Two bills impacting PERS members and employers were passed in the Special Session and signed into law by Governor Kitzhaber on October 8, 2013.
Senate Bill 861 - COLA Changes and Supplemental Payments
Senate Bill 861 supersedes the 2014 cost-of-living adjustment (COLA) that was previously approved in Senate Bill 822 (2013). Senate Bill 822 capped the COLA payable on August 1, 2013, at 1.5 percent for all benefit recipients. Under SB 822, the COLA payable August 1, 2014, and beyond would have varied based on the amount of the yearly benefit.
Senate Bill 861 did not affect the August 1, 2013 COLA, but modified the yearly COLAs for all PERS benefit recipients. Effective with the August 1, 2014 benefit payment, a COLA is limited to 1.25 percent on the first $60,000 of a yearly benefit payment and 0.15 percent on amounts above $60,000.
Additionally, SB 861 provided a supplemental, one-time payment of 0.25 percent of their yearly benefit to all benefit recipients, not to exceed $150. Those who have a PERS benefit of less than $20,000 per year will receive a second supplemental, one-time payment of 0.25 percent of their yearly benefit. These supplemental payments will not be compounded into the member's yearly benefit and will be in effect for six years (first payable after July 1, 2014, and ending after July 1, 2019).
Supplemental payments will be paid from the PERS Contingency Reserve, and payments are not anticipated to have a material impact on PERS' unfunded actuarial liability or employer contribution rates.
| Yearly benefit | Senate Bill 822 COLA (no longer in effect after approval of SB 861) | Senate Bill 861
|
|---|
| COLA | First supplemental payment for all benefit recipients* | Second supplemental payment for benefit recipients whose yearly benefit is $20,000 or less* |
|---|
| <$20,000 | 2.00 percent | 0.25 percent | 0.25 percent | 0.25 percent |
|---|
| $20,000 - $40,000 | 1.50 percent | --- |
|---|
| $40,000 - $60,000 | 1.00 percent |
|---|
| >$60,000 | 0.25 percent | 0.15 percent | $150 |
|---|
* Ends in 2019.
Senate Bill 862 – Modifications to Specific PERS Statutory Provisions
Senate Bill 862 contains three major provisions. First, for the purpose of "final average salary" for OPSRP members, the measure excludes certain increases in salary during the last 36 months of employment that are made by an employer so an individual employee may pay for insurance coverage previously paid by the employer. Second, the measure allows for garnishment of PERS benefits for restitution or compensatory damages if the member has been convicted of a felony. Third, the measure prohibits most new legislators from becoming members in PERS but allows them to choose to contribute to the Oregon Savings Growth Plan (OSGP). Also, current legislators may opt out of PERS and elect to make contributions to OSGP prospectively.
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