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 new guidelines regarding how employers measure pension expense and report pension liabilities on financial reports. The last sentence of OAR 459-007-0009(2), as previously adopted, 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." While 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..." While there may be a net loss in earnings for a particular year, there are always earnings throughout the year. These additional costs will be deducted from these earnings prior to netting all earnings and losses for the year.
Board Temporary Adoption: 11/21/2014
PERS Board Adoption Memo
Oregon Savings Growth Plan (OSGP)
OAR 459-050-0076, In-Plan Roth Conversion allows plan participants to convert their pre-tax dollars in OSGP to after-tax and move their money to the Roth 457 account. Initially, the Internal Revenue Code only allowed this option after plan participants had a severance from employment. However, with the passage of the American Taxpayer Relief Act of 2012, plan participants are now eligible to convert any pre-tax money in their OSGP account to the Roth 457 account while still employed.
Paragraph (1)(a)(A) has been modified and paragraph (B) has been deleted because plan participants no longer need a severance of employment to be eligible for an In-Plan Roth Conversion. Paragraph (1)(a)(E) has been deleted because the IRS has not provided guidance that non-spouse beneficiaries are eligible for In-Plan Roth Conversion.
Finally, subsection (3)(a) has been modified because only plan participants who are making a Roth conversion after a severance from employment are required to receive a written explanation on the rollover eligibility of their Roth conversion amount.
OAR 459-050-0120, Self-Directed Brokerage Option was adopted in 2011 to implement the new option added to the OSGP. Previously, the Oregon State Treasury believed there should be some restrictions on the amount that plan participants could transfer into the Self-Directed Brokerage Option. Therefore, it was required that participants have at least $20,000 in their OSGP account before they could participate, and they could transfer up to half of that amount. Treasury now believes it is appropriate to lower the option participation restriction to a $10,000 account balance. This change was approved by the Oregon Investment Council at its July 30, 2014 meeting. Subsection (2)(a) of the rule was modified to reflect the new dollar amount.
Board Adoption: 11/21/2014
PERS Board Adoption Memo