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Oregon Bulletin

March 1, 2012

Oregon Public Employees Retirement System, Chapter 459

Rule Caption: Amend and adopt rules to implement 2011 legislation impacting PERS.

Adm. Order No.: PERS 1-2012

Filed with Sec. of State: 2-1-2012

Certified to be Effective: 2-1-12

Notice Publication Date: 11-1-2011

Rules Adopted: 459-005-0620

Rules Amended: 459-005-0001, 459-005-0525, 459-005-0545, 459-075-0060, 459-080-0010

Subject: The 2011 Oregon Legislative Assembly passed several bills which require rulemaking to implement. The first, House Bill 2113 (chapter 722, Oregon Laws 2011), became effective on August 5, 2011. The bill contains modifications to the retirement plan options available to legislators; clean-up of trustee to trustee transfer retirement credit purchases; and clarification of vesting standards for OPSRP Pension Program and IAP members. The bill also addressed the dual membership problem presented by members who withdraw from the IAP but are not eligible to withdraw from the OPSRP Pension Program.

 House Bill 2252, which became effective on June 2, 2011, provides a state agency direct authority to write off uncollectible debts on its accounts under its own criteria (previously, the Secretary of State and Attorney General had to approve the criteria). The proposed new rule establishes the criteria which are mandated by HB 2252 for PERS. As the agency’s criteria must still be approved by the Attorney General, the new rule adopts the model criteria that they provided.

 Senate Bill 301 (Chapter 7, Oregon Laws 2011), became effective on September 29, 2011. The bill updates the connection date to the federal Internal Revenue Code and other provisions of federal tax law.

 Staff has reviewed the bills and determined that certain existing rules need modification to conform to these statutory provisions. One new rule is needed to implement HB 2252.

Rules Coordinator: Daniel Rivas—(503) 603-7713

459-005-0001

Definitions, Generally

The words and phrases used in chapter 459, Oregon Administrative Rules, have the same meaning given them in ORS 238.005 to 238.750. Specific and additional terms used in chapter 459 generally are defined as follows unless context of a particular division or rule within this chapter requires otherwise:

(1) “Ad hoc” means one-time for a specific purpose, case, or situation without consideration of a broader application.

(2) “After-tax” contributions means:

(a) Member contributions required or permitted by ORS 238.200 or 238.515, which a participating employer has not elected to “pick up,” assume or pay in accordance with ORS 238.205 and 238.515(b). “After-tax” contributions are included in the member’s taxable income for purposes of state or federal income taxation at the time paid to PERS. “After-tax” contributions are included in computing FAS and in computing the employer’s contributions paid to PERS.

(b) Payments made by a member to PERS for the purchase of additional benefits.

(3) “Before-tax” contributions means member contributions required or permitted by ORS 238.200 or 238.515, which a participating employer has elected to “pick up,” assume or pay in accordance with ORS 238.205 and 238.515(b). “Before-tax” contributions are not included in the member’s taxable income for purposes of state or federal income taxation at the time paid to PERS. “Before-tax” contributions are included in:

(a) Computing final average salary; and

(b) Computing the employer’s contributions paid to PERS if the employer has elected to “pick up” the member contributions.

(4) “Calendar month” means the Julian Calendar beginning with the first calendar day of a month through the last calendar day of that month.

(5) “Casual worker” means an individual engaged for incidental, occasional, irregular, or unscheduled intervals or for a period of less than six consecutive calendar months.

(6) “Contributions” means any contributions required or permitted pursuant to ORS 238.200 or 238.515.

(7) “Differential wage payment” means a payment made on or after January 1, 2009:

(a) By an employer to a member with respect to any period during which the member is performing service in the uniformed services, as defined in USERRA, while on active duty for a period of more than 30 consecutive days; and

(b) That represents all or a portion of the wages the member would have received from the employer if the member were performing service for the employer.

(8) “Effective date of withdrawal” means the later of:

(a) The first day of the calendar month in which PERS receives the last completed document required from a member who requested a withdrawal; or

(b) The first day of the second calendar month following the calendar month in which the member terminated employment with all participating employers and all employers in a controlled group with a participating employer.

(9) “Effective retirement date” means:

(a) For service retirements, the date described in OAR 459-013-0260; or

(b) For disability retirements, the date described in OAR 459-015-0001.

(10) “Elected official” means an individual who is a public official holding an elective office or an appointive office with a fixed term for the state or for a political subdivision of the state who has elected to participate in PERS pursuant to ORS 238.015(5).

(11) “Emergency worker” means an individual engaged in case of emergency, including fire, storm, earthquake, or flood.

(12) “Employee” has the same meaning as provided in ORS 238.005 and shall be determined in accordance with OAR 459-010-0030.

(a) For the purposes of ORS 238.005 to 238.750 the term “employee” includes public officers whether elected or appointed for a fixed term.

(b) The term “employee” does not include:

(A) A member of the governing board of a political subdivision unless the individual qualifies for membership under ORS 238.015.

(B) An individual who performs services for a public employer as a contractor in an independently established business or as an employee of that contractor in accordance with OAR 459-010-0030.

(c) An individual providing volunteer service to a public employer without compensation for hours of service as a volunteer, except for volunteer firefighters who establish membership in accordance with ORS 238.015(6).

(13) “Employer contribution account” means a record of employer contributions to the Fund, as required by ORS 238.225(1), and investment earnings attributable to those contributions, that the Board has credited to the account after deducting amounts required or permitted by ORS Chapter 238.

(14) “Employment” is compensated service to a participating employer as an employee whose:

(a) Period or periods of employment includes only the actual hours of compensated service with a participating employer as an employee; and

(b) Compensated service includes, but is not limited to, paid vacation, paid sick leave, or other paid leave.

(15) “Estimate” means a projection of benefits prepared by staff of a service or disability retirement allowance, a death or a refund payment. An estimate is not a guarantee or promise of actual benefits that eventually may become due and payable, and PERS is not bound by any estimates it provides. (ORS 238.455(6))

(16) “FAS” and “final average salary” have the same meaning as provided in:

(a) ORS 238.005 for all PERS Tier One members;

(b) ORS 238.435(2) for all PERS Tier Two members who are not employed by a local government as defined in ORS 174.116;

(c) ORS 238.435(4) for all PERS Tier Two members who are employed by a local government as defined in ORS 174.116; or

(d) ORS 238.535(2) for judge members of PERS for service as a judge.

(17) “General service member” means membership in PERS as other than a judge member, a police officer, a firefighter, or a legislator.

(18) “Good cause” means a cause beyond the reasonable control of an individual. “Good cause” exists when it is established by satisfactory evidence that factors or circumstances are beyond the reasonable control of a rational and prudent individual of normal sensitivity, exercising ordinary common sense.

(19) “Independent contractor” means an individual or business entity that is not subject to the direction and control of the employing entity as determined in accordance with OAR 459-010-0032.

(20) “Judge member” has the same meaning as provided in ORS 238.500(3). For purposes of this chapter, active, inactive, and retired membership of a judge member shall have the same meaning as provided in ORS 238.005.

(21) “Legislator” means an individual elected or appointed to the Oregon Legislative Assembly who has elected to participate in PERS for their legislative service.

(22) “Member cost” means after-tax member contributions and payments made by or on behalf of a member to purchase additional benefits.

(23) “Participating employer” means a public employer who has one or more employees who are active members of PERS.

(24) “PERS” and “system” have the same meaning as the Public Employees Retirement System in ORS 238.600.

(25) “Qualifying position” has the same meaning as provided in ORS 238.005.

(26) “Regular account” means the account established under ORS 238.250 for each active and inactive member who has made contributions to the Fund or the account of an alternate payee of such a member.

(27) “Salary” has the same meaning as provided in ORS 238.005.

(a) “Salary” includes a differential wage payment, as defined in this rule.

(b) For a Tier One member, a lump sum payment for accrued vacation pay is considered salary:

(A) In determining employee and employer contributions.

(B) In determining final average salary for the purpose of calculating PERS benefits.

(c) For a Tier Two member, a lump sum payment for accrued vacation pay:

(A) Is considered salary in determining employee and employer contributions.

(B) Is not considered salary in determining final average salary for the purpose of calculating PERS benefits.

(28) “Seasonal worker” means an individual whose engagement is characterized as recurring for defined periods that are natural divisions of the employer’s business cycle or services.

(29) “Staff” means the employees of the Public Employees Retirement System as provided for in ORS 238.645.

(30) “Tier One member” means a member who established membership in the system before January 1, 1996, as defined in ORS 238.430(2).

(31) “Tier Two member” means a member who established membership in the system on or after January 1, 1996, in accordance with ORS 238.430.

(32) “USERRA” means the federal Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301-4334, as in effect on the effective date of this rule.

(33) “Vacation pay” means a lump sum payment for accrued leave in a Vacation Leave Program provided by a public employer which grants a period of exemption from work for rest and relaxation with pay, and does not include:

(a) Sick leave programs;

(b) Programs allowing the accumulation of compensatory time, holiday pay or other special leaves unless the public employer’s governing body indicates by resolution, ordinance, or other legislative process, that such leave is intended to serve as additional vacation leave; and

(c) Other programs, such as a Personal Time Off (PTO) plan, which are a combination of vacation, sick, bereavement, personal and other leaves of pay as defined and described by a public employer unless the employer has a written policy that clearly indicates the percentage of the plan that represents vacation leave. If the employer’s PTO has a cash option, the employer must report to PERS the amount of any lump sum pay-off for the percentage that represents vacation leave.

(34) “Variable account” and “member variable account” mean the account in the Variable Annuity Account established under ORS 238.260(2) for each active and inactive member who has elected to have amounts paid or transferred into the Variable Annuity Account.

(35) “Variable Annuity Account” means the account established in ORS 238.260(2).

(36)(a) “Volunteer” means an individual who performs a service for a public employer, and who receives no compensation for the service performed.

(b) The term “volunteer” does not include an individual whose compensation received from the same public employer for similar service within the same calendar year exceeds the reasonable market value for such service.

(37) “Year” means any period of 12 consecutive calendar months.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PERS 2-1998, f. & cert. ef. 3-16-98; PERS 3-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 12-2003, f. & cert. ef. 11-14-03; PERS 14-2003, f. & cert. ef. 11-20-03; PERS 15-2003, f. & cert. ef. 12-15-03; PERS 9-2004(Temp), f. 4-15-04 cert. ef. 5-21-04 thru 7-1-04; PERS 15-2004, f. & cert. ef. 6-15-04; PERS 19-2005, f. 11-1-05, cert. ef. 1-1-06; PERS 4-2006, f. & cert. ef. 4-5-06; PERS 1-2009, f. & cert. ef. 2-12-09; PERS 3-2010, f. & cert. ef. 5-28-10; PERS 1-2012, f. & cert. ef. 2-1-12

459-005-0525

Ceiling on Compensation for Purposes of Contributions and Benefits

(1) The purpose of this rule is to assure compliance of the Public Employees Retirement System (PERS) with Internal Revenue Code (IRC) Section 401(a)(17) relating to the limitation on annual compensation allowable for determining contribution and benefits under ORS Chapters 238 and 238A.

(2) Definitions:

(a) “Annual compensation” means “salary,” as defined in ORS 238.005 and 238.205 with respect to Chapter 238 and in 238A.005 with respect to Chapter 238A paid to the member during a calendar year or other 12-month period, as specified in this rule.

(b) “Eligible participant” means a person who first becomes a member of PERS before January 1, 1996.

(c) “Employer” means a “public employer” as defined in ORS 238.005, for the purposes of this rule as it applies to Chapter 238. For the purposes of this rule as it applies to Chapter 238A, an “employer” means a “participating public employer” as defined in 238A.005.

(d) “Noneligible participant” means a person who first becomes a member of PERS after December 31, 1995.

(e) “Participant” means an active or inactive member of PERS.

(3) For eligible participants, the limit set forth in IRC Section 401(a)(17) shall not apply for purposes of determining the amount of employee or employer contributions that may be paid into PERS, and for purposes of determining benefits due under ORS Chapters 238 and 238A. The limit on annual compensation for eligible participants shall be no less than the amount which was allowed to be taken into account for purposes of determining contributions or benefits under former 237.001 to 237.315 as in effect on July 1, 1993.

(4) For noneligible participants, the annual compensation taken into account for purposes of determining contributions or benefits under ORS Chapters 238 and 238A shall be measured on a calendar year basis, and shall not exceed $250,000 per calendar year beginning in 2012.

(a) The limitation on annual compensation will be indexed by cost-of-living adjustments in subsequent years as provided in IRC Section 401(a)(17)(B).

(b) A noneligible participant employed by two or more agencies or instrumentalities of a PERS participating employer in a calendar year, whether concurrently or consecutively, shall have all compensation paid by the employer combined for determining the allowable annual compensation under this rule.

(c) PERS participating employers shall monitor annual compensation and contributions to assure that reports and remitting are within the limits established by this rule and IRC Section 401(a)(17).

(5) For a noneligible participant, Final Average Salary under ORS 238.005 with respect to Chapter 238 and under 238A.130 with respect to Chapter 238A shall be calculated based on the amount of compensation that is allowed to be taken into account under this rule.

(6) Notwithstanding section (4) and (5) of this rule, if the Final Average Salary as defined in ORS 238.005 with respect to Chapter 238 and as defined in 238A.130 with respect to Chapter 238A is used in computing a noneligible participant’s retirement benefits, the annual compensation shall be based on compensation paid in a 12-month period beginning with the earliest calendar month used in determining the 36 months of salary paid. For each 12-month period, annual compensation shall not exceed the amount of compensation that is allowable under this rule for the calendar year in which the 12-month period begins.

(7) With respect to ORS Chapter 238, creditable service, as defined in 238.005, shall be given for each month that an active member is paid salary or wages and allowable contributions have been remitted to PERS, or would be remitted but for the annual compensation limit in IRC Section 410(a)(17). With respect to Chapter 238A, retirement credit as determined in 238A.140, shall be given for each month that an active member is paid salary or wages and allowable contributions have been remitted to PERS, or would be remitted but for the annual compensation limit in IRC Section 401(a)(17).

(8) The provisions of this rule are effective on January 1, 2004.

Stat. Auth.: ORS 238.630, 238.650, 238A.370 & 238A.450
Stats. Implemented: ORS 238, 238A
Hist.: PERS 4-1995, f. 11-14-95, cert. ef. 12-1-95; PERS 5-1999, f. & cert. ef. 11-15-99; PERS 11-2002, f. & cert. ef. 7-17-02; PERS 31-2004(Temp), f. & cert. ef. 12-15-04 thru 6-1-05; PERS 8-2005, f. & cert. ef. 2-22-05; PERS 19-2005, f. 11-1-05, cert. ef. 1-1-06; PERS 14-2008, f. & cert. ef. 11-26-08; PERS 1-2012, f. & cert. ef. 2-1-12

459-005-0545

Annual Addition Limitation

(1) Applicable Law. This administrative rule shall be construed consistently with the requirements of the Internal Revenue Code (IRC) Section 415(c) and the Treasury regulations and Internal Revenue Service rulings and other interpretations issued thereunder.

(2) Annual Addition Limitation. Except as otherwise provided in this rule, a member’s annual additions to PERS for any calendar year after 2011 may not exceed $50,000 (as adjusted under IRC Section 415(d)).

(3) Annual Additions. For purposes of this rule, the term “annual additions” has the same meaning as under IRC Section 415(c)(2).

(4) Permissive Service Credit. The following special rules shall apply with respect to purchases of permissive service credit, as defined in OAR 459-005-0540, Permissive Service Credit:

(a) If a member’s after-tax contributions to purchase permissive service credit are included in the member’s annual additions under section (3) of this rule, the member shall not be treated as exceeding the limitation under section (2) of this rule solely because of the inclusion of such contributions.

(b) With respect to any eligible participant, the annual addition limitation in section (2) of this rule shall not be applied to reduce the amount of permissive service credit to an amount less than the amount that could be purchased under the terms of the plan as in effect on August 5, 1997. As used in this subsection, the term “eligible participant” includes any individual who became an active member before January 1, 2000.

(5) Purchase of Service in the Armed Forces Under ORS 238.156 or 238A.150. If a member makes a payment to PERS to purchase retirement credit for service in the Armed Forces pursuant to 238.156(3)(c) or 238A.150 and the service is covered under Internal Revenue Code Section 414(u), the following special rules shall apply for purposes of applying the annual addition limitation in section (2) of this rule:

(a) The payment shall be treated as an annual addition for the calendar year to which it relates;

(b) The payment shall not be treated as an annual addition for the calendar year in which it is made; and

(c) The member shall be treated as having received the following amount of compensation for the period of service in the Armed Forces to which the payment relates:

(A) The amount of compensation the member would have received from a participating employer had the member not been in the Armed Forces; or

(B) If the amount in paragraph (A) of this subsection is not reasonably certain, the member’s average compensation from the participating employer during the 12-month period immediately preceding the period of service in the Armed Forces (or, if shorter, the period of employment immediately preceding the period of service in the Armed Forces).

(6) The provisions of this rule are effective on January 1, 2004.

Stat. Auth.: ORS 238.630, 238.650, 238A.370 & 238A.450
Stats. Implemented: ORS 238.005 - 238.715, 238A.370
Hist.: PERS 5-1999, f. & cert. ef. 11-15-99; PERS 11-2002, f. & cert. ef. 7-17-02; PERS 31-2004(Temp), f. & cert. ef. 12-15-04 thru 6-1-05; PERS 8-2005, f. & cert. ef. 2-22-05; PERS 14-2008, f. & cert. ef. 11-26-08; PERS 1-2012, f. & cert. ef. 2-1-12

459-005-0620

Uncollectible Debt Owed to PERS

Any debt, including interest, penalties, or any portion of the debt, may be considered to be uncollectible when the debtor has no money or other thing of value owing or held by PERS that has not been credited to the debt, and it is reasonable to conclude, after all reasonable efforts to collect the debt have been made, that one or more of the following is true:

(1) The debtor does not and will not for the foreseeable future own or have the right to own assets from which PERS could collect the debt.

(2) It is reasonably estimated that the cost of collecting the debt would equal or exceed the amount of the debt.

(3) The debtor is deceased, and there are no assets in the debtor’s estate from which PERS could collect the debt.

(4) The debtor is a corporation or a limited liability company that is not and for the foreseeable future will not be engaged in any income-producing activity, and there are no assets from which PERS could collect the debt.

(5) The debt has previously been discharged in bankruptcy.

(6) The debtor’s estate is subject to a pending bankruptcy proceeding in which it is reasonable to conclude that the debt will be discharged and that PERS will receive none or an insubstantial share of the assets of the bankruptcy estate.

(7) PERS is and will be for the foreseeable future unable to collect from the debtor or from anyone owing the debtor money or holding assets of or from the debtor.

(8) PERS is unable to locate the debtor despite having made reasonable efforts to do so.

(9) The debt has been liquidated by reduction to a court judgment, administrative order or distraint warrant, which has subsequently expired.

Stat. Auth.: ORS 238.650, 293.240 & 238A.450
Stats. Implemented: ORS 293.240(2)
Hist.: PERS 9-2011(Temp), f. & cert. ef. 11-23-11 thru 5-20-12; PERS 1-2012, f. & cert. ef. 2-1-12

459-075-0060

Vesting in the OPSRP Pension Program

For the purpose of determining vesting under ORS 238A.115(1)(a):

(1) Hours of service performed for all participating public employers during a calendar year are included.

(2) Hours of service performed during the six-month period required to establish membership under ORS 238A.100 are included.

(3) For calendar years beginning on or after January 1, 2004, hours of service will be determined based on hours reported to PERS by the member’s employer(s) pursuant to OAR 459-070-0100.

(4) An eligible employee first employed by a participating public employer on or after August 29, 2003 and before January 1, 2004 is presumed to have performed less than 600 hours of service in calendar year 2003 unless records provided to PERS establish that the eligible employee performed at least 600 hours of service in the calendar year.

(5) Hours of service attributable to periods of active membership before termination of membership under ORS 238.095 and hours of service excluded under ORS 238A.120 and 238A.145 may not be included.

Stat. Auth.: ORS 238A.450
Stats. Implemented: ORS 238A.010, 238A.115
Hist.: PERS 9-2009, f. & cert. ef. 7-21-09; PERS 1-2012, f. & cert. ef. 2-1-12

459-080-0010

Membership

(1) An employee who is eligible for membership in the pension program under OAR 459-075-0010 becomes a member of the individual account program on the same date the employee becomes a member of the pension program.

(2) An employee who was an active or inactive member of PERS on August 28, 2003, and retains membership in PERS through January 1, 2004, becomes a member of the individual account program on January 1, 2004.

(3) An employee who performed a period of service before August 29, 2003, that was credited to the six-month period required under ORS 238.015 for membership in PERS becomes a member of the individual account program on the date the employee becomes a member of PERS, or January 1, 2004, whichever is later.

(4) An employee may become a member of the individual account program as provided in ORS 238A.300(2)

Stat. Auth.: ORS 238A.450
Stats. Implemented: ORS 238A.300, 238A.305 & OL 2011 Ch. 722
Hist.: PERS 21-2003, f. 12-15-03 cert. ef. 1-1-04; PERS 1-2012, f. & cert. ef. 2-1-12


 

Rule Caption: Administration of death/survivor benefits clarification. Rulemaking is also needed to address audit findings.

Adm. Order No.: PERS 2-2012

Filed with Sec. of State: 2-1-2012

Certified to be Effective: 2-1-12

Notice Publication Date: 11-1-2011

Rules Adopted: 459-014-0040, 459-014-0050

Rules Amended: 459-014-0030

Subject: Recent audit findings raised concerns about the state of the administrative rules regarding the administration of death benefits for the OPSRP Pension Program (OPSRP), Individual Account Program (IAP), and the Tier One or Tier Two member death benefit. Modifications to the existing rule and two new rules reflect current administration of pre-retirement death benefits and post-retirement payments to survivors and beneficiaries, excluding judge members, whose death benefits are addressed in the judge member OARs.

Rules Coordinator: Daniel Rivas—(503) 603-7713

459-014-0030

Pre-Retirement Designation of Beneficiary

(1) At any time before the effective date of retirement, a member or alternate payee with a separate account may designate a new beneficiary or revoke a previous designation of beneficiary for the purposes of paying benefits under ORS 238.390 and 238A.410.

(2) A designation of beneficiary must be:

(a) In a written format acceptable to PERS;

(b) Signed and dated by the member or alternate payee; and

(c) Received by PERS before the member or alternate payee’s death.

(3) The receipt by PERS of a new beneficiary designation revokes all previous designations.

(4) A member who has a member account and IAP account or an alternate payee with separate accounts must file a designation of beneficiary for each account.

(5) If the designation of beneficiary on file with PERS at the time of death is not administrable, distributions will be paid as if no designation of beneficiary had been made in accordance with ORS 238.390 and 238A.410.

(6) If a trustee of a trust is named as beneficiary, the individual beneficiary or beneficiaries of the trust will be treated as designated beneficiaries for the purpose of federal Required Minimum Distribution rules pursuant to 26 CFR 1.401(a)(9)-4, if the trust satisfies the following requirements:

(a) The trust is a valid trust under state law, or would be but for the fact it is not funded;

(b) The trust is irrevocable or will become irrevocable upon the death of the member or alternate payee;

(c) The beneficiaries of the trust, with respect to the trust’s interest in the account, are identifiable from the trust instrument. The beneficiaries will be considered identifiable as long as it is possible to identify the beneficiary with the shortest life expectancy; and

(d) PERS is provided:

(A) A copy of the trust document; or

(B) A certification of trust containing the following:

(i) A list of all beneficiaries of the trust;

(ii) Certification that the list is correct and complete to the best of the member or alternate payee’s knowledge and the trust satisfies the requirements in subsections (a), (b) and (c) of this section; and

(iii) A statement agreeing to provide a copy of the trust document upon demand.

(7) If a trust fails to satisfy the requirements in section (6) of this rule, the member will be deemed as having no beneficiary for purposes of Required Minimum Distributions and the entire death benefit must be distributed to the trust by December 31 of the calendar year containing the fifth anniversary of the death of the member or alternate payee pursuant to 26 CFR 1.401(a)(9)-3.

(8) The beneficiary designation made by a Tier One or Tier Two member will apply to the member account as defined in ORS 238.005 and any optional unit account under ORS 238.440.

(9) A pre-retirement designation of beneficiary may not be made for the OPSRP Pension Program as ORS 238A.230 determines who is eligible to receive a pre-retirement death benefit.

(10) The right of a beneficiary to receive a death benefit payment may not be deemed nullified or waived by any agreement or property settlement between the member and the beneficiary, or on behalf of either of them, which does not specifically mention such right and waive it on the part of the beneficiary or vacate and set aside the designation of said beneficiary by such member.

Stat. Auth.: ORS 238.650 & 238A.450
Stats. Implemented: ORS 238.390, 238A.230 & 238A.410
Hist.: PER 8, f. 12-15-55; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0075; PERS 21-2005, f. & cert. ef. 11-1-05; PERS 5-2006, f. & cert. ef. 4-5-06; PERS 2-2012, f. & cert. ef. 2-1-12

459-014-0040

Valid Request for Distribution of Pre-Retirement Death Benefits

(1) For the purposes of this rule, “valid request for distribution” is when PERS receives the last required document PERS has determined necessary to distribute a death benefit to a beneficiary.

(2) PERS must receive a copy of the death certificate of the deceased member or alternate payee. PERS will provide instructions to a beneficiary identifying additional documents that must be received to make a valid request for distribution. Required documents may include but are not limited to:

(a) Death Benefit Election;

(b) Letters of Testamentary/Administration;

(c) Small Estate Affidavit or out of state equivalent;

(d) Affidavit of Next of Kin;

(e) Affidavit of Beneficiary;

(f) Declaration of Beneficiary;

(g) Proof of marriage;

(h) Proof of registered domestic partnership;

(i) Proof of birth of the beneficiary;

(j) Trust document or certification of trust;

(k) Proof of Conservatorship; and

(l) Proof of Guardianship.

(3) Earnings crediting for the distribution amount for an IAP account beneficiary will be determined under OAR 459-007-0320.

Stat. Auth.: ORS 238.650 & 238A.450
Stats. Implemented: ORS 238.390, 238A.230 & 238A.410
Hist.: PERS 2-2012, f. & cert. ef. 2-1-12

459-014-0050

Designation of Beneficiary at Retirement and Survivor Benefits

(1) For the purposes of this rule, “first payment is due” means the first of the calendar month after the effective retirement date.

(2) The beneficiary designated on an application for service retirement becomes effective on the effective retirement date. If the service retirement application is rejected by PERS or cancelled by the member, the beneficiary designation is null and void.

(3) PERS must receive a copy of the death certificate of the member or alternate payee.

(4) When a retired Tier One or Tier Two member or alternate payee dies:

(a) Before the first payment is due, the benefit option selected pursuant to ORS 238.300 or 238.305 determines how benefits are paid to the designated beneficiary.

(b) After the first payment is due, unpaid benefits accrued by the member or alternate payee before their death will be paid to the member or alternate payee’s estate.

(5) A monthly benefit payable to a beneficiary is effective the first of the month after the last month payable to the member or alternate payee.

(6) If a retired member receiving unit payments under ORS 238.440 dies before the last payment has been made, the designated beneficiary will receive a lump sum payment of the remaining unit account balance. There is no benefit due from employer contributions.

(7) If adjustments are made to the retirement allowance or benefit of a deceased retiree:

(a) A member’s estate will be paid any underpayment or invoiced for any overpayment of benefits paid to the member.

(b) An alternate payee’s estate will be paid any underpayment or invoiced for any overpayment of benefits paid to the alternate payee.

(c) A beneficiary or a beneficiary’s estate will be paid any underpayment or invoiced for any overpayment of benefits paid to a beneficiary.

Stat. Auth.: ORS 238.650 & 238A.450
Stats. Implemented: ORS 238.300, 238.305, 238.390, 238.715, 238A.190 & 238A.400
Hist.: PERS 2-2012, f. & cert. ef. 2-1-12

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.

2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use

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