The following measures affecting PERS employers were passed during the 2009 legislative session and signed by the Governor.
Senate Bill 112
Effective January 1, 2010, SB 112 changes the work after retirement limitations for retired members who received a Total Lump-Sum benefit. The limitation based upon designation as casual, emergency, or seasonal worker and working 599 or less hours within the first six months of retirement is eliminated. Total Lump-Sum benefit recipients can work up to 1,039 hours per calendar year for a PERS-covered employer, the same limitation currently applicable to retired members receiving a monthly benefit.
Consequently, effective January 1, 2010, Tier One/Tier Two Total Lump Sum or monthly benefit recipients who begin working or continue working part-time as retirees for PERS-participating employers will have the same work limit of 1,039 hours per calendar year. This limit also applies to Tier One/Tier Two members who receive an Aggregate Sum (AS) refund benefit at retirement. Retirees receive a single lump-sum payment(AS refund)in place of a monthly retirement benefit if their calculated monthly benefit at retirement is less than $200 per month.
Retirees who work more than 1,039 hours in a calendar year for a PERS-covered employer will become active members on the first of the month after the limit is exceeded, and their retirement benefit will stop. A Tier One/Tier Two Total Lump-Sum benefit recipient receiving the Total Lump-Sum benefit in installment payments will not receive installments after the date active membership is re-established.
Total Lump-Sum and Aggregate-Sum (AS)refund recipients will now be eligible to take advantage of the 1,039 work limit exceptions for any positions listed in ORS 238.082 and OAR 459-017-0060.
The current 599 work hour and position hiring restrictions for Tier One/Tier Two Total Lump Sum and Aggregate Sum (AS) refund recipients will remain in effect through, and including, December 31, 2009.
SB 112 also prohibits inclusion of hours worked in “excepted” positions towards the 1,039 hours per calendar year work limit for Tier One/Tier Two benefit recipients. An “excepted” position is one listed in ORS 238.082 or OAR 459-017-0060 which allows qualified Tier One/Tier Two retirees working in those positions to exceed 1,039 hours in a calendar year and continue to receive their PERS benefits.
Prior to SB 112, if a retiree was employed under an exception to the 1039-hour limitation and concurrently employed in a position not under an exception, hours worked in the calendar year under the exception were counted toward the 1039-hour limitation on the position not under an exception. Application of total “excepted” and non-“excepted” hours toward the 1,039 hours in a calendar year work limit was not well understood and caused retirees to inadvertently exceed the 1,039-hour annual work limit, again becoming active PERS members and halting retirement benefits. SB 112 reduces that risk by counting only the hours worked in non-“excepted” positions toward the 1,039-hour annual work hour limit.
This section of SB112 is retroactive back to January 1, 2004, or the date the applicable exception was created by statute.
No additional positions were “excepted” from the 1,039 hour per calendar year work limit by the 2009 Legislature.
The “Working After Retirement” document on the PERS employer web site has been updated to reflect these changes. Please refer to that document for more comprehensive information.
House Bill 3401
HB 3401 allows employers with established “side accounts” to use excess funds in the side account to offset employer-paid member IAP contribution obligations. Although the bill was effective upon the Governor’s signature, the measure requires that PERS seek an IRS ruling whether use of funds for this purpose would affect PERS’ status as a qualified governmental retirement plan. NO ACTION on this bill will be taken until the IRS has returned that ruling.
Please e-mail: firstname.lastname@example.org if you have further questions on measures resulting from the 2009 legislative session.