US Laws, Codes, Statutes & Cases

Chapter 238 — Public Employees Retirement System

 

2007 EDITION

 

PUBLIC EMPLOYEES RETIREMENT SYSTEM

 

PUBLIC OFFICERS AND EMPLOYEES

 

GENERAL PROVISIONS

 

238.005     Definitions

 

MEMBERSHIP

 

(Membership Generally)

 

238.015     Membership generally

 

238.025     Effect of service interruptions on membership

 

238.035     Membership of part but not all employees of a public employer

 

238.045     Membership of certain circuit court judges

 

238.055     Membership of judges previously receiving retirement pay from Judges’ Retirement Fund

 

238.062     Membership of deputy district attorneys

 

238.068     Membership of legislators

 

238.072     Membership of certain legislative employees

 

238.074     Membership of community college employees

 

(Membership of Retired Employees)

 

238.078     Reemployment of retired members

 

238.082     Active membership of reemployed retired members

 

238.088     Appointment or election of retired member to public office

 

238.092     Option of legislators to receive certain benefits; employment of persons as legislative employees or state police officer beyond 65 years of age

 

(Termination of Membership)

 

238.095     Termination of membership

 

RETIREMENT CREDIT

 

(Restoration of Forfeited Credit)

 

238.105     Restoration of credit forfeited by reason of termination of membership

 

238.115     Alternate method of restoring credit forfeited by reason of termination of membership

 

(Credit for Probationary Periods)

 

238.125     Credit for probationary period of employment

 

238.135     Credit for probationary periods in seasonal positions

 

(Credit for Periods of Service With Other Employers)

 

238.145     Credit for service as police officer or firefighter with nonparticipating employer

 

238.148     Credit for service as public safety officer in another state

 

238.156     Contributions, benefits and retirement credit for periods of service in uniformed services or Armed Forces; rules

 

238.157     Alternative provision for retirement credit for periods of service with Armed Forces

 

238.160     Retirement credit for service while on loan to federal government

 

238.162     Retirement credit for service as teacher in public schools of another state

 

(Miscellaneous)

 

238.165     Credit for certain periods of employment by Legislative Assembly

 

238.175     Retirement credit for periods of disability

 

CONTRIBUTIONS

 

(Employee Contributions)

 

238.200     Employee contributions generally

 

238.205     Payment of employee contribution by employer

 

238.210     Payment of certain circuit court judge employee contributions by employer

 

238.215     Contributions by certain higher education employees

 

(Employee Rollover Contributions)

 

238.220     Employee rollover contributions; rules

 

(Employer Contributions)

 

238.225     Employer contributions

 

238.227     Pooling of employers for purpose of computing employer contributions

 

238.229     Effect of lump sum payment on contributions of pooled employer; rules

 

238.231     Unfunded liability or surplus after employee transfer or employer merger, consolidation or split

 

MEMBER ACCOUNTS

 

(Generally)

 

238.250     Regular accounts

 

238.255     Credits to regular accounts when earnings less than assumed interest rate

 

238.258     Minimum regular account balance

 

238.260     Variable Annuity Account; rules

 

(Withdrawal or Transfer of Member Account)

 

238.265     Withdrawal of member account

 

238.270     Transfer of member account to other public employee retirement system

 

ELIGIBILITY FOR RETIREMENT

 

238.280     Eligibility for retirement

 

BENEFITS

 

(Service Retirement Allowance)

 

238.300     Service retirement allowance

 

238.305     Optional service retirement allowance calculations

 

238.310     Minimum service retirement allowance

 

238.315     Lump sum payment in lieu of small allowance

 

(Disability Retirement Allowance)

 

238.320     Disability retirement allowance

 

238.325     Optional disability retirement allowance calculations

 

238.330     Minimum disability retirement allowance

 

238.335     Medical examination for disability retirement allowance; rules

 

238.340     Return to work

 

238.345     Optional service-connected disability retirement allowance for police officers and firefighters

 

(Use of Sick Leave to Increase Retirement Allowance)

 

238.350     Use of unused sick leave to increase retirement allowance; rules

 

238.355     Computation of unused sick leave for community college employees

 

(Cost-of-Living Adjustments)

 

238.360     Cost-of-living adjustments

 

(Benefit Increases in Compensation of Claims Based on Taxation of Benefits)

 

238.375     Increased benefits payable in compensation for certain damages attributable to taxation of benefits

 

238.380     Calculation of increased benefit payable under ORS 238.375

 

238.385     Retirement allowance increase based on years of service

 

238.387     Retirement allowance increases for members who retired before January 1, 1991

 

(Death Benefits)

 

238.390     Death benefit

 

238.395     Additional death benefit

 

238.400     Payment upon death of retired member who dies before making election of retirement benefits

 

238.405     Death benefit payable to survivors of certain police officers or firefighters

 

238.407     Distribution of death benefit as rollover distribution

 

(Insurance Premium Payments)

 

238.410     Board may contract for insurance for retirees; rules

 

238.415     Payment toward cost of pre-Medicare insurance; rules

 

238.420     Payment toward cost of Medicare supplemental insurance

 

(Benefits Payable to Vested Inactive Member)

 

238.425     Benefits payable to vested inactive member

 

(Benefits Payable to Persons Establishing Membership on or After January 1, 1996)

 

238.430     Limitation on benefits payable to persons establishing membership on or after January 1, 1996

 

238.435     Provisions applicable to persons establishing membership on or after January 1, 1996

 

(Optional Purchase of Benefit Units by Police and Firefighters)

 

238.440     Optional purchase of benefit units by police and firefighters

 

(Prior Service Credit)

 

238.442     Prior service credit

 

(Miscellaneous)

 

238.445     Benefits exempt from execution, bankruptcy and certain taxes; exceptions

 

238.450     Computation of retirement allowance or benefit; notice of dispute

 

238.455     Estimated benefit payments

 

238.458     Unclaimed benefits

 

238.460     Waiver of retirement allowance

 

238.462     Spousal consent required for certain optional forms of retirement allowance

 

238.465     Benefits payable to others under certain judgments; rules

 

238.470     Interest on payments from fund

 

238.475     Effect of transfer of employee to another participating employer

 

238.480     Effect of change to calendar year on contributions and credit of members

 

PUBLIC EMPLOYEE BENEFIT EQUALIZATION FUND

 

238.485     Fund established

 

238.488     Payment of benefits; employer contributions

 

238.490     Administrative expenses

 

238.492     Rules for administration of fund

 

JUDGE MEMBERS

 

238.500     Definitions for ORS 238.500 to 238.585

 

238.505     Judges as PERS members

 

238.515     Contributions

 

238.525     Compulsory retirement age

 

238.535     Service retirement allowance

 

238.538     Health benefit plans for certain retired judge members

 

238.545     Withdrawal of member account; retirement allowance of inactive judge member

 

238.555     Disability retirement allowance

 

238.565     Beneficiary of judge; spouse’s pension

 

238.575     Cost-of-living adjustments; ad hoc increase

 

238.580     Application of PERS laws to judges

 

238.585     Use of creditable service by person who serves as both member and judge member; restoration of forfeited rights upon becoming judge member

 

ADMINISTRATION

 

(Public Employees Retirement System)

 

238.600     System established; legislative intent

 

238.601     Legislative findings and intent; administration of system

 

238.605     Actuarial report on system

 

238.607     Actuarial equivalency factor tables

 

238.608     Separate actuarial equivalency factor tables for certain police officers and firefighters

 

238.610     Administrative expenses of system

 

238.615     Revolving fund for payment of administrative expenses

 

238.618     Exclusion of employer or employee from system to maintain tax qualification

 

(Public Employees Retirement Board)

 

238.630     Board generally; rules

 

238.635     Board consideration of system goals and objectives

 

238.640     Qualifications of board members

 

238.645     Director and staff

 

238.646     Authority of Director of Public Employees Retirement System to require fingerprints

 

238.650     Rules of board; written plan document

 

238.655     Procedure for board hearings

 

238.657     Board counsel

 

(Public Employees Retirement Fund)

 

238.660     Fund generally; board review of legislative proposals

 

238.661     Moneys in fund appropriated to board

 

238.665     Contributions and interest not included in board’s budget

 

238.670     Reserve accounts in fund

 

238.672     Crediting of earnings to employer upon death or retirement of member

 

238.675     Transfer of unclaimed death benefit or account balance to other account or reserve

 

(Integration of Other Retirement Systems)

 

238.680     Integration of other retirement systems

 

238.685     Method of payment of unfunded obligation under integration contract

 

238.690     Integration of retirement plan of mass transit district

 

(Bonding of Pension Liabilities)

 

238.692     Definitions for ORS 238.692 to 238.698

 

238.694     Certain public bodies authorized to issue bonds to finance pension liabilities; revenue bonds

 

238.695     Intergovernmental agreements for collective issuance, administration or payment of bonds

 

238.696     Debt service trust fund

 

238.698     Funds diversion agreement

 

(Enforcement)

 

238.700     Enforcement of requirements of ORS chapters 238 and 238A

 

238.705     State departments to remit contributions and furnish reports

 

238.710     Mandamus against defaulting employer; appeal

 

238.715     Recovery of overpayments; rules

 

238.720     Rollover contributions; application against payments improperly made to retirees; rules

 

(Short Title)

 

238.750     Short title

 

GENERAL PROVISIONS

 

      238.005 Definitions. 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, 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, 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 made to an employee to correct a clerical error or pursuant to an award by a court or by order of or a conciliation agreement with an administration agency charged with enforcing federal or state law protecting the employee’s rights to employment or wages, which shall be allocated to and deemed paid in the periods in which the work was done or in which it would have been done; 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 Department of Higher Education 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. [Formerly 237.003; 1997 c.249 §64; 1997 c.853 §36; 1999 c.317 §24; 1999 c.407 §3; 1999 c.971 §1; 2001 c.295 §9; 2001 c.874 §1; 2001 c.945 §29a; 2001 c.968 §1; 2003 c.14 §112; 2003 c.67 §16; 2003 c.625 §20; 2005 c.152 §5; 2005 c.332 §1]

 

      Note: Section 3, chapter 332, Oregon Laws 2005, provides:

      Sec. 3. The amendments to ORS 238.005 and 238A.005 by sections 1 and 2 of this 2005 Act apply only to members of the Public Employees Retirement System who die on or after the effective date of this 2005 Act [June 29, 2005]. [2005 c.332 §3]

 

      Note: Section 2, chapter 968, Oregon Laws 2001, provides:

      Sec. 2. The amendments to ORS 238.005 by section 1 of this 2001 Act apply to all service by an adult parole and probation officer that is performed on and after the date that the adult parole and probation officer is classified as a police officer for the purposes of ORS chapter 238 by the county governing body, whether that classification occurs before, on or after the effective date of this 2001 Act [January 1, 2002]. [2001 c.968 §2]

 

      Note: Section 2, chapter 971, Oregon Laws 1999, provides:

      Sec. 2. (1) The amendments to ORS 238.005 by section 1 of this 1999 Act apply only to persons specified in ORS 238.005 (16)(b) who are employed by the State Forestry Department on the effective date of this 1999 Act [October 23, 1999] or who become employed by the State Forestry Department after the effective date of this 1999 Act.

      (2) Except as provided in subsection (3) of this section, the amendments to ORS 238.005 by section 1 of this 1999 Act apply only to service rendered to a participating public employer on or after the effective date of this 1999 Act.

      (3) Any employee who is employed by the State Forestry Department in a position described in ORS 238.005 (16)(b) on the effective date of this 1999 Act may acquire creditable service in the Public Employees Retirement System as a firefighter for service performed by the employee in a position described in ORS 238.005 (16)(b) before the effective date of this 1999 Act by paying to the Public Employees Retirement Board an amount determined by the board to represent the full cost to the system of providing credit as a firefighter to the member. The member may acquire credit as a firefighter for all or part of the service in a position described in ORS 238.005 (16)(b) performed before the effective date of this 1999 Act. All amounts required for acquisition of credit as a firefighter under this subsection must be paid at least 90 days before a member’s effective date of retirement. The board may by rule allow members to pay amounts required under this subsection in installments in lieu of requiring a single lump sum payment. [1999 c.971 §2]

 

      238.010 [Repealed by 1981 c.126 §6]

 

MEMBERSHIP

 

(Membership Generally)

 

      238.015 Membership generally. (1) No person may become a member of the system unless that person is in the service of a public employer and has completed six months’ service uninterrupted by more than 30 consecutive working days during the six months’ period. Every employee of a participating employer shall become a member of the system at the beginning of the first full pay period of the employee following the six months’ period. Contributions for new members shall first be made for those wages that are attributable to services performed by the employee during the first full pay period following the six months’ period, without regard to when those wages are considered earned for other purposes under this chapter. All public employers participating in the Public Employees Retirement System established by chapter 401, Oregon Laws 1945, as amended, at the time of repeal of that chapter, and all school districts of the state, shall participate in, and their employees shall be members of, the system, except as otherwise specifically provided by law.

      (2) Any active member of the Public Employees Retirement System who, through the annexation of a political subdivision employing the member or by change of employment, becomes the employee of another political subdivision which is participating in the Public Employees Retirement System and has also a separate retirement system for its employees, shall remain an active member of the Public Employees Retirement System unless, within 60 days after the effective date of the annexation or change of employment or April 8, 1953, the member shall by written notice to the Public Employees Retirement Board and to the administrative body of the new public employer elect to relinquish membership in the Public Employees Retirement System and become a member of the separate retirement system of the employer, if eligible for membership in that retirement system, and the member shall be so carried by the new employer. Immediately upon such annexation of any political subdivision or such change of employment, the new public employer shall inform such employee in writing of the right of the employee to exercise an election as in this section provided.

      (3) A political subdivision (other than a school district) not participating in the retirement system established by chapter 401, Oregon Laws 1945, as amended, which employs one or more employees, each of whose position requires 600 hours of service per year, or an agency created by two or more political subdivisions to provide themselves governmental services, which employs one or more employees, each of whose position requires 600 hours of service per year, may, through its governing body, notify the board in writing, that it elects to include its employees in the system hereby established. Such public employer may request the board to make a study and estimate of the cost of including it and its eligible employees, other than volunteer firefighters, in the system, which the board thereupon shall cause to be made and the cost of which the employer shall bear. Upon completion of the study and estimate the employer may apply for admission to the system, whereupon it shall begin to participate therein and its eligible employees other than volunteer firefighters shall become members of the system. If the employer is an agency created by two or more political subdivisions to provide themselves governmental services and ceases thereafter to transmit to the board contributions for any of its eligible employees, the benefits based upon employer contributions to which such employees would otherwise be entitled shall be reduced accordingly.

      (4) No inmate of a state institution or an alien on a training or educational visa working for any participating employer, even though the inmate or alien received compensation from a participating employer, shall be eligible to become a member of the system. No person employed by a participating employer and defined by such employer as a student employee is eligible to become a member of the system for such student employment.

      (5) A person holding an elective office or an appointive office with a fixed term or an office as head of a department to which the person is appointed by the Governor may become a member of the system by giving the board written notice of desire to do so within 30 days after taking the office or, in the event that the officer is not eligible to become a member of the system at the time of taking the office, within 30 days after becoming so eligible. Membership so established shall not be discontinued during the appointive or elective term of the officer except upon separation of the officer from service.

      (6) A public employer employing volunteer firefighters may apply to the board at any time for them to become members of the system. Upon receiving the application the board shall fix a wage at which, for purposes of this chapter only, they shall be considered to be employed and which shall be the basis for computing the amounts of the contributions, if any, which they pay into, and of the benefits which they and their beneficiaries receive from, the fund; and if the wage so fixed is satisfactory to the employer, shall include the firefighters in the system.

      (7)(a) In the event that an employee enters the service of a public employer which is participating in or later begins to participate in the system and in the event that at the time of entering that service or at the time that the employer begins to participate in the system the employee has commenced to purchase and is continuing to purchase a retirement annuity, if the employer deems the annuity adequate for the purposes of this chapter, it may enter into an agreement with the employee and the board pursuant to which the employee may be exempted from contributing to the Public Employees Retirement Fund, and, if no public funds are being used to purchase the annuity or a corresponding pension, the employer, in lieu of the contributions which it otherwise would make to the fund on account of the employee, may make contributions toward the cost of purchasing the annuity. Such employee otherwise shall be subject to the provisions of this chapter, except that neither the employee nor any person claiming under the employee shall receive any payments from the retirement fund as service or disability allowance.

      (b) An employee who enters into an agreement under paragraph (a) of this subsection may elect at any time thereafter to start to participate in the system by giving written notice of desire to participate to the board and to the employer. The employee shall receive no retirement credit for the period during which the employee was exempted from contributing to the fund under the agreement, but the employee shall be considered to have completed the six months’ service required for membership in the system. When the employee starts to participate in the system the employer shall start to contribute to the fund on account of the employee in the same manner as the employer contributes on account of other employees who are active members of the system and the employer shall stop making contributions toward the cost of purchasing the retirement annuity.

      (8)(a) All new appointees in the Federal Cooperative Extension Service or in any other service in which participation in the Federal Civil Service retirement program is mandatory, who receive a federal appointment on or after July 1, 1955, may participate in the Public Employees Retirement System only by giving written notice of their election to so participate to the Public Employees Retirement Board within six months after the effective date of their appointment.

      (b) All persons employed by the Federal Cooperative Extension Service or by any other service in which participation in the Federal Civil Service retirement program is mandatory, who are under federal appointment as of July 1, 1955, and who are members of the state retirement system, shall continue such membership unless, prior to February 1, 1956, they give written notice to the Public Employees Retirement Board of their desire to cancel their membership.

      (c) Any person who is an active member of the Public Employees Retirement System, who, on or after July 1, 1955, is employed by the Federal Cooperative Extension Service or by any other service in which participation in the Federal Civil Service retirement program is mandatory, and who is given a federal appointment, shall continue such membership in the Public Employees Retirement System unless, within six months after the effective date of the appointment, the person gives written notice to the Public Employees Retirement Board of the desire to cancel membership.

      (d) A cancellation of membership under paragraph (b) or (c) of this subsection terminates membership in the Public Employees Retirement System and cancels the right to any benefits from, or claims against, that system. Such cancellation prevents the withdrawing member from claiming thereafter any retirement credit for any period of employment before the cancellation. Upon receipt of a notice of cancellation, the Public Employees Retirement Board shall refund the member account of the withdrawing member, regardless of the age of the withdrawing member.

      (9) Employees, including managers, of foreign trade offices of the Economic and Community Development Department who live and perform services in foreign countries under the provisions of ORS 285A.075 (1)(g) shall not be members of the system. However, any person who is an active member of the system immediately before becoming an employee of a foreign trade office shall continue to be a member of the system during the period of time the person serves as an employee of the foreign trade office.

      (10) An employee who is participating in an alternative retirement program established pursuant to ORS 353.250 or an optional retirement plan established pursuant to ORS 341.551 may not be an active member of the Public Employees Retirement System. [Formerly 237.011; 1997 c.249 §65; 1999 c.130 §4; 1999 c.509 §23; 2001 c.192 §1; 2001 c.883 §41; 2001 c.945 §30; 2003 c.67 §17; 2005 c.152 §6; 2005 c.728 §3; 2007 c.804 §76]

 

      238.020 [Amended by 1965 c.607 §1; repealed by 1981 c.126 §6]

 

      238.025 Effect of service interruptions on membership. Within the limits hereinafter specified regarding absence from service, no leave of absence, sabbatical leave, illness, accident or emergency preventing or interrupting service by an employee to an employer participating in the system shall be deemed to break the continuity of the employee’s membership in the system. [Formerly 237.091]

 

      238.030 [Amended by 1953 c.426 §4; 1955 c.49 §1; repealed by 1981 c.126 §6]

 

      238.035 Membership of part but not all employees of a public employer. (1) A public employer that is not participating in the system may, by application to the board, designate any class of employees of the public employer to become members of the system at the time of entering the system.

      (2) The board shall consider an application received under this section to be an application to become a participating employer under this chapter, but only to the extent of providing membership for the class of employees designated in the application.

      (3) The board, upon such terms as are set forth in a contract between the board and the employer, shall allow every employee in the designated class to become members of the Public Employees Retirement System in accordance with this chapter. A contract entered into under this section shall require the public employer to agree to eventually contract to provide membership to all of the employees who do not become members of the system at the time that the employer becomes a participating employer.

      (4) All employees who have completed the period of service with the public employer that is required under ORS 238.015 shall become members of the system on a date specified by the board. All other employees in the designated class shall become members upon completion of the required period of service.

      (5) The contract provided for in subsection (3) of this section may be in addition to or in lieu of a contract of integration under ORS 238.680.

      (6) An employer entering into a contract under subsection (3) of this section may at any time thereafter enter into a contract with the board to provide membership to all or part of the employees who do not become members of the system at the time that the employer becomes a participating employer. Except as may be provided for prior service credit, or under a contract of integration under ORS 238.680, employees shall receive no retirement credit for the period during which the employee was exempted from contributing to the fund under the agreement, but the employee shall be considered to have completed the six months’ service required for membership in the system if the employee has served with the employer for at least six months. When the employee starts to participate in the system the employer shall start to contribute to the fund on account of the employee in the same manner as the employer contributes on account of other employees who are members of the system. [Formerly 237.031; 2001 c.945 §31]

 

      238.040 [Amended by 1963 c.227 §1; 1965 c.607 §2; repealed by 1981 c.126 §6]

 

      238.043 [1965 c.605 §2; repealed by 1981 c.126 §6]

 

      238.045 Membership of certain circuit court judges. Each circuit court judge who was a district court judge before January 15, 1998, and who is a member of the Public Employees Retirement System shall be governed by the provisions of this chapter applicable to other persons holding elective offices who may become members of the system. [Formerly 237.013]

 

      238.047 [1965 c.605 §5; repealed by 1981 c.126 §6]

 

      238.050 [Amended by 1965 c.607 §3; repealed by 1981 c.126 §6]

 

      238.055 Membership of judges previously receiving retirement pay from Judges’ Retirement Fund. (1) On August 1, 1991, all judges receiving retirement pay from the Judges’ Retirement Fund and all surviving spouses of judges receiving a pension from the Judges’ Retirement Fund shall be retired members of the Public Employees Retirement System, except that:

      (a) The amount of retirement pay or pension payable to the judge or surviving spouse of a judge and the terms and conditions of eligibility to receive retirement pay or a pension shall be as established by ORS 1.314 to 1.380 (1989 Edition); and

      (b) The right of any person to receive any benefit as a result of the death of a judge by reason of the provisions of ORS 1.314 to 1.380 (1989 Edition) shall solely be as provided by ORS 1.314 to 1.380 (1989 Edition).

      (2) After August 1, 1991, any judge who would have become eligible to receive retirement pay from the Judges’ Retirement Fund shall, upon retirement, be a retired member of the Public Employees Retirement System, except that:

      (a) The amount of retirement pay or pension payable to the judge or the surviving spouse of the judge and the terms and conditions of eligibility to receive retirement pay or a pension shall be as established by ORS 1.314 to 1.380 (1989 Edition); and

      (b) The right of any person to receive any benefit as a result of the death of the judge by reason of the provisions of ORS 1.314 to 1.380 (1989 Edition) shall solely be as provided by ORS 1.314 to 1.380 (1989 Edition).

      (3) On August 1, 1991, the Judges’ Retirement Fund shall cease to exist as a separate fund and the assets and earnings of the Judges’ Retirement Fund shall be paid into the employer reserves for judge members of the Public Employees Retirement Fund. The Public Employees Retirement Board shall continue to keep a separate regular account for any person who may become eligible to receive a retirement benefit under subsection (2) of this section and for any person whose child or children may become entitled to a benefit under ORS 1.346 (1989 Edition).

      (4) Upon deposit of the assets and earnings of the Judge’s Retirement Fund as provided under subsection (3) of this section, the Public Employees Retirement Board shall cause to be deposited from the employer reserves for judge members to the retired reserves of the Public Employees Retirement Fund, the amount actuarially determined to be necessary to fund the retirement pay and pensions of those judges and surviving spouses of judges who were receiving retirement pay or a pension from the Judges’ Retirement Fund on August 1, 1991.

      (5) The amount of retirement pay or pension payable to a judge or spouse of a retired judge who previously received retirement pay or a pension from the Judges’ Retirement Fund, or who would have received retirement pay or a pension from the Judges’ Retirement Fund, shall not be recalculated or affected in any way based on the provisions of ORS chapter 238, nor shall the eligibility of a judge or surviving spouse of a judge to receive retirement pay or a pension be affected by ORS chapter 238.

      (6) The provisions of ORS 238.390, 238.395, 238.400 and 238.500 to 238.585 do not apply to a judge or surviving spouse of a judge who received retirement pay or a pension from the Judges’ Retirement Fund prior to August 1, 1991, or to a judge who retires as a member of the Public Employees Retirement System under subsection (2) of this section.

      (7) Any person who served as a judge before August 1, 1991, who had amounts deducted from the person’s salary while serving as a judge for the purpose of making contributions to the Judges’ Retirement Fund, and who is not eligible to become a retired member of the Public Employees Retirement System under this section, may withdraw the amounts deducted from the person’s salary, with all earnings on those deductions, at any time after May 24, 2003. Withdrawal under this subsection cancels all rights the person may have in the Judges’ Retirement Fund or the Public Employees Retirement System, and the rights that any spouse or beneficiary of the person may have in the Judges’ Retirement Fund or the Public Employees Retirement System, by reason of service by the person as a judge for which contributions were made to the Judges’ Retirement Fund. [Formerly 237.039; 2001 c.945 §32; 2003 c.90 §1]

 

      238.060 [Amended by 1953 c.426 §4; repealed by 1965 c.607 §5 (238.061 enacted in lieu of 238.060)]

 

      238.061 [1965 c.607 §6 (enacted in lieu of 238.060); repealed by 1981 c.126 §6]

 

      238.062 Membership of deputy district attorneys. Any deputy district attorney receiving any compensation from the state or from a county participating in the Public Employees Retirement System shall establish membership in the system after service for six months without having been absent 30 working days. Any contributions required to be paid by any such deputy district attorney shall be based on salary paid by the state, by a county participating in the system or by both. The application of this chapter to any such deputy district attorney made prior to the effective date of this section by the Public Employees Retirement Board hereby is confirmed and ratified. [Formerly 237.025; 2003 c.67 §18]

 

      238.065 [1965 c.605 §4; repealed by 1981 c.126 §6]

 

      238.068 Membership of legislators. (1) Notwithstanding ORS 238.015, any person who is a member of the Legislative Assembly at any time on or after September 13, 1975, and before January 1, 1988, regardless of whether the person has reached the age of 65 years, may become a member of the Public Employees Retirement System by giving the Public Employees Retirement Board, before January 1, 1990, written notice of desire to do so. The written notice shall take effect on the first day of the month following the date of receipt thereof by the board or upon the person’s completion of six months’ service, whichever occurs last.

      (2) Notwithstanding any other provision of this chapter, any person who is a member of the Legislative Assembly and a member of the system, and any person who is not a member of the Legislative Assembly but was a member thereof before January 11, 1987, upon payment to the board before July 1, 1991, of the total amount of the employee contributions the person would have made to the Public Employees Retirement Fund for all periods of service as a member of the Legislative Assembly before the date of that payment for which the person was not a member of the system, is entitled to retirement credit for those periods served as a member of the Legislative Assembly, including those periods after reaching the age of 65 years, that the person would have been entitled to had the person been a member of the system for those periods. Employee contributions to be paid by a person under this subsection may be paid at the option of the person in a lump sum or in installments. If the person is a member of the Legislative Assembly, upon request by the person in writing to the state official authorized to disburse funds in payment of the salary of the person as a member of the Legislative Assembly, the state official shall deduct monthly from that salary the amount of money indicated in the request for payment of employment contributions under this subsection and shall pay amounts so deducted to the board.

      (3) Notwithstanding any other provision of this chapter, any person who is a member of the Legislative Assembly and a member of the system, and any person who is not a member of the Legislative Assembly but was a member thereof before January 9, 1989, who previously had been employed by an employer participating in the system, but had separated from all service with that employer entitling the employee to membership in the system and withdrawn the amount credited to the member account of the member, may have all of the rights in the system which were forfeited by the withdrawal restored by repaying to the board by July 1, 1991, the full amount so withdrawn together with the interest that would have accumulated on the sum had the amount not been withdrawn. [Formerly 237.029; 2001 c.945 §33]

 

      238.070 [Repealed by 1965 c.607 §9]

 

      238.072 Membership of certain legislative employees. An employee shall not be considered to have ceased to be a member of the system under ORS 238.095 (2) by reason of any year in which the employee is employed by the Legislative Assembly or either house thereof, or by a committee of the Legislative Assembly or either house thereof, for periods aggregating eight months or more during the year, whether or not contributions are made to the fund by or on behalf of the employee for those periods of employment, unless the employee withdraws the amount credited to the member account of the member. [Formerly 237.019; 2001 c.945 §34]

 

      238.074 Membership of community college employees. An academic employee of a community college who is employed 0.375 full-time equivalent (FTE) on a 12-month basis or 0.50 FTE on a nine-month basis shall be deemed to be employed for 600 hours or more in a year for purposes of this chapter. The combination of duties that comprises a 1.0 FTE in any given discipline or academic activity shall be determined by the governing body of the institution in which the academic employee is employed. Nothing in this section is intended to affect the rights of academic employees at institutions of higher learning or academic employees employed in public secondary or elementary schools. [Formerly 237.017 (3)]

 

      238.075 [1965 c.607 §8; repealed by 1981 c.126 §6]

 

(Membership of Retired Employees)

 

      238.078 Reemployment of retired members. (1)(a) A retired member who has been retired for more than six consecutive calendar months may be reemployed by a participating public employer in the manner provided by this subsection.

      (b) Any person reemployed as provided in this subsection shall resume making contributions to the retirement fund, and the employer shall make contributions on behalf of the person as provided in ORS 238.225. Payments of retirement allowance received by such person during separation from the service shall not be repaid into the retirement fund after the person reenters public employment except as provided in paragraph (c) of this subsection; but the amount of such payment shall be deducted from such employee’s reserve in the retirement fund and the remainder shall be credited pro rata to the funds from which it was derived.

      (c) Upon reentering public employment as provided in this subsection, the former retirement of such person and any election of option for payment of retirement benefits theretofore made by the person shall be canceled; and thereafter upon retiring such person may elect any option for payment of retirement benefits authorized by this chapter, except that a person who elected to receive lump sum payment of benefits pursuant to ORS 238.305 (2) or (3) at the time of former retirement may not elect any other option at the time of subsequent retirement unless an amount equal to the lump sum and the interest that would have accumulated on the sum has been repaid by the employee to the fund. Upon such subsequent retirement any prior service pension due the employee shall be derived from the unused portion of the prior service credit reserve and shall be calculated on the basis of then attained age.

      (2) A retired member who has been retired for less than six consecutive calendar months may be reemployed by a participating public employer only upon immediate repayment in a lump sum by the member of the amount of retirement benefits drawn. The member account of the member shall be reestablished just as it was at the time of earlier retirement after the lump sum repayment is made.

      (3) If a member of the system who retired before August 21, 1981, is reemployed, as provided in subsection (1) or (2) of this section, beginning on or after August 21, 1981, the service retirement allowance received upon subsequent retirement by the member shall be:

      (a) For service before August 21, 1981, an allowance including a current service pension computed on the basis of ORS 237.147 (2) (1979 Replacement Part).

      (b) For service on or after August 21, 1981, an allowance including a current service pension computed on the basis of ORS 238.300 (2).

      (4) A person may be reemployed by a public employer that is not participating in the system, or may be employed by a participating public employer in a position that is in a class of employees that was not designated by the public employer under ORS 238.035 as a class of employees that become members of the system, without affecting the person’s status as a retired member or the person’s continued receipt of retirement benefits.

      (5) Subsection (4) of this section does not apply to any member who retires under the provisions of ORS 238.280 (1), (2) or (3). [Formerly 237.125; 2001 c.945 §10; 2003 c.625 §33a; 2005 c.808 §39; 2007 c.404 §3]

 

      238.080 [Repealed by 1981 c.126 §6]

 

      238.082 Active membership of reemployed retired members. (1) Subject to the limitations in subsection (2) of this section, any public employer may employ any person receiving a service retirement allowance if the administrative head of such employer is satisfied that such employment is in the public interest.

      (2) The period or periods of employment by one or more public employers of any person receiving a service retirement allowance may not total 1,040 hours or more in any calendar year; but if the person is receiving old-age, survivors or disability insurance benefits under the federal Social Security Act, the person may be employed for the number of hours for which the salary equals the maximum allowed for receipt of the full amount of those benefits to which the person is entitled.

      (3) The limitations on employment imposed by subsection (2) of this section do not apply to a retired member who is employed as a teacher or as an administrator, as those terms are defined in ORS 342.120, if the retired member is employed by a school district or community college district located within a county with a population of not more than 35,000 inhabitants according to the latest federal decennial census, or is employed by an education service district and the retired member’s primary work duties are performed in a county with a population of not more than 35,000 inhabitants according to the latest federal decennial census. A retired member who is employed under this subsection as a teacher, as defined in ORS 342.120, by the same public employer that employed the member at the time of retirement remains in the same collective bargaining unit that included the member before retirement.

      (4) The limitations on employment imposed by subsection (2) of this section do not apply to a retired member who is employed:

      (a) By the sheriff of a county with a population of fewer than 75,000 inhabitants, according to the latest federal decennial census;

      (b) By the municipal police department of a city with a population of fewer than 15,000 inhabitants, according to the latest federal decennial census;

      (c) By the state or a county for work in a correctional institution located in a county with a population of fewer than 75,000 inhabitants, according to the latest federal decennial census;

      (d) By the Black Butte Ranch Rural Fire Protection District, the Black Butte Ranch Service District or the Sunriver Service District;

      (e) By the Oregon State Police for work in a county with a population of fewer than 75,000 inhabitants, according to the latest federal decennial census; or

      (f) As a deputy director or assistant director of the Department of Human Services, if the Governor approves the exemption for the person from the limitations on employment imposed in subsection (2) of this section.

      (5) The limitations on employment imposed by subsection (2) of this section do not apply to a retired member who is employed to temporarily replace an employee who serves in the National Guard or in a reserve component of the Armed Forces of the United States and who is called to federal active duty.

      (6) The limitations on employment imposed by subsection (2) of this section do not apply to a retired member who is employed by a road assessment district organized under ORS 371.405 to 371.535.

      (7) The limitations on employment imposed by subsection (2) of this section do not apply to a retired member who is a nurse and is employed by a public employer as a nurse or for the purpose of teaching nursing during the period in which a nursing workforce shortage declared by the Legislative Assembly or the Governor is in effect.

      (8)(a) Except as provided in paragraph (b) of this subsection, subsections (3) to (7) of this section do not apply to any member who retires under the provisions of ORS 238.280 (1), (2) or (3).

      (b) Subsection (3) of this section applies to a person who retires under the provisions of ORS 238.280 (1) or (3) as long as the person’s date of retirement is more than six months before the date the person is employed under subsection (3) of this section.

      (9) Employment under this section does not affect the status of a person as a retired member of the system and a recipient of retirement benefits under this chapter. [Formerly 237.143; 1997 c.178 §1; 2001 c.874 §2; 2003 c.625 §34; 2005 c.808 §40; 2007 c.307 §1; 2007 c.404 §4; 2007 c.774 §1; 2007 c.789 §4]

 

      Note: Sections 2 and 3, chapter 499, Oregon Laws 2007, provide:

      Sec. 2. (1) The limitations on employment imposed by ORS 238.082 (2) do not apply to a retired member who is a registered nurse and who is employed by a public employer as a nursing instructor.

      (2) The limitations on employment imposed by ORS 238.082 (2) do not apply to a retired member who is employed by the Department of Public Safety Standards and Training for the purpose of providing training under ORS 181.610 to 181.712.

      (3) This section does not apply to any member who retires under the provisions of ORS 238.280 (1) or (3).

      (4) Employment under this section does not affect the status of a person as a retired member of the Public Employees Retirement System and a recipient of retirement benefits under this chapter [ORS chapter 238]. [2007 c.499 §2]

 

      Sec. 3. Section 2 of this 2007 Act is repealed January 2, 2016. [2007 c.499 §3]

 

      Note: Sections 3 and 4, chapter 774, Oregon Laws 2007, provide:

      Sec. 3. (1) The limitations on employment imposed by ORS 238.082 (2) do not apply to a retired member who is employed by a school district or education service district to provide services as a speech-language pathologist or speech-language pathologist assistant.

      (2) This section does not apply to any member who retires under the provisions of ORS 238.280 (1) or (3) unless the person’s date of retirement is more than six months before the date the person is employed under this section.

      (3) Employment under this section does not affect the status of a person as a retired member of the Public Employees Retirement System and a recipient of retirement benefits under this chapter [ORS chapter 238]. [2007 c.774 §3]

 

      Sec. 4. Section 3 of this 2007 Act is repealed January 2, 2016. [2007 c.774 §4]

 

      238.085 [1965 c.605 §3; repealed by 1981 c.126 §6]

 

      238.088 Appointment or election of retired member to public office. (1) Except as provided in subsection (2) of this section, a person who is elected to a full-time salaried office of the state or one of the participating political subdivisions thereof, or who is appointed to a full-time salaried office having a term fixed by statute or charter, whether or not the person has been retired, does not forfeit any rights accrued or accruing to the person under this chapter. However, for the period that such person holds such office the person is not entitled to any pension or annuity provided by this chapter. Upon ceasing to hold such office, benefits shall be computed or recomputed by the Public Employees Retirement Board on the basis of age then attained.

      (2) If a person is elected or appointed to the office of sheriff or county judge or commissioner in a county with a population of fewer than 75,000 inhabitants, according to the latest federal decennial census, and the person does not elect to become an active member of the system under ORS 238.015 (5), the person shall continue to be a retired member and to receive retirement benefits for as long as the person holds the office.

      (3) Subsection (2) of this section does not apply to any member who retires under the provisions of ORS 238.280 (1), (2) or (3). [Formerly 237.133; 2003 c.625 §35a; 2005 c.152 §7; 2005 c.808 §41; 2007 c.404 §5]

 

      238.090 [Amended by 1953 c.426 §4; 1955 c.66 §1; 1963 c.227 §6; repealed by 1981 c.126 §6]

 

      238.092 Option of legislators to receive certain benefits; employment of persons as legislative employees or state police officer beyond 65 years of age. (1) Notwithstanding any other provision of this chapter:

      (a) A retired member of the system who has retired as other than a member of the Legislative Assembly and who thereafter becomes a member of the Legislative Assembly and elects to become an active member of the system as a member of the Legislative Assembly may also elect, by giving the board written notice of desire to do so, to receive the pension and annuity provided by this chapter for service as other than a member of the Legislative Assembly, and be an active member of the system as a member of the Legislative Assembly for the period the member holds office as a member of the Legislative Assembly. The notice provided for in this paragraph shall be given within 30 days after the retired member takes office as a member of the Legislative Assembly.

      (b) A member of the Legislative Assembly who is a member of the system as a member of the Legislative Assembly and who becomes eligible to retire by reason of service as other than a member of the Legislative Assembly, without regard to when that service was performed, may elect, by giving the board written notice of desire to do so, to retire and receive the pension and annuity provided by this chapter for service as other than a member of the Legislative Assembly, and to continue, for the period the member holds office as a member of the Legislative Assembly, as an active member of the system as a member of the Legislative Assembly.

      (c) Upon receipt of the notice provided for in paragraphs (a) and (b) of this subsection, the board shall determine that portion of the accumulated contributions, if any, of the member and interest thereon attributable to service as other than a member of the Legislative Assembly, which shall be used in determining the amount of the annuity the member shall receive for that service. The portion of the accumulated contributions, if any, of the member and interest thereon attributable to service as a member of the Legislative Assembly shall remain in the member account of the member and, together with any subsequent contributions and interest thereon, be used in determining the amount of the additional annuity the member shall receive for that service upon ceasing to hold office as a member of the Legislative Assembly. If the member does not have a member account, the board shall determine the member’s retirement allowance for nonlegislative service based on the number of years of nonlegislative service, and shall determine any additional benefit to be received after the member ceases to hold office as a member of the Legislative Assembly based on the number of years of service in the Legislative Assembly.

      (2) If a retired member of the system is employed by the Legislative Assembly, or by the Oregon State Police, for the purpose of service during a regular or special session of the Legislative Assembly, the hours worked during the session shall not be counted for the purpose of the limitations on employment imposed by ORS 238.082 (2). [Formerly 237.145; 2001 c.945 §35; 2003 c.67 §19; 2007 c.776 §4]

 

(Termination of Membership)

 

      238.095 Termination of membership. (1) An employee shall cease to be a member of the Public Employees Retirement System if the employee withdraws the member account, if any, of the member in the manner provided by ORS 238.265.

      (2) Except as provided in subsection (3) of this section, an inactive member ceases to be a member of the system if the member is not vested and is inactive for a period of five consecutive years.

      (3) A school district employee does not cease to be a member of the system under subsection (2) of this section if:

      (a) After completing a school year, the member is inactive for the next following five school years; and

      (b) The member either is reemployed by a school district in a qualifying position at the beginning of the sixth school year, or reaches earliest service retirement age before the beginning of the sixth school year.

      (4) Interest shall not accrue on the amount in the member account of the former member from the date that membership is terminated under subsection (2) of this section. Upon request by the former member, the Public Employees Retirement Board shall pay the amount in a member account to a former member upon the termination of the membership of the former member under subsection (2) of this section if the former member is separated from all service 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. The board may deduct, from the amount paid to a former member under this subsection, all reasonable costs incurred by the system in locating the member.

      (5) If the membership of a person in the system is terminated under subsection (2) of this section, and the person subsequently becomes an active member of the system, any amounts that were not paid to the person under subsection (4) of this section shall be credited with net earnings and losses. Crediting under this subsection commences upon the person becoming an active member of the system and continues as long as the person remains an active member. [Formerly 237.109; 1999 c.317 §7; 2001 c.945 §36; 2003 c.67 §20; 2003 c.105 §1; 2005 c.152 §4; 2007 c.776 §5]

 

      Note: Section 6, chapter 776, Oregon Laws 2007, provides:

      Sec. 6. (1) Except as provided in subsection (2) of this section, the amendments to ORS 238.095 by section 5 of this 2007 Act apply to all persons who resume active membership in the Public Employees Retirement System, whether that resumption occurs before, on or after the effective date of this 2007 Act [July 16, 2007].

      (2) Crediting under ORS 238.095 (5) shall be made by the Public Employees Retirement Board only for periods of active membership served on or after the effective date of this 2007 Act. [2007 c.776 §6]

 

      238.100 [Repealed by 1965 c.607 §9]

 

RETIREMENT CREDIT

 

(Restoration of Forfeited Credit)

 

      238.105 Restoration of credit forfeited by reason of termination of membership. (1) Whenever, within five years after the employee is separated from all service entitling the employee to membership in the system, an employee who has withdrawn the amount credited to the member account of the member reenters the service of an employer participating in the system, the employee’s rights in the system that were forfeited by the withdrawal shall be restored upon repaying to the board within one year after reentering the service of the employer, the full amount so withdrawn together with the interest that would have been accumulated on the sum had the amount not been withdrawn.

      (2) Restoration of rights under this section does not affect any forfeiture of rights of a person by reason of:

      (a) Withdrawal of an account established under ORS 238.440;

      (b) Withdrawal from the pension program under ORS 238A.120; or

      (c) Withdrawal of individual accounts pursuant to ORS 238A.375. [Formerly 237.111 (3); 2001 c.945 §37; 2007 c.52 §4]

 

      238.110 [1963 c.227 §2; 1965 c.607 §4; repealed by 1981 c.126 §6]

 

      238.115 Alternate method of restoring credit forfeited by reason of termination of membership. (1)(a) A member of the system who, after separation from all service entitling the employee to membership in the system and withdrawal of the amount credited to the member account of the member, reenters the service of an employer participating in the system and serves as an active member of the system for 10 years after that reentry, and who has not otherwise obtained restoration of creditable service forfeited by the withdrawal, shall obtain restoration of one full month of creditable service forfeited by the withdrawal for each three full months of service as an active member after that reentry if the member, within 90 days before the effective date of retirement of the member:

      (A) Applies in writing to the board for restoration of creditable service; and

      (B) Pays to the board in a lump sum for credit to the member account of the member the amount withdrawn and interest on the amount withdrawn compounded annually for each year or portion of a year after the date of the withdrawal and before the effective date of retirement of the member. The interest shall be computed at the annual rate of 7.5 percent.

      (b) If a member who obtains restoration of creditable service as provided in this subsection does not obtain restoration of all creditable service forfeited by the withdrawal pursuant to service after reentry, the payment under paragraph (a) of this subsection shall be reduced proportionately to reflect the percentage of creditable service restored.

      (c) A member who obtains restoration of creditable service as provided in this subsection is not entitled to elect to receive the service retirement benefit described in ORS 238.305 (2) or (3).

      (2) A member who forfeited creditable service rendered to a public employer before March 27, 1953, because under ORS 237.976 (2) the employee withdrew contributions of the employee to the Public Employees Retirement System established by chapter 401, Oregon Laws 1945, and who did not obtain restoration of creditable service so forfeited as provided in chapter 857, Oregon Laws 1977, shall, upon retirement, receive restoration of creditable service so forfeited, if the member, before the effective date of retirement of the member:

      (a) Applies in writing to the board for the restoration of the creditable service; and

      (b) Pays to the board in a lump sum for credit to the member account of the member an amount determined by the board to be equal to the full amount of contributions so withdrawn and the interest that would have accumulated to the regular account of the member had those contributions not been withdrawn.

      (3)(a) A member of the Public Employees Retirement System who was a member of an association established pursuant to ORS chapter 239 (1997 Edition), but separated from all service entitling the employee to membership in the system of the association and withdrew the amount credited to the member account of the employee in the retirement fund of the association, and who, after that separation, entered the service of an employer in the field of education participating in the Public Employees Retirement System and served as an active member of that system for 10 years after that entry, and who has not otherwise obtained restoration of all creditable service forfeited by the withdrawal, shall obtain creditable service as a member of the Public Employees Retirement System equal to all creditable service forfeited by the withdrawal if the member within 90 days before the effective date of retirement of the member:

      (A) Applies in writing to the Public Employees Retirement Board for that creditable service; and

      (B) Pays to the board in a lump sum for credit to the member account of the member the amount withdrawn and interest on the amount withdrawn compounded annually for each year or portion of a year after the date of the withdrawal and before the effective date of retirement or effective date of application of the member. The interest shall be computed at the rate actually credited to regular accounts for that period.

      (b) This subsection provides a method of obtaining creditable service for forfeited creditable service described in this subsection that is in lieu of any application of subsection (1) of this section for that purpose.

      (4) Restoration of creditable service under this section does not affect any forfeiture of rights of a person by reason of:

      (a) Withdrawal of an account established under ORS 238.440;

      (b) Withdrawal from the pension program under ORS 238A.120; or

      (c) Withdrawal of individual accounts pursuant to ORS 238A.375. [Formerly 237.108; 1999 c.130 §5; 2001 c.945 §§11,38; 2007 c.52 §5]

 

      Note: Section 10, chapter 628, Oregon Laws 2007, provides:

      Sec. 10. (1) A member of the system described in subsection (5) of this section who participates in the state deferred compensation plan under ORS 243.401 to 243.507 may give written notice to the Public Employees Retirement Board requesting that payment of all or part of the deferred amount be made to the board for the purpose of acquiring creditable service under ORS 238.115 and 238.125. Written notice under this section must be given no later than 60 days after the effective date of this 2007 Act [January 1, 2008]. Upon receiving the notice, the board shall immediately take any action necessary to effectuate the transfer of the requested amount. The board may not make the amount available to the member, and shall use the amount only for the purposes described in this section. The amount transferred under this section may not exceed the amount needed to:

      (a) Make the lump sum payment described in ORS 238.115 (1)(a)(B) that is required to restore forfeited creditable service for which the member is eligible at the time of the transfer; and

      (b) Make the lump sum payment described in ORS 238.125 necessary to acquire retirement credit under ORS 238.125.

      (2) Notwithstanding ORS 238.220, moneys transferred under this section may be used to restore forfeited creditable service under ORS 238.115 (1) in the manner provided by this section. Notwithstanding ORS 238.115 (1)(a), the amount transferred under this section must be applied to the restoration of forfeited creditable service under ORS 238.115 (1) immediately after the transfer is made.

      (3) If a member does not obtain restoration of all forfeited creditable service by reason of the payment under subsection (2) of this section, the member may obtain restoration of any remaining forfeited creditable service by making the application required by ORS 238.115 (1)(a)(A), and the lump sum payment required by ORS 238.115 (1)(a)(B), within 90 days before the effective date of retirement of the member.

      (4) Notwithstanding ORS 238.220, moneys transferred under this section may be used to acquire retirement credit under ORS 238.125 in the manner provided by this section. Notwithstanding ORS 238.125, the amount transferred under this section must be applied to acquisition of retirement credit under ORS 238.125 immediately after the transfer is made.

      (5) A member may give written notice under subsection (1) of this section only if:

      (a) The member is 60 years of age or older; and

      (b) The member will have 35 years or more of creditable service after restoration of forfeited creditable service under ORS 238.115 (1), and acquisition of retirement credit under ORS 238.125, by reason of the transfer and application of amounts under this section. [2007 c.628 §10]

 

      238.120 [1963 c.227 §3; repealed by 1981 c.126 §6]

 

(Credit for Probationary Periods)

 

      238.125 Credit for probationary period of employment. A member of the system who has a combined total of 10 years or more of creditable service in the system and prior service credit at the time of retirement, and who was required to complete one or more periods of six months or less in the service of an employer participating in the system before becoming a member of the system, shall receive retirement credit for those periods of six months or less if the member, within 90 days before the effective date of retirement of the member, applies in writing to the board for that retirement credit and pays to the board in a lump sum an amount determined by the board to be equal to:

      (1) The total amount of employee contributions to the fund by or on behalf of the employee that would have been required for the six months’ period if the employee had been a member of the system during that period, which amount shall be credited to the regular account of the member; and

      (2) The total amount of employer contributions to the fund the employer of the employee would have been required to make in respect to the employee if the employee had been a member of the system during the six months’ period, which amount shall be credited to the reserve for pension accounts in the fund. [Formerly 237.117; 2001 c.945 §39]

 

      Note: See note under 238.115.

 

      238.130 [1963 c.227 §4; 1967 c.335 §24; repealed by 1981 c.126 §6]

 

      238.135 Credit for probationary periods in seasonal positions. (1) A member of the system who has 10 years or more of creditable service in the system at the time of retirement, and who served for less than six months working full-time in a seasonal position with a public employer participating in the system before becoming a member of the system, shall receive retirement credit for those periods of less than six months if the member, within 90 days before the effective date of retirement of the member, applies in writing to the board for that retirement credit and pays to the board in a lump sum an amount determined by the board to be equal to:

      (a) The total amount of employee contributions to the fund by or on behalf of the employee that would have been required for the six months’ period if the employee had been a member of the system during that period, plus interest at the rate of eight percent per annum from the date the contributions would have been made, which amount shall be credited to the regular account of the member; and

      (b) The total amount of employer contributions to the fund the employer of the employee would have been required to make in respect to the employee if the employee had been a member of the system during the six months’ period, plus interest at the rate of eight percent per annum from the date the contributions would have been made, which amount shall be credited to the reserve for pension accounts in the fund.

      (2) As used in this section, “seasonal position” means an apprenticeship, internship or entry level role in the employ of a participating public employer that is served by a person before being employed in a technical or professional position with that public employer.

      (3) No retirement credit shall be allowed under this section for any period of employment for which retirement credit is acquired under ORS 238.125. [Formerly 237.119; 2001 c.945 §40]

 

      238.140 [1963 c.227 §5; repealed by 1981 c.126 §6]

 

(Credit for Periods of Service With Other Employers)

 

      238.145 Credit for service as police officer or firefighter with nonparticipating employer. (1) A member of the system employed as a police officer or firefighter shall be entitled to receive retirement credit as provided in subsection (3) of this section if:

      (a) The member was employed by a public employer as a police officer or firefighter prior to becoming a member of the system;

      (b) The public employer that had previously employed the member was not a participant in the system at the time the member was in the service of that public employer; and

      (c) The public employer that had previously employed the member was located in this state.

      (2) In addition to the requirements of subsection (1) of this section, if the member first becomes a member of the system on or after January 1, 2000, as described in subsection (5) of this section, the member must have been a member of the system for at least 60 calendar months at the time the purchase is made.

      (3) Except as provided in subsection (4) of this section, a member of the system employed as a police officer or firefighter who meets the requirements of this section shall be entitled to receive retirement credit for the period of employment with a previous public employer as described in subsection (1) of this section up to a maximum of 10 years’ retirement credit if the member:

      (a) Applies in writing to the Public Employees Retirement Board for such retirement credit; and

      (b) Pays to the board, in a lump sum, an amount representing the contributions the member and the member’s employer would have made for the years for which the member seeks retirement credit calculated as though the member had received a salary for each of those years equal to the salary received by the member in the first full calendar year of employment as a police officer or firefighter within the system. In addition, the member shall pay the interest that would have accrued had the contributions been paid in the years for which the member seeks retirement credit, compounded annually. The interest shall be computed at the annual rate of eight percent. Payment of the lump sum shall be made on or before the effective date of retirement for the member. The amounts representing the contributions the member would have made and the interest on those amounts shall be credited to the regular account of the member. The amounts representing the contributions the employer would have made and the interest on those amounts shall be credits to the account of the member’s current participating employer.

      (4) If a person first becomes a member of the system on or after January 1, 2000, as described in subsection (5) of this section, the person may not acquire more than five years of credit under this section in combination with any credit acquired under ORS 526.052 for periods of service with another employer that entitle the employee to retirement credit under a retirement plan offered by the other employer. If a person subject to limitation imposed by this subsection also is eligible for credit under ORS 526.052, the total years of credit that may be acquired under this subsection and ORS 526.052 may not exceed five years.

      (5) A person becomes a member of the system before January 1, 2000, for the purposes of this section if:

      (a) The person is a member of the system on January 1, 2000; or

      (b) The person was a member of the system before January 1, 2000, ceased to be a member of the system under the provisions of ORS 238.095, 238.265 or 238.545 before January 1, 2000, but restores part or all of the forfeited creditable service from before January 1, 2000, under the provisions of ORS 238.105 or 238.115 after January 1, 2000. [Formerly 237.099; 1999 c.317 §12; 2001 c.945 §41]

 

      238.148 Credit for service as public safety officer in another state. (1) A member of the Public Employees Retirement System who is a police officer is entitled to receive retirement credit as provided in subsection (2) of this section if:

      (a) The member was employed as a public safety officer by another state, or political subdivision of another state, before being employed in a position that entitled the member to credit in the system; and

      (b) The member makes the payment required by subsection (2) of this section within the time specified by that subsection.

      (2) Except as provided in subsection (3) of this section, a member of the system employed as a police officer who meets the requirements of subsection (1) of this section is entitled to receive retirement credit for the period of the member’s service with another state, or political subdivision of another state, not to exceed a maximum of four years, if the member within 90 days of the member’s effective date of retirement:

      (a) Applies in writing to the Public Employees Retirement Board for such retirement credit;

      (b) Provides written verification to the board from the other state, or political subdivision of the other state, that employed the member, verifying the period of time that the member served as a public safety officer in the other state; and

      (c) Pays to the board, in a lump sum, for each year of retirement credit applied for under this section, an amount determined by the board to represent the full cost to the system of providing the retirement credit to the member, including all administrative costs incurred by the system in processing the application for acquisition of the retirement credit.

      (3) A member may not receive retirement credit under the provisions of this section for any period of service with another state, or political subdivision of another state, if the member is entitled to a pension or retirement allowance by reason of that service under a public plan or system offered by the other state or by a political subdivision of the other state.

      (4) For the purposes of this section, “public safety officer” means a person who serves in a position with another state, or political subdivision of another state, that is the other state’s equivalent of a position described in ORS 238.005 (16). [2007 c.776 §2]

 

      Note: 238.148 was added to and made a part of ORS chapter 238 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

 

      238.150 [Formerly 237.085; repealed by 2001 c.945 §73]

 

      238.155 [Formerly 237.093; repealed by 1997 c.175 §1 (238.156 enacted in lieu of 238.155)]

 

      238.156 Contributions, benefits and retirement credit for periods of service in uniformed services or Armed Forces; rules. (1) Notwithstanding any other provision of this chapter, but subject to subsection (4) of this section, an employee who leaves a qualifying position for the purpose of performing service in the uniformed services is entitled to receive contributions, benefits and service credit for the period under rules adopted by the Public Employees Retirement Board pursuant to subsection (2) of this section.

      (2) The board shall adopt rules establishing contributions, benefits and service credit for any period of service in the uniformed services by an employee described in subsection (1) of this section. For the purpose of adopting rules under this subsection, the board shall consider and take into account all federal law relating to contributions, benefits and service credit for any period of service in the uniformed services. Contributions, benefits and service credit under rules adopted by the board pursuant to this subsection may not exceed contributions, benefits and service credit required under federal law for periods of service in the uniformed services.

      (3) Subject to subsection (4) of this section, an employee who leaves a qualifying position for the purpose of entering or reentering active service in the Armed Forces shall acquire retirement credit for the period during which the employee served in the Armed Forces if:

      (a) The employee returns to the service of the employer who employed the employee immediately before commencing service in the Armed Forces in a qualifying position;

      (b) The employee returns to that employment within one year after being otherwise than dishonorably discharged from the Armed Forces and within five years after the date that the employee entered or reentered active service in the Armed Forces; and

      (c) After returning to employment and before retirement, the employee pays to the Public Employees Retirement Board in a lump sum six percent of the salary that would have been paid to the member during the period of military service in the Armed Forces based on the employee’s salary rate at the time the employee entered or reentered the Armed Forces, as though the employee had remained in the employment of the employer. Any lump sum contribution made under this paragraph shall be added to the employee’s regular account and in all respects shall be considered as though made by payroll deduction.

      (4) An employee may not receive benefits under both subsections (1) and (3) of this section for the same period of service in the Armed Forces or uniformed services. If an employee is entitled to benefits under both subsections (1) and (3) of this section by the terms of those provisions, the employee shall receive benefits under the subsection that provides the greater benefit.

      (5) For the purposes of this section, “Armed Forces” means the Army, Navy, Air Force, Marine Corps and Coast Guard. [1997 c.175 §2 (enacted in lieu of 238.155); 2001 c.945 §42; 2003 c.625 §21; 2003 c.733 §51a; 2005 c.152 §8]

 

      238.157 Alternative provision for retirement credit for periods of service with Armed Forces. (1) Any person who entered or reentered active service in the Armed Forces of the United States after January 1, 1950, for other than active duty for training, or who was in active service in the Armed Forces of the United States on January 1, 1950, for other than active duty for training, and who, after being other than dishonorably discharged therefrom, entered the employ of an employer participating in the Public Employees Retirement System, may acquire retirement credit for up to four years of active service in the Armed Forces by paying in a lump sum to the Public Employees Retirement Board within 90 days of the member’s effective date of retirement an amount determined by the board to represent the full cost to the system of providing the retirement credit to the member, including all administrative costs incurred by the system in processing the application for acquisition of the retirement credit.

      (2) No person shall receive retirement credit under this section for any period of service with the Armed Forces of the United States for which that person receives credit under the provisions of ORS 238.156 or for which the person is receiving or entitled to receive a pension or retirement pay under a public retirement system established by the United States for the performance of service in the Armed Forces.

      (3) Any person acquiring retirement credit under this section may elect to have the service retirement allowance of the person determined under any calculation for which the person is eligible under ORS 238.300, even if the calculation does not produce the largest service retirement allowance. An election under this subsection must be made within 90 days of the member’s effective date of retirement. [1997 c.578 §2; 2003 c.105 §2; 2005 c.808 §26]

 

      238.160 Retirement credit for service while on loan to federal government. Any employee of an employer participating in the system shall receive retirement credit, subject to the limitations of this chapter, for the period of employment with the participating employer prior to July 1, 1946, and for employment in any branch or department of the United States Government, and for military service in the Armed Forces of the United States, as though the person had been an employee of the participating employer throughout such period of employment or service, if within 40 days from and after separation from such civilian employment with the United States Government, or within one year after being otherwise than dishonorably discharged from military service in the Armed Forces of the United States, the person returned to the employment of the participating employer from which the person was transferred or loaned, provided that such employee comes within either of the following descriptions:

      (1) Prior to employment with the United States Government, the person was employed by the participating employer and was transferred or loaned to a branch or department of the United States Government pursuant to an agreement between such participating employer and such branch or department of the United States Government for the transfer or loan of any departmental unit of such participating employer to the federal government during the war emergency.

      (2) Served in any branch of the Armed Forces of the United States while on military leave of absence from a position in federal government employment as set forth in subsection (1) of this section. [Formerly 237.097]

 

      238.162 Retirement credit for service as teacher in public schools of another state. (1) A member of the Public Employees Retirement System who is a teacher as described in subsection (3) of this section is entitled to receive retirement credit as provided in subsection (2) of this section if:

      (a) The member was employed as a teacher in a public school in another state before being employed in a position that entitled the member to credit in the system; and

      (b) The member makes the payment required by subsection (2) of this section within the time specified by that subsection.

      (2) Except as provided in subsection (4) of this section, a member of the system employed as a teacher as described in subsection (3) of this section and who meets the requirements of subsection (1) of this section is entitled to receive retirement credit for the period of the member’s service with a public school in another state, not to exceed a maximum of four years, if the member within 90 days of the member’s effective date of retirement:

      (a) Applies in writing to the Public Employees Retirement Board for such retirement credit;

      (b) Provides written verification to the board from the public employer that employed the member in the other state, verifying the period of time that the member served as a teacher in a public school in the other state; and

      (c) Pays to the board, in a lump sum, for each year of retirement credit applied for under this section, an amount determined by the board to represent the full cost to the system of providing the retirement credit to the member, including all administrative costs incurred by the system in processing the application for acquisition of the retirement credit.

      (3) The provisions of this section apply only to a licensed teacher, as defined in ORS 342.120, who is employed by a common school district, a union high school district or an education service district.

      (4) A member may not receive retirement credit under the provisions of this section for any period of service with a public school in another state if the member is entitled to a pension or retirement allowance by reason of that service under a public plan or system offered by the other state. [1997 c.742 §2; 2003 c.105 §3]

 

(Miscellaneous)

 

      238.165 Credit for certain periods of employment by Legislative Assembly. (1) As used in this section, “legislative employee” means any person employed by the Legislative Assembly, either of its houses or any of its committees prior or subsequent to July 22, 1973, during any period or periods of such employment qualifying the person for membership and participation in the Public Employees Retirement System under the provisions of this chapter then in effect. “Legislative employee” does not include any member of the legislature.

      (2) A person shall not receive retirement credit in the Public Employees Retirement System for any period in which the person was a legislative employee, during which the person did not pay the employee contributions required by law, except as provided under this section and ORS 173.210.

      (3) Nothing in this section shall be considered to change any requirements of this chapter for membership in the Public Employees Retirement System, or to grant any membership or other rights to persons whose employment by the Legislative Assembly, either of its houses or any of its committees was not of a character or duration qualifying them under then applicable provisions of this chapter for membership in the system.

      (4) Any person who is a legislative employee on July 22, 1973, who did not pay the employee contributions required by law during employment as a legislative employee prior to July 22, 1973, may obtain retirement credit for the period of such employment in the following manner:

      (a) No later than one year after July 22, 1973, the employee shall give written notice to the board that the employee elects to pay to the fund the unpaid employee contributions attributable to legislative employment.

      (b) The employee shall then pay to the board the entire amount of the unpaid employee contributions without interest, in a lump sum or at the option of the employee in installments, within five years after the date of making the election but prior to reaching compulsory retirement age.

      (c) If a person has reached compulsory retirement age on or before July 22, 1973, or will reach compulsory retirement age no later than one year after July 22, 1973, the time in which the employee may pay the contributions to the system is extended to one year after July 22, 1973.

      (5) Any person who was a legislative employee prior to July 22, 1973, and who is not so employed on July 22, 1973, but who becomes a legislative employee once again after July 22, 1973, may elect to pay employee contributions and obtain retirement credit for service prior to July 22, 1973, as a legislative employee. The election shall be made by giving written notice to the board no later than one year after the first day of the subsequent employment, in the same manner and subject to the same conditions as set forth in subsection (4) of this section.

      (6) Subject to subsection (8) of this section, any person who makes the election under subsection (4) or (5) of this section and pays to the system the entire amount of employee contributions required thereunder, and who during other qualifying employment by a participating public employer contributed to the fund and subsequently but prior to July 22, 1973, withdrew contributions under ORS 238.265, may, in the same manner and subject to the same conditions as set forth in subsection (4) of this section, repay to the fund the full amount of the contributions withdrawn by the employee, and rights in the system forfeited by the withdrawal shall thereupon be restored.

      (7) If a person who has reached or will reach compulsory retirement age within one year after July 22, 1973, the time for repayment under this section of the full amount of withdrawn contributions in order to restore rights in the system is extended to one year after July 22, 1973.

      (8) A restoration of forfeited rights in the system shall not be available under subsections (6) and (7) of this section if a person withdrew contributions before the commencement of the employment in the course of which the person was or became a legislative employee, if the covered employment in the course of which the withdrawn contributions were made terminated more than five years before the commencement of employment.

      (9) Any person who, on July 22, 1973, is an employee of the Legislative Counsel, or the Legislative Counsel, and who would have been eligible for retirement credit in the system for such employment prior to July 22, 1973, but for failure to exercise the option to become a member of the system under provisions of ORS 173.210 prior to its amendment by chapter 735, Oregon Laws 1973, may nevertheless obtain retirement credit in the system for such employment by making the election and paying employee contributions as provided in and subject to the conditions of subsection (4) of this section. The person shall not be eligible to make any election under subsection (5) or subsections (6) and (7) of this section. [Formerly 237.095]

 

      238.170 [Formerly 237.021; repealed by 1999 c.130 §1]

 

      238.175 Retirement credit for periods of disability. (1) A member of the Public Employees Retirement System who receives a disability retirement allowance or disability payments under ORS chapter 656 shall receive retirement credit for the period during which the member receives the disability retirement allowance or disability payments if the member receives the allowance or payments by reason of injury or disease sustained while in actual performance of duty and not intentionally self-inflicted.

      (2) A member of the Public Employees Retirement System who receives a disability retirement allowance or disability payments under ORS chapter 656 by reason of injury or disease that was not sustained while in actual performance of duty and that was not intentionally self-inflicted shall receive retirement credit for all or part of the period during which the member receives the disability retirement allowance or disability payments if the member, within 90 days before the effective date of retirement of the member, applies in writing to the Public Employees Retirement Board for that retirement credit and pays to the board in a lump sum an amount determined by the board to represent the full cost to the system of providing the retirement credit to the member, including all administrative costs incurred by the system in processing the application for acquisition of the retirement credit.

      (3) A member may acquire retirement credit under the provisions of this section for the purposes of calculating a service retirement allowance only if the member returns to employment with a participating public employer after the period of disability.

      (4) A member may not acquire retirement credit under the provisions of this section for a period of time that is in excess of the period of time used in calculating the disability retirement allowance paid to the member under ORS 238.320 during the period of disability for which the member seeks credit. For the purposes of this subsection, the retirement credit that may be acquired by a police officer or firefighter who elects to receive the optional, service-connected disability retirement allowance provided for under ORS 238.345 shall be determined as though the police officer or firefighter had received a disability retirement allowance calculated under ORS 238.320.

      (5) Retirement credit acquired under this section may be used for the purpose of establishing eligibility under ORS 238.115, 238.125 or 238.135 or any other provision of this chapter that requires a specified number of years of creditable service.

      (6) Retirement credit under this section may be acquired only for periods occurring on or after January 1, 1985, during which a member receives a disability retirement allowance or disability payments under ORS chapter 656. [1997 c.648 §2; 2003 c.105 §4]

 

      238.180 [2005 c.332 §10; repealed by 2007 c.769 §7]

 

CONTRIBUTIONS

 

(Employee Contributions)

 

      238.200 Employee contributions generally. (1)(a) An active member of the Public Employees Retirement System shall contribute to the Public Employees Retirement Fund and there shall be withheld from salary of the member six percent of that salary as an employee contribution.

      (b) Notwithstanding paragraph (a) of this subsection, an employee who is an active member of the system on August 21, 1981, shall contribute to the fund and there shall be withheld from salary of the member, as long as the employee continues to be an active member of the system, four percent of that salary if the salary for a month is less than $500, or five percent of that salary if the salary for a month is $500 or more and less than $1,000. Notwithstanding subsection (2) of this section, for the purpose of computing the percentage of salary to be withheld under this paragraph from a member who is an employee of a school district or of the State Board of Higher Education whose salary is based on an annual agreement, the agreed annual salary of the member shall be divided into 12 equal installments, and each installment shall be considered as earned and paid in separate, consecutive months, commencing with the first month that payment is actually made under the terms of the salary agreement.

      (2) The contributions of each member as provided in subsection (1) of this section shall be deducted by the employer from each payroll and transmitted by the employer to the Public Employees Retirement Board, which shall cause them to be credited to the member account of the member. Salary shall be considered earned in the month in which it is paid. The date inscribed on the paycheck or warrant shall be considered as the pay date, regardless of when the salary is actually delivered to the member.

      (3) An active member who is concurrently employed by more than one participating public employer, and who is a member of or entitled to membership in the system, shall make contributions to the fund on the basis of salary paid by each employer.

      (4) Notwithstanding subsections (1) to (3) of this section, a member of the system, or a participating employer acting on behalf of the member pursuant to ORS 238.205, is not permitted or required to make employee contributions to the fund for service performed on or after January 1, 2004. This subsection does not affect any contribution for the purpose of unit purchases under ORS 238.440 or amounts paid for acquisition of creditable service under ORS 238.105 to 238.175. [Formerly 237.071 (1) to (3); 2001 c.945 §43; 2003 c.67 §1; 2003 c.625 §9]

 

      238.205 Payment of employee contribution by employer. Notwithstanding any other provision of this chapter, and subject to the provisions of this section, a public employer participating in the system may agree, by a written employment policy or agreement in effect on or after July 1, 1979, to “pick-up,” assume or pay the full amount of employee contributions required or permitted by ORS 238.200 for all or less than all active members of the system employed by the employer to the extent employee contributions are required or permitted by ORS 238.200. If a public employer so agrees:

      (1) The rate of contribution of each active member of the system employed by the employer who is covered by such policy or agreement shall uniformly be six percent of salary regardless of the amount of monthly salary.

      (2) The full amount of required employee contributions assumed or paid by the employer on behalf of its employees shall be considered “salary,” as defined in ORS 238.005, only for the purpose of computing a member’s “final average salary,” as defined in ORS 238.005, and shall not constitute additional “salary” or “other advantages,” as defined in ORS 238.005, for any other purpose.

      (3) The full amount of required employee contributions “picked-up” by the employer on behalf of its employees shall be considered “salary,” as defined in ORS 238.005, for the purpose of calculating the amount of the contribution, for the purpose of computing a member’s “final average salary,” as defined in ORS 238.005, and for all other purposes.

      (4) The full amount of required employee contributions “picked-up,” assumed or paid by the employer on behalf of its employees shall be added to the member accounts of the members for their annuities and shall be considered employee contributions for all other purposes of this chapter.

      (5) For the purposes of this section:

      (a) Employee contributions are “picked-up” if the written employment policy or agreement described in subsection (1) of this section provides that employee compensation will be reduced to generate the funds needed to make the employee contributions; and

      (b) Employee contributions are “assumed or paid” by an employer if the written employment policy or agreement described in subsection (1) of this section provides that additional amounts shall be paid by the employer for the purpose of making the employee contributions, and employee compensation will not be reduced for the purpose of generating the funds needed to make the employee contributions.

      (6) A participating public employer must give written notice to the Public Employees Retirement Board at the time that a written employment policy or agreement described in subsection (1) of this section is adopted or changed. The notice must indicate whether the employer will “pick-up” or “assume or pay” the employee contributions as described in subsection (5) of this section. Any change in the manner in which employee contributions are to be paid applies only to employee contributions made on and after the date the notice is received by the board. [Formerly 237.075; 1997 c.175 §8; 2001 c.945 §44; 2003 c.67 §2]

 

      238.210 Payment of certain circuit court judge employee contributions by employer. The state shall “pick-up,” assume or pay the full amount of contributions to the fund required of circuit court judges who were district court judges before January 15, 1998, and who are members of the system, but not judge members under ORS 238.500 to 238.585. The full amount of those contributions “picked-up,” assumed or paid by the state shall be treated as provided in ORS 238.205 (2) to (4). [Formerly 237.079; 1997 c.175 §§9,10]

 

      238.215 Contributions by certain higher education employees. Notwithstanding any other provision of this chapter:

      (1) An employee, as defined in ORS 243.910 (2), who is an active member of the system and who has elected, and not canceled that election, to be assisted by the State Board of Higher Education under ORS 243.920 (1), shall not contribute to the fund on any part of the annual salary of the employee in excess of $4,800 at any time during which the State Board of Higher Education assists the employee under ORS 243.920 (1).

      (2) The current service pension, whether for service or disability retirement, under this chapter provided by the contributions of the employers of such employee shall be:

      (a) If the State Board of Higher Education is assisting such employee under ORS 243.920 (1) at the time of retirement, a pension equal to the annuity provided by the employee’s accumulated contributions to the fund.

      (b) If the State Board of Higher Education is not assisting such employee under ORS 243.920 (1) at the time of retirement, but previously so assisted the employee:

      (A) For service before the date the State Board of Higher Education last ceased to assist the employee, a pension equal to the annuity provided by the employee’s accumulated contributions to the fund before that date.

      (B) For service on and after the date the State Board of Higher Education last ceased to so assist the employee, a pension computed as provided in ORS 238.300 (2), but if the employee retires before reaching the normal retirement age, actuarially reduced and computed on the then attained age. For the purpose of computing the pension under this subparagraph, only the number of years of membership of the employee after the day before that date and only the salary of the employee on which the employee contributes to the fund for those years shall be considered.

      (3) Subsection (2) of this section does not apply to an employee, as defined in ORS 243.910 (2), who is an active member of the system, who elected to be assisted by the State Board of Higher Education under ORS 243.920 (1) before January 1, 1968, who canceled that election within the first 60 days of the calendar year 1968 as provided in ORS 243.940 (5) and who does not thereafter elect to be assisted by the State Board of Higher Education under ORS 243.920 (1).

      (4) Subsection (2) of this section does not apply to an employee, as defined in ORS 243.910 (2), who is an active member of the system and has been an active member of the system continuously since any date before January 1, 1968; who elected to be assisted by the State Board of Higher Education under ORS 243.920 (1) before January 1, 1968; and who cancels that election in any calendar year after 1968, but before the calendar year in which the employee retires, as provided in ORS 243.940 (5) and does not thereafter elect to be assisted by the State Board of Higher Education under ORS 243.920 (1). In this case the benefit, whether for service or disability retirement, shall be computed as under ORS 238.300; however, for service during periods in which the employee was assisted by the State Board of Higher Education under ORS 243.920 (1), a year of membership as used in ORS 238.300 (2) shall be a portion of a year which is represented by a fraction the numerator of which is $4,800 and the denominator of which is the salary earned by the employee in that year. However, in no case shall the fraction be greater than one. [Formerly 237.073]

 

(Employee Rollover Contributions)

 

      238.220 Employee rollover contributions; rules. (1) The Public Employees Retirement Board may, at its discretion, accept rollover contributions from an active member. The board may accept rollover contributions under this section only if the amounts contributed qualify for pretax rollover treatment under the federal income tax laws governing qualified retirement plans.

      (2) If the board accepts a rollover contribution under this section, the contribution shall be paid into the Public Employees Retirement Fund and credited to an individual rollover account in the name of the member who made the contribution. The rollover account must be kept separate from the member account of the member and must be invested separately from all other moneys in the Public Employees Retirement Fund. All earnings on the rollover account shall be credited by the board to the rollover account. If the membership of the employee in the Public Employees Retirement System is terminated under the provisions of ORS 238.095, the board shall cease investment of the amounts in the rollover account and, after the effective date of the termination, shall no longer credit earnings and losses to the rollover account.

      (3) Except as provided in subsection (2) of this section, amounts in a rollover account established under this section shall be invested in the same manner as funds in regular accounts. However, ORS 238.255 does not apply to rollover accounts.

      (4) Amounts held in a rollover account under this section shall be distributed to the member within 90 days after the member’s effective date of retirement under this chapter, or within 90 days after termination of the person’s membership in the system under ORS 238.095.

      (5) Distribution from a member’s rollover account shall be made in a single lump sum payment. Distribution from a member’s rollover account shall not affect the calculation of any other service or disability retirement allowance, death benefit or other benefit payable to a member under this chapter.

      (6) The board shall adopt rules and establish procedures for determining whether a member will be allowed to make a rollover contribution under this section. Rules and procedures adopted by the board must ensure that the rollover contributions do not adversely affect the status of the system and the Public Employees Retirement Fund as a qualified governmental plan and trust under federal income tax law.

      (7) The board shall by rule establish a maintenance fee for rollover accounts established under this section. The fee may be collected out of earnings on rollover accounts or, if there are no earnings, from the principal amounts paid into the rollover accounts. The fee shall be in an amount determined by the board to be adequate to pay the full cost to the system of maintaining rollover accounts under this section. [1999 c.988 §2; 2001 c.945 §45; 2003 c.67 §29]

 

(Employer Contributions)

 

      238.225 Employer contributions. A participating public employer shall, at intervals designated by the Public Employees Retirement Board, transmit to the board those amounts the board determines to be actuarially necessary to adequately fund the benefits to be provided by the contributions of the employer under this chapter and the benefits to be provided under the pension program established by ORS 238A.100 to 238A.245, except for the disability benefit for which funding is provided under ORS 238A.240. From time to time, the board shall determine the liabilities of the system and shall set the amount of contributions to be made by participating public employers, and by other public employers who are required to make contributions on behalf of members, to ensure that those liabilities will be funded no more than 40 years after the date on which the determination is made. [Formerly 237.081; 2001 c.945 §13; 2002 s.s.1 c.9 §1; 2002 s.s.3 c.5 §1; 2003 c.625 §8; 2003 c.746 §7; 2003 c.802 §160; 2005 c.808 §10]

 

      238.227 Pooling of employers for purpose of computing employer contributions. (1) For the purpose of computing the employer contributions required under ORS 238.225 for benefits to be provided under this chapter:

      (a) The Public Employees Retirement Board shall group together the school districts of the state and treat the school districts of the state as a single employer for actuarial purposes; and

      (b) The board shall group together all community college districts and the state and treat the community college districts and the state as a single employer for actuarial purposes.

      (2) For the purpose of computing the employer contributions required under ORS 238.225 for benefits to be provided under this chapter, any participating public employer other than school districts may elect to be grouped with the state and all community college districts and treated as a single employer for actuarial purposes. An election under this subsection is irrevocable.

      (3) The computation of the contributions of a participating public employer that makes an election under subsection (2) of this section shall be based only on the liabilities of the employer under this chapter that are incurred after the effective date of the employer’s election. The board shall separately compute the contribution of the employer for the liabilities incurred by the employer under this chapter before the effective date of the employer’s election.

      (4) A participating public employer may make an election under subsection (2) of this section only by the adoption of a resolution or ordinance by the governing body of the public employer.

      (5) Except as provided in this section, the board may not require that any participating public employer be grouped with any other participating public employer for the purpose of computing the employer contributions required under ORS 238.225 for benefits to be provided under this chapter. If two participating public employers merge or otherwise consolidate, and one of the public employers has made an election under subsection (2) of this section:

      (a) The board may not require that the public employer that is the product of the consolidation be grouped with the state and all community college districts unless the public employer makes an election under subsection (2) of this section; and

      (b) The board may require that the participating public employer that is the product of the consolidation make contributions based on the group rate only for those members for whom contributions based on the group rate were made before the consolidation. [2005 c.808 §12]

 

      238.229 Effect of lump sum payment on contributions of pooled employer; rules. (1) If a participating public employer is grouped with any other public employer for the purpose of computing employer contributions under ORS 238.225 and the individual public employer makes a lump sum payment that is in addition to the normal contribution of the public employer, the Public Employees Retirement Board shall adjust the amount of contributions to be made by the individual public employer to ensure that the benefit of the lump sum payment accrues only to the individual public employer making the payment. An individual public employer that makes a lump sum payment under the provisions of this subsection shall remain grouped with other public employers as provided by ORS 238.227 and 238A.220 for the purpose of all liabilities of the employer that are not paid under this subsection. The board by rule may establish a minimum lump sum payment that must be made by an individual public employer before adjusting contributions under this subsection. Notwithstanding any minimum lump sum payment established by the board, the board must allow an individual public employer to make a lump sum payment under this subsection if the payment is equal to the full amount of the individual public employer’s accrued unfunded liabilities under this section and ORS chapter 238A.

      (2) The board shall establish a separate account within the Public Employees Retirement Fund for each lump sum payment made under this section by an individual public employer. The board shall credit to each account all interest and other income received from investment of the account funds during the calendar year. Except as provided in subsection (3) of this section, the board may not collect any administrative expense or other charge from the account or from earnings on the account. The account shall be used to offset contributions that the public employer would otherwise be required to make for the liabilities against which the lump sum payment is applied.

      (3) The board may charge a participating public employer expenses for administration of an account established under subsection (2) of this section in an amount not to exceed $2,500 for the calendar year in which the account is established and for the immediately following two calendar years, and in an amount not to exceed $1,000 per year for all subsequent years.

      (4) If a participating public employer has any liabilities that are attributable to creditable service by employees of the employer before the participating public employer was grouped with other public employers under ORS 238.227, whether under this section or pursuant to board rule, any lump sum payment made under this section must be applied first against those liabilities, with the oldest liability being paid first. Any amounts remaining after application under this subsection must be deposited in a separate account established under subsection (2) of this section. [2005 c.808 §13]

 

      238.230 [Formerly 237.017 (2); repealed by 2001 c.945 §15]

 

      238.231 Unfunded liability or surplus after employee transfer or employer merger, consolidation or split. (1) If a participating public employer transfers employees who are members of the Public Employees Retirement System to another public employer, the two public employers must enter into a written agreement that addresses the manner in which any unfunded liability or surplus of the transferring public employer under the system will be paid or credited.

      (2) If two or more public employers merge or consolidate, and any of the public employers participate in the system, the public employers that merged or consolidated must enter into a written agreement that addresses the manner in which any unfunded liability or surplus of the merged or consolidated public employers under the system will be paid or credited.

      (3) If a participating public employer splits into two or more public employers, the public employers that result from the split must enter into a written agreement that addresses the manner in which any unfunded liability or surplus of the original participating public employer under the system will be paid or credited.

      (4) A written agreement entered into under this section must be delivered to the Public Employees Retirement Board not later than 60 days after the transfer, merger, consolidation or split becomes effective. If public employers affected by a transfer, merger, consolidation or split, including public employers created by a merger, consolidation or split, fail to deliver to the board a written agreement that addresses the unfunded liabilities or surpluses, or fail to deliver to the board a written agreement that addresses the unfunded liabilities or surpluses in a manner satisfactory to the board, the board shall decide the manner in which unfunded liabilities or surpluses will be allocated among the public employers. [2005 c.808 §14]

 

MEMBER ACCOUNTS

 

(Generally)

 

      238.250 Regular accounts. The board shall provide for a regular account for each active and inactive member of the system who has made contributions to the fund. The regular account of the member shall show the amount of the member’s contributions to the fund and the interest which they have earned. The board shall furnish a written statement thereof upon request by any member or beneficiary of the system. [Formerly 237.275; 2001 c.945 §46; 2003 c.67 §22]

 

      238.255 Credits to regular accounts when earnings less than assumed interest rate. (1) The regular account for 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 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 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 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, 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 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 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 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. [Formerly 237.277; 2001 c.945 §4; 2003 c.3 §1; 2003 c.67 §5; 2003 c.625 §10]

 

      238.258 Minimum regular account balance. (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 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. [2003 c.67 §8; 2003 c.625 §12]

 

      238.260 Variable Annuity Account; rules. (1) The purpose of this section is to establish a well balanced, broadly diversified investment program for certain contributions and portions of the member accounts so as to provide retirement benefits for members of the system that will fluctuate as the value and earnings of the investments vary in relation to changes in the general economy. It is anticipated that investment of those contributions and portions of the member accounts in equities will result in the accumulation of larger deposit reserves for those members during their working years, tend to preserve the purchasing power of those reserves and the retirement benefits provided thereby and afford better protection in periods of economic inflation.

      (2) There is established in the Public Employees Retirement Fund an account, separate and distinct from the General Fund, to be known as the Variable Annuity Account. Interest earned by the account shall be credited to the account. The account is part of the Public Employees Retirement System and is not a separate defined contribution plan or account for the purposes of the Internal Revenue Code.

      (3)(a) A member who is making contributions to the fund may elect at any time to have 25, 50 or 75 percent of contributions by the member to the fund on and after the effective date of the election paid into the Variable Annuity Account, credited to a variable account, and reserved for the purchase of a variable annuity. A member who has elected to have a percentage of contributions so paid, credited and reserved may elect at any time thereafter to have an additional 25 or 50 percent of contributions by the member, but not to exceed a maximum of 75 percent, so paid, credited and reserved. An election shall be in writing on a form furnished by the board and be filed with the board. An election shall be effective on January 1 following the filing thereof.

      (b) Notwithstanding any other provision of this section, a member may not contribute to the Variable Annuity Account after December 31, 2003.

      (4) A member who has elected to have contributions paid into the Variable Annuity Account under subsection (3) of this section may thereafter cause the contributions to cease being paid into the member’s variable account by filing a request in writing on a form furnished by the board and filed with the board. The contributions shall cease being paid into the member’s variable account after December 31 following the filing of the request. Contributions paid into the member’s variable account before the effective date of the request for cessation shall remain in the member’s variable account.

      (5)(a) An employee who is a member of the system on January 1, 1968, and who thereafter made contributions to the Variable Annuity Account, may elect at any time to have an amount equal to 10 percent per year, for not more than five years, of the balance of the regular account of the member in the fund on the effective date of an election filed under subsection (3) of this section, transferred from the regular account of the member to the Variable Annuity Account, credited to the member’s variable account, and reserved for the purchase of a variable annuity. An election shall be in writing on a form furnished by the board and be filed with the board. An election is final and irrevocable upon the filing thereof. The first transfer pursuant to an election shall be made on July 1 following the filing of the election, but may be made, in the discretion of the board, on an earlier date.

      (b) If the transfers elected by a member under this subsection have not been completed at the time of retirement, a transfer equal to one annual transfer shall be made pursuant to an election by the member made and filed as provided in this subsection.

      (c) No transfer shall be made under this subsection after the first payment of the service retirement allowance of the member becomes normally due.

      (d) Notwithstanding paragraphs (a) to (c) of this subsection, a member may not elect to transfer funds under this subsection after December 31, 2003.

      (6) Moneys in the Variable Annuity Account may be invested in investments authorized by law for investment of moneys in the Public Employees Retirement Fund; but, notwithstanding any other general or specific law, moneys in the account shall be invested primarily in equities, including common stock, securities convertible into common stock, real property and other recognized forms of equities, whether or not subject to indebtedness. Not more than five percent of the amortized value of all the investments of the Variable Annuity Account and of moneys in the account immediately available for investment may be invested in the obligations of or equities in a single, primary obligor or issuer. A pro rata share of the administrative expenses of the system shall be paid from interest earned by the Variable Annuity Account.

      (7)(a) Except as provided in subsection (8) of this section, the policy-making investment authority for the Public Employees Retirement Fund shall enter into contracts with one or more persons whom the authority determines to be qualified, whereby the persons undertake to invest and reinvest moneys in the Variable Annuity Account available for investment and acquire, retain, manage and dispose of investments of the account in accordance with subsections (1) and (6) of this section and to the extent provided in the contracts.

      (b) Performance of functions under contracts so entered into shall be paid for out of the gross interest or other income of the investments with respect to which the functions are performed, and the net interest or other income of the investments after that payment shall be considered income of the Variable Annuity Account.

      (c) The policy-making investment authority may require a person contracted with to give to the state a fidelity bond in a penal sum as may be fixed by law or, if not so fixed, as may be fixed by the authority, with corporate surety authorized to do business in this state.

      (d) Contracts so entered into and functions performed thereunder are not subject to the State Personnel Relations Law or ORS 279A.050 (2) and 279A.140.

      (e) A person contracted with shall report to the policy-making investment authority as often as the authority may require, but at least annually, the earnings of the moneys invested during the period covered by the report, the capital gains and losses of the Variable Annuity Account during the period, the changes in the market value of the investments of the account during the period and such other information as the authority may require.

      (8) The policy-making investment authority for the Public Employees Retirement Fund, for and on behalf of the Public Employees Retirement System and Public Employees Retirement Board, may enter into group annuity contracts with one or more insurance companies authorized to do business in this state. In lieu of any investment of moneys in the Variable Annuity Account as provided in subsections (6) and (7) of this section, the authority may pay, from time to time under contracts so entered into, any moneys in that account available for investment purposes. Contracts so entered into:

      (a) May provide that annuities purchased thereunder be payable in variable dollar amounts, but if that provision is made, provision also shall be made that a member of the system who has a variable account, upon retiring from service and before the first payment of retirement allowance becomes normally due, may elect an option to have the annuities payable to the member or the beneficiary of the member in fixed or variable dollar amounts or both.

      (b) May provide that payment of annuities purchased thereunder may be made by the insurance company directly to persons entitled thereto or to the Variable Annuity Account for payment therefrom to those persons.

      (c) Are not subject to ORS 279A.050 (2) and 279A.140.

      (9) Upon retiring from service but within 60 days after the date of the first benefit payment, a member of the system who has a variable account may elect to transfer the balance in the variable account to the regular account of the member, and by that transfer the annuity shall be based on the amount in the regular account of the member as otherwise provided in this chapter and the member shall not receive a variable annuity as provided in this section.

      (10) When an annuity is payable under this chapter to a member of the system who has a variable account, or is payable to a beneficiary of that person, the portion of the annuity payable from the Variable Annuity Account shall be proportionately increased or decreased for a calendar year when, as of October 31 of the preceding calendar year, the balance of the member’s variable account exceeds or is less than the current value of the annuity, determined in accordance with the rate of interest and approved actuarial tables then in effect.

      (11) Notwithstanding subsection (10) of this section, the board, in the event of extraordinary fluctuation in the market value of investments of the Variable Annuity Account and in order to avoid substantial inequities, may increase or decrease the portions of annuities paid from the account for periods less than a calendar year and determined as of dates other than October 31.

      (12) Notwithstanding any other provision of this chapter, the retirement allowance to which a member of the system who has a variable account or who made contributions on salary in excess of $4,800 per year during the period January 1, 1956, through December 31, 1967, and whose effective date of retirement is January 1, 1982, or later, is otherwise entitled under this chapter shall be subject to the following adjustment:

      (a) The board shall determine the difference between the member account of the member and what the member account of the member would have been had the member not participated in the variable annuity program on or after January 1, 1982, plus the contributions made on salary in excess of $4,800 per year during the period January 1, 1956, through December 31, 1967.

      (b) If the member account of the member due to participation in the variable annuity program or due to the contributions made on salary in excess of $4,800 per year is greater, the monthly retirement allowance of the member shall be increased by the value of the difference, using the annuity tables applicable to the plan selected by the member.

      (c) If the member account of the member due to participation in the variable annuity program or due to the contributions made on salary in excess of $4,800 per year is lesser, the monthly retirement allowance of the member shall be decreased by the value of the difference, using the annuity tables applicable to the plan selected by the member.

      (13) Except as otherwise specifically provided in this section, the rights and benefits under this chapter of an active or retired member of the system or of a beneficiary of the member are not affected by this section and the provisions of this chapter applicable to regular accounts of active and retired members of the system in the fund are also applicable to variable accounts.

      (14)(a) In addition to the transfer provided for in subsection (9) of this section, a member of the system who has a variable account may at any time prior to retirement elect to transfer the balance in that account to the regular account of the member in the fund if:

      (A) The member is other than a police officer or firefighter and has attained the age of 50;

      (B) The member is a police officer or firefighter and has attained the age of 45; or

      (C) The member has a combined total of 25 years or more of creditable service in the system and prior service credit.

      (b) An election under paragraph (a) of this subsection is irrevocable, and a member who has so elected may not thereafter elect to make contributions to the Variable Annuity Account under subsection (3) of this section.

      (c) An election under paragraph (a) of this subsection shall be in writing and shall be filed with the board. The board by rule shall prescribe a form for the purposes of application. An election so made shall be effective on January 1 of the year following the year in which the election is made. If the member account of the member as of the effective date of the election is less than what the member account of the member would have been had the member not participated in the variable annuity program, not including the contributions made on salary in excess of $4,800 per year during the period January 1, 1956, through December 31, 1967, the monthly retirement allowance of a member calculated under ORS 238.300 (2)(a) or (b)(B) shall be decreased by the value of the difference.

      (d) As of the effective date of an election under this subsection, the board shall credit all earnings to the member’s variable account based on the actual calendar year variable earnings rate for the year in which the election is made. This account balance shall:

      (A) Be used by the board in determining whether the member’s election is effective under paragraph (c) of this subsection; and

      (B) Be the account balance credited by the board to the regular account of the member in the fund if the election is determined to be effective.

      (e) Subject to paragraph (c) of this subsection, the annuity of a member who makes an effective transfer under this subsection shall be based on the amount in the regular account of the member in the fund as otherwise provided in this chapter, and the member shall not receive a variable annuity as provided in this section. [Formerly 237.197; 2001 c.945 §47; 2003 c.67 §3; 2003 c.625 §36; 2003 c.794 §218; 2005 c.808 §§2,3]

 

      Note: Section 19, chapter 625, Oregon Laws 2003, provides:

      Sec. 19. The amendments to ORS 238.260 by section 3, chapter 67, Oregon Laws 2003, do not apply to any judge member who is a judge member of the system on June 30, 2003. A person who is a judge member of the system on June 30, 2003, may continue to make contributions to the Variable Annuity Account for services as a judge member performed on or after January 1, 2004. [2003 c.625 §19]

 

(Withdrawal or Transfer of Member Account)

 

      238.265 Withdrawal of member account. (1) Except as otherwise provided in this section, a member of the Public Employees Retirement System may withdraw from the Public Employees Retirement Fund the amount credited to the member account, if any, for the member if:

      (a) The member is separated from all service with participating public employers;

      (b) The member is separated from all service with employers who are treated as part of a participating public employer’s controlled group under the federal laws and rules governing the status of the system and the fund as a qualified governmental retirement plan and trust;

      (c) The member has not attained earliest service retirement age; and

      (d) The separation from service is not by reason of death or disability.

      (2) If a member wishes to withdraw the member account, if any, of the member under this section, the member must transmit to the Public Employees Retirement Board a withdrawal request. The board shall deny the withdrawal, or shall take all reasonable steps to recover withdrawn amounts, if:

      (a) The board determines that the separation is not a bona fide separation; or

      (b) The member fails to remain absent from the service of all employers described in subsection (1) of this section for at least one calendar month following the month in which the member separates from service.

      (3) If a member has contributed to the fund in each of five calendar years and has separated from all service in the manner described in subsection (1) of this section before reaching earliest service retirement age, the member may elect to withdraw the member account of the member under this section at any time before reaching earliest service retirement age. If the inactive member does not make an election to withdraw under this section, the member shall be paid the benefits or retirement allowances described in ORS 238.425.

      (4) A member who is vested in the pension program established under ORS chapter 238A and who is eligible to withdraw from the pension program under ORS 238A.120 may withdraw a member account under this section only if the member also withdraws from the pension program. A member who has an individual account or accounts in the individual account program established under ORS chapter 238A may withdraw a member account under this section only if the member also withdraws all individual accounts pursuant to ORS 238A.375. A member who has an account established under ORS 238.440 may withdraw a member account under this section only if the member also withdraws the account established under ORS 238.440.

      (5) Withdrawal of a member account under this section cancels all membership rights in the system, including the right to claim credit for any employment before withdrawal. [Formerly 237.111 (2); 1999 c.317 §5; 2001 c.945 §48; 2003 c.67 §11; 2007 c.52 §1]

 

      238.270 Transfer of member account to other public employee retirement system. Whenever a person who is past the earliest service retirement age separates from the service of a public employer participating in the Public Employees Retirement System and who thereafter, but before applying to the Public Employees Retirement Board for retirement benefits, is employed in a position that entitles the person to membership in another public employees retirement system, either within or without this state, the board, upon the written request of the person and if in conformance with the provisions of law governing the other public employees retirement system, may transfer the member account, if any, of the person in the fund to the other public employees retirement system. Such transfer shall cancel the right of the person to claim any future benefits under the Public Employees Retirement System for service rendered to a public employer in this state prior to the date of the transfer. [Formerly 237.115; 2001 c.945 §49; 2003 c.67 §23]

 

ELIGIBILITY FOR RETIREMENT

 

      238.280 Eligibility for retirement. (1) Except as otherwise provided in this section, a member of the Public Employees Retirement System who attains the age of 55 shall be retired upon written application by the member to the Public Employees Retirement Board on a reduced service retirement allowance, that is the actuarial equivalent of the service retirement allowance provided for in ORS 238.300 at the normal retirement age.

      (2) A member of the system who has 25 years or more of creditable service in the system as a telecommunicator, as defined in ORS 181.610, shall be retired upon written application by the member to the board on a reduced service retirement allowance that is the actuarial equivalent of the service retirement allowance provided for in ORS 238.300 at the normal retirement age. A member who retires under this subsection before attaining the age of 55 shall not receive a cost-of-living adjustment under ORS 238.360 until the member attains the age of 55.

      (3) A police officer or firefighter who is a member of the system and attains the age of 50 shall be retired upon written application by the member to the board on a reduced service retirement allowance, which shall be the actuarial equivalent of the service retirement allowance provided for in ORS 238.300 at the normal retirement age. The provisions of this subsection apply to an inactive member of the system who was employed as a police officer or firefighter in a qualifying position immediately before becoming inactive.

      (4) Notwithstanding ORS 238.215 (2)(b)(B):

      (a) A police officer or firefighter who is a member of the system, attains the age of 50 and has a combined total of 25 years or more of creditable service in the system and prior service credit shall be retired upon written application by the member to the board on a service retirement allowance including, without actuarial reduction, the same current service pension and prior service pension provided for in ORS 238.300 at the normal retirement age. The provisions of this paragraph apply to an inactive member of the system who was employed as a police officer or firefighter in a qualifying position immediately before becoming inactive.

      (b) An employee who is a member of the system, has a combined total of 30 years or more of creditable service in the system and prior service credit, and is not eligible to retire under paragraph (a) of this subsection shall be retired upon written application by the member to the board on a service retirement allowance including, without actuarial reduction, the same current service pension and prior service pension provided for in ORS 238.300 at the normal retirement age. [Formerly 237.121; 2001 c.945 §78; 2005 c.808 §§37,38; 2007 c.404 §1]

 

BENEFITS

 

(Service Retirement Allowance)

 

      238.300 Service retirement allowance. Upon retiring from service at normal retirement age or thereafter, a member of the system shall receive a service retirement allowance which shall consist of the following annuity and pensions:

      (1) A refund annuity which shall be the actuarial equivalent of accumulated contributions, if any, by the member and interest thereon credited at the time of retirement, which annuity shall provide an allowance payable during the life of the member and at death a lump sum equal in amount to the difference between accumulated contributions at the time of retirement and the sum of the annuity payments actually made to the member during life shall be paid to such person, if any, as the member nominates by written designation duly acknowledged and filed with the board or shall otherwise be paid according to the provisions of this chapter for disposal of an amount credited to the member account of a member at the time of death in the event the member designates no beneficiary to receive the amount or no such beneficiary is able to receive the amount. If death of the member occurs before the first payment is due, the member account of the member shall be treated as though death had occurred before retirement.

      (2)(a) A life pension (nonrefund) for current service provided by the contributions of employers, which pension, subject to paragraph (b) of this subsection, shall be an amount which, when added to the sum of the annuity, if any, under subsection (1) of this section and the annuity, if any, provided on the same basis and payable from the Variable Annuity Account, both annuities considered on a refund basis, results in a total of:

      (A) For service as a police officer or firefighter, two percent of final average salary multiplied by the number of years of membership in the system as a police officer or firefighter before the effective date of retirement.

      (B) For service as other than a police officer or firefighter, including service as a member of the Legislative Assembly, 1.67 percent of final average salary multiplied by the number of years of membership in the system as other than a police officer or firefighter before the effective date of retirement.

      (b) A pension under this subsection shall be at least:

      (A) For a member who first establishes membership in the system before July 1, 2003, the actuarial equivalent of the annuity provided by the accumulated contributions of the member. A person establishes membership in the system before July 1, 2003, for the purposes of this subparagraph if:

      (i) The person is a member of the system, or a judge member of the system, on the day immediately before July 1, 2003; or

      (ii) The person performed any period of service for a participating public employer before July 1, 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.

      (B) For a member who made contributions before August 21, 1981, the equivalent of a pension computed pursuant to this subsection as it existed immediately before that date.

      (c) As used in this subsection, “number of years of membership” means the number of full years of creditable service plus any remaining fraction of a year of creditable service. Except as otherwise provided in this paragraph, in determining a remaining fraction a full month shall be considered as one-twelfth of a year and a major fraction of a month shall be considered as a full month. Membership of a school district employee, an employee of the State Board of Higher Education engaged in teaching or other school activity at an institution of higher education or an employee of the Department of Human Services, the Oregon Youth Authority, the Department of Corrections or the State Board of Education engaged in teaching or other school activity at an institution supervised by the authority, board or department, for all portions of a school year in a calendar year in which the district school, institution of higher education or school activity at an institution so supervised in which the member is employed is normally in session shall be considered as a full one-half year of membership. The number of years of membership of a member who received a refund of contributions as provided in ORS 237.976 (2) is limited to the number of years after the day before the date on which the refund was received. The number of years of membership of a member who is separated, for any reason other than death or disability, from all service entitling the member to membership in the system, who withdraws the amount credited to the member account of the member in the fund during absence from such service and who thereafter reenters the service of an employer participating in the system but does not repay the amount so withdrawn as provided in this chapter, is limited to the number of years after the day before the date of so reentering.

      (3) An additional life pension (nonrefund) for prior service credit, including military service, credited to the member at the time of first becoming a member of the system, as elsewhere provided in this chapter, which pension shall be provided by the contributions of the employer. [Formerly 237.147; 1997 c.249 §67; 2001 c.900 §49; 2001 c.945 §50; 2003 c.67 §4; 2003 c.625 §22; 2003 c.733 §46e]

 

      Note: Section 46f, chapter 733, Oregon Laws 2003, provides:

      Sec. 46f. The amendments to ORS 238.300 by section 46e of this 2003 Act apply to periods of service as a member of the Legislative Assembly served by reason of appointment or election to the Legislative Assembly on or after the effective date of this 2003 Act [August 29, 2003], including periods of service as a member of the Legislative Assembly served by reason of reelection to the Legislative Assembly after the effective date of this 2003 Act. [2003 c.733 §46f]

 

      238.305 Optional service retirement allowance calculations. (1) Not later than 60 days after the first benefit payment is made to a retired member of the Public Employees Retirement System, the member may elect to convert the allowance described by ORS 238.300 as payable after retirement into a service retirement annuity of equivalent actuarial value of one of the optional forms named below. The election of Option 2, 2A, 3 or 3A shall be effective immediately upon the member’s retirement.

      Option 1. (a) A life annuity (nonrefund) payable during the member’s life only, which shall be the actuarial equivalent of accumulated contributions by the member and interest thereon credited at the time of retirement (if death occurs before the first payment is due, the member account shall be treated as though death had occurred before retirement); (b) a life pension (nonrefund) provided by the contributions of employers as provided in ORS 238.300 (2); (c) an additional nonrefund pension for prior service credit, including military service, credited to the member at the time of first becoming a member of the system, as elsewhere provided in this chapter, which pension shall be provided by the contributions of the employer; or

      Option 2. A reduced service retirement allowance payable during the member’s life, with the provision that it continue after death for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the Public Employees Retirement Board at the time of election, should the beneficiary survive the member; or

      Option 2A. A reduced service retirement allowance payable during the member’s life which, unless modified under subsection (6) of this section, continues after death for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 3. A reduced service retirement allowance payable during the member’s life, with the provision that it continue after death at one-half the rate paid to the member and be paid for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 3A. A reduced service retirement allowance payable during the member’s life which, unless modified under subsection (6) of this section, continues after death at one-half the rate paid to the member and is paid for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 4. A reduced service retirement allowance payable during the member’s life, with the provisions that if the member dies before a total of 180 monthly payments is made, the remainder of the 180 monthly payments shall be paid monthly to the beneficiary the member nominates by written designation duly acknowledged and filed with the board at any time before the member’s death; and that if the member designates no beneficiary to receive the monthly payments or no such beneficiary is able to receive the monthly payments, an amount equal to the actuarial value, on the date of the member’s death, of the total of the monthly payments not made to the member shall be paid according to ORS 238.390 for disposal of an amount credited to the member account of a member at the time of death; and that if the beneficiary receiving monthly payments dies before the total number of monthly payments to which the beneficiary is entitled is made, an amount equal to the actuarial value, on the date of the beneficiary’s death, of the total of the monthly payments not made to the member and beneficiary shall be paid according to ORS 238.390 for disposal of an amount credited to the member account of a member at the time of death and as if the beneficiary had been a member.

      (2) Not later than 60 days after the first benefit payment is made to a retired member of the system, the member may elect, in lieu of the allowance described by ORS 238.300 as payable after retirement, a service retirement benefit consisting of:

      (a) A refund of accumulated contributions by the member and interest thereon credited at the time of refund; and

      (b) A life pension (nonrefund) provided by the contributions of employers as provided in ORS 237.147 (2) (1979 Replacement Part), and an additional life pension (nonrefund) for prior service credit as provided in ORS 238.300 (3). At the same time as making the election under this subsection, the member may elect to convert the pensions described by this paragraph into a service retirement annuity of equivalent actuarial value of one of the optional forms named as Option 2, 2A, 3 or 3A under subsection (1) of this section.

      (3) Not later than 60 days after the first benefit payment is made to a retired member of the system, the member may elect in lieu of the allowance described by ORS 238.300 a refund service retirement benefit consisting of:

      (a) A refund of accumulated contributions by the member and interest thereon credited at the time of retirement;

      (b) An amount that matches the amount of accumulated contributions by the member and interest thereon, provided by the contributions of employers; and

      (c) Interest on the amounts described in paragraphs (a) and (b) of this subsection from the effective date of retirement until the amounts are paid.

      (4)(a) If the member elects to receive the service retirement benefit described in subsection (2) or (3) of this section, the member shall elect at the same time to receive the refund described in subsection (2)(a) or (3) of this section in one lump sum payment or in more than one but not more than five installment payments. If the member elects installment payments:

      (A) The amount to be paid by employer contributions under subsection (3)(b) of this section shall be transferred to the individual account of the member in the Public Employees Retirement Fund as of the effective date of retirement.

      (B) The installment payments shall be paid once each year for the number of consecutive years equal to the number of installment payments elected.

      (C) The amount of each installment payment shall be designated by the member at the time of making the election, but the last installment payment shall be the unrefunded balance remaining in the member account of the member in the fund.

      (D) The member account of the member in the fund shall be maintained until the last installment payment is paid. The board shall establish procedures for computing and crediting interest annually on the unrefunded balance of the member account.

      (E) A yearly installment payment shall be paid on the anniversary of the date of the first installment payment.

      (F) The member is considered to have elected to transfer any balance in the variable account of the member to the regular account of the member.

      (G) If the member dies before payment of all installment payments, the unrefunded balance in the member account of the member plus interest to date of disbursement is payable as provided in ORS 238.390 (4).

      (b) If a member elects to receive the refund service retirement benefit described in subsection (3) of this section, and does not elect to receive those amounts in installments under the provisions of this subsection, all rights of the member in the system shall terminate upon the payment of the amounts provided for in subsection (3) of this section, except as provided in paragraph (c) of this subsection. If a member elects to receive the refund service retirement benefit described in subsection (3) of this section, and also elects to receive those amounts in installments under the provisions of this subsection, all rights of the member in the system shall terminate upon the making of the first payment, except as provided in paragraph (c) of this subsection.

      (c) A member who elects to receive the refund service retirement benefit described in subsection (3) of this section, and any eligible spouse or dependent of the member, shall continue to be eligible for insurance under ORS 238.410, and for any premium payments the member may be entitled to under ORS 238.415 and 238.420.

      (5) The designation of a beneficiary, the election of an option or any other election or designation under subsection (1), (2), (3) or (4) of this section may be changed by the member within 60 days after the date of the first benefit payment, except that the designation of a beneficiary under Option 4 may be changed by the member at any time before the member’s death.

      (6) If a retired member has elected to receive a service retirement allowance under Option 2A or Option 3A as provided in subsection (1) of this section, and if the beneficiary under that option dies after the expiration of the time within which the member could change the election of an option or if the beneficiary is the spouse of the member and the marriage relationship is terminated as provided by law after the expiration of the time within which the member could change the election of an option, the member may elect to receive, in lieu of the optional form of allowance previously elected, the allowance that the member would have received on the effective date of retirement under Option 1 as provided in subsection (1) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original allowance since the effective date of retirement. Notice of election under this subsection must be in a form approved by the board. If an election is made under this subsection, the Option 1 payment amount is applicable to the first full month after the death of the beneficiary, or the first full month after entry of the judgment of divorce, and payable the first day of the month thereafter. If the increased amount is not paid in any month in which the increased amount is due, the board shall make a lump sum payment to the retired member that is equal to the difference between the amount paid to the member for that month and the amount that should have been paid under the provisions of this subsection.

      (7) Notwithstanding any other provision of this section, any member of the system who retired before October 3, 1989, and elected to receive a service retirement allowance under either Option 2 or 3 as provided in subsection (1) of this section shall be entitled to receive a service retirement allowance equal to that which the member would have received on the effective date of retirement under Option 1 as provided in subsection (1) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original allowance since the effective date of retirement if:

      (a) The member has attained 80 years of age;

      (b) The person designated by the member as the member’s beneficiary has predeceased the member; and

      (c) The member gives written notice to the board of the death of the member’s beneficiary.

      (8) Notwithstanding any other provision of this section, any member of the system who retired before October 3, 1989, who elected to receive a refund of accumulated employee contributions and a life pension or pensions under subsection (2) of this section, and who elected to convert the life pension or pensions provided for in subsection (2) of this section into a service retirement annuity under Option 2 or 3 under subsection (1) of this section, shall be entitled to receive a life pension or pensions equal to that which the member would have received on the effective date of retirement under subsection (2) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original life pension or pensions since the effective date of retirement if:

      (a) The member has attained 80 years of age;

      (b) The person designated by the member as the member’s beneficiary has predeceased the member; and

      (c) The member gives written notice to the board of the death of the member’s beneficiary.

      (9) The service retirement allowance provided in subsection (7) or (8) of this section shall be applicable to the first full month after the death of the member’s beneficiary, or the first full month after the member attains 80 years of age, whichever is later.

      (10) The board may deny an election to convert a service retirement allowance under this section, a change of beneficiary under this section or a change in benefit options under this section if that denial is required to maintain the status of the system and the Public Employees Retirement Fund as a qualified governmental retirement plan and trust under the Internal Revenue Code and under regulations adopted pursuant to the Internal Revenue Code. [Formerly 237.155; 1997 c.180 §1; 1999 c.317 §10; 2001 c.945 §§8,68; 2003 c.625 §3; 2005 c.138 §1]

 

      Note: Section 3, chapter 180, Oregon Laws 1997, provides:

      Sec. 3. (1) If on October 4, 1997, a retired member is eligible for the service retirement allowance provided by ORS 238.305 (7) or (8) but was not eligible under ORS 238.305 (1995 Edition):

      (a) The member may give written notice of the member’s eligibility to the Public Employees Retirement Board at any time after October 4, 1997; and

      (b) The service retirement allowance of the retired member under ORS 238.305 (7) or (8) is first applicable to the first full month after the death of the member’s beneficiary, or the first full month after the member attained 80 years of age, whichever is later.

      (2) As soon as possible after October 4, 1997, the board shall calculate and mail a check for the amount of any retroactive payment required under subsection (1) of this section. The retroactive payment shall represent the difference between the total of all monthly amounts paid to the member before the first recalculated monthly payment is made under subsection (1) of this section, and the total of all monthly amounts that would have been paid to the member if ORS 238.305, as amended by section 1, chapter 180, Oregon Laws 1997, had been in effect on and after October 3, 1989. In no event shall the increased service allowance under ORS 238.305 (7), or the increased life pension or pensions under ORS 238.305 (8), be applicable to any monthly payment that was made before the first full month following October 3, 1989, and no retroactive payment shall be made under this section for any monthly payment that was made before the first full month following October 3, 1989. [1997 c.180 §3; 2001 c.945 §9]

 

      238.310 Minimum service retirement allowance. (1) Notwithstanding any other provision of this chapter, the service retirement allowance of a member who has 15 or more years of creditable service shall be not less than $100 a month, computed under the nonrefund plan:

      (a) For a member who retires and begins receiving a service retirement allowance before or on reaching the age of 65 years, on the basis of retirement at the age of 65 years.

      (b) For a member who retires and begins receiving a service retirement allowance after reaching the age of 65 years, on the basis of age reached at retirement.

      (2) Any member who receives a service retirement allowance calculated under the provisions of this section shall receive the retirement benefit in the form of a lump sum amount as provided in ORS 238.315. [Formerly 237.200; 2001 c.945 §85]

 

      238.315 Lump sum payment in lieu of small allowance. A member of the system who has separated from the service of all participating employers, who retires for service and whose total service retirement allowance on the effective date of retirement, as computed by the board in accordance with the nonrefund plan, is less than $200 per month, shall receive, in lieu of any and all retirement allowance or other benefits under the system, a retirement benefit in the form of a lump sum amount equal to the actuarial value, on the effective date of retirement, of the retirement allowance computed by the board in accordance with the nonrefund plan. A member who receives a retirement benefit as provided in this section is eligible to participate in insurance coverage under ORS 238.410, and the board shall determine the manner in which the cost of that coverage payable by the member shall be paid. [Formerly 237.151; 2001 c.945 §84]

 

(Disability Retirement Allowance)

 

      238.320 Disability retirement allowance. (1) Whenever an employee who is a member of the system is found, after being examined by one or more physicians selected by the board, to be mentally or physically incapacitated for an extended duration, as determined by medical examination, and thereby unable to perform any work for which qualified, by injury or disease sustained while in actual performance of duty and not intentionally self-inflicted, the member shall receive a disability retirement allowance consisting of:

      (a) A disability retirement refund annuity based on the contributions, if any, credited to the member account of the member.

      (b) A current service pension provided by the contributions of employers equal to:

      (A) For a police officer or firefighter, the pension to which the member would have been entitled if the member had worked continuously until attaining the age of 55, or if the member has attained the age of 55, the pension which the member would receive were the member to retire for service, as provided in this chapter.

      (B) For a member other than a police officer or firefighter, the pension to which the member would have been entitled if the member had worked continuously until attaining the age of 58, or if the member has attained the age of 58, the pension which the member would receive were the member to retire for service, as provided in this chapter.

      (c) The same prior service pension the member would have received had the member worked until normal retirement age.

      (2) As used in subsection (1) of this section, “injury” means bodily injury causing the disability directly and independently of all other causes and effected solely through accidental means.

      (3) Whenever an employee who is a member of the system and who has been an employee for 10 years or more of an employer participating in the system is found, after being examined by one or more physicians selected by the board, to be mentally or physically incapacitated for an extended duration, as determined by medical examination, and thereby unable to perform any work for which qualified, from cause other than injury or disease sustained while in actual performance of duty or intentionally self-inflicted, the member shall receive a disability retirement allowance as provided in subsection (1) of this section.

      (4) Payments under a disability retirement allowance provided for in subsection (1) or (3) of this section for the first 90-day period of incapacity shall be withheld until such 90-day period has elapsed.

      (5) An inactive member is not eligible for disability benefits referred to in subsection (1) or (3) of this section unless the member applies for such disability benefits within five calendar years after the date of separation from service with a participating public employer if the disability is continuous from such separation date or within six months after the date of such separation from service if disability occurs after such separation date.

      (6) In computing years of employment for the purpose of subsection (3) of this section, the following schedule shall be used: For employment before the employee established membership in the Public Employees Retirement System, a member shall be considered to have been employed for one year for each year of prior service credit allowed, and for any minor fraction of a year of continuous service as certified by the employer for which no prior service credit was granted. After having established membership in the Public Employees Retirement System a member shall be considered to have been employed one year for each 12-month period or major fraction thereof during which time the member received compensation for employment which entitled the member to membership in the system, as evidenced by payroll records. For the purpose of determining a member’s eligibility for disability benefits, no leave of absence after a member ceases to work for any participating employer shall be considered other than accumulated sick leave not in excess of 90 days. The effective date of the disability shall not in any event be determined by the board as prior to the last day for which the disabled member performed services for a participating employer. No benefits may be paid for any month in which the member received salary or sick leave benefits from the participating employer.

      (7) For the purposes of subsections (1) and (3) of this section, a member of the system shall be considered to be mentally or physically incapacitated for an extended duration if the mental or physical incapacity can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 90 days. [Formerly 237.171; 2001 c.945 §51; 2003 c.67 §24]

 

      238.325 Optional disability retirement allowance calculations. (1) At any time after establishing membership, but before the expiration of 90 days after the Public Employees Retirement Board makes its finding that the employee is disabled, an employee who is a member of the Public Employees Retirement System may elect to convert the disability retirement allowance otherwise payable on the member account of the member into a disability retirement annuity of equivalent actuarial value, by selecting one of the optional forms named below. The election of Option 2, 2A, 3 or 3A shall be effective immediately upon the effective date of the member’s disability, and in the event of death within the first 90-day period of incapacity, payment to the beneficiary of the member shall be made in accordance with the option selected.

      Option 1. (a) A life annuity (nonrefund) payable during the member’s life only, which shall be the actuarial equivalent of the accumulated contributions and interest thereon credited to the member at the time the member retires (if death occurs before the first payment is due, the member account of the member shall be treated as though death had occurred before retirement); (b) a life pension (nonrefund) provided by the contributions of employers as provided in ORS 238.320 (1)(b); (c) an additional nonrefund pension for prior service credit, including military service, credited to the member at the time the member first becomes a member of the system, as elsewhere provided in this chapter, which pension shall be provided by the contributions of the employer; or

      Option 2. A reduced disability retirement allowance payable during the period of incapacity, with the provision that after death, if death shall occur after the effective date of the disability and during the period of incapacity, it shall continue for the life of the beneficiary whom the member has designated in writing duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 2A. A reduced disability retirement allowance payable during the period of incapacity which, unless modified under subsection (3) of this section, continues after death, if death shall occur after the effective date of the disability and during the period of incapacity, for the life of the beneficiary whom the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 3. A reduced disability retirement allowance payable during the period of incapacity, with the provision that after death, if death shall occur after the effective date of the disability and during the period of incapacity, such allowance shall continue at one-half the rate paid to the member and be paid for the life of the beneficiary whom the member has designated in writing duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 3A. A reduced disability retirement allowance payable during the period of incapacity which, unless modified under subsection (3) of this section, continues after death, if death shall occur after the effective date of the disability and during the period of incapacity, at one-half the rate paid to the member and is paid for the life of the beneficiary whom the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or

      Option 4. A reduced disability retirement allowance payable during the period of incapacity, with the provisions that if the member dies during the period of incapacity and before a total of 180 monthly payments is made, the remainder of the 180 monthly payments shall be paid monthly to the beneficiary the member nominates by written designation duly acknowledged and filed with the board at any time before the member’s death; and that if the member designates no beneficiary to receive the monthly payments or no such beneficiary is able to receive the monthly payments, an amount equal to the actuarial value, on the date of the member’s death, of the total of the monthly payments not made to the member shall be paid according to ORS 238.390 for disposal of an amount credited to the member account of a member at the time of death; and that if the beneficiary receiving monthly payments dies before the total number of monthly payments to which the beneficiary is entitled is made, an amount equal to the actuarial value, on the date of the beneficiary’s death, of the total of the monthly payments not made to the member and beneficiary shall be paid according to ORS 238.390 for disposal of an amount credited to the member account of a member at the time of death and as if the beneficiary had been a member.

      (2) The beneficiary designated by a member to receive any benefit under this section shall be the same as designated under ORS 238.390 (1). The designation of a beneficiary or the election of an option may be changed by a member within 60 days after the date of the first benefit payment, except that the designation of a beneficiary under Option 4 may be changed by the member at any time before the member’s death.

      (3) If a retired member has elected to receive a disability retirement allowance under Option 2A or Option 3A as provided in subsection (1) of this section, and if the beneficiary under that option dies after the expiration of the time within which the member could change the election of an option or if the beneficiary is the spouse of the member and the marriage relationship is terminated as provided by law after the expiration of the time within which the member could change the election of an option, the member may elect to receive, in lieu of the optional form of allowance previously elected, the allowance that the member would have received on the effective date of retirement under Option 1 as provided in subsection (1) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original allowance since the effective date of retirement. Notice of election under this subsection must be in a form approved by the board. If an election is made under this subsection, the Option 1 payment amount is applicable to the first full month after the death of the beneficiary, or the first full month after entry of the judgment of divorce, and payable the first day of the month thereafter. If the increased amount is not paid in any month in which the increased amount is due, the board shall make a lump sum payment to the retired member that is equal to the difference between the amount paid to the member for that month and the amount that should have been paid under the provisions of this subsection.

      (4) The cost to the system of a disability retirement allowance in any optional form may not exceed the cost to the system of a nonrefund disability retirement allowance payable to, and on account of, the member making such election.

      (5) The obligation for payment of any benefit in force prior to April 8, 1953, may not be altered by subsections (1) to (4) of this section. However, the beneficiary of a retired member who prior to July 1, 1953, elected an option but died prior to the effective date of such election, shall have a right to repay, before December 31, 1953, the amount of the lump sum refund made in lieu of the monthly life benefit elected and receive payment of such benefit, computed as of the date of the member’s death and payable from such date.

      (6) If a member who would have qualified for disability benefits makes preliminary application for such benefits but dies prior to being found by the board to be disabled or prior to electing a plan of benefit payments, and the records of the board indicate that the member had designated the surviving spouse as beneficiary under ORS 238.390 (1), such surviving spouse may, not more than 90 days after the board makes its finding that the member would have qualified for disability benefits if living:

      (a) Elect to receive the amount referred to in ORS 238.395 if such benefit would have been available if the member had not applied for disability benefits;

      (b) If not eligible for benefits under ORS 238.395, elect to receive benefits under ORS 238.390 (1); or

      (c) Elect Option 2 or 3 under subsection (1) of this section and designate the surviving spouse as beneficiary thereunder with the same force and effect as if the election and designation had been properly made by the deceased member.

      (7) The board may deny an election to convert a disability retirement allowance under this section, a change of beneficiary under this section or a change in benefit options under this section if that denial is required to maintain the status of the system and the Public Employees Retirement Fund as a qualified governmental retirement plan and trust under the Internal Revenue Code and under regulations adopted pursuant to the Internal Revenue Code. [Formerly 237.181; 1999 c.317 §11; 2001 c.945 §52; 2005 c.138 §2]

 

      238.330 Minimum disability retirement allowance. (1) Whenever an active or inactive member of the system has been found to be entitled to a disability retirement allowance as provided in ORS 238.320, the member shall receive not less than an aggregate of $100 a month under the nonrefund plan, subject to reduction to equivalent actuarial value in the event of the member’s exercising any option provided by ORS 238.325.

      (2) Notwithstanding ORS 238.320, 238.325 and subsection (1) of this section, if an active or inactive member of the system has been found to be entitled to a disability retirement allowance as provided in ORS 238.320 after the member has passed earliest service retirement age, the amount of monthly disability retirement allowance shall not be less than the amount which the member would have received had the member retired for service and elected the same option.

      (3) Notwithstanding ORS 238.320, 238.325 and subsection (1) of this section, the amount of a monthly disability retirement allowance shall be reduced by the amount by which the combined total of the disability retirement allowance to which the retired member is otherwise entitled for the month and the earned income for the month exceeds the monthly salary received by the retired member at the time of retirement for disability; but the amount of the reduction shall not reduce the combined total of the disability retirement allowance and earned income for the month to less than $400. [Formerly 237.187]

 

      238.335 Medical examination for disability retirement allowance; rules. The board shall require medical examinations for all applicants for retirement for disability under such general rules as it prescribes, and may provide for the discontinuance of any disability retirement allowance and the forfeiture of all rights under this chapter, in the case of any person who refuses to submit to such an examination. [Formerly 237.191]

 

      238.340 Return to work. When a member retired because of disability is determined by the Public Employees Retirement Board to be not incapacitated to the extent that the member is disabled from the performance of any work for which the member is qualified, the disability retirement shall be canceled forthwith, the member shall be eligible for reemployment and the member account of the member shall be credited with the amount that stood to the credit in the member account of the member in the fund at the time of retirement for disability. Any such person who for any reason is not reinstated in the service of an employer participating in the system shall receive separation benefits or service retirement benefits as provided in this chapter. [Formerly 237.195; 1997 c.53 §1; 2001 c.945 §53]

 

      238.345 Optional service-connected disability retirement allowance for police officers and firefighters. (1) A police officer or firefighter, other than a volunteer firefighter, who would be entitled to receive disability benefits as a member of the Public Employees Retirement System under ORS 238.320 (1), may elect to receive the service-connected disability retirement allowance authorized under this section. The allowance authorized under this section is an amount equal to 50 percent of the police officer’s or firefighter’s final average salary as determined at the date of the injury causing the disability. If elected, the allowance authorized under this section is in lieu of any service-connected disability retirement benefit available under this chapter.

      (2) The election to receive the benefits authorized under subsection (1) of this section shall be made within 90 days after the board makes its decision that the police officer or firefighter is disabled. The election once made shall not be changed.

      (3) A police officer or firefighter electing to receive the benefits authorized under subsection (1) of this section may elect to convert those benefits to a service-connected disability retirement annuity of equivalent actuarial value as provided in ORS 238.325.

      (4) Nothing in this section shall interfere with the right of a police officer or firefighter to receive a disability retirement allowance under this chapter for disability not incurred in the line of duty. [Formerly 237.173]

 

(Use of Sick Leave to Increase Retirement Allowance)

 

      238.350 Use of unused sick leave to increase retirement allowance; rules. (1)(a) Upon the request by a public employer that its employees be compensated for accumulated unused sick leave with pay in the form of increased retirement benefits upon service or disability retirement, the board shall establish a procedure for adding to the gross amount of salary used in determining final average salary the monetary value of one-half of the accumulated unused sick leave with pay of each retiring employee of the requesting public employer and shall establish benefits of the retiring employee on the basis of a final average salary reflecting that addition.

      (b) For employees of a common school district, a union high school district, an education service district or a community college, or employees of the State Board of Higher Education engaged in teaching or other school activity at an institution of higher education, or employees of schools operated under ORS 346.010 engaged in teaching or other school activity, who are employed under contract for a period of less than 12 consecutive months and who are entitled to sick leave with pay of less than 96 hours for a year, each hour of accumulated unused sick leave with pay shall be valued on the basis of the actual number of contract hours of employment during the last year of contributing membership of an employee before retiring and the salary of the employee during the same period. This paragraph does not apply to any employee who is employed under contract for 12 consecutive months in any of the three or less years used in determining the final average salary of the employee.

      (c) For the purpose of this subsection, accumulated unused sick leave with pay includes unused sick leave with pay accumulated by an active member of the system while in the service of any public employer participating in the system that has the request described in paragraph (a) of this subsection in effect at the time of the member’s separation from the service of the employer, whether that employer is or is not the employer of the member at the time of the member’s retirement.

      (d) The board shall establish rules requiring all public employers participating in the system to transmit to the board reports of unused sick leave with pay accumulated by their employees who are members of the system and to provide timely notification to each of those employees of unused sick leave with pay accumulated by the employee and reported to the board.

      (2) Accumulated unused sick leave with pay may be considered for the purpose of subsection (1) of this section only in accordance with the following requirements:

      (a) Sick leave not credited at the rate actually provided by the public employer may not be considered. The amount of sick leave exceeding an amount credited at the lowest rate in effect for any employee of the public employer who is normally entitled to sick leave, and in any event exceeding an amount credited at a rate of eight hours for each full month worked, may not be considered.

      (b) Sick leave credited for periods when an employee was absent from employment on sabbatical leave, educational leave or any leave without pay may not be considered.

      (c) Any period during which an employee was absent from employment for illness or injury that was charged against sick leave not qualified for consideration shall be deducted from sick leave qualified for consideration.

      (d) Sick leave for any period for which the public employer provides no sick leave with pay for its employees may not be considered.

      (e) Sick leave accumulated on and after July 1, 1973, may be considered only to the extent it is supported by records of accumulation and use pursuant to a plan adopted formally by the public employer.

      (f) Accumulated unused sick leave for periods before July 1, 1973, may be considered as follows:

      (A) If any department, bureau or other organizational unit of a public employer maintained formal records of accumulation and use even though the public employer did not require that those records be maintained, the accumulated unused sick leave shall be considered according to those records.

      (B) Where the public employer provided sick leave before July 1, 1973, but formal records of accumulation and use were not required or if required, are unavailable or incomplete, or the sick leave was subject to administrative limitations on total accumulation or transfer between public employers, accumulated unused sick leave for periods before July 1, 1973, may be considered as equal to 2.675 hours for each full month worked or an amount per month equal to the average monthly accumulation by an employee during the period beginning July 1, 1973, and ending at the time of retirement, whichever amount is greater, but reduced by the amount of any accumulated unused sick leave credited to the employee on July 1, 1973.

      (g) The written certification of a member or former member of the Legislative Assembly shall constitute a formal record of accumulation and use in determining the amount of accumulated unused sick leave of an employee of the Legislative Assembly, either of its houses or any of its committees or officers for periods of employment before July 1, 1981. Sick leave accumulated on and after July 1, 1981, by employees of the Legislative Assembly, either of its houses or any of its committees or officers may be considered only to the extent it is supported by records of accumulation and use maintained by the Legislative Administration Committee, or any statutory, standing, special or interim committee of the Legislative Assembly or either house thereof, or any constitutional or statutory office of the Legislative Assembly or either house thereof, pursuant to a plan adopted formally by the committee or officer.

      (3)(a) As used in this subsection, “legislative employee” means any person employed by the Legislative Assembly, either of its houses or any of its committees or officers, but does not include a regular employee of a statutory committee or statutory office of the Legislative Assembly described in ORS 173.005 (1).

      (b) Upon the request of a retiring legislative employee who is a member of the system, and the request of the public employer of the legislative employee, that the legislative employee be compensated for accumulated unused vacation with pay for periods of legislative employment in the form of increased retirement benefits upon service or disability retirement, the board shall add to the gross amount of salary used in determining final average salary of the legislative employee the monetary value of one-half of the accumulated unused vacation with pay of the legislative employee and shall establish the benefits of the legislative employee on the basis of a final average salary reflecting that addition.

      (c) Accumulated unused vacation with pay may be considered for the purposes of paragraph (b) of this subsection only in accordance with the following requirements:

      (A) Vacation not credited at the rate actually provided by the public employer may not be considered.

      (B) Amounts of vacation exceeding amounts creditable to employees in the classified service of the state service pursuant to ORS 240.515 (1), and rules adopted pursuant thereto, in effect on June 30, 1981, shall not be considered.

      (C) Vacation accumulated before, on and after July 1, 1981, may be considered only to the extent it is supported by records of accumulation and use pursuant to a plan adopted formally by the public employer. However, the written certification of a member or former member of the Legislative Assembly shall constitute a formal record of accumulation and use in determining the amount of accumulated unused vacation of a legislative employee for periods of legislative employment before July 1, 1981.

      (4) Employers with plans providing payments on account of sickness in lieu of sick leave with pay may request the board to consider the monetary value of accumulated unused payments on account of sickness as if such payments were an equivalent amount of accumulated unused sick leave with pay under the same terms and conditions specified in subsections (1) and (2) of this section. [Formerly 237.153; 1997 c.249 §68; 2001 c.295 §10; 2007 c.70 §57; 2007 c.858 §60]

 

      238.355 Computation of unused sick leave for community college employees. Notwithstanding ORS 238.350 (2)(a), unused sick leave for community college employees shall accumulate for an unlimited number of days and shall accumulate at the rate of 10 days per school year or one day per month employed, whichever is greater. Except as provided in ORS 238.350 (1)(b), unused sick leave accumulated by community college employees shall be computed in the same manner as for employees in state classified service for computation of retirement benefits. [Formerly 237.017 (1)]

 

(Cost-of-Living Adjustments)

 

      238.360 Cost-of-living adjustments. (1) As soon as practicable after January 1 each year, the Public Employees Retirement Board shall determine the percentage increase or decrease in the cost-of-living for the previous calendar year, based on the Consumer Price Index (Portland area–all items) as published by the Bureau of Labor Statistics of the U.S. Department of Labor for the Portland, Oregon, area. Prior to July 1 each year the allowance which the member or the member’s beneficiary is receiving or is entitled to receive on August 1 for the month of July shall be multiplied by the percentage figure determined, and the allowance for the next 12 months beginning July 1 adjusted to the resultant amount.

      (2) Such increase or decrease shall not exceed two percent of any monthly retirement allowance in any year and no allowance shall be adjusted to an amount less than the amount to which the recipient would be entitled if no cost-of-living adjustment were authorized.

      (3) The amount of any cost-of-living increase or decrease in any year in excess of the maximum annual retirement allowance adjustment of two percent shall be accumulated from year to year and included in the computation of increases or decreases in succeeding years.

      (4) Any increase in the allowance shall be paid from contributions of the public employer under ORS 238.225. Any decrease in the allowance shall be returned to the employer in the form of a credit against contributions of the employer under ORS 238.225. [Formerly 237.060; 2001 c.945 §79]

 

      238.365 [Formerly 237.209; 2001 c.945 §69; renumbered 238.387 in 2001]

 

      238.370 [Formerly 237.199; repealed by 2001 c.945 §73]

 

(Benefit Increases in Compensation of Claims Based on Taxation of Benefits)

 

      238.375 Increased benefits payable in compensation for certain damages attributable to taxation of benefits. (1) Notwithstanding any other provision of sections 3 to 10, chapter 569, Oregon Laws 1995, the increased benefits payable under ORS 238.380 and 238.387 (2), including all increased benefits payable to judge members by reason of the application of ORS 238.380 and 238.387 (2) to judge members, and under section 10, chapter 569, Oregon Laws 1995:

      (a) Shall not be paid in any tax year in which retirement benefits that are payable under the Public Employees Retirement System and that are attributable to service rendered by the member before September 29, 1991, are wholly exempt from Oregon personal income taxation under Oregon law.

      (b) Shall be reduced proportionately for any tax year in which retirement benefits that are payable under the Public Employees Retirement System and that are attributable to service rendered by the member before September 29, 1991, are partially exempt from Oregon personal income taxation under Oregon law.

      (2) An overpayment of benefits that results from the operation of subsection (1) of this section is not recoverable from the recipient of the benefits, but the Public Employees Retirement Board shall ensure that no additional overpayments are made.

      (3) No member of the system or beneficiary of a member of the system shall acquire a right, contractual or otherwise, to the increased benefits provided by sections 3 to 10, chapter 569, Oregon Laws 1995.

      (4)(a) Notwithstanding any other provision of law, a class action may not be commenced on or after July 14, 1995, based on a claim for damages arising out of the subjecting of benefits paid under this chapter to Oregon personal income taxation by act of the Legislative Assembly.

      (b) Notwithstanding any other provision of law, any court in which there is pending on May 30, 1997, a class action that was commenced before July 14, 1995, based on a claim for damages arising out of the subjecting of benefits paid under this chapter to Oregon personal income taxation, may at any time after May 30, 1997, reopen that class action if by act of the Legislative Assembly there is a decrease in the benefit payable under ORS 238.380 or 238.387 (2), or in the benefits payable to judge members by reason of the application of ORS 238.380 or 238.387 (2) to judge members, or in the benefits payable to any member, judge member or beneficiary under section 10, chapter 569, Oregon Laws 1995, without an equivalent decrease in the personal income tax imposed under Oregon law on benefits paid under the system that are attributable to service rendered before September 29, 1991. Upon reopening the class action, the court may change the membership of the classes and may grant such further relief as may be warranted, including the entry of a judgment for damages or a judgment for supplemental relief under ORS 28.080. [1995 c.569 §2; 1997 c.175 §4; 2001 c.945 §70]

 

      238.380 Calculation of increased benefit payable under ORS 238.375. (1)(a) Upon retirement of an employee who is a member of the Public Employees Retirement System and computation of that member’s service retirement allowance under ORS 238.300, 238.305 or 238.425, or computation of any disability retirement allowance under ORS 238.320, 238.325, 238.330, 238.345 or 238.425, the Public Employees Retirement Board shall add to the amount of the allowance, including amounts attributable to prior service credit and the amount of any refund of accumulated employee contributions, the greater of the percentage increase calculated under ORS 238.385 or a percentage increase calculated under subsection (4) of this section. No benefit shall be paid to a member or beneficiary under ORS 238.385 if the benefit payable to the member or beneficiary under this section is larger than the benefit payable under ORS 238.385.

      (b) The percentage increase provided for in this section shall be adjusted by the board to reflect increases or decreases in a member’s retirement allowance that are attributable to the member’s participation in the Variable Annuity Account established by ORS 238.260, that are attributable to a change in the member’s beneficiary or payment option under ORS 238.305 or 238.325, or that are attributable to corrections to the member’s retirement allowance calculation.

      (c) The percentage increase provided for in this section shall be applied to any lump sum payment made to a member or a beneficiary of a member on or after January 1, 1991, that is attributable to a retroactive correction or adjustment of the amount payable to the member or beneficiary as a retirement allowance or that is attributable to a retroactive correction or adjustment to any other benefit that entitles a member or beneficiary to an increased benefit under this section. The percentage increase payable under this paragraph applies only to the principal amounts included in the lump sum payment as a retroactive correction or adjustment and does not apply to any interest on the retroactive correction or adjustment paid as part of the lump sum payment.

      (2) The amount of any death benefit under ORS 238.390, 238.395, 238.400 or 238.405, including the amount of any monthly payments, shall be increased by the greater of the percentage provided for in ORS 238.385 or the percentage calculated under subsection (4) of this section.

      (3)(a) A member of the system who elects to receive a lump sum in lieu of a retirement allowance or other benefit under ORS 238.315 shall receive an increase based on the greater of the percentage provided for in ORS 238.385 or the percentage calculated under subsection (4) of this section.

      (b) A member of the system who withdraws the amount credited to the member account, if any, of the member in the fund under the provisions of ORS 238.265, or whose member account is returned to the employee after the membership of the employee is terminated under the provisions of ORS 238.095, shall receive an additional amount calculated by multiplying the amount of the member account of the member by the greater of the percentage provided for in ORS 238.385 or the percentage calculated under subsection (4) of this section. If a member thereafter elects to obtain restoration of creditable service by repaying the amount of the withdrawn member account pursuant to the provisions of ORS 238.105, the member must also repay all amounts paid under this section, together with interest from the date of withdrawal at the same rate as applied to the withdrawn member account under ORS 238.105. If a member repays only part of the withdrawn member account pursuant to the provisions of ORS 238.115, the member must repay that part of the amount paid under this section that is proportionate to the portion of the withdrawn member account that is repaid under ORS 238.115, together with interest from the date of withdrawal at the same rate as applied to the withdrawn member account under ORS 238.115. All amounts paid to the member that are subsequently repaid under ORS 238.105 or 238.115 shall be deposited by the board to the employer reserve for pension accounts in the fund.

      (4)(a) The Public Employees Retirement Board shall calculate a multiplier for the purposes of this section equal to the percentage produced by the following formula:

 

1

______________________

1 − the maximum Oregon

personal income tax rate

 

      (b) Upon the retirement or death of a member of the system, the board shall determine the fraction of the member’s retirement allowance or death benefit, including any refund or lump sum payment, that is attributable to service rendered by the member before October 1, 1991. The board shall then calculate a percentage that is equal to that fraction multiplied by the multiplier determined by the board under paragraph (a) of this subsection. The percentage so calculated shall be used to determine the amount of the increase in benefits provided to a member, if any, under this section.

      (5) For the purpose of determining that portion of a retirement allowance or death benefit attributable to service rendered before October 1, 1991, the board shall divide the number of years of creditable service performed before October 1, 1991, by the total number of years of creditable service during which the pension income was earned. For the purposes of this subsection:

      (a) The number of years of creditable service does not include any period of employment for which a benefit is paid for prior service credit.

      (b) Except as provided in subsection (8)(a) of this section, the number of years of creditable service includes all retirement credit of the member, and any retirement credit of a member that is attributable to periods of service, employment or other activity performed before October 1, 1991, shall be considered creditable service performed before October 1, 1991.

      (6) The increased benefits provided for in this section shall be funded by employer contributions.

      (7) If the maximum Oregon income tax rate is changed for any taxable year, the board shall utilize the new rate for the purposes of calculating the benefit provided for in this section for all members of the system who retire or die after the change in rates takes effect. In addition, the board shall recalculate the benefits payable to all retired members of the Public Employees Retirement System, or to the beneficiaries of those members, using the new tax rate. The benefit so recalculated shall be applicable to the first full month after the recalculation is made, and be payable the first day of the month immediately following. If by reason of the calculation or recalculation of the benefit under this subsection the amount of the benefit provided for in this section is decreased, any benefits paid after the change in the tax rate takes effect and before the calculation or recalculation is made shall not be recoverable by the system, but the Public Employees Retirement Board shall ensure that only the amount of the benefit so calculated or recalculated shall be paid after the calculation or recalculation is made.

      (8)(a) The increased benefits provided by this section apply only to members who establish membership in the Public Employees Retirement System before July 14, 1995, and whose effective date of retirement or date of death is on or after January 1, 1991. The increased benefits provided by this section do not apply to any creditable service or prior service credit acquired by a member under the terms of a contract of integration entered into pursuant to ORS 238.035, 238.680 or 238.690 on or after October 1, 1991.

      (b) The recalculation of benefits provided for in subsection (7) of this section applies to all retired members, without regard to the date of the member’s retirement or death.

      (9) If a member is entitled to receive an increased benefit under the provisions of this section, and any portion of the member’s retirement allowance or other benefit payable under the system is payable to an alternate payee under the provisions of ORS 238.465, the increased benefits payable under this section shall be divided between the member and the alternate payee in proportion to the share of the total benefit received by each person. If an alternate payee elects to begin receiving benefits under ORS 238.465 (1) before the member’s effective date of retirement, the alternate payee may not begin receiving the increased benefit provided for in this section until benefits are first paid from the system on behalf of the member.

      (10) A person establishes membership in the system before July 14, 1995, for the purposes of subsection (8) of this section if:

      (a) The person is a member of the system, or a judge member of the system, on July 14, 1995;

      (b) The person was a member of the system before July 14, 1995, ceased to be a member of the system under the provisions of ORS 238.095, 238.265 or 238.545 before July 14, 1995, but restores part or all of the forfeited creditable service from before July 14, 1995, under the provisions of ORS 238.105 or 238.115 after July 14, 1995; or

      (c) The person performed any period of service for a participating public employer before July 14, 1995, 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. [1995 c.569 §3; 1997 c.175 §5; 2001 c.945 §54; 2003 c.67 §30]

 

      238.385 Retirement allowance increase based on years of service. (1)(a) Upon retirement of an employee who is a member of the Public Employees Retirement System and computation of that member’s service retirement allowance under ORS 238.300, 238.305 or 238.425, or computation of any disability retirement allowance under ORS 238.320, 238.325, 238.330, 238.345 or 238.425, the Public Employees Retirement Board shall add to the amount of the allowance, including amounts attributable to prior service credit and the amount of any refund of accumulated member contributions, an additional amount equal to the percentage increase provided in subsection (4) of this section.

      (b) The percentage increase provided for in this section shall be adjusted by the board to reflect increases or decreases in a member’s retirement allowance that are attributable to the member’s participation in the Variable Annuity Account established by ORS 238.260, that are attributable to a change in the member’s beneficiary or payment option under ORS 238.305 or 238.325, or that are attributable to corrections to the member’s retirement allowance calculation.

      (c) The percentage increase provided for in this section shall be applied to any lump sum payment made to a member or a beneficiary of a member on or after January 1, 1991, that is attributable to a retroactive correction or adjustment of the amount payable to the member or beneficiary as a retirement allowance or that is attributable to a retroactive correction or adjustment to any other benefit that entitles a member or beneficiary to an increased benefit under this section. The percentage increase payable under this paragraph applies only to the principal amounts included in the lump sum payment as a retroactive correction or adjustment and does not apply to any interest on the retroactive correction or adjustment paid as part of the lump sum payment.

      (2) The amount of any death benefit under ORS 238.390, 238.395, 238.400 or 238.405, including the amount of any monthly payments, shall be increased by an amount equal to the percentage increase provided in subsection (4) of this section.

      (3)(a) A member of the system who receives a lump sum under ORS 238.315 in lieu of a retirement allowance or other benefit shall receive an additional amount equal to the percentage increase provided in subsection (4) of this section.

      (b) A member of the system who withdraws the amount credited to the member account, if any, of the member under the provisions of ORS 238.265, or whose member account is returned to the employee after the membership of the employee is terminated under the provisions of ORS 238.095, shall receive an additional amount calculated by multiplying the amount of the member account of the member by the percentage increase provided for under subsection (4) of this section. If a member thereafter elects to obtain restoration of creditable service by repaying the amount of the withdrawn member account pursuant to the provisions of ORS 238.105, the member must also repay all amounts paid under this section, together with interest from the date of withdrawal at the same rate as applied to the withdrawn member account under ORS 238.105. If a member repays only part of the withdrawn member account pursuant to the provisions of ORS 238.115, the member must repay that part of the amount paid under this section that is proportionate to the portion of the withdrawn member account that is repaid under ORS 238.115, together with interest from the date of withdrawal at the same rate as applied to the withdrawn member account under ORS 238.115. All amounts paid to the member that are subsequently repaid under ORS 238.105 or 238.115 shall be deposited by the board to the employer reserve for pension accounts in the fund.

      (4)(a) The percentage increases provided for in this section to the benefits payable to or on account of a member of the system who is serving as other than a police officer or firefighter at the time of death or retirement shall be:

      (A) For a member with a combined total of 10 or more years of creditable service in the system and prior service credit but less than a combined total of 20 years, one percent.

      (B) For a member with a combined total of 20 or more years of creditable service in the system and prior service credit but less than a combined total of 25 years, two percent.

      (C) For a member with a combined total of 25 or more years of creditable service in the system and prior service credit but less than a combined total of 30 years, three percent.

      (D) For a member with a combined total of 30 or more years of creditable service in the system and prior service credit, four percent.

      (b) The percentage increases provided for in this section to the benefits payable to or on account of a member of the system who is serving as a police officer or firefighter at the time of death or retirement shall be:

      (A) For a member with a combined total of 10 or more years of creditable service in the system and prior service credit but less than a combined total of 20 years, one percent.

      (B) For a member with a combined total of 20 or more years of creditable service in the system and prior service credit but less than a combined total of 25 years, two and one-half percent.

      (C) For a member with a combined total of 25 or more years of creditable service in the system and prior service credit, four percent.

      (c) The benefits payable to or on account of a member with less than a combined total of 10 years of creditable service in the system and prior service credit at the time of death or retirement shall not be increased under the provisions of this section.

      (5) The increased benefits provided for in this section shall be funded by employer contributions.

      (6) This section applies only to a member who establishes membership in the Public Employees Retirement System before July 14, 1995, as described in ORS 238.380 (10), and whose effective date of retirement or date of death is on or after January 1, 1991. The increased benefits provided by this section do not apply to any creditable service or prior service credit acquired by a member under the terms of a contract of integration entered into pursuant to ORS 238.035, 238.680 or 238.690 on or after October 1, 1991.

      (7) If a member is entitled to receive an increased benefit under the provisions of this section, and any portion of the member’s retirement allowance or other benefit payable under the system is payable to an alternate payee under the provisions of ORS 238.465, the increased benefits payable under this section shall be divided between the member and the alternate payee in proportion to the share of the total benefit received by each person. If an alternate payee elects to begin receiving benefits under ORS 238.465 (1) before the member’s effective date of retirement, the alternate payee may not begin receiving the increased benefit provided for in this section until benefits are first paid from the system on behalf of the member. [Formerly 237.208; 1997 c.175 §6; 2001 c.945 §55; 2003 c.67 §31]

 

      238.387 Retirement allowance increases for members who retired before January 1, 1991. (1) In addition to any increase under ORS 238.360, first effective for the month of December 1990, payable January 1, 1991, the monthly retirement allowance payable to or on account of any person who has retired as a member of the Public Employees Retirement System shall be increased by the following percentages:

      (a) If the member was serving as other than a police officer or firefighter at the time of retirement, the percentage increase shall be:

      (A) For a member with a combined total of 10 or more years of creditable service in the system and prior service credit but less than a combined total of 20 years, one percent.

      (B) For a member with a combined total of 20 or more years of creditable service in the system and prior service credit but less than a combined total of 25 years, two percent.

      (C) For a member with a combined total of 25 or more years of creditable service in the system and prior service credit but less than a combined total of 30 years, three percent.

      (D) For a member with a combined total of 30 or more years of creditable service in the system and prior service credit, four percent.

      (b) If the member was serving as a police officer or firefighter at the time of retirement, the percentage increase shall be:

      (A) For a member with a combined total of 10 or more years of creditable service in the system and prior service credit but less than a combined total of 20 years, one percent.

      (B) For a member with a combined total of 20 or more years of creditable service in the system and prior service credit but less than a combined total of 25 years, two and one-half percent.

      (C) For a member with a combined total of 25 or more years of creditable service in the system and prior service credit, four percent.

      (c) The monthly retirement allowance payable to or on account of a member with less than a combined total of 10 years of creditable service in the system and prior service credit at the time of retirement shall not be increased under the provisions of this subsection.

      (2) In addition to any increase under ORS 238.360, first effective for the month of December 1990, payable January 1, 1991, the monthly retirement allowance payable to or on account of any person who has retired as a member of the Public Employees Retirement System shall be increased by a percentage equal to the percentage calculated under ORS 238.380 (4), less any increase provided to the retired member under subsection (1) of this section.

      (3) The increased allowance provided in subsections (1) and (2) of this section shall be funded by employer contributions. [Formerly 238.365]

 

(Death Benefits)

 

      238.390 Death benefit. (1) If a member of the system dies before retiring, the amount of money, if any, credited at the time of death to the member account of the member in the fund shall be paid to the beneficiaries designated by the member. For this purpose a member may designate as a beneficiary any person or the executor or administrator of the estate of the member or a trustee named by the member to execute an express trust in regard to such amount. The termination of a person’s membership in the system pursuant to ORS 238.095 (1) or (2) invalidates any designation of beneficiary made by the person before the termination of membership.

      (2) If a member dies before retiring and has not designated a beneficiary under subsection (1) of this section, the Public Employees Retirement Board shall pay the amount of money, if any, credited at the time of death to the member account of the deceased member to a personal representative appointed for the estate of the deceased member. If an affidavit has been filed under ORS 114.505 to 114.560, and the amount of money credited to the account does not exceed the maximum amount of personal property for which an affidavit may be filed under ORS 114.505 to 114.560, the board shall pay the amount to the person who filed the affidavit.

      (3) The beneficiary designated under subsection (1) of this section may elect to receive the amount payable in actuarially determined monthly payments for the life of such beneficiary as long as such monthly payments are at least $200.

      (4) Accrued benefits due a retired member at the time of death are payable to the designated beneficiary or as provided in subsection (2) of this section. For the purpose of determining accrued benefits due a retired member at the time of death, accrued benefits are considered to have ceased as of the last day of the month preceding the month in which the retired member dies; but if Option 2 or Option 3 under ORS 238.305 has been elected as provided in this chapter and the beneficiary survives the retired member, the benefits to the beneficiary shall commence as of the first day of the month in which the retired member dies, and payment of benefits under Option 2 or Option 3 shall cease with the payment for the month preceding the month in which the beneficiary dies.

      (5) If a member dies before retiring and has designated a beneficiary under subsection (1) of this section, but the beneficiary dies before the member, or dies before distribution is made under this section, the Public Employees Retirement Board shall pay the amount of money, if any, that would otherwise have been paid to the beneficiary to a personal representative appointed for the estate of the deceased beneficiary. If an affidavit has been filed under ORS 114.505 to 114.560, and the amount of money that would have been paid to the beneficiary does not exceed the maximum amount of personal property for which an affidavit may be filed under ORS 114.505 to 114.560, the board shall pay the amount to the person who filed the affidavit on behalf of the estate of the beneficiary.

      (6) Interest upon the member account of the member shall accrue until the date that the amount in the member account is distributed. Any balance in the variable account of the deceased member is considered to be transferred to the regular account of the member as of the date of death. The board shall establish procedures for computing and crediting interest on the balance in the member account for the period between the date of death and date of distribution.

      (7) Payment by the board of amounts in the manner provided by this section completely discharges the board and system on account of the death, and shall hold the board and system harmless from any claim for wrongful payment. [Formerly 237.165; 2001 c.945 §56; 2003 c.67 §25; 2003 c.625 §1; 2005 c.808 §28]

 

      238.395 Additional death benefit. (1) In addition to any other benefits under this chapter, a death benefit, provided by contributions of the public employer under ORS 238.225, shall be paid to the beneficiaries designated under ORS 238.390 (1) of a person who is an active or inactive member of the system and who dies as a result of injuries received while employed in the service of the public employer or within 120 days after termination from service with a participating public employer. A member who is on a leave of absence without pay from employment with a participating public employer has not terminated service with that participating public employer for the purposes of this section.

      (2) The death benefit referred to in subsection (1) of this section shall be an amount equal to the amount in the member account of the deceased member at the time of death.

      (3) In the event that a beneficiary has not been named as provided in subsection (1) of this section and ORS 238.390 (1), the death benefit referred to in subsection (1) of this section shall be paid in the manner provided for payment of money credited to the member account of the member in ORS 238.390 (2).

      (4) The beneficiary designated under subsection (1) of this section and ORS 238.390 (1) may elect to receive the amount payable in actuarially determined monthly payments for the life of such beneficiary as long as such monthly payments, plus the monthly amount if elected under ORS 238.390 (3), are at least $200.

      (5) Interest upon the death benefit provided by this section shall accrue until the date that the benefit is distributed. The board shall establish procedures for computing interest to be credited on the benefit for the period between the date of death and date of distribution.

      (6) Payment by the Public Employees Retirement Board of additional death benefits in the manner provided by this section completely discharges the board and system on account of the death, and shall hold the board and system harmless from any claim for wrongful payment. [Formerly 237.169; 2001 c.945 §57; 2003 c.625 §4]

 

      238.400 Payment upon death of retired member who dies before making election of retirement benefits. If a person who is a member of the system, who has attained normal retirement age and who has retired from service, dies without making an election under ORS 238.305 and prior to the expiration of the time within which such an election could be made by the person, and the records of the Public Employees Retirement Board indicate that the person has designated the surviving spouse as the beneficiary under ORS 238.390 (1), such surviving spouse may, not more than 60 days after the date of the death of such deceased member, elect to receive the amount referred to in ORS 238.390 (1), or elect Option 2 or Option 3 under ORS 238.305 and designate self as the beneficiary thereunder with the same force and effect as if the election and designation had been properly made by the deceased member. [Formerly 237.167]

 

      238.405 Death benefit payable to survivors of certain police officers or firefighters. (1) The surviving spouse or child of a police officer or firefighter, who died a member of the Public Employees Retirement System while retired either for service or disability and while receiving or being entitled to receive a benefit under ORS 238.345 or under this chapter, is entitled to a benefit under this section. The benefit shall be equal to 25 percent of the unmodified retirement allowance the police officer or firefighter was receiving or was entitled to receive at the time of death under ORS 238.345 or under this chapter. The benefit authorized by this section is in addition to any other benefit the surviving spouse or child is entitled to and is available to the child until the child attains 18 years of age.

      (2) For the purpose of this section, the unmodified retirement allowance is that allowance described in ORS 238.300, or if election to receive the benefits authorized under ORS 238.345 has been made, the unmodified retirement allowance is 50 percent of the final average salary of the police officer or firefighter as determined on the date of the injury causing disability.

      (3) The board shall pay to a surviving spouse or child entitled to a benefit under this section a lump sum amount equal to the actuarial value of the allowance provided under this section if the allowance is less than $30 per month. The lump sum amount shall be in lieu of the allowance provided for under this section. [Formerly 237.163]

 

      238.407 Distribution of death benefit as rollover distribution. (1) If a benefit is payable under this chapter to a beneficiary by reason of the death of a member of the system, the beneficiary may elect to have all or part of the distribution of the death benefit paid in an eligible rollover distribution to an individual retirement plan described in 26 U.S.C. 408(a), or an individual retirement annuity, other than an endowment contract, described in 26 U.S.C. 408(b), if the plan or annuity is established for the purpose of receiving the eligible rollover distribution on behalf of the designated beneficiary.

      (2) Subsection (1) of this section applies to an eligible rollover distribution of death benefits to a beneficiary who is not treated as the spouse of the decedent for federal tax purposes and who is the decedent’s designated beneficiary for the purposes of the minimum required distribution requirements of 26 U.S.C. 401(a)(9). To the extent provided by rules of the Public Employees Retirement Board, a trust maintained for the benefit of one or more beneficiaries must be treated by the board in the same manner as a trust that is designated as a beneficiary for the purposes of the minimum required distribution requirements of 26 U.S.C. 401(a)(9).

      (3) As used in this section, “eligible rollover distribution” has the meaning given that term in 26 U.S.C. 402(c)(4), as in effect on January 1, 2008. [2007 c.628 §4]

 

(Insurance Premium Payments)

 

      238.410 Board may contract for insurance for retirees; rules. (1) As used in this section:

      (a) “Carrier” means an insurance company or health care service contractor holding a valid certificate of authority from the Director of the Department of Consumer and Business Services, an insurance company or health care service contractor licensed or certified in another state that is operating under the laws of that state, or two or more of those companies or contractors acting together pursuant to a joint venture, partnership or other joint means of operation.

      (b) “Eligible person” means:

      (A) A member of the Public Employees Retirement System who is retired for service or disability and is receiving a retirement allowance or benefit under the system, and a spouse or dependent of that member;

      (B) A person who is a surviving spouse or dependent of a deceased retired member of the system or the surviving spouse or dependent of a member of the system who had not retired but who had reached earliest retirement age at the time of death;

      (C) A person who is receiving retirement pay or a pension calculated under ORS 1.314 to 1.380 (1989 Edition), and a spouse or dependent of that person; or

      (D) A surviving spouse or dependent of a deceased retired member of the system or of a person who was receiving retirement pay or a pension calculated under ORS 1.314 to 1.380 (1989 Edition) if the surviving spouse or dependent was covered at the time of the decedent’s death by a health care insurance plan contracted for under this section.

      (c) “Health care” means medical, surgical, hospital or any other remedial care recognized by state law and related services and supplies and includes comparable benefits for persons who rely on spiritual means of healing.

      (2) The Public Employees Retirement Board shall conduct a continuing study and investigation of all matters connected with the providing of health care insurance protection to eligible persons. The board shall design benefits, devise specifications, invite proposals, analyze carrier responses to advertisements for proposals and do acts necessary to award contracts to provide health care insurance, including insurance that provides coverage supplemental to federal Medicare coverage, with emphasis on features based on health care cost containment principles, for eligible persons. The board is not subject to the provisions of ORS chapters 279A and 279B, except ORS 279B.235, in awarding contracts under the provisions of this section. The board shall establish procedures for inviting proposals and awarding contracts under this section.

      (3) The board shall enter into a contract with a carrier to provide health care insurance for eligible persons for a one or two-year period. The board may enter into more than one contract with one or more carriers, contracting jointly or severally, if in the opinion of the board it is necessary to do so to obtain maximum coverage at minimum cost and consistent with the health care insurance needs of eligible persons. The board periodically shall review a current contract or contracts and make suitable study and investigation for the purpose of determining whether a different contract or contracts can and should, in the best interest of eligible persons, be entered into. If it would be advantageous to eligible persons to do so, the board shall enter into a different contract or contracts. Contracts shall be signed by the chairperson on behalf of the board.

      (4) Except as provided in ORS 238.415 and 238.420, the board may deduct monthly from the retirement allowance or benefit, retirement pay or pension payable to an eligible person who elects to participate in a health care insurance plan the monthly cost of the coverage for the person under a health care insurance contract entered into under this section and the administrative costs incurred by the board under this section, and shall pay those amounts into the Standard Retiree Health Insurance Account established under subsection (7) of this section. The board by rule may establish other procedures for collecting the monthly cost of the coverage and the administrative costs incurred by the board under this section if the board does not deduct those costs from the retirement allowance or benefit, retirement pay or pension payable to an eligible person.

      (5) Subject to applicable provisions of ORS chapter 183, the board may make rules not inconsistent with this section to determine the terms and conditions of eligible person participation and coverage and otherwise to implement and carry out the purposes and provisions of this section and ORS 238.420.

      (6) The board may retain consultants, brokers or other advisory personnel, organizations specializing in health care cost containment or other administrative services when it determines the necessity and, subject to the State Personnel Relations Law, shall employ such personnel as are required to assist in performing the functions of the board under this section.

      (7) Pursuant to section 401(h) of the Internal Revenue Code, the Standard Retiree Health Insurance Account is established within the Public Employees Retirement Fund, separate and distinct from the General Fund. All payments made by eligible persons for health insurance coverage provided under this section shall be held in the account. Interest earned by the account shall be credited to the account. All moneys in the account are continuously appropriated to the Public Employees Retirement Board and may be used by the board only to pay the cost of health insurance coverage under this section and to pay the administrative costs incurred by the board under this section.

      (8) The sum of all amounts paid by eligible persons into the Standard Retiree Health Insurance Account, by participating public employers into the Retiree Health Insurance Premium Account under ORS 238.415, and by participating public employers into the Retirement Health Insurance Account under ORS 238.420, may not exceed 25 percent of the aggregate contributions made by participating public employers to the Public Employees Retirement Fund on or after July 11, 1987, not including contributions made by participating public employers to fund prior service credits.

      (9) Until all liabilities for health benefits under the system are satisfied, contributions and earnings in the Standard Retiree Health Insurance Account, the Retiree Health Insurance Premium Account under ORS 238.415 and the Retirement Health Insurance Account under ORS 238.420 may not be diverted or otherwise put to any use other than providing health benefits and payment of reasonable costs incurred in administering this section and ORS 238.415 and 238.420. Upon satisfaction of all liabilities for providing health benefits under this section, any amount remaining in the Standard Retiree Health Insurance Account shall be returned to the participating public employers who have made contributions to the account. The distribution shall be made in such equitable manner as the board determines appropriate. [Formerly 237.320; 1999 c.317 §16; 1999 c.407 §7; 2003 c.794 §219; 2005 c.808 §§4,5]

 

      Note: 238.410 was added to and made a part of ORS chapter 237 (1993 Edition) by legislative action but was not added to ORS chapter 238 or any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

 

      238.415 Payment toward cost of pre-Medicare insurance; rules. (1) As used in this section:

      (a) “Board” means the Public Employees Retirement Board.

      (b) “Eligible retired state employee” means:

      (A) A retired member of the Public Employees Retirement System who was a state employee at the time of retirement, is retired for service or disability, is receiving a retirement allowance or benefit under the system, had eight years or more of qualifying service in the system at the time of retirement or is receiving a disability retirement allowance including a pension computed as if the member had eight years or more of creditable service in the system at the time of retirement, and has attained earliest service retirement age but is not eligible for federal Medicare coverage; or