Bill Text: OR HB2986 | 2011 | Regular Session | Introduced
Bill Title: Relating to public employee retirement.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2986 Detail]
Download: Oregon-2011-HB2986-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 440
House Bill 2986
Sponsored by Representative RICHARDSON (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Eliminates Oregon Public Service Retirement Plan and
substitutes Tier 3 level of benefits under Public Employees
Retirement System.
Specifies benefits payable to Tier 1 PERS members, Tier 2 PERS
members and Tier 3 PERS members.
A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
amending ORS 237.620, 237.650, 238.005, 238.255, 238.258,
238.660, 238A.005, 238A.025, 238A.030, 238A.050, 238A.070,
238A.245, 238A.305, 238A.340, 238A.465, 238A.470, 238A.475,
243.800 and 341.551; and repealing ORS 238.430 and 238.435.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 8 of this 2011 Act are added to
and made a part of ORS chapter 238. + }
SECTION 2. { + Tier 1 PERS members. A Tier 1 PERS member is a
person who establishes membership in the Public Employees
Retirement System before January 1, 1996. A person establishes
membership in the system before January 1, 1996, for the purposes
of this section if:
(1) The person is a member of the system, or a judge member of
the system, on January 1, 1996;
(2) The person was a member of the system before January 1,
1996, ceased to be a member of the system under the provisions of
ORS 238.095, 238.265 or 238.545 before January 1, 1996, but
restored part or all of the forfeited creditable service from
before January 1, 1996, under the provisions of ORS 238.105 or
238.115 after January 1, 1996;
(3) The person performed any period of service for a
participating public employer before January 1, 1996, 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; or
(4) The person becomes a member of the system under the terms
of an integration contract pursuant to the terms of ORS 238.680,
and under the terms of the contract the person receives
retirement credit in the system for periods of employment
performed for the public employer before January 1, 1996. + }
SECTION 3. { + Tier 1 benefits. (1) A Tier 1 PERS member is
entitled to all benefits provided by ORS chapter 238, subject to
the requirements and limitations provided by law for those
benefits.
(2) A Tier 1 PERS member is a member of the individual account
program and is entitled to all benefits provided by that program,
subject to the requirements and limitations provided by law for
that program. + }
SECTION 4. { + Tier 2 PERS members. A Tier 2 PERS member is a
person who is not a Tier 1 PERS member and who establishes
membership in the Public Employees Retirement System before
August 29, 2003. A person establishes membership in the system
before August 29, 2003, for the purposes of this section if:
(1) The person is a member of the system, or a judge member of
the system, on August 28, 2003; or
(2) 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. + }
SECTION 5. { + Tier 2 benefits. (1) Except as provided in this
section, a Tier 2 PERS member is entitled to all benefits
provided by ORS chapter 238, subject to the requirements and
limitations provided by law for those benefits.
(2) Notwithstanding the definition of 'salary' or 'other
advantages' provided by ORS 238.005, for the purpose of
calculating the retirement allowance of a Tier 2 PERS member, the
Public Employees Retirement Board shall not include any lump sum
payment for accrued vacation pay made to the member during the
last 36 calendar months of membership before the effective date
of retirement of the member, or during any period of time taken
into account for purposes of determining the three years in which
the member was paid the highest salary for the purposes of
determining the member's final average salary.
(3) Notwithstanding the definition of 'final average salary'
provided by ORS 238.005, for the purpose of calculating the
retirement allowance of a Tier 2 PERS member who is not employed
by a local government as defined in ORS 174.116, the term ' final
average salary' means whichever of the following is greater:
(a) The average salary per calendar year paid to a public
employee who is an active member of the system in three of the
calendar years of membership before the effective date of
retirement of the employee, in which three years the employee was
paid the highest salary. The three calendar years in which the
employee was paid the largest total salary may include calendar
years in which the employee was employed for less than a full
calendar year. If the number of calendar years of active
membership before the effective date of retirement of the
employee is three or less, the final average salary for the
employee is the average salary per calendar year paid to the
public employee in all of those years, without regard to whether
the employee was employed for full calendar years.
(b) One-third of the total salary paid to a public employee who
is an active member of the system in the last 36 calendar months
of membership before the effective date of retirement of the
employee.
(4) For the purposes of calculating the final average salary of
a member under subsection (3) 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 calendar years of
membership under subsection (3)(a) of this section if the three
calendar years were consecutive; 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 (3)(b) of this section.
(5) Notwithstanding the definition of 'final average salary'
provided by ORS 238.005, for the purpose of calculating the
retirement allowance of a Tier 2 PERS member who is employed by a
local government as defined in ORS 174.116, the term 'final
average salary' means whichever of the following is greater:
(a) The average salary per calendar year earned by a public
employee who is an active member of the system in three of the
calendar years of membership before the effective date of
retirement of the employee, in which three years the employee
earned the highest salary. The three calendar years in which the
employee earned the largest total salary may include calendar
years in which the employee was employed for less than a full
calendar year. If the number of calendar years of active
membership before the effective date of retirement of the
employee is three or less, the final average salary for the
employee is the average salary per calendar year earned by the
public employee in all of those years, without regard to whether
the employee was employed for full calendar years.
(b) One-third of the total salary earned by a public employee
who is an active member of the system in the last 36 calendar
months of membership before the effective date of retirement of
the employee.
(6) The normal retirement age is 60 years of age for a Tier 2
PERS member who retires as other than a police officer or
firefighter.
(7) ORS 238.255 does not apply to a Tier 2 PERS member.
(8) A Tier 2 PERS member is a member of the individual account
program and is entitled to all benefits provided by that program,
subject to the requirements and limitations provided by law for
that program. + }
SECTION 6. { + Tier 3 PERS members. A Tier 3 PERS member is a
person who establishes membership in the Public Employees
Retirement System on or after August 29, 2003. + }
SECTION 7. { + Tier 3 benefits. A Tier 3 PERS member is
entitled to all benefits provided by ORS chapter 238A, subject to
the requirements and limitations provided by law for those
benefits. + }
SECTION 8. { + Judges. A person who is elected or appointed as
a judge as defined in ORS 238.500 is not a Tier 1 PERS member,
Tier 2 PERS member or Tier 3 PERS member for the purposes of
service as a judge. The benefits for service as a judge are as
provided by ORS 238.500 to 238.585. + }
SECTION 9. ORS 237.620 is amended to read:
237.620. (1) Except as provided in this section, all public
employers of police officers or firefighters shall provide
retirement benefits to those employees under the Public Employees
Retirement System.
(2) Notwithstanding subsection (1) of this section, a public
employer of police officers or firefighters need not provide
retirement benefits to those employees under the Public Employees
Retirement System if the Public Employees Retirement Board
determines that the public employer provides retirement benefits
to each of the following classes of employees that are equal to
or better than the retirement benefits that would be provided to
the equivalent classes of employees under the Public Employees
Retirement System:
(a) Police officers or firefighters who are { - entitled to
receive benefits only under ORS chapter 238 and who established
membership in the system before January 1, 1996, as described in
ORS 238.430 (2) - } { + Tier 1 PERS members + };
(b) Police officers or firefighters who are { - entitled to
receive benefits only under ORS chapter 238 and who established
membership in the system on or after January 1, 1996, and before
August 29, 2003, as described in ORS 238A.025 (4) - } { + Tier
2 PERS members + }; and
(c) Police officers or firefighters who { - establish
membership in the system on or after August 29, 2003, and are
entitled to benefits only under the Oregon Public Service
Retirement Plan - } { + are Tier 3 PERS members + }.
(3) At such times as may be established by board rule, the
Public Employees Retirement Board shall review the retirement
benefits provided by a public employer of police officers or
firefighters that does not provide retirement benefits for those
employees under the Public Employees Retirement System. The
review must be conducted at the expense of the public employer.
Based on the review, the board shall determine whether the public
employer complies with the requirements of subsection (2) of this
section. If the board determines that the public employer does
not comply with the requirements of subsection (2) of this
section for any class of employees described in subsection (2) of
this section, the public employer must provide that class of
employees with retirement benefits adequate to meet the
requirements of subsection (2) of this section. If the public
employer fails to provide those benefits, any employee within the
class may bring an action in circuit court to compel compliance
with the requirements of this section.
SECTION 10. ORS 237.650 is amended to read:
237.650. (1) A person appointed or elected as a member of the
Legislative Assembly must elect within 30 days after taking
office if the person will:
(a) Become a { + Tier 3 PERS + } member { - of the Oregon
Public Service Retirement Plan established under ORS chapter
238A - } ;
(b) Become a legislator member of the state deferred
compensation plan under ORS 237.655; or
(c) Decline to become a { + Tier 3 PERS + } member { - of
the Oregon Public Service Retirement Plan - } , or to become a
legislator member of the state deferred compensation plan, for
service as a member of the Legislative Assembly.
(2) Written notice of a person's election under this section
must be given to the Public Employees Retirement Board. If the
board does not receive written notice within 30 days after the
person takes office, the person shall be conclusively deemed to
have elected to become a legislator member of the state deferred
compensation plan under ORS 237.655.
(3) Any member of the Legislative Assembly who elects to become
a { + Tier 3 PERS + } member { - of the Oregon Public Service
Retirement Plan - } may request that the Public Employees
Retirement Board roll over the amount in the regular account
maintained for the member under ORS 238.250 into the individual
account maintained for the member under the individual account
program.
(4) An election under this section does not affect the ability
of a person appointed or elected as a member of the Legislative
Assembly to participate in the state deferred compensation plan
in the manner provided by ORS 243.401 to 243.507.
SECTION 11. ORS 238.005, as amended by section 8, chapter 1,
Oregon Laws 2010, is amended to read:
238.005. For purposes of this chapter:
(1) 'Annuity' means payments for life derived from
contributions made by a member as provided in this chapter.
(2) 'Board' means the Public Employees Retirement Board.
(3) 'Calendar year' means 12 calendar months commencing on
January 1 and ending on December 31 following.
(4) 'Continuous service' means service not interrupted for more
than five years, except that such continuous service shall be
computed without regard to interruptions in the case of:
(a) An employee who had returned to the service of the employer
as of January 1, 1945, and who remained in that employment until
having established membership in the Public Employees Retirement
System.
(b) An employee who was in the armed services on January 1,
1945, and returned to the service of the employer within one year
of the date of being otherwise than dishonorably discharged and
remained in that employment until having established membership
in the Public Employees Retirement System.
(5) 'Creditable service' means any period of time during which
an active member is being paid a salary by a participating public
employer and for which benefits under this chapter are funded by
employer contributions and earnings on the fund. For purposes of
computing years of 'creditable service,' full months and major
fractions of a month shall be considered to be one-twelfth of a
year and shall be added to all full years. ' Creditable service'
includes all retirement credit received by a member.
(6) 'Earliest service retirement age' means the age attained by
a member when the member could first make application for
retirement under the provisions of ORS 238.280.
(7) 'Employee' includes, in addition to employees, public
officers, but does not include:
(a) Persons engaged as independent contractors.
(b) Seasonal, emergency or casual workers whose periods of
employment with any public employer or public employers do not
total 600 hours in any calendar year.
(c) Persons, other than workers in the Oregon Industries for
the Blind under ORS 346.190, provided sheltered employment or
made-work by a public employer in an employment or industries
program maintained for the benefit of such persons.
(d) Persons employed and paid from federal funds received under
the Emergency Job and Unemployment Assistance Act of 1974 (Public
Law 93-567) or any other federal program intended primarily to
alleviate unemployment. However, any such person shall be
considered an 'employee' if not otherwise excluded by paragraphs
(a) to (c) of this subsection and the public employer elects to
have the person so considered by an irrevocable written notice to
the board.
(e) Persons who are employees of a railroad, as defined in ORS
824.020, and who, as such employees, are included in a retirement
plan under federal railroad retirement statutes. This paragraph
shall be deemed to have been in effect since the inception of the
system.
(8) 'Final average salary' means whichever of the following is
greater:
(a) The average salary per calendar year paid by one or more
participating public employers to an employee who is an active
member of the system in three of the calendar years of membership
before the effective date of retirement of the employee, in which
three years the employee was paid the highest salary. The three
calendar years in which the employee was paid the largest total
salary may include calendar years in which the employee was
employed for less than a full calendar year. If the number of
calendar years of active membership before the effective date of
retirement of the employee is three or fewer, the final average
salary for the employee is the average salary per calendar year
paid by one or more participating public employers to the
employee in all of those years, without regard to whether the
employee was employed for the full calendar year.
(b) One-third of the total salary paid by a participating
public employer to an employee who is an active member of the
system in the last 36 calendar months of active membership before
the effective date of retirement of the employee.
(9) 'Firefighter' does not include a volunteer firefighter, but
does include:
(a) The State Fire Marshal, the chief deputy fire marshal and
deputy state fire marshals; and
(b) 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.
(10) 'Fiscal year' means 12 calendar months commencing on July
1 and ending on June 30 following.
(11) 'Fund' means the Public Employees Retirement Fund.
(12)(a) 'Member' means a person who has established membership
in the system and whose membership has not been terminated as
described in ORS 238.095. 'Member' includes active, inactive and
retired members.
(b) 'Active member' means a member who is presently employed by
a participating public employer in a qualifying position and who
has completed the six-month period of service required by ORS
238.015.
(c) 'Inactive member' means a member who is not employed in a
qualifying position, whose membership has not been terminated in
the manner described by ORS 238.095, and who is not retired for
service or disability.
(d) 'Retired member' means a member who is retired for service
or disability.
(13)(a) 'Member account' means the regular account and the
variable account.
(b) 'Regular account' means the account established for each
active and inactive member under ORS 238.250.
(c) 'Variable account' means the account established for a
member who participates in the Variable Annuity Account under ORS
238.260.
(14) 'Normal retirement age' means:
(a) For a { - person who establishes membership in the system
before January 1, 1996, as described in ORS 238.430 - } { +
Tier 1 PERS member + }, 55 years of age if the employee retires
at that age as a police officer or firefighter or 58 years of age
if the employee retires at that age as other than a police
officer or firefighter.
(b) For a { - person who establishes membership in the system
on or after January 1, 1996, as described in ORS 238.430 - }
{ + Tier 2 PERS member + }, 55 years of age if the employee
retires at that age as a police officer or firefighter or 60
years of age if the employee retires at that age as other than a
police officer or firefighter.
(15) 'Pension' means annual payments for life derived from
contributions by one or more public employers.
(16) 'Police officer' includes:
(a) Employees of institutions defined in ORS 421.005 as
Department of Corrections institutions whose duties, as assigned
by the Director of the Department of Corrections, include the
custody of persons committed to the custody of or transferred to
the Department of Corrections and employees of the Department of
Corrections who were classified as police officers on or before
July 27, 1989, whether or not such classification was authorized
by law.
(b) Employees of the Department of State Police who are
classified as police officers by the Superintendent of State
Police.
(c) Employees of the Oregon Liquor Control Commission who are
classified as enforcement officers by the administrator of the
commission.
(d) Sheriffs and those deputy sheriffs or other employees of a
sheriff whose duties, as classified by the sheriff, are the
regular duties of police officers or corrections officers.
(e) Police chiefs and police personnel of a city who are
classified as police officers by the council or other governing
body of the city.
(f) Parole and probation officers employed by the Department of
Corrections, parole and probation officers who are transferred to
county employment under ORS 423.549 and adult parole and
probation officers, as defined in ORS 181.610, who are classified
as police officers for the purposes of this chapter by the county
governing body. If a county classifies adult parole and probation
officers as police officers for the purposes of this chapter, and
the employees so classified are represented by a labor
organization, any proposal by the county to change that
classification or to cease to classify adult parole and probation
officers as police officers for the purposes of this chapter is a
mandatory subject of bargaining.
(g) Police officers appointed under ORS 276.021 or 276.023.
(h) Employees of the Port of Portland who are classified as
airport police by the Board of Commissioners of the Port of
Portland.
(i) Employees of the State Department of Agriculture who are
classified as livestock police officers by the Director of
Agriculture.
(j) Employees of the Department of Public Safety Standards and
Training who are classified by the department as other than
secretarial or clerical personnel.
(k) Investigators of the Criminal Justice Division of the
Department of Justice.
(L) Corrections officers as defined in ORS 181.610.
(m) Employees of the Oregon State Lottery Commission who are
classified by the Director of the Oregon State Lottery as
enforcement agents pursuant to ORS 461.110.
(n) The Director of the Department of Corrections.
(o) An employee who for seven consecutive years has been
classified as a police officer as defined by this section, and
who is employed or transferred by the Department of Corrections
to fill a position designated by the Director of the Department
of Corrections as being eligible for police officer status.
(p) An employee of the Department of Corrections classified as
a police officer on or prior to July 27, 1989, whether or not
that classification was authorized by law, as long as the
employee remains in the position held on July 27, 1989. The
initial classification of an employee under a system implemented
pursuant to ORS 240.190 does not affect police officer status.
(q) Employees of a school district who are appointed and duly
sworn members of a law enforcement agency of the district as
provided in ORS 332.531 or otherwise employed full-time as police
officers commissioned by the district.
(r) Employees at youth correction facilities and juvenile
detention facilities under ORS 419A.050, 419A.052 and 420.005 to
420.915 who are required to hold valid Oregon teaching licenses
and who have supervisory, control or teaching responsibilities
over juveniles committed to the custody of the Department of
Corrections or the Oregon Youth Authority.
(s) Employees at youth correction facilities as defined in ORS
420.005 whose primary job description involves the custody,
control, treatment, investigation or supervision of juveniles
placed in such facilities.
(t) Employees of the Oregon Youth Authority who are classified
as juvenile parole and probation officers.
(17) 'Public employer' means the state, one of its agencies,
any city, county, or municipal or public corporation, any
political subdivision of the state or any instrumentality
thereof, or an agency created by one or more such governmental
organizations to provide governmental services. For purposes of
this chapter, such agency created by one or more governmental
organizations is a governmental instrumentality and a legal
entity with power to enter into contracts, hold property and sue
and be sued.
(18) 'Prior service credit' means credit provided under ORS
238.442 or under ORS 238.225 (2) to (6) (1999 Edition).
(19) 'Qualifying position' means one or more jobs with one or
more participating public employers in which an employee performs
600 or more hours of service in a calendar year, excluding any
service in a job for which a participating public employer does
not provide benefits under this chapter pursuant to an
application made under ORS 238.035.
(20) 'Retirement credit' means a period of time that is treated
as creditable service for the purposes of this chapter.
(21)(a) 'Salary' means the remuneration paid an employee in
cash out of the funds of a public employer in return for services
to the employer, plus the monetary value, as determined by the
Public Employees Retirement Board, of whatever living quarters,
board, lodging, fuel, laundry and other advantages the employer
furnishes the employee in return for services.
(b) 'Salary' includes but is not limited to:
(A) Payments of employee and employer money into a deferred
compensation plan, which are deemed salary paid in each month of
deferral;
(B) The amount of participation in a tax-sheltered or deferred
annuity, which is deemed salary paid in each month of
participation;
(C) Retroactive payments described in section 7, chapter 1,
Oregon Laws 2010; and
(D) Wages of a deceased member paid to a surviving spouse or
dependent children under ORS 652.190.
(c) 'Salary' or 'other advantages' does not include:
(A) Travel or any other expenses incidental to employer's
business which is reimbursed by the employer;
(B) Payments for insurance coverage by an employer on behalf of
employee or employee and dependents, for which the employee has
no cash option;
(C) Payments made on account of an employee's death;
(D) Any lump sum payment for accumulated unused sick leave;
(E) Any accelerated payment of an employment contract for a
future period or an advance against future wages;
(F) Any retirement incentive, retirement severance pay,
retirement bonus or retirement gratuitous payment;
(G) Payments for periods of leave of absence after the date the
employer and employee have agreed that no future services
qualifying pursuant to ORS 238.015 (3) will be performed, except
for sick leave and vacation;
(H) Payments for instructional services rendered to
institutions of the Oregon University System or the Oregon Health
and Science University when such 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 to which the contract pertains;
or
(I) Payments made by an employer for insurance coverage
provided to a domestic partner of an employee.
(22) 'School year' means the period beginning July 1 and ending
June 30 next following.
(23) 'System' means the Public Employees Retirement System.
(24) 'Vested' means being an active member of the system in
each of five calendar years.
(25) 'Volunteer firefighter' means a firefighter whose position
normally requires less than 600 hours of service per year.
SECTION 12. ORS 238.255 is amended to read:
238.255. (1) The regular account for { + Tier 1 PERS + }
members { - who established membership in the system before
January 1, 1996, as described in ORS 238.430 - } , and for
alternate payees of those members, shall be examined each year.
If the regular account is credited with earnings for the previous
year in an amount less than the earnings that would have been
credited pursuant to the assumed interest rate for that year
determined by the Public Employees Retirement Board, the amount
of the difference shall be credited to the regular account and
charged to a reserve account in the fund established for the
purpose. In years following the year for which a charge is made
to the reserve account, all earnings on the regular accounts of
{ + Tier 1 PERS + } members { - who established membership in
the system before January 1, 1996, as described in ORS
238.430 - } , and of alternate payees of those members, shall
first be applied to reduce or eliminate the amount of a deficit.
Only earnings on the regular accounts of { + Tier 1 PERS + }
members { - who established membership in the system before
January 1, 1996, as described in ORS 238.430 - } , and of
alternate payees of those members, may be used to reduce or
eliminate the amount of a deficit.
(2) Notwithstanding subsection (1) of this section and except
as provided in subsection (5) of this section, the board may not
credit any earnings to the regular accounts of { + Tier 1
PERS + } members
{ - who established membership in the system before January 1,
1996, as described in ORS 238.430 - } , or of alternate payees of
those members, in any year in which there is a deficit in the
reserve account established under subsection (1) of this section,
or credit any earnings to the regular accounts of those members,
or alternate payees { + of those members + }, that would result
in a deficit in that reserve account. In any year in which the
fund experiences a loss, the board shall charge the amount of the
loss attributable to the regular accounts of { + Tier 1 PERS + }
members { - who established membership in the system before
January 1, 1996, as described in ORS 238.430, - } against the
reserve account.
(3) The regular account for { + Tier 1 PERS + } members
{ - who established membership in the system before January 1,
1996, as described in ORS 238.430 - } , and for alternate payees
of those members, may not be credited with earnings in excess of
the assumed interest rate until:
(a) The reserve account established under subsection (1) of
this section is fully funded with amounts determined by the
board, after consultation with the actuary employed by the board,
to be necessary to ensure a zero balance in the account when all
{ + Tier 1 PERS + } members { - who established membership in
the system before January 1, 1996, as described in ORS
238.430, - } have retired; and
(b) The reserve account established under subsection (1) of
this section has been fully funded as described in paragraph (a)
of this subsection in each of the three immediately preceding
calendar years.
(4) The board may divide the reserve account established under
subsection (1) of this section into one or more subaccounts for
the purpose of implementing the provisions of this section.
{ - (5) Subsection (2) of this section does not apply to a
person who is a judge member of the system on June 30, 2003. - }
SECTION 13. ORS 238.258 is amended to read:
238.258. (1) Notwithstanding any other provision of this
chapter, the regular account balance of a member or alternate
payee described in subsection (3) of this section may not be less
than the amount provided for under subsection (2) of this section
for the purpose of computing retirement allowances, death
benefits and amounts to be paid to a withdrawing member under ORS
238.265 and for other computations under the provisions of this
chapter that are based on a member's or alternate payee's regular
account balance. If the regular account balance of a member or
alternate payee described in subsection (3) of this section is
less than the amount provided for under subsection (2) of this
section at the time of retirement or withdrawal of the account,
the Public Employees Retirement Board shall credit the account
with the difference and charge the amount so credited to the
reserve account established under ORS 238.255.
(2) The minimum regular account balance for a member or
alternate payee described in subsection (3) of this section is
the amount that the regular account of a member or alternate
payee would have contained if the regular account of the member
had been credited with earnings at the assumed interest rate in
every year in which the regular account of the member or
alternate payee was in existence.
(3) The provisions of this section apply only to:
(a) A { + Tier 1 PERS + } member { - who establishes
membership in the system before January 1, 1996, as described in
ORS 238.430, and - } who retires or withdraws the member account
of the member on or after April 1, 2004; and
(b) An alternate payee of a member described in paragraph (a)
of this subsection.
SECTION 14. 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.
(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
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 - } { + for benefits
under + } 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 15. ORS 238A.005, as amended by section 9, chapter 1,
Oregon Laws 2010, and section 1, chapter 82, Oregon Laws 2010, is
amended to read:
238A.005. 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 - } { + Public Employees Retirement System + }
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) '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.
(11) '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.
(12) 'Pension program' means the defined benefit pension
program { - of the Oregon Public Service Retirement Plan - }
established under ORS 238A.025.
(13) 'Police officer' means a police officer as described in
ORS 238.005.
(14) '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 - } { + Public Employees Retirement System + } pursuant to
ORS 238A.070 (2).
(15) 'Retired member' means a pension program member who is
receiving a pension as provided in ORS 238A.180 to 238A.195.
(16)(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, 2009.
(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, 2009.
(E) Retroactive payments described in section 7, chapter 1,
Oregon Laws 2010.
(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
institutions 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.
(17) 'System' means the Public Employees Retirement System.
SECTION 16. ORS 238A.025 is amended to read:
238A.025. (1) { - The Oregon Public Service Retirement Plan
is established. - } The purpose of { - the Oregon Public
Service Retirement Plan - } { + this chapter + } 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 - }
{ + benefits provided by this chapter consist + } 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, - } { + a Tier 3 PERS member + } is entitled to receive
only the benefits provided under { - the Oregon Public Service
Retirement Plan - } { + this chapter + } 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, - } { + A person who is a
Tier 1 PERS member or Tier 2 PERS member + } 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 - } { + this
chapter + } 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) - } { + (4) + } Except as provided in this chapter,
ORS chapter 238 does not apply to { - the Oregon Public Service
Retirement Plan - } { + Tier 3 PERS members + }.
{ - (6) The provisions of this section do not apply to a
person elected or appointed as a judge as defined in ORS
238.500. - }
SECTION 17. ORS 238A.030 is amended to read:
238A.030. 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 - } { + implementation of this chapter + }. 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.
SECTION 18. ORS 238A.050, as amended by section 5, chapter 1,
Oregon Laws 2010, is amended to read:
238A.050. { - (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) - } { + (1) + } Sections 3 and 7, chapter 1, Oregon
Laws 2010, and ORS 238.225, 238.229, 238.231, 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 - } { + Tier 3 PERS members + }.
{ - (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) - } { + (2) + } The { + Public Employees
Retirement + }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.
SECTION 19. ORS 238A.070 is amended to read:
238A.070. (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 - }
{ + this chapter + };
(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 - } { + this chapter + } 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.
SECTION 20. ORS 238A.245 is amended to read:
238A.245. (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
elect under ORS 237.650 to become an active member of the
{ - Oregon Public Service Retirement Plan - } { + Public
Employees Retirement System + } or a legislator member of the
state deferred compensation plan.
SECTION 21. ORS 238A.305 is amended to read:
238A.305. (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 - } { + Tier 1 PERS members and Tier 2 PERS
members + } 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.
SECTION 22. ORS 238A.340 is amended to read:
238A.340. (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 - } { + this chapter + }.
SECTION 23. ORS 238A.465 is amended to read:
238A.465. It is the intent of the Legislative Assembly that any
increase in benefits under { - the Oregon Public Service
Retirement Plan - } { + this chapter + } be provided through
changes in the individual account program and not through changes
in the pension program.
SECTION 24. ORS 238A.470 is amended to read:
238A.470. 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 - } { + Tier 3 PERS members + }, 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.
SECTION 25. ORS 238A.475 is amended to read:
238A.475. 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 - } { + this chapter + }.
SECTION 26. ORS 243.800 is amended to read:
243.800. (1) Notwithstanding any provision of ORS chapter 238
or 238A or ORS 243.910 to 243.945, the State Board of Higher
Education shall establish and administer an Optional Retirement
Plan for administrative and academic employees of the Oregon
University System who are eligible for membership in the Public
Employees Retirement System. The Optional Retirement Plan must be
a qualified plan under the Internal Revenue Code, capable of
accepting funds transferred under subsection (7) of this section
without the transfer being treated as a taxable event under the
Internal Revenue Code, and willing to accept those funds.
Retirement and death benefits shall be provided under the plan by
the purchase of annuity contracts, fixed or variable or a
combination thereof, or by contracts for investments in mutual
funds.
(2) The State Board of Higher Education shall select at least
two life insurance companies providing fixed and variable
annuities and at least two investment companies providing mutual
funds, but not more than five companies in total, for the purpose
of providing benefits under the Optional Retirement Plan. The
State Board of Higher Education shall establish selection
criteria for the purpose of this subsection.
(3) An administrative or academic employee may make an
irrevocable election to participate in the Optional Retirement
Plan within six months after being employed. An election under
this subsection is effective on the first day of the month
following six full months of employment.
(4) An administrative or academic employee who does not elect
to participate in the Optional Retirement Plan:
(a) Remains or becomes a member of the Public Employees
Retirement System in accordance with ORS chapters 238 and 238A;
or
(b) Continues to be assisted by the State Board of Higher
Education under ORS 243.920 if the employee is being so assisted.
(5) Except as provided in subsection (6) of this section,
employees who elect to participate in the Optional Retirement
Plan are ineligible for active membership in the Public Employees
Retirement System or for any assistance by the State Board of
Higher Education under ORS 243.920 as long as those employees are
employed in the Oregon University System and the plan is in
effect.
(6)(a) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is not vested shall be considered by the Public Employees
Retirement Board to be a terminated member under the provisions
of ORS 238.095 as of the effective date of the election, and the
amount credited to the member account of the member shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board in the manner provided by
subsection (7) of this section.
(b) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, who has creditable
service under ORS chapter 238 as defined by ORS 238.005 and who
is vested shall be considered to be an inactive member by the
Public Employees Retirement Board and shall retain all the
rights, privileges and options under ORS chapter 238 unless the
employee makes a written request to the Public Employees
Retirement Board for a transfer of the amounts credited to the
member account of the member to the Optional Retirement Plan. A
request for a transfer must be made at the time the member elects
to participate in the Optional Retirement Plan. Upon receiving
the request, the Public Employees Retirement Board shall transfer
all amounts credited to the member account of the member directly
to the Optional Retirement Plan, and shall terminate all rights,
privileges and options of the employee under ORS chapter 238.
(c) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is not a
vested member of the pension program { - of the Oregon Public
Service Retirement Plan as described in ORS 238A.115 - } { +
established under ORS chapter 238A + } on the date that the
election becomes effective, shall be considered to be a
terminated member of the pension program by the Public Employees
Retirement Board as of the effective date of the election.
(d) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the pension program { - of the Oregon Public Service
Retirement Plan as described in ORS 238A.115 - } { +
established under ORS chapter 238A + } on the date that the
election becomes effective, shall be considered an inactive
member of the pension program by the Public Employees Retirement
Board as of the effective date of the election. An employee who
is subject to the provisions of this paragraph retains all the
rights, privileges and options of an inactive member of the
pension program. If the actuarial equivalent of the employee's
benefit under the pension program at the time that the election
becomes effective is $5,000 or less, the employee may make a
written request to the Public Employees Retirement Board for a
transfer of the employee's interest under the pension program to
the Optional Retirement Plan. The request must be made at the
time the member elects to participate in the Optional Retirement
Plan. Upon receiving the request, the Public Employees Retirement
Board shall transfer the amount determined to be the actuarial
equivalent of the employee's benefit under the pension program
directly to the Optional Retirement Plan, and shall terminate the
membership of the employee in the pension program.
(e) An administrative or academic employee who elects to
participate in the Optional Retirement Plan, and who is a vested
member of the individual account program { - of the Oregon
Public Service Retirement Plan as described in ORS 238A.320 - }
{ + established under ORS chapter 238A + } on the date that the
election becomes effective, shall be considered an inactive
member of the individual account program by the Public Employees
Retirement Board as of the effective date of the election. An
employee who is subject to the provisions of this paragraph
retains all the rights, privileges and options of an inactive
member of the individual account program. An administrative or
academic employee who elects to participate in the Optional
Retirement Plan, and who is a member of the individual account
program { - of the Oregon Public Service Retirement Plan - }
{ + established under ORS chapter 238A + }, may make a written
request to the Public Employees Retirement Board that all 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, be transferred to the Optional Retirement
Plan. The request must be made at the time the member elects to
participate in the Optional Retirement Plan. Upon receiving the
request, the Public Employees Retirement Board shall transfer the
amounts directly to the Optional Retirement Plan, and shall
terminate the membership of the employee in the individual
account program upon making the transfer.
(f) Notwithstanding paragraphs (b), (d) and (e) of this
subsection, the Public Employees Retirement Board may not treat
any employee as an inactive member under the provisions of this
subsection for the purpose of receiving any benefit under ORS
chapter 238 or 238A that requires that the employee be 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 Public Employees
Retirement Fund as a qualified governmental retirement plan and
trust.
(7) Any amounts transferred from the Public Employees
Retirement Fund under subsection (6) of this section shall be
transferred directly to the Optional Retirement Plan by the
Public Employees Retirement Board and may not be made available
to the employee.
(8) An employee participating in the Optional Retirement Plan
shall contribute monthly an amount equal to the percentage of the
employee's salary that the employee would otherwise have
contributed as an employee contribution to the Public Employees
Retirement System if the employee had not elected to participate
in the Optional Retirement Plan.
(9) The State Board of Higher Education shall contribute
monthly to the Optional Retirement Plan the percentage of salary
of each employee participating in the plan equal to the
percentage of salary that would otherwise have been contributed
as an employer contribution on behalf of the employee to the
Public Employees Retirement System, before any offset under ORS
238.229 (2), if the employee had not elected to participate in
the Optional Retirement Plan.
(10) Both employee and employer contributions to an Optional
Retirement Plan shall be remitted directly to the companies that
have issued annuity contracts to the participating employees or
directly to the mutual funds.
(11) Benefits under the Optional Retirement Plan are payable to
employees who elect to participate in the plan and their
beneficiaries by the selected annuity provider or mutual fund in
accordance with the terms of the annuity contracts or the terms
of the contract with the mutual fund. Employees electing to
participate in the plan agree that benefits payable under the
plan are not obligations of the State of Oregon or of the Public
Employees Retirement System.
SECTION 27. ORS 341.551 is amended to read:
341.551. (1) Notwithstanding any provision of ORS chapter 238
or 238A, the Department of Community Colleges and Workforce
Development may establish and administer an optional retirement
plan for administrative employees of community college districts
who are eligible for membership in the Public Employees
Retirement System. Any community college district may participate
in the plan by giving written notice to the department.
(2) An administrative employee may make an election to
participate in the optional retirement plan if the community
college district that employs the employee is participating in
the plan. The election must be made in the following manner:
(a) An administrative employee who is an active member of the
Public Employees Retirement System may make an election to
participate in the plan within 180 days after the community
college district commences participation in the plan, effective
on the first day of the month following the election.
(b) An administrative employee who is hired after the community
college district commences participation in the plan may make an
election to participate in the plan within the first six months
of employment, effective on the first day of the month following
six full months of employment.
(3) An administrative employee who does not elect to
participate in the optional retirement plan remains or becomes a
member of the Public Employees Retirement System in accordance
with ORS chapters 238 and 238A.
(4) An administrative employee may elect to participate in the
optional retirement plan only if at the time the election becomes
effective the employee is not concurrently employed in a position
with any participating public employer other than the community
college district in a position that entitles the employee to
membership in the Public Employees Retirement System. Except as
provided in subsection (9) of this section, employees who elect
to participate in the optional retirement plan are ineligible for
active membership in the Public Employees Retirement System for
as long as those employees are employed by a community college
district that participates in the plan, whether by reason of
employment by the district or any other participating public
employer.
(5)(a) An administrative employee who elects to participate in
the optional retirement plan, who has creditable service under
ORS chapter 238 as defined by ORS 238.005 and who is not vested
shall be considered by the Public Employees Retirement Board to
be a terminated member under the provisions of ORS 238.095 as of
the effective date of the election, and the amount credited to
the member account of the member shall be transferred directly to
the optional retirement plan by the Public Employees Retirement
Board in the manner provided by subsection (6) of this section.
(b) An administrative employee who elects to participate in the
optional retirement plan, who has creditable service under ORS
chapter 238 as defined by ORS 238.005 and who is vested shall be
considered to be an inactive member by the Public Employees
Retirement Board and shall retain all the rights, privileges and
options under ORS chapter 238 unless the employee makes a written
request to the Public Employees Retirement Board for a transfer
of the amounts credited to the member account of the member to
the optional retirement plan. A request for a transfer must be
made at the time the member elects to participate in the optional
retirement plan. Upon receiving the request, the Public Employees
Retirement Board shall transfer all amounts credited to the
member account of the member directly to the optional retirement
plan and shall terminate all rights, privileges and options of
the employee under ORS chapter 238.
(c) An administrative employee who elects to participate in the
optional retirement plan and who is not a vested member of the
pension program { - of the Oregon Public Service Retirement
Plan as described in ORS 238A.115 - } { + established under ORS
chapter 238A + } on the date that the election becomes effective
shall be considered to be a terminated member of the pension
program by the Public Employees Retirement Board as of the
effective date of the election.
(d) An administrative employee who elects to participate in the
optional retirement plan and who is a vested member of the
pension program { - of the Oregon Public Service Retirement
Plan as described in ORS 238A.115 - } { + established under ORS
chapter 238A + } on the date that the election becomes effective
shall be considered an inactive member of the pension program by
the Public Employees Retirement Board as of the effective date of
the election. An employee who is subject to the provisions of
this paragraph retains all the rights, privileges and options of
an inactive member of the pension program. If the actuarial
equivalent of the employee's benefit under the pension program at
the time that the election becomes effective is $5,000 or less,
the employee may make a written request to the Public Employees
Retirement Board for a transfer of the employee's interest under
the pension program to the optional retirement plan. The request
must be made at the time the member elects to participate in the
optional retirement plan. Upon receiving the request, the Public
Employees Retirement Board shall transfer the amount determined
to be the actuarial equivalent of the employee's benefit under
the pension program directly to the optional retirement plan and
shall terminate the membership of the employee in the pension
program.
(e) An administrative employee who elects to participate in the
optional retirement plan and who is a vested member of the
individual account program { - of the Oregon Public Service
Retirement Plan as described in ORS 238A.320 - } { +
established under ORS chapter 238A + } on the date that the
election becomes effective shall be considered an inactive member
of the individual account program by the Public Employees
Retirement Board as of the effective date of the election. An
employee who is subject to the provisions of this paragraph
retains all the rights, privileges and options of an inactive
member of the individual account program. An administrative
employee who elects to participate in the optional retirement
plan and who is a member of the individual account program
{ - of the Oregon Public Service Retirement Plan - } { +
established under ORS chapter 238A + } may make a written request
to the Public Employees Retirement Board that all 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, be transferred to the optional retirement plan. The
request must be made at the time the member elects to participate
in the optional retirement plan. Upon receiving the request, the
Public Employees Retirement Board shall transfer the amounts
directly to the optional retirement plan and shall terminate the
membership of the employee in the individual account program.
(f) Notwithstanding paragraphs (b), (d) and (e) of this
subsection, the Public Employees Retirement Board shall not treat
any employee as an inactive member under the provisions of this
subsection for the purpose of receiving any benefit under ORS
chapter 238 or 238A that requires that the employee be 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 Public Employees Retirement System
and the Public Employees Retirement Fund as a qualified
governmental retirement plan and trust.
(6) Any amounts transferred from the Public Employees
Retirement Fund under subsection (5) of this section shall be
transferred directly to the optional retirement plan by the
Public Employees Retirement Board and shall not be made available
to the employee.
(7) An employee participating in the optional retirement plan
shall contribute monthly an amount equal to the percentage of the
employee's salary that the employee would otherwise have
contributed as an employee contribution to the Public Employees
Retirement System if the employee had not elected to participate
in the optional retirement plan.
(8) A participating community college district shall contribute
monthly to the optional retirement plan the percentage of salary
for each employee participating in the plan that is equal to the
percentage of salary that is required to be made as the employer
contribution under ORS 238A.220, less any contributions made by
reason of unfunded liabilities. The district may make
contributions under this subsection only during periods of time
in which the employee would be eligible for membership in the
Public Employees Retirement System if the employee had not
elected to participate in the optional retirement plan.
(9) An administrative employee who elects to participate in the
optional retirement plan may make an election to withdraw from
the plan. An employee may make an election under this subsection
only once. Upon withdrawing from the plan:
(a) All contributions made to the plan before the effective
date of the withdrawal remain credited to the employee;
(b) The employee becomes a member of the Public Employees
Retirement System under ORS chapter 238A if the member meets all
requirements for membership under ORS chapter 238A; and
(c) The employee is barred from ever again electing to
participate in the optional retirement plan.
(10) For the purposes of this section, 'administrative
employee' means a president, vice president or dean, or a person
holding a position that is the equivalent of a president, vice
president or dean.
SECTION 28. { + ORS 238.430 and 238.435 are repealed. + }
SECTION 29. { + The section captions used in this 2011 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2011 Act. + }
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