Bill Text: OR SB662 | 2013 | Regular Session | Introduced

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Bill Title: Relating to the individual account program; declaring an emergency.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB662 Detail]

Download: Oregon-2013-SB662-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 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 3544

                         Senate Bill 662

Sponsored by Senator WHITSETT

                             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.

  Permits employer to pay all or part of employee contribution to
individual account program of Public Employees Retirement System.
Requires employer's payment of employee contribution to be
percentage of salary, be not less than one percent of salary or
more than six percent of salary, and be whole number. Permits
employer to specify percentage by agreement with all or some
employees.
  Reduces maximum payment of employee contribution by employer to
three percent of employee's salary on and after January 1, 2016.
  Specifies that requirements do not apply to collective
bargaining agreements entered into before effective date of Act.
  Provides for direct review to Supreme Court.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to the individual account program; creating new
  provisions; amending ORS 238A.005, 238A.330 and 238A.335; and
  declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 238A.330 is amended to read:
  238A.330. (1) A member of the individual account program must
make  { + an + } employee   { - contributions - }
 { + contribution + } to the individual account program of six
percent of the member's salary.
  (2)  { + The + } employee   { - contributions - }
 { + contribution + } made by a member of the individual account
program under this section shall be credited by the  { + Public
Employees Retirement + } Board to the employee account
established for the member under ORS 238A.350 (2).
   { +  (3) The employee contribution required by this section,
whether made by the member or by the employer pursuant to an
agreement under ORS 238A.335, must be remitted by the employer to
the board in the manner established by the board. + }
  SECTION 2. ORS 238A.335 is amended to read:
  238A.335. (1) A participating public employer may agree, by a
written employment policy or by a collective bargaining
agreement, to pay  { + all or part of + } the employee
contribution required under ORS 238A.330.   { - The policy or
agreement need not include all members of the individual account
program employed by the employer. - }  { +  The amount of the
employee contribution that is paid by the employer must be equal
to a percentage of the member's salary that is not less than one
percent, and the percentage must be a whole number.  The employer
may enter into an agreement under this section with all or some
of the employees employed by the employer. + }
  (2) An agreement under this section   { - to pay the required
employee contribution - }  may provide that:
  (a)  { + Amounts be deducted from + } employee compensation
 { - be reduced - }  to generate the funds needed to make
 { - the - }  employee contributions;   { - or - }
  (b) Additional amounts be paid by the employer for the purpose
of making   { - the - }  employee contributions  { - , and
employee compensation not be reduced for the purpose of
generating the funds needed to make the employee
contributions. - }  { + ; or
  (c) Amounts be deducted from employee compensation under
paragraph (a) of this subsection to generate the funds needed to
make a portion of the employee contributions, and additional
amounts be paid by the employer under paragraph (b) of this
subsection to generate the funds needed to make a portion of the
employee contributions. + }
  (3) A participating public employer must give written notice to
the Public Employees Retirement Board at the time that   { - a
written employment policy or collective bargaining agreement
described in subsection (1) of - }   { + an agreement under + }
this section is adopted or changed. The notice must specifically
 { - indicate whether the agreement is as described in subsection
(2)(a) or (b) of this section. - }  { +  describe the
apportionment of the employee contribution between the members
and the employer. + }   { - Any change in the manner in which
employee contributions are to be paid applies only to employee
contributions made on and after the date the notice is received
by the board. - }  { +  An agreement under this section and any
change to an agreement under this section apply only to employee
contributions for pay periods beginning on or after the date that
the board receives the notice. + }
  SECTION 3. ORS 238A.335, as amended by section 2 of this 2013
Act, is amended to read:
  238A.335. (1) A participating public employer may agree, by a
written employment policy or by a collective bargaining
agreement, to pay   { - all or - }  part of the employee
contribution required under ORS 238A.330. The amount of the
employee contribution that is paid by the employer must be equal
to a percentage of the member's salary that is  { + not more than
three percent and + } not less than one percent, and the
percentage must be a whole number. The employer may enter into an
agreement under this section with all or some of the employees
employed by the employer.
  (2) An agreement under this section may provide that:
  (a) Amounts be deducted from employee compensation to generate
the funds needed to make employee contributions;
  (b) Additional amounts be paid by the employer for the purpose
of making employee contributions; or
  (c) Amounts be deducted from employee compensation under
paragraph (a) of this subsection to generate the funds needed to
make a portion of the employee contributions, and additional
amounts be paid by the employer under paragraph (b) of this
subsection to generate the funds needed to make a portion of the
employee contributions.
  (3) A participating public employer must give written notice to
the Public Employees Retirement Board at the time that an
agreement under this section is adopted or changed. The notice
must specifically describe the apportionment of the employee
contribution between the members and the employer. An agreement
under this section and any change to an agreement under this
section apply only to employee contributions for pay periods

beginning on or after the date that the board receives the
notice.
  SECTION 4.  { + The amendments to ORS 238A.335 by section 3 of
this 2013 Act become operative on January 1, 2016. + }
  SECTION 5. ORS 238A.005, as amended by section 1, chapter 31,
Oregon Laws 2012, is amended to read:
  238A.005. For the purposes of this chapter:
  (1) 'Active member' means a member of the pension program or
the individual account program of the Oregon Public Service
Retirement Plan who is actively employed in a qualifying
position.
  (2) 'Actuarial equivalent' means a payment or series of
payments having the same value as the payment or series of
payments replaced, computed on the basis of interest rate and
mortality assumptions adopted by the board.
  (3) 'Board' means the Public Employees Retirement Board.
  (4) 'Eligible employee' means a person who performs services
for a participating public employer, including elected officials
other than judges. 'Eligible employee' does not include:
  (a) Persons engaged as independent contractors;
  (b) Aliens working under a training or educational visa;
  (c) Persons, other than workers in the Industries for the Blind
Program under ORS 346.190, provided sheltered employment or
make-work by a public employer;
  (d) Persons categorized by a participating public employer as
student employees;
  (e) Any person who is an inmate of a state institution;
  (f) Employees of foreign trade offices of the Oregon Business
Development Department who live and perform services in foreign
countries under the provisions of ORS 285A.075 (1)(g);
  (g) An employee actively participating in an alternative
retirement program established under ORS 353.250 or an optional
retirement plan established under ORS 341.551;
  (h) Employees of the Oregon University System who are actively
participating in an optional retirement plan offered under ORS
243.800;
  (i) Any employee who belongs to a class of employees that was
not eligible on August 28, 2003, for membership in the system
under the provisions of ORS chapter 238 or other law;
  (j) Any person who belongs to a class of employees who are not
eligible to become members of the Oregon Public Service
Retirement Plan under the provisions of ORS 238A.070 (2);
  (k) Any person who is retired under ORS 238A.100 to 238A.245 or
ORS chapter 238 and who continues to receive retirement benefits
while employed; and
  (L) Judges.
  (5) 'Firefighter' means:
  (a) A person employed by a local government, as defined in ORS
174.116, whose primary job duties include the fighting of fires;
  (b) The State Fire Marshal, the chief deputy state fire marshal
and deputy state fire marshals; and
  (c) 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.
  (6) 'Fund' means the Public Employees Retirement Fund.
  (7)(a) 'Hour of service' means:
  (A) An hour for which an eligible employee is directly or
indirectly paid or entitled to payment by a participating public
employer for performance of duties in a qualifying position; and
  (B) An hour of vacation, holiday, illness, incapacity, jury
duty, military duty or authorized leave during which an employee
does not perform duties but for which the employee is directly or
indirectly paid or entitled to payment by a participating public
employer for services in a qualifying position, as long as the
hour is within the number of hours regularly scheduled for the
performance of duties during the period of vacation, holiday,
illness, incapacity, jury duty, military duty or authorized
leave.
  (b) 'Hour of service' does not include any hour for which
payment is made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation laws
or unemployment compensation laws.
  (8) 'Inactive member' means a member of the pension program or
the individual account program of the Oregon Public Service
Retirement Plan whose membership has not been terminated, who is
not a retired member and who is not employed in a qualifying
position.
  (9) 'Individual account program' means the defined contribution
individual account program of the Oregon Public Service
Retirement Plan established under ORS 238A.025.
  (10) 'Institution of higher education' means a public
university listed in ORS 352.002, the Oregon Health and Science
University or a community college, as defined in ORS 341.005.
  (11) 'Member' means an eligible employee who has established
membership in the pension program or the individual account
program of the Oregon Public Service Retirement Plan and whose
membership has not been terminated under ORS 238A.110 or
238A.310.
  (12) 'Participating public employer' means a public employer as
defined in ORS 238.005 that provides retirement benefits for
employees of the public employer under the system.
  (13) 'Pension program' means the defined benefit pension
program of the Oregon Public Service Retirement Plan established
under ORS 238A.025.
  (14) 'Police officer' means a police officer as described in
ORS 238.005.
  (15) 'Qualifying position' means one or more jobs with one or
more participating public employers in which an eligible employee
performs 600 or more hours of service in a calendar year,
excluding any service in a job for which benefits are not
provided under the Oregon Public Service Retirement Plan pursuant
to ORS 238A.070 (2).
  (16) 'Retired member' means a pension program member who is
receiving a pension as provided in ORS 238A.180 to 238A.195.
  (17)(a) 'Salary' means the remuneration paid to an active
member in return for services to the participating public
employer, including remuneration in the form of living quarters,
board or other items of value, to the extent the remuneration is
includable in the employee's taxable income under Oregon law.
Salary includes the additional amounts specified in paragraph (b)
of this subsection, but does not include the amounts specified in
paragraph (c) of this subsection, regardless of whether those
amounts are includable in taxable income.
  (b) 'Salary' includes the following amounts:
  (A) Payments of employee and employer money into a deferred
compensation plan that are made at the election of the employee.
  (B) Contributions to a tax-sheltered or deferred annuity that
are made at the election of the employee.
  (C) Any amount that is contributed to a cafeteria plan or
qualified transportation fringe benefit plan by the employer at
the election of the employee and that is not includable in the
taxable income of the employee by reason of 26 U.S.C. 125 or
132(f)(4), as in effect on December 31, 2011.
  (D) Any amount that is contributed to a cash or deferred
arrangement by the employer at the election of the employee and
that is not included in the taxable income of the employee by
reason of 26 U.S.C. 402(e)(3), as in effect on December 31, 2011.
  (E) Retroactive payments described in ORS 238.008.
  (F) The amount of an employee contribution to the individual
account program that is   { - paid by the employer and - }

deducted from the compensation of the employee  { - , as
provided - }  under ORS 238A.335
  { - (1) and (2)(a) - } .
    { - (G) The amount of an employee contribution to the
individual account program that is not paid by the employer under
ORS 238A.335. - }
    { - (H) - }   { + (G) + } Wages of a deceased member paid to
a surviving spouse or dependent children under ORS 652.190.
  (c) 'Salary' does not include the following amounts:
  (A) Travel or any other expenses incidental to employer's
business which is reimbursed by the employer.
  (B) Payments made on account of an employee's death.
  (C) Any lump sum payment for accumulated unused sick leave,
vacation leave or other paid leave.
  (D) Any severance payment, accelerated payment of an employment
contract for a future period or advance against future wages.
  (E) Any retirement incentive, retirement bonus or retirement
gratuitous payment.
  (F) Payment for a leave of absence after the date the employer
and employee have agreed that no future services in a qualifying
position will be performed.
  (G) Payments for instructional services rendered to public
universities of the Oregon University System or the Oregon Health
and Science University when those 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 covered by the contract.
  (H) The amount of an employee contribution to the individual
account program that is paid by the employer and is not deducted
from the compensation of the employee  { - , as provided - }
under ORS 238A.335   { - (1) and (2)(b) - } .
  (I) Any amount in excess of $200,000 for a calendar year. If
any period over which salary is determined is less than 12
months, the $200,000 limitation for that period shall be
multiplied by a fraction, the numerator of which is the number of
months in the determination period and the denominator of which
is 12. The board shall adopt rules adjusting this dollar limit to
incorporate cost-of-living adjustments authorized by the Internal
Revenue Service.
  (18) 'System' means the Public Employees Retirement System.
  SECTION 6.  { + The amendments to ORS 238A.005, 238A.330 and
238A.335 by sections 1 to 3 and 5 of this 2013 Act do not apply
to a collective bargaining agreement entered into before the
effective date of this 2013 Act. Any collective bargaining
agreement entered into on or after the effective date of this
2013 Act must be in conformance with ORS 238A.005, 238A.330 and
238A.335 as amended by sections 1 to 3 and 5 of this 2013
Act. + }
  SECTION 7.  { + (1) Jurisdiction is conferred on the Supreme
Court to determine in the manner provided by this section whether
this 2013 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 Article I, section 21, of the Oregon Constitution,
or Article I, section 10, clause 1, of the United States
Constitution.
  (2) A person who is adversely affected by this 2013 Act or who
will be adversely affected by this 2013 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 2013 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)(a) The Supreme Court shall allow members of the Legislative
Assembly to intervene in any proceeding under this section. After
a member intervenes in a proceeding under this section, the
member has standing to participate in the proceeding even if the
member ceases to be a member of the Legislative Assembly.
  (b) A member of the Senate or House of Representatives who
intervenes in a proceeding under this subsection may not use
public funds to pay legal expenses incurred in intervening or
participating in the proceeding.
  (7) 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.
  (8) The court may not award attorney fees to a petitioner in a
proceeding under this section. + }
  SECTION 8.  { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
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