Bill Text: OR HB2454 | 2011 | Regular Session | Introduced
Bill Title: Relating to final average salary of members of Public Employees Retirement System; declaring an emergency.
Spectrum: Unknown
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2454 Detail]
Download: Oregon-2011-HB2454-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2189
House Bill 2454
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of House Interim Committee on
Rules)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Eliminates use of accumulated unused vacation leave and unused
sick leave in computation of final average salary for purposes of
determining retirement benefit of member of Public Employees
Retirement System. Applies only to members who retire on or after
effective date of Act.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to final average salary of members of Public Employees
Retirement System; creating new provisions; amending ORS
238.005, 238.580 and 292.180 and sections 3 and 4, chapter 1,
Oregon Laws 2010; repealing ORS 238.350 and 238.355; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 238.005, as amended by section 8, chapter 1,
Oregon Laws 2010, is amended to read:
238.005. For purposes of this chapter:
(1) 'Annuity' means payments for life derived from
contributions made by a member as provided in this chapter.
(2) 'Board' means the Public Employees Retirement Board.
(3) 'Calendar year' means 12 calendar months commencing on
January 1 and ending on December 31 following.
(4) 'Continuous service' means service not interrupted for more
than five years, except that such continuous service shall be
computed without regard to interruptions in the case of:
(a) An employee who had returned to the service of the employer
as of January 1, 1945, and who remained in that employment until
having established membership in the Public Employees Retirement
System.
(b) An employee who was in the armed services on January 1,
1945, and returned to the service of the employer within one year
of the date of being otherwise than dishonorably discharged and
remained in that employment until having established membership
in the Public Employees Retirement System.
(5) 'Creditable service' means any period of time during which
an active member is being paid a salary by a participating public
employer and for which benefits under this chapter are funded by
employer contributions and earnings on the fund. For purposes of
computing years of 'creditable service,' full months and major
fractions of a month shall be considered to be one-twelfth of a
year and shall be added to all full years. ' Creditable service'
includes all retirement credit received by a member.
(6) 'Earliest service retirement age' means the age attained by
a member when the member could first make application for
retirement under the provisions of ORS 238.280.
(7) 'Employee' includes, in addition to employees, public
officers, but does not include:
(a) Persons engaged as independent contractors.
(b) Seasonal, emergency or casual workers whose periods of
employment with any public employer or public employers do not
total 600 hours in any calendar year.
(c) Persons, other than workers in the Oregon Industries for
the Blind under ORS 346.190, provided sheltered employment or
made-work by a public employer in an employment or industries
program maintained for the benefit of such persons.
(d) Persons employed and paid from federal funds received under
the Emergency Job and Unemployment Assistance Act of 1974 (Public
Law 93-567) or any other federal program intended primarily to
alleviate unemployment. However, any such person shall be
considered an 'employee' if not otherwise excluded by paragraphs
(a) to (c) of this subsection and the public employer elects to
have the person so considered by an irrevocable written notice to
the board.
(e) Persons who are employees of a railroad, as defined in ORS
824.020, and who, as such employees, are included in a retirement
plan under federal railroad retirement statutes. This paragraph
shall be deemed to have been in effect since the inception of the
system.
(8) 'Final average salary' means whichever of the following is
greater:
(a) The average salary per calendar year paid by one or more
participating public employers to an employee who is an active
member of the system in three of the calendar years of membership
before the effective date of retirement of the employee, in which
three years the employee was paid the highest salary. The three
calendar years in which the employee was paid the largest total
salary may include calendar years in which the employee was
employed for less than a full calendar year. If the number of
calendar years of active membership before the effective date of
retirement of the employee is three or fewer, the final average
salary for the employee is the average salary per calendar year
paid by one or more participating public employers to the
employee in all of those years, without regard to whether the
employee was employed for the full calendar year.
(b) One-third of the total salary paid by a participating
public employer to an employee who is an active member of the
system in the last 36 calendar months of active membership before
the effective date of retirement of the employee.
(9) 'Firefighter' does not include a volunteer firefighter, but
does include:
(a) The State Fire Marshal, the chief deputy fire marshal and
deputy state fire marshals; and
(b) An employee of the State Forestry Department who is
certified by the State Forester as a professional wildland
firefighter and whose primary duties include the abatement of
uncontrolled fires as described in ORS 477.064.
(10) 'Fiscal year' means 12 calendar months commencing on July
1 and ending on June 30 following.
(11) 'Fund' means the Public Employees Retirement Fund.
(12)(a) 'Member' means a person who has established membership
in the system and whose membership has not been terminated as
described in ORS 238.095. 'Member' includes active, inactive and
retired members.
(b) 'Active member' means a member who is presently employed by
a participating public employer in a qualifying position and who
has completed the six-month period of service required by ORS
238.015.
(c) 'Inactive member' means a member who is not employed in a
qualifying position, whose membership has not been terminated in
the manner described by ORS 238.095, and who is not retired for
service or disability.
(d) 'Retired member' means a member who is retired for service
or disability.
(13)(a) 'Member account' means the regular account and the
variable account.
(b) 'Regular account' means the account established for each
active and inactive member under ORS 238.250.
(c) 'Variable account' means the account established for a
member who participates in the Variable Annuity Account under ORS
238.260.
(14) 'Normal retirement age' means:
(a) For a person who establishes membership in the system
before January 1, 1996, as described in ORS 238.430, 55 years of
age if the employee retires at that age as a police officer or
firefighter or 58 years of age if the employee retires at that
age as other than a police officer or firefighter.
(b) For a person who establishes membership in the system on or
after January 1, 1996, as described in ORS 238.430, 55 years of
age if the employee retires at that age as a police officer or
firefighter or 60 years of age if the employee retires at that
age as other than a police officer or firefighter.
(15) 'Pension' means annual payments for life derived from
contributions by one or more public employers.
(16) 'Police officer' includes:
(a) Employees of institutions defined in ORS 421.005 as
Department of Corrections institutions whose duties, as assigned
by the Director of the Department of Corrections, include the
custody of persons committed to the custody of or transferred to
the Department of Corrections and employees of the Department of
Corrections who were classified as police officers on or before
July 27, 1989, whether or not such classification was authorized
by law.
(b) Employees of the Department of State Police who are
classified as police officers by the Superintendent of State
Police.
(c) Employees of the Oregon Liquor Control Commission who are
classified as enforcement officers by the administrator of the
commission.
(d) Sheriffs and those deputy sheriffs or other employees of a
sheriff whose duties, as classified by the sheriff, are the
regular duties of police officers or corrections officers.
(e) Police chiefs and police personnel of a city who are
classified as police officers by the council or other governing
body of the city.
(f) Parole and probation officers employed by the Department of
Corrections, parole and probation officers who are transferred to
county employment under ORS 423.549 and adult parole and
probation officers, as defined in ORS 181.610, who are classified
as police officers for the purposes of this chapter by the county
governing body. If a county classifies adult parole and probation
officers as police officers for the purposes of this chapter, and
the employees so classified are represented by a labor
organization, any proposal by the county to change that
classification or to cease to classify adult parole and probation
officers as police officers for the purposes of this chapter is a
mandatory subject of bargaining.
(g) Police officers appointed under ORS 276.021 or 276.023.
(h) Employees of the Port of Portland who are classified as
airport police by the Board of Commissioners of the Port of
Portland.
(i) Employees of the State Department of Agriculture who are
classified as livestock police officers by the Director of
Agriculture.
(j) Employees of the Department of Public Safety Standards and
Training who are classified by the department as other than
secretarial or clerical personnel.
(k) Investigators of the Criminal Justice Division of the
Department of Justice.
(L) Corrections officers as defined in ORS 181.610.
(m) Employees of the Oregon State Lottery Commission who are
classified by the Director of the Oregon State Lottery as
enforcement agents pursuant to ORS 461.110.
(n) The Director of the Department of Corrections.
(o) An employee who for seven consecutive years has been
classified as a police officer as defined by this section, and
who is employed or transferred by the Department of Corrections
to fill a position designated by the Director of the Department
of Corrections as being eligible for police officer status.
(p) An employee of the Department of Corrections classified as
a police officer on or prior to July 27, 1989, whether or not
that classification was authorized by law, as long as the
employee remains in the position held on July 27, 1989. The
initial classification of an employee under a system implemented
pursuant to ORS 240.190 does not affect police officer status.
(q) Employees of a school district who are appointed and duly
sworn members of a law enforcement agency of the district as
provided in ORS 332.531 or otherwise employed full-time as police
officers commissioned by the district.
(r) Employees at youth correction facilities and juvenile
detention facilities under ORS 419A.050, 419A.052 and 420.005 to
420.915 who are required to hold valid Oregon teaching licenses
and who have supervisory, control or teaching responsibilities
over juveniles committed to the custody of the Department of
Corrections or the Oregon Youth Authority.
(s) Employees at youth correction facilities as defined in ORS
420.005 whose primary job description involves the custody,
control, treatment, investigation or supervision of juveniles
placed in such facilities.
(t) Employees of the Oregon Youth Authority who are classified
as juvenile parole and probation officers.
(17) 'Public employer' means the state, one of its agencies,
any city, county, or municipal or public corporation, any
political subdivision of the state or any instrumentality
thereof, or an agency created by one or more such governmental
organizations to provide governmental services. For purposes of
this chapter, such agency created by one or more governmental
organizations is a governmental instrumentality and a legal
entity with power to enter into contracts, hold property and sue
and be sued.
(18) 'Prior service credit' means credit provided under ORS
238.442 or under ORS 238.225 (2) to (6) (1999 Edition).
(19) 'Qualifying position' means one or more jobs with one or
more participating public employers in which an employee performs
600 or more hours of service in a calendar year, excluding any
service in a job for which a participating public employer does
not provide benefits under this chapter pursuant to an
application made under ORS 238.035.
(20) 'Retirement credit' means a period of time that is treated
as creditable service for the purposes of this chapter.
(21)(a) 'Salary' means the remuneration paid an employee in
cash out of the funds of a public employer in return for services
to the employer, plus the monetary value, as determined by the
Public Employees Retirement Board, of whatever living quarters,
board, lodging, fuel, laundry and other advantages the employer
furnishes the employee in return for services.
(b) 'Salary' includes but is not limited to:
(A) Payments of employee and employer money into a deferred
compensation plan, which are deemed salary paid in each month of
deferral;
(B) The amount of participation in a tax-sheltered or deferred
annuity, which is deemed salary paid in each month of
participation;
(C) Retroactive payments described in section 7, chapter 1,
Oregon Laws 2010; and
(D) Wages of a deceased member paid to a surviving spouse or
dependent children under ORS 652.190.
(c) 'Salary' or 'other advantages' does not include:
(A) Travel or any other expenses incidental to employer's
business which is reimbursed by the employer;
(B) Payments for insurance coverage by an employer on behalf of
employee or employee and dependents, for which the employee has
no cash option;
(C) Payments made on account of an employee's death;
(D) Any lump sum payment for accumulated unused sick leave;
(E) Any accelerated payment of an employment contract for a
future period or an advance against future wages;
(F) Any retirement incentive, retirement severance pay,
retirement bonus or retirement gratuitous payment;
(G) Payments for periods of leave of absence after the date the
employer and employee have agreed that no future services
qualifying pursuant to ORS 238.015 (3) will be performed { - ,
except for sick leave and vacation - } ;
(H) Payments for instructional services rendered to
institutions of the Oregon University System or the Oregon Health
and Science University when such services are in excess of
full-time employment subject to this chapter. A person employed
under a contract for less than 12 months is subject to this
subparagraph only for the months to which the contract pertains;
{ - or - }
(I) Payments made by an employer for insurance coverage
provided to a domestic partner of an employee { - . - } { + ;
or
(J) Any lump sum payment for accumulated unused vacation leave
or other unused paid leave. + }
(22) 'School year' means the period beginning July 1 and ending
June 30 next following.
(23) 'System' means the Public Employees Retirement System.
(24) 'Vested' means being an active member of the system in
each of five calendar years.
(25) 'Volunteer firefighter' means a firefighter whose position
normally requires less than 600 hours of service per year.
SECTION 2. ORS 238.580 is amended to read:
238.580. (1) ORS 238.005 (3) and (21), 238.025, 238.078,
238.082, 238.092, 238.115 (1), 238.250, 238.255, 238.260,
{ - 238.350, - } 238.380, 238.410, 238.415, 238.420, 238.445,
238.458, 238.460, 238.465, 238.475, 238.600, 238.605, 238.610,
238.618, 238.630, 238.635, 238.645, 238.650, 238.655, 238.660,
238.665, 238.670 and 238.705 and the increases provided by ORS
238.385 for members of the system who are serving as other than
police officers or firefighters apply in respect to service as a
judge member.
(2) This chapter applies in respect to persons described in ORS
238.505 (1) and in respect to service as a judge member only as
specifically provided in ORS 238.500 to 238.585.
SECTION 3. ORS 292.180 is amended to read:
292.180. (1) The Oregon Department of Administrative Services
may render a monthly or quarterly invoice to all state agencies
utilizing or intending to utilize the joint payroll system in the
future. This monthly or quarterly invoice shall be equal to
demonstrated savings of Workers' Compensation workday tax costs
which are a direct result of the savings from payment of the
workday tax based on actual days worked by the employee.
(2) It is the intention of this section to allow the department
to use demonstrated savings of Workers' Compensation workday tax
costs to pay for the implementation costs of ORS
{ - 238.350, - } 240.546, 292.026, 292.033, 292.070 to
292.110, 292.170 and this section and the moneys received are
continuously appropriated for the purposes of ORS
{ - 238.350, - } 240.546, 292.026, 292.033, 292.070 to 292.110,
292.170 and this section.
(3) Any excess moneys remaining after the implementation of ORS
{ - 238.350, - } 240.546, 292.026, 292.033, 292.070 to 292.110,
292.170 and this section shall be returned pro rata on the basis
of total moneys to agency contributions to the agencies from
which received. However, if the amount remaining is less than
$10,000, that amount may be transferred to the General Fund as a
miscellaneous receipt.
SECTION 4. Section 3, chapter 1, Oregon Laws 2010, is amended
to read:
{ + Sec. 3. + } (1) Not earlier than two years before a
member's earliest service retirement age, a member may request a
verification of retirement data from the Public Employees
Retirement Board. Upon receiving a request under this section,
the board shall notify all of the member's participating public
employers of the request. In a manner specified by rules of the
board, the board shall allow those employers a reasonable time to
confirm the records relating to the member that were provided to
the board before the request was made. The board shall thereafter
provide a verification to the member that includes the following
data, as reflected in the records of the Public Employees
Retirement System:
(a) The service information reported by the member's employers
and the number of years and months of creditable service or
retirement credit derived from that information, determined as of
a date specified in the verification.
(b) The salary data reported by the member's employers for each
calendar year, and the final average salary for the member
derived from that data.
(c) If applicable, the member's regular account balance, and
any variable account balance, as of the end of a calendar year
specified in the verification.
{ - (d) If applicable, the total amount of unused sick leave
accumulated by the member as of a date specified in the
verification. - }
(2) A member of the system may dispute the accuracy of the data
provided in the verification by filing a written notice of
dispute with the board not more than 60 days after the date on
which the verification is provided to the member. Upon receiving
a notice of dispute under this subsection, the board shall
determine the accuracy of the disputed data and make a written
decision based on its determination. The board shall provide to
the member a copy of the decision and a written explanation of
any applicable statutes and rules. A member may seek judicial
review of the decision as provided in ORS 183.484 and rules of
the board.
(3) Except as provided in this section, when a member who
receives a verification under this section retires for service,
the creditable service, retirement credit, final average salary
{ - , - } { + and + } member account balances { - and
accumulated unused sick leave - } used in calculating the
member's retirement allowance or pension may not be less than the
amounts provided in the verification, subject to adjustments for:
(a) Creditable service or retirement credit accrued by the
member after the date specified in the verification.
(b) Salary attributable to periods of employment after the date
specified in the verification.
(c) Earnings and losses credited to the member's accounts from
the end of the calendar year specified in the verification to the
member's effective retirement date, in accordance with rules
adopted by the board.
{ - (d) Sick leave used and accrued after the date specified
in the verification. - }
(4) The board may use creditable service, retirement credit,
final average salary { - , - } { + or + } member account
balances { - or accumulated unused sick leave - } in
calculating a member's service retirement allowance that is less
than the amounts provided in a verification received under this
section if the member knew that the amounts were not accurate at
the time the verification was provided and the member did not
dispute the accuracy of the amounts as provided in subsection (2)
of this section.
(5) A participating public employer may not modify information
provided to the board relating to a member's creditable service,
retirement credit, final average salary { - , - } { + or + }
employee contributions { - or accumulated unused sick leave - }
after the board provides the member with a verification under
this section that is based on that information except in response
to the board's request for the purpose of a determination under
subsection (2) or (4) of this section.
(6)(a) Subject to paragraph (b) of this subsection, erroneous
payments or overpayments paid to or on account of a member based
on a verification provided under this section may not be
recovered under ORS 238.715, but may be charged to the reserve
account established under ORS 238.670 (1), or charged as an
administrative expense under ORS 238.610.
(b) The board shall recover erroneous payments or overpayments
paid to or on account of a member based on a verification
provided under this section if the board determines that the
recovery is required to maintain the status of the system and the
Public Employees Retirement Fund as a qualified governmental
retirement plan and trust under the Internal Revenue Code and
under regulations adopted pursuant to the Internal Revenue Code.
(7) A member may dispute the accuracy of data in a verification
only as provided under this section. A member may not dispute the
accuracy of data in a verification in the manner provided by ORS
238.450.
(8) A member shall be provided with one verification under this
section at no cost. The board may establish procedures for
recovering administrative costs from members for services in
providing additional verifications.
SECTION 5. Section 4, chapter 1, Oregon Laws 2010, is amended
to read:
{ + Sec. 4. + } { - (1) Except as provided in this
section, - } Section 3 { + , chapter 1, Oregon Laws 2010, + }
{ - of this 2009 Act - } becomes operative on July 1, 2011.
{ - (2) The requirement that the Public Employees Retirement
Board provide verification of the amount of a member's
accumulated unused sick leave under section 3 (1)(d) of this 2009
Act first applies to requests for verifications of retirement
data received by the board on or after July 1, 2012. - }
SECTION 6. { + The amendments to ORS 238.005, 238.580 and
292.180 by sections 1 to 5 of this 2011 Act and the repeal of ORS
238.350 and 238.355 by section 8 of this 2011 Act apply only to
members of the Public Employees Retirement System who retire on
or after the effective date of this 2011 Act. + }
SECTION 7. { + (1) Jurisdiction is conferred on the Supreme
Court to determine in the manner provided by this section whether
this 2011 Act breaches any contract between members of the Public
Employees Retirement System and their employers or violates any
constitutional provision, including but not limited to impairment
of contract rights of members of the Public Employees Retirement
System under section 21, Article I of the Oregon Constitution, or
clause 1, section 10, Article I of the United States
Constitution.
(2) A person who is adversely affected by this 2011 Act or who
will be adversely affected by this 2011 Act may institute a
proceeding for review by filing with the Supreme Court a petition
that meets the following requirements:
(a) The petition must be filed within 60 days after the
effective date of this 2011 Act.
(b) The petition must include the following:
(A) A statement of the basis of the challenge; and
(B) A statement and supporting affidavit showing how the
petitioner is adversely affected.
(3) The petitioner shall serve a copy of the petition by
registered or certified mail upon the Public Employees Retirement
Board, the Attorney General and the Governor.
(4) Proceedings for review under this section shall be given
priority over all other matters before the Supreme Court.
(5) The Supreme Court shall allow public employers
participating in the Public Employees Retirement System to
intervene in any proceeding under this section.
(6) In the event the Supreme Court determines that there are
factual issues in the petition, the Supreme Court may appoint a
special master to hear evidence and to prepare recommended
findings of fact. + }
SECTION 8. { + ORS 238.350 and 238.355 are repealed. + }
SECTION 9. { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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