Bill Text: OR SB857 | 2013 | Regular Session | Engrossed

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Bill Title: Relating to public employee retirement; declaring an emergency.

Spectrum: Committee Bill

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB857 Detail]

Download: Oregon-2013-SB857-Engrossed.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 4050

                           A-Engrossed

                         Senate Bill 857
                  Ordered by the Senate June 29
            Including Senate Amendments dated June 29

Sponsored by COMMITTEE ON FINANCE AND REVENUE

                             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.

    { - Creates Task Force on PERS Reform to study approaches to
reforming Public Employees Retirement System and report to
committee or interim committee of Legislative Assembly no later
than October 1, 2014. - }
    { - Sunsets task force on date of convening of 2015 regular
session of Legislative Assembly. - }
   { +  Modifies cost-of-living adjustment under Public Employees
Retirement System.
  Directs Public Employees Retirement Board to report to
Legislative Assembly at least once every five years on impact of
changes in cost of living on purchasing power of pensions.
  Directs board to adopt actuarial equivalency factor tables for
computing money match benefit for certain members of system.
Directs board to use annual interest rate based on rates
published by Pension Benefit Guaranty Corporation in adopting
tables.
  Directs board to recalculate employer contribution rates to
reflect savings attributable to Act.
  Provides for expedited review by Supreme Court upon petition by
adversely affected party. + }
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to public employee retirement; creating new provisions;
  amending ORS 238.360 and 238A.210; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:

                               { +
COST OF LIVING ADJUSTMENTS + }

  SECTION 1. ORS 238.360, as amended by sections 1 and 3, chapter
53, Oregon Laws 2013 (Enrolled Senate Bill 822), is amended to
read:
  238.360. (1) On July 1 of each year, the Public Employees
Retirement Board shall increase the yearly allowance that a
member or member's beneficiary receives or is entitled to
receive, as provided in   { - subsections (2) and (3) - }  { +
subsection (2) + } of this section. The increase is first payable
with the allowance that the member or the member's beneficiary
receives or is entitled to receive on August 1.
  (2)(a) If the member's or member's beneficiary's yearly
allowance   { - for the previous year totaled $20,000 - }
 { + is $60,000 + } or less, the allowance shall be increased by
 { - two - }   { + 1.25 + } percent.
    { - (b) If the member's or member's beneficiary's yearly
allowance for the previous year totaled more than $20,000 but not
more than $40,000, the allowance shall be increased by $400 plus
1.5 percent of the amount of the yearly allowance exceeding
$20,000. - }
    { - (c) If the member's or member's beneficiary's yearly
allowance for the previous year totaled more than $40,000 but not
more than $60,000, the allowance shall be increased by $700 plus
one percent of the amount of the yearly allowance exceeding
$40,000. - }
    { - (d) - }   { + (b) + } If the member's or member's
beneficiary's yearly allowance   { - for the previous year
totaled - }   { + is  + }more than $60,000, the allowance shall
be increased by   { - $900 plus .25 - }   { + $750 plus 0.15 + }
percent of the amount of the yearly allowance exceeding $60,000.
    { - (3) If a member or member's beneficiary has been
receiving an allowance for less than 12 months on July 1 of any
year, the board shall calculate the increase under subsection (2)
of this section on the basis of the yearly allowance the member
or member's beneficiary would have received if the member or
member's beneficiary had received the monthly allowance for 12
months. - }
    { - (4) - }   { + (3) + } Any increase in the allowance shall
be paid from contributions of the public employer under ORS
238.225.
   { +  (4) As used in this section, 'yearly allowance' means the
monthly allowance that a member or member's beneficiary is
entitled to on July 1 of the year in which the board is
calculating the increase under subsection (1) of this section,
multiplied by 12. + }
  SECTION 2.  { + The amendments to ORS 238.360 by section 1 of
this 2013 Act apply to all increases to allowances made under ORS
238.360 on and after July 1, 2014. + }
  SECTION 3. ORS 238A.210, as amended by sections 5 and 7,
chapter 53, Oregon Laws 2013 (Enrolled Senate Bill 822), is
amended to read:
  238A.210. (1) On July 1 of each year, the board shall increase
every pension payable under ORS 238A.180, 238A.185 and 238A.190,
every disability benefit under ORS 238A.235 and every death
benefit payable under ORS 238A.230 as provided in
  { - subsections (2) and (3) - }  { +  subsection (2) + } of
this section. The increase shall be made for the payments payable
on August 1 and thereafter.
  (2)(a) If a person's yearly pension or benefit   { - for the
previous year totaled $20,000 - }   { + is $60,000 + } or less,
the pension or benefit shall be increased by   { - two - }
 { + 1.25 + } percent.
    { - (b) If a person's yearly pension or benefit for the
previous year totaled more than $20,000 but not more than
$40,000, the pension or benefit shall be increased by $400 plus
1.5 percent of the amount of the yearly pension or benefit
exceeding $20,000. - }
    { - (c) If a person's yearly pension or benefit for the
previous year totaled more than $40,000 but not more than
$60,000, the pension or benefit shall be increased by $700 plus
one percent of the amount of the yearly pension or benefit
exceeding $40,000. - }
    { - (d) - }   { + (b) + } If a person's yearly pension or
benefit   { - for the previous year totaled - }   { + is  + }more
than $60,000, the pension or benefit shall be increased by
 { - $900 plus .25 - }   { + $750 plus 0.15 + } percent of the
amount of the yearly pension or benefit exceeding $60,000.
    { - (3) If a person has been receiving a pension or benefit
for less than 12 months on July 1 of any year, the board shall
calculate the increase under subsection (2) of this section on
the basis of the yearly allowance the person would have received
if the person had received the pension or benefit for 12
months. - }
   { +  (3) As used in this section, 'yearly pension or benefit '
means the monthly pension or benefit that a person is entitled to
on July 1 of the year in which the board is calculating the
increase under subsection (1) of this section, multiplied by
12. + }
  SECTION 4.  { + The amendments to ORS 238A.210 by section 3 of
this 2013 Act apply to all increases to pensions or benefits made
under ORS 238A.210 on and after July 1, 2014. + }
  SECTION 5.  { + (1) The amendments to ORS 238.360 and 238A.210
by sections 1 and 3 of this 2013 Act become operative on July 1,
2014.
  (2) The Public Employees Retirement Board may take any action
before the operative date specified in subsection (1) of this
section to enable the board, on and after the operative date
specified in subsection (1) of this section, to exercise all the
duties, functions and powers conferred on the board by the
amendments to ORS 238.360 and 238A.210 by sections 1 and 3 of
this 2013 Act. + }
  SECTION 6.  { + Section 7 of this 2013 Act is added to and made
a part of ORS chapter 238. + }
  SECTION 7.  { + At least once every five years, the Public
Employees Retirement Board shall analyze the impact of increases
or decreases in the cost of living on the purchasing power of
pensions payable under the Public Employees Retirement System and
report to an appropriate committee or interim committee of the
Legislative Assembly on:
  (1) The results of the analysis; and
  (2) Recommendations relating to the cost-of-living adjustment
under the system. + }
  SECTION 8.  { + The Public Employees Retirement Board shall
issue the first report under section 7 of this 2013 Act on or
before September 1, 2020. + }

                               { +
ACTUARIAL EQUIVALENCY FACTOR TABLES FOR CERTAIN MEMBERS + }

  SECTION 9.  { + Sections 10 and 11 of this 2013 Act are added
to and made a part of ORS chapter 238. + }
  SECTION 10.  { + (1) In computing the service retirement
allowance under ORS 238.300 (1) and (2)(b)(A), the Public
Employees Retirement Board shall use the actuarial equivalency
factor tables adopted under ORS 238.607 for a member who is an
active member on the effective date of this 2013 Act.
  (2) In computing the service retirement allowance under ORS
238.300 (1) and (2)(b)(A), the Public Employees Retirement Board
shall use the actuarial equivalency factor tables adopted under
ORS 238.607 for a member who:
  (a) On the member's effective date of retirement, had at least
20 years of membership, as defined in ORS 238.300 (2)(c);
  (b) Retires as a police officer or firefighter; and
  (c) Performed some period of service in a qualifying position
on or after January 1, 2004, and before the effective date of
this 2013 Act.
  (3) In computing the service retirement allowance under ORS
238.300 (1) and (2)(b)(A), the Public Employees Retirement Board
shall use the actuarial equivalency factor tables adopted under
ORS 238.607 for a member who:

  (a) On the member's effective date of retirement, had at least
24 years of membership, as defined in ORS 238.300 (2)(c);
  (b) Retires as other than a police officer or firefighter; and
  (c) Performed some period of service in a qualifying position
on or after January 1, 2004, and before the effective date of
this 2013 Act.
  (4) In computing the service retirement allowance under ORS
238.300 (1) and (2)(b)(A) for a member who does not meet the
requirements of subsections (1) to (3) of this section, the board
shall use the actuarial equivalency factor tables adopted under
section 11 of this 2013 Act. + }
  SECTION 11.  { + (1) At the time the Public Employees
Retirement Board adopts actuarial equivalency factor tables under
ORS 238.607, the board shall adopt actuarial equivalency factor
tables for the purpose of computing the service retirement
allowance under ORS 238.300 (1) and (2)(b)(A) for a member who
does not meet the requirements of section 10 (1) to (3) of this
2013 Act. The tables may be adopted in conjunction with the
system evaluation required by ORS 238.605. Tables adopted under
this section must use the best actuarial information on mortality
available at the time the board adopts the tables, as provided by
the actuary engaged by the board.
  (2) The board shall determine the annual interest rate to be
used for tables adopted under this section based on the current
immediate and deferred annuity rates as published from time to
time by the Pension Benefit Guaranty Corporation at 29 C.F.R.
part 4044, Appendix B.
  (3) The tables adopted under subsection (2) of this section
shall be used as provided in ORS 238.607 (1)(a) and (c).
  (4) The board may not defer or delay implementation of the
actuarial equivalency factor tables adopted under this
section. + }
  SECTION 12.  { + Notwithstanding section 11 (1) of this 2013
Act, the Public Employees Retirement Board shall first adopt
actuarial equivalency factor tables under section 11 of this 2013
Act as soon as possible after the effective date of this 2013
Act. + }
  SECTION 13. { +  The tables adopted under sections 11 and 12 of
this 2013 Act apply only to members of the Public Employees
Retirement System whose effective date of retirement is after
September 1, 2013. + }

                               { +
EMPLOYER CONTRIBUTION RATES + }

  SECTION 14.  { + (1) As soon as possible after the effective
date of this 2013 Act, the Public Employees Retirement Board
shall recalculate the contribution rates of all employers,
pursuant to ORS 238.225, to reflect the provisions of this 2013
Act.
  (2) The board shall issue corrected contribution rate orders to
employers affected by recalculated rates under this section
within 90 days after the effective date of this 2013 Act. The
corrected rates are effective July 1, 2013. + }

                               { +
JUDICIAL REVIEW + }

  SECTION 15.  { + (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, 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, or is invalid for any other reason.
  (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) 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. + }

                               { +
ACT DOES NOT CREATE CONTRACT RIGHTS + }

  SECTION 16.  { + This 2013 Act does not constitute a statutory
contractual promise. + }

                               { +
SEVERABILITY + }

  SECTION 17.  { + It is the intent of the Legislative Assembly
that all parts of this 2013 Act are independent and that if any
part of this 2013 Act is held unconstitutional, all remaining
parts shall remain in force. + }

                               { +
CAPTIONS + }

  SECTION 18.  { + The unit captions used in this 2013 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2013 Act. + }

                               { +
EMERGENCY CLAUSE + }

  SECTION 19.  { + 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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