Enacted 2007 PERS legislation

Introduction

In 2007, the Oregon State Legislature enacted 18 major bills that impact PERS:

HB 2007

Domestic Partnerships
Directs PERS to extend the same rights and benefits to registered domestic partners that are extended to married individuals unless the plan administrator reasonably concludes such extension would conflict with a condition of the plan's tax qualification or other favorable tax treatment of the plan.

Text of HB 2007

Signed by governor: May 9, 2007
Effective: January 1, 2008

Tier One/Tier Two information for registered domestic partners

OPSRP information for registered domestic partners

HB 2184

1039-Hour Exception for Department of Human Services Assistant/Deputy Director
Adds an exception to ORS 238.082 to allow a retired member employed as deputy director or assistant director of the Department of Human Services to exceed the 1,039-hour limitation if the governor approves the exception for the specific person in the position.

Text of HB 2184

Signed by governor: June 7, 2007
Effective: June 7, 2007

HB 2280

Equal-To-or-Better-Than
Removes the requirement that review of equal-to-or-better-than (ETOB) benefits be conducted every two years. Allows PERS to establish criteria by administrative rule to determine when an ETOB review is required. Provides for three-tiered standard of review for ETOB plans based on commensurate PERS programs. ETOB benefits for P & F who would have been Tier One had they entered PERS instead of the ETOB plan are compared to Tier One P & F benefits. Appropriate comparisons are done for ETOB members who would have been Tier Two or OPSRP. If the ETOB benefits do not satisfy the standards of review, the employer is required to comply by providing benefits that meet the standards. A non-compliant employer is subject to legal action by employees to enforce compliance. There is no provision for employees of a non-compliant employer to come into PERS.

Text of HB 2280

Signed by governor: June 26, 2007
Effective: January 1, 2008

HB 2281

Withdrawals
Requires a member who withdraws from any PERS program (PERS Chapter 238, OPSRP Pension Program, IAP) to withdraw from all programs under which the member is eligible to withdraw. Such withdrawal will include the member's police and fire (P & F) unit account if any. An independent withdrawal of the P & F unit account does not require withdrawal from the other PERS programs. Establishes that restoration of membership rights and creditable service by redeposit or purchase at retirement in the PERS Chapter 238 program does not restore any rights forfeited by withdrawal from the OPSRP Pension Program, IAP, or P & F unit account. Clarifies that PERS establishes an account for a member who elects to make P & F unit contributions. Clarifies withdrawal language for P & F unit accounts. Establishes that a member who withdraws his or her P & F unit account may not elect to purchase P & F units again.

Text of HB 2281

Signed by governor: April 17, 2007
Effective: January 1, 2008

HB 2282

Notice of Contest
Changes the statutory term "Notice of Contest" to "Notice of Dispute."

Text of HB 2282

Signed by governor: April 17, 2007
Effective: January 1, 2008

HB 2283

Oregon Investment Council
Removes requirement that the governor appoint one member of the PERS Board to serve on the Oregon Investment Council (OIC). Provides that a PERS Board member qualified by training and experience in the field of investment or finance may be appointed to the OIC. Clarifies that ORS 238.640 governs compensation and expenses for a PERS Board member appointed to the OIC.

Text of HB 2283

Signed by governor: June 26, 2007
Effective: June 26, 2007

HB 2285

Break-in-Service
Eliminates "Break-in-Service" statutory provisions retroactively. Applies to all service by members of the system, whether performed before, on, or after the effective date of the Act. Effectively treats "Break-in-Service" as if it never existed. Specifically:

Provides that a person who is a member of the PERS Chapter 238 Program on August 28, 2003 remains a member of the 238 program unless membership is terminated under ORS 238.095 (withdrawal or loss of membership). If PERS Chapter 238 Program membership is terminated on or after August 29, 2003, the person is eligible only for OPSRP membership for service after 238 membership is terminated. All exceptions to "Break-in-Service" are eliminated, including HB 2284.

Eliminates provision allowing a member of the OPSRP Pension who has "Break-in-Service" but is also eligible for PERS Chapter 238 Program benefits to use PERS Chapter 238 Program early retirement eligibility to establish OPSRP Pension earliest retirement age.

Eliminates provision directing Board to use ORS 238A.005 definition of salary to determine IAP contributions for service by a member after a "Break-in-Service."

Clarifies that a person who is a member of the Legislative Assembly on August 29, 2003, and is a member of the PERS Chapter 238 Program may elect to remain a member of the 238 program until the person resigns or otherwise leaves office.

Makes a citation correction in ORS 243.800 (9).

Eliminates reciprocal use of creditable service and retirement credit.

Eliminates provisions regarding a member who has a "Break-in-Service" and returns on or after August 29, 2003, and before January 1, 2004.

Directs PERS, as soon as possible after the effective date of the Act, to:

1. Recalculate the retirement benefit of any member who retired before the effective date of the Act if the benefit was affected by "Break-in-Service."

2. Adjust the service credit of any active or inactive member who was affected by "Break-in-Service."

3. Adjust IAP contributions and accounts of any active or inactive member who was affected by "Break-in-Service." Permits PERS to refund or require additional contributions to adjust account balances.

Accrual of OPSRP Retirement Credit and Part-Time "Gross Up" of Salary
Eliminates provisions in ORS 238A.140 regarding full-time equivalency (FTE), hours, proration, and accrual of retirement credit and instead provides for accrual of retirement credit in the same manner as in the PERS Chapter 238 Program. Eliminates requirement that salary of a part-time employee be "grossed up" to full-time salary for calculation of final average salary. Applies to all service by members of the system, whether performed before, on, or after the effective date of the Act. Effectively applies these provisions to the OPSRP Pension Program from its inception. Specifically provides that an active OPSRP Pension Program member 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 or major fraction of a month.
Provides that school employees are credited with six months of retirement credit if they perform service for the major fraction of each month of the school year that falls within the six months.

Retains crediting of retirement credit upon completion of waiting period, restriction of retirement credit accrual to maximum of 1.0 per year, and the definition of "school employee."

Eliminates requirement that a member must have 600 hours of service in a calendar year to accrue retirement credit.
Eliminates equivalency of 1.0 FTE to 1200 hours for academic employees of community colleges.

Text of HB 2285

Signed by governor: July 16, 2007
Effective: January 1, 2008

HB 2286

Deferred Compensation - Alternate Payee

Aligns provisions within to OSGP to current federal tax law. Specifically, the bill specifies that payments from the OSGP to an alternate payee may commence earlier than the participant would be eligible to commence payments. Clarifies tax reporting requirements for payments to alternate payees.

Text of HB 2286

Signed by governor: April 17, 2007
Effective: January 1, 2008

HB 2358

Deferred Compensation - Oregon State Bar
Allows Oregon State Bar employees to participate in the OSGP.

Text of HB 2358

Signed by governor: April 17, 2007
Effective: January 1, 2008

HB 2397

Rollovers
Allows the PERS Board to accept qualified rollover contributions from retired members for repayment of overpayments or erroneous payments. Requires rollovers received to be credited to amounts overpaid or erroneously paid. Directs the Board to adopt rules and procedures for rollover contributions in compliance with federal tax law and plan qualification.

Allows a beneficiary, including a non-spousal beneficiary, to roll over death benefit from the PERS Chapter 238 Program, OPSRP Pension Program, IAP, and OSGP. Establishes requirements for administration of such rollovers.

Allows a member who is a state employee at least 60 years of age and a participant in the state deferred compensation plan to transfer funds from OSGP to PERS to purchase creditable service (waiting time and refunded time only) provided he or she will have at least 35 or more years of creditable service upon application of the purchase. Provides that the member must give notice to the Board requesting such transfer no later than 60 days after January 1, 2008. The transfer amount may not exceed the amount needed to purchase by lump-sum payment all creditable service for which the member is eligible, must be used only for the purpose of the purchase, and must not be made available to the member. The transfer must be processed upon receipt of notice from the member. Upon receipt the transfer must be immediately applied to the purchase. If the amount transferred is insufficient to purchase all creditable service (refunded time only), the member may later purchase the additional creditable service as provided by ORS 238.115.

Text of HB 2397

Signed by governor: June 26, 2007
Effective: January 1, 2008

HB 2401

9-1-1 Operators
Allows a PERS Chapter 238 Program (Tier One/Tier Two) member who is a telecommunicator (9-1-1 operator) with 25 years or more of creditable service as a telecommunicator to retire with an actuarially reduced benefit. Allows an OPSRP Pension Program member who is a telecommunicator with 25 years or more of retirement credit as a telecommunicator to retire with an actuarially reduced benefit. Provides that a member who retires under this eligibility standard may not receive a cost-of-living adjustment (COLA) until age 55. Establishes that a PERS Chapter 238 Program member who retires under this standard is not eligible for certain exceptions to work after retirement restrictions in ORS 238.078, .082, and .088.

Text of HB 2401

Signed by governor: June 13, 2007
Effective: January 1, 2008

HB 2585

Reemployed Retirees - Community Colleges
Creates an exception to the 1,039-hour limitation for a retired member who is employed as a teacher or administrator by a community college district located in a county of 35,000 inhabitants or less. Clarifies exception for a retired member employed as a teacher or administrator by an education service district (ESD) by eliminating the requirements that the ESD be located in a county of 35,000 inhabitants or less, but by adding that the primary duties of the retired member must be performed in a county of 35,000 inhabitants or less.

Exempts a retired member employed as a speech language pathologist or speech language pathologist assistant by a school district or education service district from the 1,039-hour limitation. This provision sunsets January 2, 2016.

Also provides that these provisions and the current exception for employment as a teacher or administrator by a school district located in a county of 35,000 inhabitants or less are available to members who took early retirement if the date of employment in the position is at least six months later than the member's retirement date.

Text of HB 2585

Signed by governor: July 16, 2007
Effective: July 16, 2007

HB 2619

PERS Omnibus Bill

Allows a member who is a police officer to make a full cost purchase of up to four years of creditable service for service as a public safety officer in another state. Establishes procedures and standards for purchase and defines public safety officer.

Clarifies that hours worked by a retired member employed by the Legislative Assembly or the Oregon State Police for service during the legislative session are not counted toward the 1,039-hour limitation. Removes requirement related to retired members age 65 or older.

Provides for net earnings and losses to be credited to member accounts in loss-of-membership status during subsequent periods of active membership. Loss of membership and a return to active membership may have occurred at any time before, on, or after the effective date of the Act, but crediting is only permitted for periods of active membership served on or after the effective date of the Act.

Text of HB 2619

Signed by governor: July 16, 2007
Effective: July 16, 2007

HB 2679

Individual Account Program
Allows payout of IAP account(s) over the life expectancy of the member. Adds this option to the current 5-, 10-, 15-, and 20-year payout periods.

Text of HB 2679

Signed by governor: June 13, 2007
Effective: January 1, 2008

HB 5040

PERS Budget

Text of HB 5040

Signed by governor: May 30, 2007
Effective: July 1, 2007

SB 4

Reemployed Retirees - Nursing Workforce Shortage
Creates exception to the 1,039-hour limitation for a retired member who is a nurse and is hired as a nurse or for the purpose of teaching nursing during a nursing workforce shortage declared by the Governor or the Legislative Assembly.

Text of SB 4

Signed by governor: July 17, 2007
Effective: July 1, 2007

SB 342

Reemployed Retirees - Nursing Instructors
Exempts a retired member who is a registered nurse and is hired by a public employer as a nursing instructor from the 1,039-hour limitation. Also, exempts a retired member hired by the Department of Public Safety Standards and Training to provide training under ORS 181.610 - 181.712. These exemptions are not available to Tier One members who retire before age 58 or Tier Two members who retire before age 62 unless the member qualified for retirement with 30 years of service. Sunsets January 2, 2016.

Text of SB 342

Signed by governor: June 20, 2007
Effective: January 1, 2008

SB 872

Judges
Provides that a judge member may, before or after retirement, designate a portion of the life pension payable to a surviving spouse to be paid to a former spouse. If the judge member is married at the time of the election, spousal consent is required. Such an election does not require recalculation or change the amount of any additional pension under ORS 238.565(4). The former spouse shall receive only the designated portion of the pension for his or her lifetime regardless of whether there is a surviving spouse at the time of the judge member's death. A surviving spouse shall receive only that portion of the surviving spouse pension not designated for payment to the former spouse. Any portion of the surviving spouse pension payable to the surviving spouse is payable only until the death of the former spouse.

Text of SB 872

Signed by governor: June 20, 2007
Effective: June 20, 2007