Enacted 2025 PERS Legislation

Introduction

The Oregon State Legislature enacted several bills impacting PERS in 2025.

Senate Bill (SB) 588

Changes to PERS disability program

For open disability benefit applications or for active periodic reviews that have not yet been referred for a contested case hearing, this bill redefines disability eligibility for police and firefighter members from a standard where members are considered disabled if they are “unable to perform any work for which qualified” to a standard where the member is considered disabled if they are “unable to perform the work the member performed at the time the member became disabled.”

For police and firefighter members requesting a contested case hearing to dispute a final denial of an application for disability benefits on or after May 27, 2025, the PERS Board must refer the case for a hearing within 180 days unless the member requests an extension, in which case the case must be referred for hearing must be within 360 days.

An OPSRP member receiving disability benefits can receive in any month “irregular or unpredictable” earned income of up to 10% of their previous monthly salary. If it exceeds 10%, their benefits will end.

Full text of SB 588

SB 757

Adds Oregon Health and Science University (OHSU) chaplains to SB 128 (2023)

SB 128 (2023) ensured that Department of Corrections chaplains’ housing allowances would be included as taxable income for PERS purposes only. That bill inadvertently left out chaplains who work at OHSU. This bill includes those chaplains, so their housing allowances are also included as taxable income for PERS purposes.

Full text of SB 757

SB 849

Changes to the School District Unfunded Liability Fund (SDULF)

The SDULF is a fund created by the legislature in 2018 to provide contribution rate relief to school district employers. However, that bill required that a side account be created to distribute any funds. As the various funding sources to this fund have ended, it has become more clear that this fund will never accumulate enough money to create a side account to provide any meaningful rate relief to all school district employers. This bill removes the requirement that a side account be created to distribute the money and states that the funds shall be applied in an equitable amount to all school district employers’ 2025-27 contribution rates. This action provided up to a 1.68% decrease in school districts’ 2025-27 contribution rates. Any money coming into the fund in the future will be applied to the next biennium’s contribution rate.

Full text of SB 849

SB 851

Changes to employer reporting and member data

This bill made a number of changes to various statutory provisions to clarify certain terms and processes and to align statute with current administrative process where practical. These changes include:

• Adding data verification results as an exception to locking the data on a member’s notice of entitlement (NOE).
• Raising the maximum invoice amount PERS is allowed to waive from $50 to $200.
• Defines “major fraction of a month” in statute.
• Repeals Oregon Revised Statute (ORS) 238A.010 as obsolete.

Full text of SB 851

SB 852

Post-retirement death benefit clarifications

This bill updates some statutory provisions to clarify language, eliminate administrative challenges, and promote efficiencies where practical. These changes include:

• Requiring all Individual Account Program (IAP) post-retirement death benefit payouts to be lump sum rather than installments. This requirement allows for compliance with new federal required minimum distribution rules that were put in place under the Secure Act 2.0 (2022). This action also aligns with our administration of IAP pre-retirement death benefit payouts.
• Increasing the minimum monthly payment required to payout an installment benefit for the additional death benefit payable to surviving spouses or children of deceased police officers and firefighters from $30 per month to $200 per month. This change is administratively aligned with our other minimum monthly payment amounts.
• Removing “or other relationship” from ORS 238A.190(2) — the “pop-up” provision* to adjust a retired member’s benefits if a marriage relationship terminates or their designated beneficiary predeceases them. This change brings the statute in line with federal tax law, which only allows a pop-up when a marriage terminates, and does not apply to the termination of any other relationships to trigger a pop-up.
• Corrects ORS 238.400 to fix an unintentional administrative roadblock for members. This bill now allows a surviving spouse to make an option change upon a member’s death within 60 days of their retirement, even if the member already elected a retirement option before their death.

(*Pop-up provisions are so named because they describe a situation in which a retired member may request to change — or pop up — to a higher-paying benefit option.)

Full text of SB 852

House Bill (HB) 2728

Changes to information included on a Notice of Entitlement (NOE)

This bill requires PERS to add more information to a retiring members NOE. One of the things the NOE does is show members how their final average salary (FAS) was calculated for retirement purposes. Beginning on January 1, 2026, the NOE also will need to provide the total amount of hours of overtime worked during the relevant FAS period by the member and the amount of hours of overtime used in the member’s FAS calculation.

Full text of HB 2728

HB 3968

Adds “Space Force” to the definition of the Armed Forces in various statutes.

The Space Force is a relatively new branch of the United States military. Until now, in the State of Oregon, the Space Force has not been included in the definition of “Armed Forces of the United States”. This definition is used for many reasons, but at PERS, it helps define who is a veteran for PERS purposes. The bill adds the Space Force to the definition of “Armed Forces” across multiple statutes. For PERS purposes, that statute is Oregon Revised Statute (ORS) 238.156.

Full text of HB 3968

HB 5534

PERS’ budget bill

Limits certain biennial expenditures from fees, moneys, or other revenues — including miscellaneous receipts but excluding lottery funds and federal funds — collected or received by PERS. Sets the operating budget for the agency for the 2025-27 biennium.

Full text of SB 5534