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Recently Adopted PERS Administrative Rules
IAP Earnings Crediting      
OAR 459-007-0320 and 459-007-0330 outline how earnings are credited to distributions from the IAP. Lump sum distributions from the IAP are credited with the latest year-to-date calculation as of the date of distribution; IAP accounts of retired members electing installment payments are credited with the latest year-to-date calculation as of the date of the initial distribution. The latest year-to-date calculation is determined on a monthly basis, as defined in OAR 459-007-0001. The rule change clarifies that the monthly latest year-to-date calculation is applied on a calendar month basis, so all distributions made in the same month will receive the same earnings crediting rate. This revision is a clarification; there is no change in our administration of the IAP.
One of the retirement options for the IAP is the Anticipated Life Span Option. This option employs a distribution method approved by the Internal Revenue Service (IRS) intended to establish substantially equal payments to retired members, which is an exception to the additional 10 percent tax on early distributions. The IRS approved method requires an annual recalculation of the member’s account to determine the distribution(s) for the following year. This annual recalculation is done on the member’s anniversary date, currently defined in OAR 459-080-0250 as the first of the month following the initial distribution. The current definition of anniversary date causes the annual recalculation to fall out of sync with the timing of the distribution(s). For example, a member electing to receive annual installments would receive the second annual installment one month before the annual recalculation. The rule change establishes the anniversary date as the first day of the month of the date of distribution, bringing the annual recalculation in line with the timing of the distributions.
Board Adoption:               03/30/2015
Effective:                         03/30/2015
Text:                               459-007-0320
                                      PERS Board Adoption Memo

PHIP Dental Insurance Program
Retired members who are eligible to enroll in PHIP are also eligible to enroll in PERS dental insurance. A retired member must enroll in PHIP to be eligible to enroll in the dental program and is only eligible to enroll in the dental program at the same time as PHIP. If a retired member discontinues participation in the dental insurance program, that member can only re-enroll in the dental insurance program during an available enrollment period and subject to the same qualifications. The rule modifications clarify that the enrollment requirements are the same for both the health insurance and dental insurance programs.
Board Adoption:                03/30/2015
Effective:                          03/30/2015
Text:                                459-035-0070
                                       PERS Board Adoption Memo


Allocating Costs of Compliance with Generally Accepted Accounting Principles
OAR 459-007-0009 was adopted by the PERS Board on July 25, 2014, as authorized by House Bill 4155 (2014) (now codified in ORS 238.610). The rule establishes procedures for recovering the additional actuarial and auditing costs associated with providing employers information necessary to comply with the new GASB 68 requirements. 

The last sentence of OAR 459-007-0009(2) needs to be clarified. As previously adopted, the permanent rule states: "In any year in which earnings on those accounts are not sufficient to recover those costs, employer contribution accounts will be reduced by the amount of those costs." Although ORS 238.610(1)(a) allows for administrative expenses to be deducted from employer accounts, (1)(b) specifically says that administrative costs may be recovered "only from interest earned on employer contributions..." The statute does not specifically allow employer accounts to be reduced. Rather, in practice, there are always earnings throughout the year even though there may be a net loss for a particular year. These GASB 68 costs will be deducted from these employer earnings pror to netting all earnings and losses for the calendar year.

The modifications were adopted as a temporary rule by the Board at the November 21, 2014 meeting, because the rule needed to be in effect before the end of the calendar year for earnings crediting purposes. This item is to adopt the same modifications as a permanent rule.

Board Adoption:                   01/30/2015
Effective:                             01/30/2015
Text:                                   459-007-0009
                                          PERS Board Adoption Memo


Definition of Service
Generally, to be eligible for OPSRP benefits, a person must provide services to a participating PERS employer. ORS 238A.005(7)(b) defines "hour of service" as excluding any hour for which payment is made under a plan maintained solely for the purposes of complying with applicable workers' compensation laws or unemployment compensation laws. However, OAR 459-070-0001(19)(b) currently provides that "service" means a period in which an employee receives a payment of "salary," as defined in ORS 238A.005 or similar payment from workers' compensation or disability. This language is inconsistent with the statute, and the proposed rule modification removes the inconsistent language.

Board Adoption:                   01/30/2015
Effective:                             01/30/2015
Text:                                   459-070-0001
                                          PERS Board Adoption Memo