [2003 c.733 §2; 2005 c.332 §6; 2005 c.808 §9;
2007 c.624 §1; 2007 c.769 §1a]
238A.030 Information technology system.
Subject to such direction and oversight as may be provided by the Legislative
Assembly, the Public Employees Retirement Board shall take all steps necessary
to develop and implement a dedicated information technology system to manage
the Oregon Public Service Retirement Plan established by ORS chapter 238A. The
board shall ensure that the essential record keeping components of the
information technology system are in operation as soon as practicable. The
board shall ensure that the information technology system is designed to
support the current and future business and technology needs of the Public
Employees Retirement System arising out of the implementation of ORS chapter
238A. [2003 c.733 §83]
Note:
238A.030 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 238A or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
ADMINISTRATION
238A.050 Oregon Public Service Retirement
Plan part of Public Employees Retirement System.
(1) The Oregon Public Service Retirement Plan is part of the Public Employees
Retirement System and is administered by the Public Employees Retirement Board.
(2)
ORS 238.008, 238.225, 238.229, 238.231, 238.285, 238.410, 238.445, 238.450,
238.455, 238.458, 238.460, 238.465, 238.470, 238.600, 238.601, 238.605,
238.610, 238.615, 238.618, 238.630, 238.635, 238.640, 238.645, 238.655,
238.660, 238.661, 238.665, 238.675, 238.692, 238.694, 238.695, 238.696,
238.698, 238.700, 238.705, 238.710 and 238.715 apply to the Oregon Public
Service Retirement Plan.
(3)
The Oregon Investment Council shall invest the assets of the Oregon Public
Service Retirement Plan as a part of the Public Employees Retirement Fund.
Except as provided by subsection (4) of this section, the investment of Oregon
Public Service Retirement Plan assets is subject to the provisions of ORS
293.701 to 293.820. The Oregon Investment Council may invest assets of the
individual account program and pension program differently than the other
assets of the Public Employees Retirement System.
(4)
Investment of the assets of the Oregon Public Service Retirement Plan is not
subject to the limitations imposed by ORS 293.726 (6).
(5)
The board may contract with a private provider for the administration of the
individual account program. The board is not subject to the provisions of ORS
chapter 279A or 279B in awarding a contract under the provisions of this
subsection. The board shall establish procedures for inviting proposals and
awarding contracts under this subsection. [2003 c.733 §§3,3a; 2005 c.808 §§15,16;
2010 c.1 §5]
PARTICIPATION BY PUBLIC EMPLOYERS
238A.070 Participation generally.
(1) All public employers participating in the Public Employees Retirement
System on August 29, 2003:
(a)
Shall continue to be participating public employers for the purpose of the
Oregon Public Service Retirement Plan;
(b)
Shall provide benefits under the pension program established under ORS 238A.100
to 238A.245 for eligible employees who are members of the pension program; and
(c)
Shall participate in the individual account program.
(2)
Any participating public employer that provided retirement benefits under ORS
chapter 238 for some but not all of the employees of the participating public
employer on August 28, 2003, need not provide benefits under the Oregon Public
Service Retirement Plan for any class of employees who were not members of the
system on August 28, 2003.
(3)
Any public employer that is not a participating public employer on August 28,
2003, may become a participating public employer under the pension program or
the individual account program, or both. A public employer may become a
participating public employer under this subsection only for the purposes of
service performed by eligible employees of the public employer on or after the
date the public employer elects to participate in the program. [2003 c.733 §4]
PENSION PROGRAM
(Membership)
238A.100 Establishing membership under
pension program. (1) Except as provided by
subsection (2) of this section, an eligible employee who is employed in a
qualifying position on or after August 29, 2003, by a public employer that is
participating in the pension program and who will not receive benefits under
ORS chapter 238 for service with the participating public employer pursuant to
the provisions of ORS 238A.025 becomes a member of the pension program on the
first day of the month after the employee completes six full calendar months of
employment. The six-month requirement may not be interrupted by more than 30
consecutive working days.
(2)
A person who is elected or appointed to an office with a fixed term other than
as a member of the Legislative Assembly, or who is appointed by the Governor to
an office as head of a department, may elect not to become a member of the
pension program by giving the Public Employees Retirement Board written notice
not later than 30 days after taking office. An election under this subsection
also operates as an election not to become a member of the individual account
program. An election under this subsection is irrevocable during the term of
office for which the election is made. [2003 c.733 §5]
238A.110 Termination of membership.
Membership under the pension program terminates when:
(1)
A member dies;
(2)
A member withdraws under ORS 238A.120; or
(3)
A member forfeits retirement credit under ORS 238A.145. [2003 c.733 §6]
(Vesting)
238A.115 Vesting.
(1) Except as provided in subsection (2) of this section, a member of the
pension program becomes vested in the pension program on the earliest of the
following dates:
(a)
The date on which the member completes at least 600 hours of service in each of
five calendar years. The five calendar years need not be consecutive, but are
subject to the provisions of subsection (3) of this section.
(b)
The date on which an active member reaches the normal retirement age for the
member under ORS 238A.160.
(c)
If the pension program is terminated, the date on which termination becomes
effective, but only to the extent the pension program is then funded.
(2)
If on the date that a person becomes an active member the person has already
reached the normal retirement age for the person under ORS 238A.160, the person
is vested in the pension program on that date.
(3)
If a member of the pension program who is not vested in the pension program
performs fewer than 600 hours of service in each of five consecutive calendar
years, hours of service performed before the first calendar year of the period
of five consecutive calendar years shall be disregarded for purposes of
determining whether the member is vested under subsection (1)(a) of this
section.
(4)
Solely for purposes of determining whether a member is vested under this
section, hours of service include creditable service, as defined in ORS
238.005, performed by the person before the person became an eligible employee,
as long as the membership of the person under ORS chapter 238 has not been
terminated under the provisions of ORS 238.095 on the date the person becomes
an eligible employee. [2003 c.733 §7; 2011 c.722 §10]
(Withdrawal)
238A.120 Withdrawal from pension program by
vested inactive member. (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.
(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. [2003 c.733 §8; 2005 c.152 §2; 2007 c.52 §2]
(Computation of Benefit)
238A.125 Amount of pension; rules.
(1) Upon retiring at normal retirement age, a vested pension program member
shall be paid an annual pension for the life of the member as follows:
(a)
For service as a police officer or firefighter, 1.8 percent of final average
salary multiplied by the number of years of retirement credit attributable to
service as a police officer or firefighter.
(b)
For service as other than a police officer or firefighter, 1.5 percent of final
average salary multiplied by the number of years of retirement credit
attributable to service as other than a police officer or firefighter.
(2)
Notwithstanding any provision of ORS 238A.100 to 238A.245, the annual benefit
payable to a member under the pension program and under any other tax-qualified
defined benefit plan maintained by the participating public employer may not
exceed the applicable limitations set forth in 26 U.S.C. 415(b), as in effect
on December 31, 2010. The Public Employees Retirement Board shall adopt rules
for the administration of this limitation, including adjustments in the annual
dollar limitation to reflect cost-of-living adjustments authorized by the
Internal Revenue Service.
(3)
The board shall make no actuarial adjustment in a member’s pension calculated
under this section by reason of the member’s retirement after normal retirement
age. [2003 c.733 §9; 2009 c.5 §2; 2009 c.909 §2; 2010 c.82 §2; 2011 c.7 §2]
238A.130 Final average salary; rules.
(1) Except as provided in subsection (3) of this section, for purposes of the
computation of pension program benefits under ORS 238A.125, “final average
salary” means whichever of the following is greater:
(a)
The average salary per calendar year paid to an active member in the three
consecutive calendar years of membership that produce the highest average
salary, including calendar years in which the member was employed for less than
a full calendar year. If the number of consecutive calendar years of active
membership before the effective date of retirement of the member is three or
less, the final average salary for the member is the average salary per
calendar year paid to the member in all of those years, without regard to
whether the member was employed for full calendar years.
(b)
One-third of the total salary paid to an active member in the last 36 calendar
months of membership before the effective date of retirement of the member.
(2)
For the purposes of calculating the final average salary of a member under
subsection (1) of this section, the Public Employees Retirement Board shall:
(a)
Include any salary paid in or for the calendar month of separation from
employment;
(b)
Exclude any salary for any pay period before the first full pay period that is
included in the three consecutive calendar years of membership under subsection
(1)(a) of this section; and
(c)
Exclude any salary for any pay period before the first full pay period that is
included in the last 36 calendar months of membership under subsection (1)(b)
of this section.
(3)
For purposes of the computation of pension program benefits under ORS 238A.125
of a person employed by a local government as defined in ORS 174.116, “final
average salary” means whichever of the following is greater:
(a)
The average salary per calendar year earned by an active member in the three
consecutive calendar years of membership that produce the highest average
salary, including calendar years in which the member was employed for less than
a full calendar year. If the number of consecutive calendar years of active
membership before the effective date of retirement of the member is three or
less, the final average salary for the member is the average salary per
calendar year earned by the member in all of those years, without regard to
whether the member was employed for full calendar years.
(b)
One-third of the total salary earned by an active member in the last 36
calendar months of membership before the effective date of retirement of the
member.
(4)
For the purposes of calculating the final average salary of a member under this
section, the salary of the member does not include any amounts attributable to
hours of overtime that exceed the average number of hours of overtime for the
same class of employees as established by rule of the Public Employees
Retirement Board. The Oregon Department of Administrative Services shall
establish by rule more than one overtime average for a class of state employees
based on the geographic placement of the employees. [2003 c.733 §10; 2005 c.332
§16; 2005 c.808 §34; 2007 c.769 §9]
(Retirement Credit)
238A.140 Accrual of retirement credit.
(1) An active member of the pension program accrues one year of retirement
credit for each complete year of service and one-twelfth of a year of
retirement credit for each full month and each major fraction of a month of
service.
(2)
An active member who is a school employee shall be credited with at least six
months of retirement credit if the member performs service for a major fraction
of each month of a school year that falls between January 1 and June 30, and at
least six months of retirement credit if the member performs service for a
major fraction of each month of a school year that falls between July 1 and
December 31.
(3)
When an eligible employee becomes a member under ORS 238A.100, the board shall
credit the eligible employee with retirement credit for the period of
employment required of the employee under ORS 238A.100.
(4)
A member may not accrue more than one full year of retirement credit in any
calendar year.
(5)
For purposes of this section, “school employee” means:
(a)
A person who is employed by a common school district, a union high school
district or an education service district;
(b)
An employee of an institution of higher education who is engaged in teaching or
other school activity; and
(c)
An employee of the Department of Human Services, the Oregon Youth Authority,
the Department of Corrections or the State Board of Education who is engaged in
teaching or other school activity at an institution supervised by the
authority, board or department. [2003 c.733 §11; 2005 c.332 §§4,21; 2007 c.769 §8;
2011 c.637 §75a]
Note:
Section 11a, chapter 733, Oregon Laws 2003, provides:
Sec. 11a.
Notwithstanding section 11 (2) of this 2003 Act [238A.140 (3)], if an eligible
employee is employed by a participating public employer in a qualifying
position on or after the effective date of this 2003 Act [August 29, 2003] and
before January 1, 2004, and will not receive benefits under ORS chapter 238 for
service with the participating public employer pursuant to the provisions of
section 2 of this 2003 Act [238A.025], the Public Employees Retirement Board
shall not credit the eligible employee with retirement credit for any period of
employment required of the employee under section 5 of this 2003 Act [238A.100]
that is performed before January 1, 2004. [2003 c.733 §11a]
238A.142 Accrual by academic employees of
community college. (1) An academic employee of a
community college who during a calendar year is employed 0.375 full-time
equivalent on a 12-month basis, or is employed 0.50 full-time equivalent on a
nine-month basis, is considered to have performed 600 hours of service in the
calendar year for all purposes under this chapter.
(2)
The governing body of a community college shall determine the duties of an
academic employee of the community college that constitute a full-time
equivalent in any discipline or academic activity for the purposes of this
section. [2005 c.332 §20; 2007 c.769 §10]
238A.145 Loss of retirement credit.
(1) A pension program member who is not vested forfeits all retirement credit
if the member performs fewer than 600 hours of service in each of five consecutive
calendar years. A forfeiture under this section takes effect at the end of the
fifth calendar year.
(2)
If a pension program member forfeits retirement credit under this section and
is subsequently reemployed by a participating public employer:
(a)
The person may acquire retirement credit under the pension program only for the
purpose of service performed after the person is reemployed; and
(b)
Any service performed before the forfeiture 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. [2003 c.733 §12]
238A.150 Retirement credit for service in uniformed
services; rules. (1) Notwithstanding any other
provision of ORS 238A.100 to 238A.245, an eligible employee who leaves a
qualifying position for the purpose of performing service in the uniformed
services, and who subsequently returns to employment with a participating
public employer with reemployment rights under federal law, is entitled to
accrue retirement credit, credit toward the probationary period required by ORS
238A.100 and credit toward the vesting requirements of ORS 238A.115 under rules
adopted by the Public Employees Retirement Board pursuant to subsection (2) of
this section.
(2)
The board shall adopt rules establishing benefits and service credit for any
period of service in the uniformed services by an employee described in
subsection (1) of this section. For the purpose of adopting rules under this
subsection, the board shall consider and take into account all federal law
relating to benefits and service credit for any period of service in the
uniformed services, including 26 U.S.C. 414(u), as in effect on December 31,
2010. Benefits and service credit under rules adopted by the board pursuant to
this subsection may not exceed benefits and service credit required under
federal law for periods of service in the uniformed services. [2003 c.733 §13;
2009 c.5 §3; 2009 c.909 §3; 2010 c.82 §3; 2011 c.7 §3]
238A.155 Retirement credit for periods of
disability. (1) Notwithstanding any other provision
of ORS 238A.100 to 238A.245, an active member of the pension program described
in subsection (2) of this section who becomes disabled shall accrue retirement
credit and hours of service credit for vesting purposes for the period during
which the member is disabled.
(2)
The provisions of this section apply only to:
(a)
A member who has accrued 10 years or more of retirement credit before the
member becomes disabled; or
(b)
A member who becomes disabled by reason of injury or disease sustained while in
the actual performance of duty.
(3)
Retirement credit accrues under this section only for as long as the member
remains disabled or until the member reaches the normal retirement age under
ORS 238A.160.
(4)
If a disabled member does not return to employment with a participating public
employer after the period of disability, the member shall receive a pension
under ORS 238A.180, 238A.185 or 238A.190 upon retirement based on an adjusted
salary. The adjusted salary shall be the salary paid to the disabled member on
the date the member left active employment with the participating public
employer by reason of disability, adjusted for each year after the member left
employment and before the member’s effective date of retirement to reflect
cost-of-living changes, based on the Portland-Salem, OR-WA, Consumer Price
Index for All Urban Consumers for All Items, as published by the Bureau of
Labor Statistics of the United States Department of Labor. Adjustments under
this subsection may not exceed a two percent increase or decrease for any year.
An adjustment shall be made under this subsection only for calendar years in
which the member is disabled for at least six months during the year.
(5)
A pension program member is considered to be disabled for the purpose of this
section if the member is found, after being examined by one or more physicians
selected by the Public Employees Retirement Board, to be mentally or physically
incapacitated for an extended duration and unable to perform any work for which
qualified, by reason of injury or disease that was not intentionally
self-inflicted. [2003 c.733 §14]
238A.157 [2005
c.332 §12; repealed by 2007 c.769 §7]
(Retirement)
238A.160 Normal retirement age; normal
retirement date. (1) Except as provided in
subsections (2) and (3) of this section, normal retirement age for a member of
the pension program is the earlier of:
(a)
65 years of age; or
(b)
58 years of age if the member has 30 years or more of retirement credit.
(2)
Normal retirement age for a member of the pension program who retires from
service as a police officer or firefighter, and who has held a position as a
police officer or firefighter continuously for a period of not less than five
years immediately preceding the effective date of retirement, is the earlier
of:
(a)
60 years of age; or
(b)
53 years of age if the member has 25 years or more of retirement credit.
(3)
Normal retirement age for a member of the pension program who retires from
service as a school employee as defined by ORS 238A.140 is the earlier of:
(a)
65 years of age; or
(b)
58 years of age if the member has been an active member in 30 or more calendar
years.
(4)
The normal retirement date of a member is the first day of the month beginning
on or after the date the member reaches normal retirement age. [2003 c.733 §15;
2005 c.808 §35]
238A.165 Earliest retirement age; earliest
retirement date. (1) Except as provided in this
section, earliest retirement age for a member of the pension program is 55
years of age.
(2)
Earliest retirement age for a member of the pension program who retires from
service as a police officer or firefighter is 50 years of age if the member has
held a position as a police officer or firefighter continuously for a period of
not less than five years immediately before the effective date of retirement.
Earliest retirement date for a member described in this subsection is not later
than the date the member reaches 55 years of age.
(3)
If a member of the pension program has 25 years or more of retirement credit as
a telecommunicator, as defined in ORS 181.610, earliest retirement age for the
member is 55 years of age or the age of the member when the member acquires a
total of 25 years or more of retirement credit as a telecommunicator, whichever
occurs first. A member who retires under this subsection before attaining the
age of 55 shall not receive a cost-of-living adjustment under ORS 238A.210
until the member attains the age of 55.
(4)
A member of the pension program who has reached earliest retirement age may
retire on an early retirement date that is the first day of any month on or
after the member has reached earliest retirement age. [2003 c.733 §16; 2005
c.332 §13; 2007 c.404 §2; 2007 c.769 §2]
238A.170 Latest retirement date; required
minimum distributions; rules. (1) An active
member of the pension program who is 70-1/2 years of age or older must retire
not later than April 1 of the calendar year following the calendar year in
which the member terminates employment with all participating public employers.
An inactive member of the pension program must retire not later than April 1 of
the calendar year following the calendar year in which the member attains
70-1/2 years of age.
(2)
Notwithstanding any other provision of ORS 238A.100 to 238A.245, the entire
interest of a member of the pension program must be distributed over a time
period commencing no later than the required beginning date set forth in
subsection (1) of this section, and must be distributed in a manner that
satisfies all other minimum distribution requirements of 26 U.S.C. 401(a)(9)
and regulations implementing that section, as in effect on December 31, 2010.
The Public Employees Retirement Board shall adopt rules implementing those
minimum distribution requirements. [2003 c.733 §17; 2009 c.5 §4; 2009 c.909 §4;
2010 c.82 §4; 2011 c.7 §4]
(Pension)
238A.180 Normal retirement benefit.
Upon retiring on normal retirement date or thereafter, a member of the pension
program who is vested shall be paid an annual pension for the life of the
member, calculated as provided in ORS 238A.125. The annual pension provided for
under this section shall be paid in equal monthly installments, payable as of
the first day of each calendar month, beginning on the later of the member’s
normal retirement date or the member’s effective date of retirement and ending
on the first day of the month in which the member dies. [2003 c.733 §18]
238A.185 Early retirement.
A member of the pension program who is vested may retire with a reduced pension
that is the actuarial equivalent of the pension provided for in ORS 238A.180 at
any time on or after the member’s earliest retirement date as described in ORS
238A.165. [2003 c.733 §19]
238A.190 Survivorship benefits.
(1) Before the effective date of retirement of a member of the pension program,
the member may elect to convert the pension calculated under ORS 238A.180 or
238A.185 into the actuarial equivalent pension as follows:
(a)
A pension payable monthly during the member’s life and, after the death of the
member, continuing at the same monthly amount for the life of a beneficiary
named by the member in a written designation filed with the Public Employees
Retirement Board at the time of election.
(b)
A pension payable monthly during the member’s life and, subject to modification
under subsection (2) of this section, after the death of the member, continuing
at the same monthly amount for the life of a beneficiary named by the member in
a written designation filed with the board at the time of election.
(c)
A pension payable monthly during the member’s life and, after the death of the
member, continuing at one-half of the monthly amount paid to the member for the
life of a beneficiary named by the member in a written designation filed with
the board at the time of election.
(d)
A pension payable monthly during the member’s life and, subject to modification
under subsection (2) of this section, after the death of the member, continuing
at one-half of the monthly amount paid to the member for the life of a
beneficiary named by the member in a written designation filed with the board
at the time of election.
(2)
A retired member who elects to receive a pension under subsection (1)(b) or (d)
of this section shall receive the pension that the member would have received
on the effective date of retirement under ORS 238A.180 or 238A.185 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 spouse or other beneficiary dies after the member retires; or
(b)
The marriage relationship or other relationship with the beneficiary is
terminated after the member retires.
(3)
An increased benefit under subsection (2) of this section is first effective on
the first day of the month following the date on which one of the events
specified in subsection (2) of this section occurs.
(4)
If a member of the pension program is married on the effective date of
retirement, or there exists any other person on the effective date of
retirement who is constitutionally required to be treated in the same manner as
a spouse for the purpose of retirement benefits, the pension payable to the
member shall be as provided in subsection (1)(c) of this section with the
spouse or other person as beneficiary, unless:
(a)
The member has selected a different pension provided for in subsection (1) of
this section with the spouse or other person as beneficiary; or
(b)
The member submits to the board a document signed by the spouse or other
person, acknowledged by a notary public, consenting to a different option or a
different beneficiary.
(5)
Subsection (4) of this section does not apply to a pension benefit that is paid
in a lump sum under ORS 238A.195. [2003 c.733 §20; 2005 c.332 §14]
238A.195 Cash out of small benefits.
If the monthly pension benefit payable to a member of the pension program under
ORS 238A.180 is less than $200, or the monthly death benefit payable to the
beneficiary of a deceased member under ORS 238A.230 is less than $200, the
Public Employees Retirement Board shall convert the benefit into a lump sum
that represents the actuarial equivalent of the present value of the pension or
death benefit and pay that amount to the member or the deceased member’s
beneficiary in lieu of a pension or death benefit under ORS 238A.100 to
238A.245. [2003 c.733 §21]
238A.200 Actuarial equivalency factor
tables. (1) Once every two calendar years, the
Public Employees Retirement Board shall adopt actuarial equivalency factor
tables for the purpose of computing the payments to be made to members of the
pension program and their beneficiaries and alternate payees under ORS 238.465.
The tables may be adopted in conjunction with the biennial evaluation of the
Public Employees Retirement System required by ORS 238.605. Tables adopted
under this section must use the best actuarial information on mortality
available at the time the board adopts the tables, as provided by the actuary
engaged by the board. Actuarial equivalency factor tables adopted under this
section become effective on January 1 of the calendar year following adoption
of the tables by the board. All computations of payments must use the actuarial
equivalency factor tables that are in effect on:
(a)
The effective date of retirement for any member or alternate payee;
(b)
The date that the first payment is due for any person receiving a death benefit
under ORS 238A.230; or
(c)
The date that the first payment is due after any recalculation of payments that
is not attributable to error, including but not limited to recalculations under
ORS 238.465 (2).
(2)
The board may not defer or delay implementation of the actuarial equivalency
factor tables adopted under this section. [2003 c.733 §22]
(Cost-of-Living Adjustment)
238A.210 Cost-of-living adjustment.
(1) As soon as practicable after January 1 each year, the Public Employees
Retirement Board shall determine the percentage increase or decrease in the
cost of living for the previous calendar year, based on the Portland-Salem,
OR-WA, Consumer Price Index for All Urban Consumers for All Items, as published
by the Bureau of Labor Statistics of the United States Department of Labor.
Before July 1 each year, the board shall adjust every pension payable under ORS
238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235
and every death benefit payable under ORS 238A.230 by multiplying the monthly
payment by the percentage figure determined by the board. If a person has been
receiving a pension or benefit for less than 12 months on July 1 of a calendar
year, the board shall make a pro rata reduction of the adjustment based on the
number of months that the pension or benefit was received before July 1 of the
year. The adjustment shall be made for the payments payable on August 1 and
thereafter.
(2)
An increase or decrease in the benefit payments under this section may not
exceed two percent in any year. A pension or death benefit may not be adjusted to
an amount that is less than the amount that would have been payable if no
cost-of-living adjustment had been made since the pension or death benefit
first became payable. [2003 c.733 §23]
(Employer Contributions)
238A.220 Employer contributions.
(1) A participating public employer shall make employer contributions to the
Public Employees Retirement Board at intervals designated by the board in the
amounts determined by the board under ORS 238.225. All participating public
employers shall be considered to be a single employer for the purposes of the
employer contributions under ORS 238.225 that are required for funding the
pension program established under ORS 238A.025.
(2)
For the purpose of the actuarial computation required under ORS 238.225, the board
shall separately establish the liability of participating public employers for
police officers and firefighters under the pension program and shall require
that public employers that employ police officers and firefighters who are
members of the pension program make contributions for those employees based on
the liability established under this subsection. [2003 c.733 §24; 2005 c.808 §17]
(Death Benefit)
238A.230 Death benefit; rules.
(1) If a member of the pension program who is vested dies before the member’s
effective date of retirement, the Public Employees Retirement Board shall pay
the death benefit provided for in this section to the spouse of the member or
to any other person who is constitutionally required to be treated in the same
manner as a spouse for the purpose of retirement benefits.
(2)(a)
The death benefit to be paid under this section shall be for the life of the
spouse or other person who is constitutionally required to be treated in the
same manner as a spouse, and shall be the actuarial equivalent of 50 percent of
the pension that would otherwise have been paid to the deceased member.
(b)
For the purpose of paragraph (a) of this subsection, the amount of the pension
that would otherwise have been paid to the deceased member shall be calculated:
(A)
As of the date of death if the member dies after the earliest retirement date
for the member under ORS 238A.165; or
(B)
As if the member became an inactive member on the date of death and thereafter
retired at the earliest retirement date if the member dies before the earliest
retirement date for the member under ORS 238A.165.
(3)
The death benefit provided under this section is first effective on the first
day of the month following the date of death of the member. The surviving spouse
or other person entitled to the death benefit may elect to delay payment of the
death benefit, but payment must commence no later than December 31 of the
calendar year in which the member would have reached 70-1/2 years of age.
(4)
Notwithstanding any other provision of ORS 238A.100 to 238A.245, distributions
of death benefits under the pension program must comply with the minimum
distribution requirements of 26 U.S.C. 401(a)(9) and the regulations
implementing that section, as in effect on December 31, 2010. The board shall
adopt rules implementing those minimum distribution requirements. [2003 c.733 §25;
2005 c.332 §15; 2009 c.5 §5; 2009 c.909 §5; 2010 c.82 §5; 2011 c.7 §5]
(Disability Benefit)
238A.235 Disability benefit.
(1) An active member of the pension program described in subsection (2) of this
section who becomes disabled shall receive a disability benefit in the amount
of 45 percent of the salary of the member determined as of the last full month
of employment before the disability commences.
(2)
The provisions of this section apply only to:
(a)
A member, other than a school employee as defined by ORS 238A.140, who has
accrued 10 years or more of retirement credit before the member becomes
disabled;
(b)
A member who is a school employee as defined by ORS 238A.140 and who was an
active member in 10 or more calendar years before the member becomes disabled;
or
(c)
A member who becomes disabled by reason of injury or disease sustained while in
the actual performance of duty.
(3)
A disability benefit under this section shall be paid until:
(a)
The member is no longer disabled; or
(b)
The member attains normal retirement age under ORS 238A.160.
(4)
A member is considered to be disabled for the purpose of this section if the
member is found, after being examined by one or more physicians selected by the
board, to be mentally or physically incapacitated for an extended duration and
unable to perform any work for which qualified, by reason of injury or disease
that was not intentionally self-inflicted. [2003 c.733 §25a; 2005 c.808 §36;
2009 c.103 §3]
238A.240 Funding of disability benefit.
(1) A participating public employer shall contribute to the pension program, at
intervals designated by the Public Employees Retirement Board, all amounts determined
by the board to be actuarially necessary to adequately fund the disability
benefits to be provided under ORS 238A.235 and the reasonable costs of
administering the provision of those benefits. The board shall periodically
determine the liabilities attributable to the disability benefits and shall set
the amount of contributions to be made by participating public employers, and
by other public employers who are required to make contributions on behalf of
members, to ensure that those liabilities will be funded no more than 40 years
after the date on which the determination is made. All participating public
employers shall be considered to be a single employer for the purposes of the
contributions required under this section.
(2)
For the purpose of the actuarial computation required under subsection (1) of
this section, the board shall separately establish the liability of
participating public employers for police officers and firefighters, and shall
require that public employers that employ police officers and firefighters make
contributions for those employees based on the liability established under this
section. [2003 c.733 §25b]
(Reemployment of Retired Members)
238A.245 Reemployment after commencement
of pension benefits. (1) Except as provided in
subsection (3) of this section, the Public Employees Retirement Board shall
cease making pension payments to a retired member of the pension program who is
reemployed by a participating public employer in a qualifying position. A
retired member of the pension program who is employed in a qualifying position
becomes an active member of the pension program without serving the
probationary period provided for in ORS 238A.100.
(2)
If a retired member of the pension program is reemployed under the provisions
of this section, any option chosen by the member under ORS 238A.190 is
canceled, and upon retiring thereafter the member may elect any option provided
for in ORS 238A.180 and 238A.190. The board shall recalculate the pension of
the member upon subsequent retirement.
(3)
A retired member of the pension program who becomes a member of the Legislative
Assembly shall continue to receive the pension elected by the member. A retired
member of the pension program who becomes a member of the Legislative Assembly
may not make an election under ORS 237.650. [2003 c.733 §26; 2011 c.722 §4]
INDIVIDUAL ACCOUNT PROGRAM
(Membership)
238A.300 Establishing membership under
individual account program. (1) Except as provided in ORS
238A.100 (2) and subsection (2) of this section, an eligible employee who is
employed in a qualifying position on or after August 29, 2003, by a public
employer that is participating in the individual account program and who will
not receive benefits under ORS chapter 238 for service with the participating
public employer pursuant to the provisions of ORS 238A.025 becomes a member of
the individual account program on the first day of the month after the employee
completes six full calendar months of employment. The six-month probationary
period may not be interrupted by more than 30 consecutive working days.
(2)
An inactive member of the pension program who terminated membership in the
individual account program pursuant to ORS 238A.310 (2) becomes a member of the
individual account program immediately upon reemployment in a qualifying
position. [2003 c.733 §29; 2011 c.722 §19]
238A.305 Persons establishing membership
in system before August 29, 2003. (1) Except as
provided in subsection (2) of this section, all members of the Public Employees
Retirement System who established membership in the Public Employees Retirement
System before August 29, 2003, as described in ORS 238A.025 become members of
the individual account program on January 1, 2004.
(2)
A member of the Public Employees Retirement System may not be a member of the
individual account program during any period of time during which the member is
required to make contributions to the system under ORS 238.200.
(3)
Solely for the purpose of determining the amount of the employee contribution
for persons who become members of the individual account program under this
section, whether paid by the employee or by the employer, the Public Employees
Retirement Board shall use the definition of “salary” provided by ORS 238.005. [2003
c.733 §33; 2005 c.332 §17; 2007 c.769 §3]
238A.310 Termination of membership.
Membership under the individual account program terminates when:
(1)
A member dies; or
(2)
An inactive member receives a distribution of the vested accounts of the member
under ORS 238A.375. [2003 c.733 §30]
(Vesting)
238A.320 Vesting.
(1) A member of the individual account program becomes vested in the employee
account established for the member under ORS 238A.350 (2) on the date the
employee account is established.
(2)
A member who makes rollover contributions becomes vested in the rollover
account established for the member under ORS 238A.350 (4) on the date the
rollover account is established.
(3)
Except as provided in subsection (4) of this section, if an employer makes employer
contributions for a member under ORS 238A.340 the member becomes vested in the
employer account established under ORS 238A.350 (3) on the earliest of the
following dates:
(a)
The date on which the member completes at least 600 hours of service in each of
five calendar years. The five calendar years need not be consecutive, but are
subject to the provisions of subsection (5) of this section.
(b)
The date on which an active member reaches the normal retirement age for the
member under ORS 238A.160.
(c)
If the individual account program is terminated, the date on which termination
becomes effective, but only to the extent the account is then funded.
(d)
The date on which an active member becomes disabled, as described in ORS
238A.155 (5).
(e)
The date on which an active member dies.
(4)
If on the date that a person becomes an active member the person has already
reached the normal retirement age for the person under ORS 238A.160, and the
employer makes employer contributions for the member under ORS 238A.340, the
person is vested in the employer account established under ORS 238A.350 (3) on
that date.
(5)
If a member of the individual account program who is not vested in the employer
account performs fewer than 600 hours of service in each of five consecutive
calendar years, hours of service performed before the first calendar year of
the period of five consecutive calendar years shall be disregarded for purposes
of determining whether the member is vested under subsection (3)(a) of this
section.
(6)
Solely for purposes of determining whether a member is vested under subsection
(3)(a) of this section, hours of service include creditable service, as defined
in ORS 238.005, performed by the person before the person became an eligible
employee, as long as the membership of the person under ORS chapter 238 has not
been terminated under the provisions of ORS 238.095 on the date the person
becomes an eligible employee. [2003 c.733 §31; 2011 c.9 §27; 2011 c.722 §11]
(Employee Contributions)
238A.330 Employee contributions.
(1) A member of the individual account program must make employee contributions
to the individual account program of six percent of the member’s salary.
(2)
Employee contributions made by a member of the individual account program under
this section shall be credited by the board to the employee account established
for the member under ORS 238A.350 (2). [2003 c.733 §32]
238A.335 Employer payment of employee
contribution. (1) A participating public employer may
agree, by a written employment policy or by a collective bargaining agreement,
to pay the employee contribution required under ORS 238A.330. The policy or
agreement need not include all members of the individual account program
employed by the employer.
(2)
An agreement under this section to pay the required employee contribution may
provide that:
(a)
Employee compensation be reduced to generate the funds needed to make the
employee contributions; or
(b)
Additional amounts be paid by the employer for the purpose of making the employee
contributions, and employee compensation not be reduced for the purpose of
generating the funds needed to make the employee contributions.
(3)
A participating public employer must give written notice to the Public
Employees Retirement Board at the time that a written employment policy or
collective bargaining agreement described in subsection (1) of this section is
adopted or changed. The notice must specifically indicate whether the agreement
is as described in subsection (2)(a) or (b) of this section. Any change in the
manner in which employee contributions are to be paid applies only to employee
contributions made on and after the date the notice is received by the board. [2003
c.733 §34]
(Employer Contributions)
238A.340 Employer contributions.
(1) A participating public employer may agree, by a written employment policy
or agreement, to make employer contributions for members of the individual
account program employed by the employer. The percentage of salary paid as
employer contributions may not be less than one percent of salary or more than
six percent of salary, and must be a whole number. A participating public
employer may make an agreement under this section for specific groups of
employees employed by the public employer.
(2)
If a participating public employer makes employer contributions under this
section and the member for which the contributions are made fails to vest in
the employer account under the provisions of ORS 238A.320, the Public Employees
Retirement Board shall apply the contributions in the employer account against
other obligations of the employer under the Oregon Public Service Retirement
Plan. [2003 c.733 §36]
(Individual Accounts)
238A.350 Individual accounts established.
(1) Upon any contributions being made to the individual account program by or
on behalf of a member of the program, the Public Employees Retirement Board
shall create the account or accounts described in this section. Each account
shall be adjusted at least annually in accordance with rules adopted by the
board to reflect any net earnings or losses on those contributions and to pay
the reasonable administrative costs of maintaining the program to the extent
the earnings on the assets of the program are insufficient to pay those costs.
The adjustments described in this subsection shall continue until the account
is distributed to the member or forfeited.
(2)
The board shall establish an employee account, which shall consist of the
employee contributions made by or on behalf of the member as adjusted under
subsection (1) of this section.
(3)
If the public employer agrees to make employer contributions under ORS
238A.340, the board shall establish an employer account, which shall consist of
the employer contributions made on behalf of the member as adjusted under
subsection (1) of this section.
(4)
If the board accepts rollover contributions on behalf of the member, the board
shall establish a rollover account, which shall consist of the rollover
contributions made by the member as adjusted under subsection (1) of this
section. Contributions and the earnings attributable to the contributions must
be accounted for separately.
(5)
The board shall provide an annual statement to each active and inactive member
of the program that reflects the amount credited to the accounts established
under this section. The statement shall reflect whether the member is vested in
the employer account under the provisions of ORS 238A.320. [2003 c.733 §37]
(Rollover Contributions)
238A.360 Rollover contributions; rules.
(1) The Public Employees Retirement Board may accept rollover contributions
from a member of the individual account program or from an eligible retirement
plan from which the member is entitled to an eligible rollover distribution.
The board may accept rollover contributions under this section only if the
amounts contributed qualify as eligible rollover distributions under the
federal income tax laws governing tax-qualified retirement plans and, if the
rollover contribution is made by the member, the contribution is paid to the
individual account program within the time limits established by the federal
income tax laws governing tax-qualified retirement plans.
(2)
The board shall adopt rules and establish procedures for determining whether to
accept a rollover contribution under this section and shall require such
documentation as may be necessary to ensure that the receipt of a rollover
contribution does not jeopardize the status of the individual account program
as a tax-qualified governmental plan. [2003 c.733 §38]
(Limitation on Contributions)
238A.370 Limitation on contributions;
rules. Notwithstanding any other provision of
ORS 238A.300 to 238A.415, the annual addition to the employee and employer
accounts of a member of the individual account program for a calendar year,
together with the annual additions to the accounts of the member under any
other defined contribution plan maintained by the participating public employer
for a calendar year, may not exceed the lesser of $40,000, or 100 percent of the
member’s compensation for that calendar year. For purposes of this section, “annual
addition” has the meaning given that term in 26 U.S.C. 415(c)(2), as in effect
on December 31, 2010, and “compensation” has the meaning given the term “participant’s
compensation” in 26 U.S.C. 415(c)(3), as in effect on December 31, 2010. The
Public Employees Retirement Board shall adopt rules for the administration of
this limitation, including adjustments in the annual dollar limitation to
reflect cost-of-living adjustments authorized by the Internal Revenue Service. [2003
c.733 §39; 2009 c.5 §6; 2009 c.909 §6; 2010 c.82 §6; 2011 c.7 §6]
(Withdrawal by Inactive Member)
238A.375 Distribution of accounts to
inactive member. (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.
(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. [2003 c.733 §40; 2005 c.152 §3; 2007 c.52 §3]
(Defined Contribution Benefit)
238A.400 Payment of accounts at retirement;
rules. (1) Upon retirement on or after the
earliest retirement date, as described in ORS 238A.165, a member of the
individual account program shall receive in a lump sum 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.
(2)
In lieu of a lump sum payment under subsection (1) of this section, a member of
the individual account program may elect to receive the amounts in the member’s
employee account and employer account, to the extent the member is vested in
those accounts under ORS 238A.320, in substantially equal installments paid
over a period of 5, 10, 15 or 20 years, or over a period that is equal to the
anticipated life span of the member as actuarially determined by the Public
Employees Retirement Board. Installments may be made on a monthly, quarterly or
annual basis. In no event may the period selected by the member exceed the time
allowed by the minimum distribution requirements described in subsection (5) of
this section. The board shall by rule establish the manner in which
installments will be adjusted to reflect investment gains and losses on the
unpaid balance during the payout period elected by the member under this
subsection. The board by rule may establish minimum monthly amounts payable
under this subsection. The board may require that a lump sum payment, or an
installment schedule different than the schedules provided for in this
subsection, be used to pay the vested amounts in the member’s accounts if those
amounts are not adequate to generate the minimum monthly amounts specified by
the rule.
(3)
A member of the individual account program electing to receive installments
under subsection (2) of this section must designate a beneficiary or
beneficiaries. In the event the member dies before all amounts in the employee
and vested employer accounts are paid, all remaining installment payments shall
be made to the beneficiary or beneficiaries designated by the member. A
beneficiary may elect to receive a lump sum distribution of the remaining
amounts.
(4)
A member who is entitled to receive retirement benefits under ORS chapter 238
may receive vested amounts in the member’s employee account, rollover account
and employer account in the manner provided by this section when the member
retires for service under the provisions of ORS chapter 238.
(5)
Notwithstanding any other provision of ORS 238A.300 to 238A.415, the entire
interest of a member of the individual account program must be distributed over
a time period commencing no later than the latest retirement date set forth in
ORS 238A.170, and must be distributed in a manner that satisfies all other
minimum distribution requirements of 26 U.S.C. 401(a)(9) and regulations
implementing that section, as in effect on December 31, 2010. The board shall
adopt rules implementing those minimum distribution requirements. [2003 c.733 §41;
2005 c.152 §10; 2007 c.71 §75; 2007 c.412 §1; 2009 c.5 §7; 2009 c.909 §7; 2010
c.82 §7; 2011 c.7 §7]
238A.410 Death benefits; rules.
(1) If a member of the individual account program dies before retirement, 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,
shall be paid in a lump sum to the beneficiary or beneficiaries designated by
the member for the purposes of this section.
(2)
If a member of the individual account program is married at the time of death,
or there exists at the time of death any other person who is constitutionally
required to be treated in the same manner as a spouse for the purpose of
retirement benefits, the spouse or other person shall be the beneficiary for
purposes of the death benefit payable under this section unless the spouse or
other person consents to the designation of a different beneficiary or
beneficiaries before the designation has been made and the consent has not been
revoked by the spouse or other person as of the time of the member’s death.
Consent and revocation of consent must be in writing, acknowledged by a notary
public, and submitted to the Public Employees Retirement Board in accordance
with rules adopted by the board. If the member’s spouse is designated as the
member’s beneficiary and the marriage of the member and spouse is subsequently
dissolved, the former spouse shall be treated as predeceasing the member for
purposes of this section, unless the member expressly designates the former
spouse as beneficiary after the effective date of the dissolution or the former
spouse is required to be designated as a beneficiary under the provisions of
ORS 238.465.
(3)
For purposes of this section and ORS 238A.400 (3), if a member fails to
designate a beneficiary, or if the person or persons designated do not survive
the member, the death benefit provided for in this section shall be paid to the
following person or persons, in the following order of priority:
(a)
The member’s surviving spouse or other person who is constitutionally required
to be treated in the same manner as a spouse;
(b)
The member’s surviving children, in equal shares; or
(c)
The member’s estate.
(4)
The entire amount of a deceased member’s vested accounts must be distributed by
December 31 of the fifth calendar year after the year in which the member died.
Notwithstanding any other provision of this chapter, distributions of death
benefits under the individual account program must comply with the minimum
distribution requirements of 26 U.S.C. 401(a)(9) and the regulations
implementing that section, as in effect on December 31, 2010. The Public
Employees Retirement Board shall adopt rules implementing those minimum
distribution requirements. [2003 c.733 §42; 2009 c.5 §8; 2009 c.909 §8; 2010
c.82 §8; 2011 c.7 §8]
238A.415 Credit for service in uniformed
services; rules. (1) Notwithstanding any other
provision of ORS 238A.300 to 238A.415, an eligible employee who leaves a
qualifying position for the purpose of performing service in the uniformed
services, and who subsequently returns to employment with a participating
public employer with reemployment rights under federal law, is entitled to
credit toward the probationary period required by ORS 238A.300, credit toward
the vesting requirements of ORS 238A.320 and contributions under rules adopted
by the Public Employees Retirement Board pursuant to subsection (2) of this
section.
(2)
The board shall adopt rules establishing contributions and service credit for
any period of service in the uniformed services by an employee described in
subsection (1) of this section. For the purpose of adopting rules under this
subsection, the board shall consider and take into account all federal law
relating to benefits and service credit for any period of service in the
uniformed services, including 26 U.S.C. 414(u), as in effect on December 31,
2010. Contributions and service credit under rules adopted by the board
pursuant to this subsection may not exceed contributions and service credit
required under federal law for periods of service in the uniformed services. [2003
c.733 §43; 2009 c.5 §9; 2009 c.909 §9; 2010 c.82 §9; 2011 c.7 §9]
DIRECT ROLLOVERS
238A.430 Direct rollovers; rules.
(1) To the extent required by law, and except as otherwise provided by rules
adopted by the Public Employees Retirement Board under subsection (4) of this
section, any portion of a distribution of benefits described in subsection (2)
of this section shall, at the election of and in lieu of distribution to the
distributee, be paid directly to an eligible retirement plan specified by the
distributee.
(2)
The provisions of subsection (1) of this section apply to a distribution of any
benefit under the pension program or the individual account program except:
(a)
A distribution that is one of a series of substantially equal periodic payments
made at least annually for the life or life expectancy of the distributee, or
for the joint lives or life expectancies of the distributee and a designated
beneficiary;
(b)
A distribution that is one of a series of substantially equal periodic payments
made at least annually for a specified period of 10 years or more; and
(c)
A distribution to the extent that the distribution is required under 26 U.S.C.
401(a)(9).
(3)
The provisions of subsection (1) of this section apply to any portion of a
distribution of benefits under the pension program or the individual account
program even though the portion consists of after-tax employee contributions
that are not includable in gross income. Any portion of a distribution that
consists of after-tax employee contributions that are not includable in gross
income may be transferred only to an individual retirement account or annuity
described in 26 U.S.C. 408(a) or (b), or to a qualified defined contribution or
defined benefit plan described in 26 U.S.C. 401(a) or 403(b) that agrees to
account separately for amounts transferred, including accounting separately for
the portion of the distribution that is includable in gross income and the
portion of the distribution that is not includable in gross income. The amount
transferred shall be treated as consisting first of the portion of the
distribution that is includable in gross income, determined without regard to
26 U.S.C. 402(c)(1).
(4)
The board shall adopt rules implementing the direct rollover requirements of 26
U.S.C. 401(a)(31) and the regulations implementing that section, and may adopt
administrative exceptions to the direct rollover requirements to the extent
permitted by 26 U.S.C. 401(a)(31) and the regulations implementing that
section.
(5)
All references in this section to federal laws and regulations are to the laws
and regulations in effect on December 31, 2010.
(6)
For purposes of this section:
(a)
“Distributee” means a member, a member’s surviving spouse or a member’s
alternate payee under ORS 238.465.
(b)
“Eligible retirement plan” means:
(A)
An individual retirement account described in 26 U.S.C. 408(a);
(B)
An individual retirement annuity described in 26 U.S.C. 408(b), other than an
endowment contract;
(C)
A qualified trust under 26 U.S.C. 401(a), that is a defined contribution or
defined benefit plan and permits the acceptance of rollover contributions;
(D)
An annuity plan described in 26 U.S.C. 403(a);
(E)
An eligible deferred compensation plan described in 26 U.S.C. 457(b) that is
maintained by an eligible governmental employer described in 26 U.S.C.
457(e)(1)(A) and that agrees to account separately for amounts transferred into
such plan from the distributing plan; or
(F)
An annuity contract described in 26 U.S.C. 403(b). [2003 c.733 §44; 2009 c.5 §10;
2009 c.909 §10; 2010 c.82 §10; 2011 c.7 §10]
238A.435 Distribution of death benefit as
rollover distribution. (1) If a benefit is payable
under this chapter to a beneficiary by reason of the death of a member of the
system, the beneficiary may elect to have all or part of the distribution of
the death benefit paid in an eligible rollover distribution to an individual
retirement plan described in 26 U.S.C. 408(a), or an individual retirement
annuity, other than an endowment contract, described in 26 U.S.C. 408(b), if
the plan or annuity is established for the purpose of receiving the eligible
rollover distribution on behalf of the designated beneficiary.
(2)
Subsection (1) of this section applies to an eligible rollover distribution of
death benefits to a beneficiary who is not treated as the spouse of the
decedent for federal tax purposes and who is the decedent’s designated
beneficiary for the purposes of the minimum required distribution requirements
of 26 U.S.C. 401(a)(9). To the extent provided by rules of the Public Employees
Retirement Board, a trust maintained for the benefit of one or more
beneficiaries must be treated by the board in the same manner as a trust that
is designated as a beneficiary for the purposes of the minimum required
distribution requirements of 26 U.S.C. 401(a)(9).
(3)
As used in this section, “eligible rollover distribution” has the meaning given
that term in 26 U.S.C. 402(c)(4), as in effect on January 1, 2008. [2007 c.628 §6]
RULES
238A.450 Rules for Oregon Public Service
Retirement Plan. (1) The Public Employees
Retirement Board shall adopt rules for the administration of this chapter.
(2)
All rules adopted by the board under this section become part of the written
plan document for the Public Employees Retirement System that is required to
maintain the status of the pension program and the individual account program
as parts of a tax-qualified governmental retirement plan under the Internal
Revenue Code and under regulations adopted pursuant to the Internal Revenue
Code. [2003 c.733 §44a; 2005 c.808 §19]
CHANGES TO OREGON PUBLIC SERVICE
RETIREMENT PLAN
238A.460 Limitation on powers of board,
director and staff. (1) The Public Employees
Retirement Board, the director employed by the board and staff employed by the
board may not adopt any rule or take any administrative action that has the
effect of increasing the total liability for benefits under this chapter that
is in excess of one-tenth of one percent.
(2)
Subsection (1) of this section does not apply to any rule or administrative
action necessary to maintain qualification of the Public Employees Retirement
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. [2003 c.733 §44b]
238A.465 Legislative intent relating to
increased benefits. It is the intent of the
Legislative Assembly that any increase in benefits under the Oregon Public
Service Retirement Plan be provided through changes in the individual account
program and not through changes in the pension program. [2003 c.733 §44d]
238A.470 Contract rights under Oregon
Public Service Retirement Plan. The
Legislative Assembly may change the benefits payable to persons who become
members of the Public Employees Retirement System on or after August 29, 2003,
as described in ORS 238A.025, as long as the change applies only to benefits
attributable to service performed and salary earned on or after the date the change
is made. [2003 c.733 §45]
238A.475 Application of legislative
changes to legislators. Any law enacted after January 1,
2004, that has the effect of increasing the total liability for benefits under
this chapter that is in excess of one-tenth of one percent does not apply to
service by members of the Legislative Assembly that entitles those members to
benefits under the Oregon Public Service Retirement Plan. [2003 c.733 §44c]
_______________