| Proposed PERS Administrative Rules |
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| Proposed Administrative Rules |
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Rules to Implement 2011 Legislation
The 2011 Oregon Legislative Assembly passed four bills which require rulemaking to implement. The first, House Bill 2113 (chapter 722, Oregon Laws 2011), became effective on August 5, 2011. The bill was introduced at PERS’ request by the Governor and contains the following technical corrections: modifications to the retirement plan options available to legislators; clean-up of trustee to trustee transfer retirement credit purchases; and clarification of vesting standards for OPSRP Pension Program and IAP members. The bill was amended to also include the provisions of HB 2114, another PERS-sponsored concept, which addressed the dual membership problem presented by members who withdraw from the IAP but are not eligible to withdraw from the OPSRP Pension Program. Lastly, the bill was amended to include the SB 950 provisions authorizing the Oregon Savings Growth Plan (OSGP) to offer a Roth 457 account to conform to a change in federal law.
House Bill 2456 (chapter 653, Oregon Laws 2011) became effective on August 2, 2011. The bill prohibits PERS from paying an increased benefit under the tax remedy provisions of HB 3349 (Chapter 569, Oregon Laws 1995) if a person is not subject to Oregon personal income tax under ORS 316.127(9). The prohibition against payment of the HB 3349 tax remedy does not apply to members who retired before January 1, 2012 and persons who received payments attributable to retirement of a member who retired before January 1, 2012. This bill does not affect the payment of the tax remedy enacted by SB 656 (1991 Session), codified at ORS 238.385.
Senate Bill 301 (chapter 7, Oregon Laws 2011) became effective on September 29, 2011. The bill updates the connection date to the federal Internal Revenue Code and other provisions of federal tax law.
House Bill 2252 (chapter 223, Oregon Laws 2011), became effective on June 2, 2011. The bill allows a state agency to write off uncollectible debts on its account. Also, the bill requires that a state agency must adopt Attorney General-approved criteria for determining when debts are uncollectible. A new administrative rule is needed to address these provisions.
Staff has reviewed the bills and determined that certain existing rules need modification to conform to these statutory provisions, and that two new rules are needed to implement the tax remedy provisions of HB 2456. Note that rules to implement the Roth 457 provisions in HB 2113 will be noticed at the January 2012 Board meeting. More staff time was needed to develop the new program’s parameters that would need to be included in the rule.
Death and Survivor Benefits Rules
Recent audit findings raised concerns about the state of the administrative rules regarding the administration of death benefits for the OPSRP Pension Program (OPSRP), Individual Account Program (IAP), and the Tier One or Tier Two member’s death benefit. Modifications to the existing rule and two new rules reflect current administration of pre-retirement death benefits and post retirement payments to survivors and beneficiaries for Chapters 238 and 238A, excluding judge members, whose death benefits are addressed in the judge member OARs.
Minimum Retroactive Payment
PERS may make an adjustment to a payee’s monthly benefit and lump sum distributions for a variety of reasons which include but are not limited to: a contested case hearing; court decision; law changes; notice of dispute; settlement agreement; cost of living adjustments, annual variable annuity adjustment and to correct errors whether they are made by the member, alternate payee, beneficiary, a participating employer or PERS. These adjustments often result in a one time retroactive payment to the payee. Currently PERS does not have a minimum amount for issuing a retroactive payment so checks are generated for any amount. PERS often receives complaints from the payee who express their displeasure at having to spend their time and money to cash a check for small amounts such as $.35 or $2.85.
Setting a minimum amount for a retroactive payment would not affect the plan qualification. As trustee of the Public Employees Retirement fund, the PERS Board is charged with maintaining a stable and viable system which includes the full funding for the benefits provided in the system giving equal consideration to the interests of the public employers and the employee to the extent that treatment does not violate the fiduciary duties of the board. In weighing the interests of public employers and retirees and their beneficiaries, PERS believes that setting a minimum amount of a retroactive payment is both a reasonable and prudent administration of the fund.
Earnings Crediting
OAR 459-007-0090 and 459-007-0270 currently provide for proration of the annual rate to determine the crediting of an installment payment in the year of distribution. “Annual rate” is incorrect and that it should be the latest year to date calculation as of the date of distribution.
Reemployment of Retired Members
OAR 459-007-0090 and 459-007-0270 currently provide for proration of the annual rate to determine the crediting of an installment payment in the year of distribution. “Annual rate” is incorrect and that it should be the latest year to date calculation as of the date of distribution.
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| Rulemaking Schedule |
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OAR
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Title
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Notice to Board
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Public hearing
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Public comment ends
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Expected adoption date
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459-013-0010
459-013-0020
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Tax Remedy
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11/18/11
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11/22/11
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1/27/12
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3/22/12
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| 459-005-0615 |
Minimum Retroactive Payments |
1/27/12 |
2/28/12 |
3/1/12 |
3/22/12 |
459-007-0090
459-007-0270
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Earnings Crediting
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1/27/12
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2/28/12
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3/1/12
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3/22/12
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459-017-0060
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Reemployment of Retired Members
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1/27/12
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2/28/12
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3/1/12
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3/22/12
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459-001-0025
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Petition for Reconsideration
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1/27/12
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2/28/12
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3/1/12
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3/22/12
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459-015-0020
459-076-0020
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Application for Disability Retirement
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1/27/12
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2/28/12
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3/1/12
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3/22/12
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459-007-0005
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Annual Earnings Crediting
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3/22/12
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4/25/12
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4/30/12
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5/18/12
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Division 050
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Roth 457
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3/22/12
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4/24/12
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4/30/12
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5/18/12
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Division 001 and 015
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Appeals and Contested Case OARs
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3/22/12
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4/24/12
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4/30/12
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5/18/12
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