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Oregon Bulletin

May 1, 2014

Oregon Public Employees Retirement System, Chapter 459

Rule Caption: Implement provisions of Senate Bill 861 (2013) affecting COLA calculation and administration of supplementary payments.

Adm. Order No.: PERS 4-2014

Filed with Sec. of State: 3-31-2014

Certified to be Effective: 3-31-14

Notice Publication Date: 11-1-2013

Rules Adopted: 459-005-0510, 459-005-0520

Subject: The 2013 Oregon Legislative Assembly (Special Session) passed Senate Bill 861, which modified the COLA structure previously adopted in Senate Bill 822 (2013) for COLAs paid on or after July 1, 2014. Under Senate Bill 861, the COLA is determined using the monthly allowance, pension, or benefit a recipient is entitled to on July 1 of the year in which the increase is calculated. The proposed OAR 459-005-0510 clarifies that the resulting annual COLA is paid during the following 12 months in the recipient’s monthly allowance, pension, or benefit starting on August 1.

   The bill includes an annual supplementary payment that begins in 2014 and sunsets on December 31, 2019. The annual supplementary payment is based on 0.25 percent of the benefit recipient’s yearly allowance, pension, or benefit, but capped at $150. An additional supplementary payment of 0.25 percent is paid to a benefit recipient whose yearly allowance, pension, or benefit is $20,000 or less.

   Annual supplementary payments will be paid to retired members, beneficiaries, alternate payees, and judges who receive or are entitled to receive a retirement allowance, pension, or benefit on July 1. Alternate payees will receive a supplementary payment by operation of ORS 238.465(5), which requires that any increase in a member’s retirement allowance increases the amount paid to the alternate payee in the same proportion. Similar to the provisions applicable to the COLA, however, if the associated member is not receiving a supplementary payment because he or she has not yet retired, then the alternate payee will not receive a supplementary payment.

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

459-005-0510

Cost-of-Living Adjustment

(1) A cost-of-living adjustment (COLA) under ORS 238.360 and 238A.210 is calculated on an annual basis and then divided by 12 to determine the adjustment to the recipient’s monthly allowance, pension, or benefit.

(2) Monthly COLA increases end when the recipient is no longer eligible to receive a monthly allowance, pension, or benefit.

(3) This rule is effective on July 1, 2014.

Stat. Auth.: ORS 238.650 & 238A.450

Stats. Implemented: ORS 238.360, 238.575 & 238A.210

Hist.: PERS 4-2014, f. & cert. ef. 3-31-14

459-005-0520

Supplementary Payment

(1) For purposes of this rule, “benefit recipient” means a member, beneficiary, alternate payee, or judge member.

(2) In accordance with ORS 238.465(1), an alternate payee is eligible for a supplementary payment only if the associated member or judge member is eligible.

(3) Increased benefits under ORS 238.364 and 238.366 or cost-of-living adjustments under 238.360 or 238A.210 are not applied to a benefit recipient’s supplementary payments.

(4) A benefit recipient’s supplementary payment shall not be included in a benefit recipient’s yearly allowance or yearly pension or benefit for the purpose of calculating the cost-of-living adjustments under ORS 238.360, 238.575, or 238A.210.

Stat. Auth: ORS 238.650, 238.465 & 238A.450

Stats. Implemented: ORS 238.360, 238.575, 238A.210 & OL 2013, Ch. 2, §8 (1st special session)

Hist.: PERS 4-2014, f. & cert. ef. 3-31-14


Rule Caption: Update the Model Rules of Procedure Rule to reflect current state law.

Adm. Order No.: PERS 5-2014

Filed with Sec. of State: 3-31-2014

Certified to be Effective: 3-31-14

Notice Publication Date: 1-1-2014

Rules Amended: 459-001-0005

Subject: The Oregon Administrative Procedures Act (APA) requires state agencies to adopt procedural rules for administrative rulemaking and conducting contested case proceedings. The APA also requires the Attorney General to adopt model rules that state agencies must use, although agencies may adopt additional rules governing administrative procedures. OAR 459-001-0005 adopted the Attorney General’s Model Rules of Procedure. In response to statutory changes and appellate court decisions, the Attorney General updated the Model Rules, effective January 31, 2012. These rule modifications are only to conform to the date of and therefore adopt the updated Model Rules.

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

459-001-0005

Model Rules of Procedure

The Attorney General’s Model Rules of Procedure under the Administrative Procedures Act, as adopted and effective January 31, 2012, are adopted as rules of procedure of the Public Employees Retirement Board, except as modified by other rules of the Board.

[ED. NOTE: The full text of the Attorney General’s Model Rules of Procedure is available from the office of the Attorney General or the Oregon Public Employees Retirement System.]

Stat. Auth.: ORS 183.341, 237.470, 238.650, 238A.450 & 243.470

Stats. Implemented: ORS 237.410 - 237.620, chapters 238, 238A & 243.401-243.507

Hist.: PER 11, f. 4-18-72, ef. 5-1-72; PER 12, f. 3-14-74, ef. 4-11-74; PER 13, f. & ef. 10-26-72; Renumbered from 459-030-0005; PER 2-1978, f. & ef. 11-2-78; PER 1-1980, f. & ef. 2-15-80; PER 1-1986, f. & ef. 7-7-86; PERS 2-1990, f. & cert. ef. 1-8-90; PERS 1-1992, f. & cert. ef. 1-14-92; PERS 4-1994, f. & cert. ef. 5-10-94; PERS 3-1995, f. 11-14-95, cert. ef. 11-15-95; PERS 1-1998, f. & cert. ef. 3-16-98; PERS 4-2000, f. & cert. ef. 7-14-00; PERS 11-2001, f. 12-14-01, cert. ef. 1-1-02; PERS 25-2004, f. 11-23-04, cert. ef. 12-1-04; PERS 10-2006, f. & cert. ef. 6-26-06; PERS 7-2008, f. & cert. ef. 4-4-08; PERS 5-2014, f. & cert. ef. 3-31-14


Rule Caption: Clarify participant eligibility and service time used in apportioning the health insurance premium.

Adm. Order No.: PERS 6-2014

Filed with Sec. of State: 3-31-2014

Certified to be Effective: 3-31-14

Notice Publication Date:

Rules Amended: 459-035-0001, 459-035-0050

Subject: ORS 238.415 established the Retiree Health Insurance Premium Account (RHIPA) to pay a monthly subsidy toward the cost of healthcare coverage for eligible retired state employees who are not Medicare eligible. This subsidy is actuarially funded solely by state employers as part of their employer rates and applies only to members who retire from a state employer and who immediately apply for their retirement benefit.

   To be eligible for the subsidy, the state employee (or their surviving spouse or dependent) must retire for service or disability and have 8 years or more of “qualifying service.” The monthly premium subsidy is calculated on a sliding scale that incrementally increases with years of “qualifying service” with a state employer. For Plan Year 2014, the RHIPA monthly premium subsidy will range from $163.39 (8 years of service) to $326.79 (30+ years of service).

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

459-035-0001

Definitions

For purposes of this division:

(1) “Dependent” means a PERS member’s or retiree’s dependent child. For the purpose of this rule a “child” is defined as follows:

(a) A natural child.

(b) A legally adopted child, or a child placed in the home pending adoption.

(c) A step-child who resides in the household of the stepparent who is an eligible retired member.

(d) A grandchild, provided that at the time of birth, at least one of the grandchild’s parents was covered under a PERS-sponsored health insurance plan as a dependent child of the PERS member or retiree and resides in the household of the member or retiree.

(2) “Dependent Domestic Partner” means a person who has a relationship with a PERS retiree that has the characteristics described below. To qualify as a “dependent domestic partner”, the person and the PERS retiree must:

(a) Share a close personal relationship and be responsible for each other’s common welfare, including but not limited to having joint financial responsibilities;

(b) Be each other’s sole domestic partner;

(c) Not be married to anyone, nor have had another domestic partner within the previous 12 months;

(d) Not be related by blood so closely as to bar marriage in the State of Oregon;

(e) Have jointly shared the same regular and permanent residence for at least 12 months immediately preceding the effective date of coverage with the intent to continue doing so indefinitely; and

(f) Have the PERS retiree providing over one-half of the financial support for the person and qualify as a dependent of the PERS retiree as determined under section 105(b) of the Internal Revenue Code, 26 USC 105(b).

(3) “Eligible Person” means a person who is eligible for coverage under a PERS-sponsored health insurance plan. The conditions for such eligibility are set forth in OAR 459-035-0020.

(4) “Eligible Retired Member” means an eligible person who is eligible for payments toward the cost of the Medicare Companion Plan from RHIA. The conditions for such eligibility are set forth in OAR 459-035-0030.

(5) “Eligible Retired State Employee” means an eligible person who is eligible for non-Medicare insurance premium payments from the RHIPA. Conditions for such eligibility are set forth in OAR 459-035-0040.

(6) “Health Insurance Premium” means the self-sustaining premium calculated to cover the projected claims and costs incurred by the insurance company for a participant in a health care plan. “Health Insurance Premium” includes retrospective premiums and employee contributions. “Health Insurance Premium” does not include any intentional load to cover dependents or other groups or participants.

(7) “Medicare” means the federal health care insurance plan established under Title XVIII of the Social Security Act as amended.

(8) “Medicare Companion Plan” means a PERS-sponsored health insurance plan for eligible persons who are eligible for and enrolled in Medicare.

(9) “Net to Carrier” means the health insurance premium due to the insurance company. “Net to Carrier” does not include any charges for PEBB or PERS health insurance administration.

(10) “PEBB” means the Public Employees’ Benefit Board established under ORS 243.061.

(11) “PERS Member” has the same meaning as “member” provided in ORS 238.005 and 238A.005.

(12) “Plan Year” means a 12-month period beginning January 1 and ending December 31.

(13) “Qualifying Service” under ORS 238.415(1)(c) means creditable service, as defined in ORS 238.005, with a state employer, plus any periods of employment with a state employer participating in PERS that are required of the employee before becoming a PERS member.

(14) “Retiree” means a PERS member who is receiving a service or disability retirement allowance or benefit under PERS or who received a lump sum payment under ORS 238.305(3), 238.315, or 238A.195, or payment(s) under ORS 238A.400, or a person who is receiving retirement pay or pension calculated under ORS 1.314 to 1.380 (1989 Edition).

(15) “Retrospective Premium” means any additional premium liability that is determined at the end of the plan year, based on any pre-determined formula.

(16) “RHIA” means the Retirement Health Insurance Account established under ORS 238.420 to help defray the cost of the Medicare Companion Plan.

(17) “RHIPA” means the Retiree Health Insurance Premium Account established under ORS 238.415 to help defray the cost of PERS-sponsored health plans other than the Medicare Companion Plan.

(18) “SRHIA” means the Standard Retiree Health Insurance Account established under ORS 238.410 to administer employee and the employer contributions to the PERS sponsored health insurance program.

(19) “Staff” means the employees of the Public Employees Retirement System.

(20) “Third Party Administrator” means the individual or organization that the Board contracts with to provide administrative services as specified in the contract.

Stat. Auth.: ORS 238.410, 238.650 & 238A.450

Stats. Implemented: ORS 238.410, 238.415, 238.420 & 238A.050

Hist.: PERS 4-1996, f. & cert. ef. 6-11-96; PERS 15-1998, f. & cert. ef. 12-17-98; PERS 5-1999, f. & cert. ef. 11-15-99; PERS 14-2002, f. & cert. ef. 11-18-02; PERS 17-2005, f. & cert. ef. 10-3-05; PERS 1-2010(Temp), f. & cert. ef. 4-5-10 thru 9-27-10; PERS 9-2010, f. & cert. ef. 9-29-10; PERS 13-2012, f. & cert. ef. 12-5-12; PERS 6-2014, f. & cert. ef. 3-31-14

459-035-0050

Contribution Payment From Retiree Health Insurance Premium Account for Eligible Retired State Employees Not Eligible for Medicare

This rule establishes the procedure for determining the amount of contribution that will be paid from the Retiree Health Insurance Premium Account (RHIPA)(ORS 238.415) on behalf of an eligible retired state employee under age 65, as described in OAR 459-035-0040, who is enrolled in a health insurance plan sponsored by PERS.

(1) On or before November 1 of each calendar year, staff shall determine the monthly amount available to be paid from the RHIPA on behalf of an eligible retired state employee enrolled in a PERS health insurance plan contracted for under ORS 238.410. In determining the average difference between the health insurance premiums paid by retired state employees under contracts entered into by the Public Employees Retirement Board and the health insurance premiums paid by state employees who are not retired under contracts entered into by PEBB (without regard to employees who have opted out of PEBB-sponsored health insurance coverage), the staff shall calculate the change in value of the average of active PEBB plans after adjusting for the demographic (age/sex) differences between:

(a) The active employee participants; and

(b) Retired members receiving a subsidy and participating in one of the PERS non-Medicare health insurance plans as follows:

(A) Obtain the average employee participation for each health insurance plan sponsored by PEBB for the most recent three-month period;

(B) Obtain the health insurance premium for each health insurance plan sponsored by PEBB for the plan year next following;

(C) Obtain the average eligible retired state employee participation for each health insurance plan sponsored by PERS for the most recent three-month period;

(D) Compute the average health insurance premium for all plans sponsored by PEBB pursuant to the following formula:

(i) Step 1. Multiply the average participation in paragraph (A) of this subsection by the health insurance premium in paragraph (B) of this subsection for each plan;

(ii) Step 2. Total the average participation for all plans;

(iii) Step 3. Total the result for all of the calculations in Step 1 of sub-paragraph (i) of this paragraph; and

(iv) Step 4. Divide the total in Step 3 of sub-paragraph (iii) of this paragraph by the total in Step 2 of sub-paragraph (ii) of this paragraph.

(E) Compute the change in value of the average active PEBB plan pursuant to the following formula:

(i) Step 1. Divide the total in paragraph (C) of this subsection by the total in Step 2 of paragraph (D) of this subsection;

(ii) Step 2. Multiply the average participation for each plan in paragraph (A) of this subsection by the result of Step 1 of sub-paragraph (i) of this paragraph for each plan;

(iii) Step 3. Multiply the premium for each plan in paragraph (B) of this subsection by the estimated factor of non-Medicare retiree claims cost to active claims cost;

(iv) Step 4. Multiply the result of Step 2 of sub-paragraph (ii) of this paragraph by the result of Step 3 of subparagraph (iii) of this paragraph for each plan;

(v) Step 5. Total the results for all of the calculations in Step 4 of sub-paragraph (iv) of this paragraph;

(vi) Step 6. Total the results of the average participation calculations for all plans in Step 2 of sub-paragraph (ii) of this paragraph; and

(vii) Step 7. Divide the total premium in Step 5 of sub-paragraph (v) of this paragraph by total average participation as calculated in Step 6 of sub-paragraph (vi) of this paragraph.

(F) The result of Step 7 of sub-paragraph (E)(vii) of this subsection minus Step 4 of sub-paragraph (D)(iv) of this subsection is the maximum monthly amount available to be paid by PERS on behalf of an eligible retired state employee. Under no circumstances will this amount be less than $0.

(G) The maximum monthly amount paid by PERS on behalf of an eligible retired state employee shall be determined using qualifying service.

(2) The factor in Step 3 of sub-paragraph (1)(b)(E)(iii) of this rule shall be evaluated no less frequently than every three years.

(3) The monthly amount available established under section (1) of this rule shall be published by November 1 of each calendar year, or as soon as possible thereafter, and shall be effective for the plan year next following for PERS sponsored plans.

(4) In the event an active plan is not to be renewed for a subsequent plan year, the participants shall be deemed to be covered by another existing plan most similar in benefits.

(5) This rule applies to the amount to be paid by PERS for the plan year 1993 and subsequent plan years.

(6) No person eligible for a contribution from the RHIPA as provided for in this rule shall be entitled to a contribution from the RHIA.

Stat. Auth.: ORS 238.650

Stats. Implemented: ORS 238.415

Hist.: PERS 8-1992, f. 12-14-92, cert. ef. 12-31-92; PERS 4-1996, f. & cert. ef. 6-11-96; PERS 4-1998, f. & cert. ef. 3-16-98; PERS 15-1998, f. & cert. ef. 12-17-98; PERS 12-2000(Temp), f. 12-15-00 cert. ef. 1-1-01 thru 6-29-01; PERS 2-2001, f. & cert. ef. 4-12-01; PERS 14-2002, f. & cert. ef. 11-18-02; PERS 23-2003, f. 12-15-03 cert. ef. 1-1-04; PERS 6-2014, f. & cert. ef. 3-31-14


Rule Caption: Clarify the receipt stamp requirement for received items.

Adm. Order No.: PERS 7-2014

Filed with Sec. of State: 3-31-2014

Certified to be Effective: 3-31-14

Notice Publication Date: 1-1-2014

Rules Amended: 459-005-0220

Subject: Clarify the receipt stamp affixation/display requirement to include the receipt log for checks, and the presumption that if no date stamp is displayed the item will be deemed filed and received three business days before the imaged date.

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

459-005-0220

Receipt Date for Reports, Documents, Remittances, and Payments

(1) As used in this rule:

(a) “Imaged date” means the date on which a report, document, remittance, or payment is imaged and stored electronically to a dedicated network server.

(b) “Private express carrier” has the same meaning as in ORS 293.660(2).

(c) “Settlement date” means the date on which the participating Depository Financial Institution (DFI) or its correspondent is scheduled to be debited or credited by the Federal Reserve.

(2) If the due date of a report, document, remittance, or payment falls on a weekend or legal holiday, the due date is deemed to be the next business day.

(3) Any report, document, remittance, or payment required by PERS shall be deemed filed and received based on the receipt stamp affixed to the report, document, remittance, or payment when received by PERS; or in the case of a check or cash submission, on the date recorded in PERS’ daily cash receipts log or check log.

(4) Any report, document, remittance, or payment that does not display a PERS receipt stamp, or has not been recorded in PERS’ daily cash receipts log or check log, shall be deemed filed and received on the imaged date. If the imaged date is later than the due date, the report, document, remittance, or payment shall be deemed filed and received three (3) business days before the imaged date.

(5) Any report, document, remittance, or payment required by PERS which is lost or delayed in transmission through USPS or by a private express carrier, shall be deemed filed and received on the date it was mailed or deposited for transmittal if the sender:

(a) Can establish by evidence satisfactory to PERS, which includes but is not limited to documentation provided by USPS or the private express carrier, that the report, document, remittance, or payment was deposited in the USPS or with a private express carrier before the date due for filing, and was correctly addressed to PERS;

(b) Files with PERS a duplicate of the lost report, document, remittance, or payment, in accordance with the transmittal requirements of OAR 459-005-0210 or 459-005-0215; and

(c) Satisfies the requirements of subsections (a) and (b) of this section within 30 days after PERS notifies the sender in writing of failure to receive the report, document, remittance, or payment.

(6) An electronic funds transfer (EFT) shall be deemed received on the settlement date of the transfer. A settlement date specified by an employer for an EFT shall be no later than the due date specified by PERS for a remittance or a payment.

(7) Any report or document that PERS accepts by fax as provided in OAR 459-005-0210 or 459-005-0215 which is:

(a) Transmitted by a fax device to any office of PERS shall be deemed filed or received on the date of transmission as inscribed by the PERS fax device.

(b) Lost in transmission through a fax communication shall be deemed filed and received when originally transmitted if the sender can establish by affidavit the proof of sending and correct addressing, together with a copy of any activity report from the sender’s fax device, and a duplicate of the original report or document.

(8) A fax shall be accepted on weekends and holidays as long as the fax is otherwise in compliance with due dates specified in administrative rule.

(9) Any report or document that PERS accepts by e-mail transmission as specified in OAR 459-005-0210(5) which is:

(a) Transmitted by e-mail to any office of PERS shall be deemed received as of the date PERS receives the transmission.

(b) Lost in transmission by e-mail shall be deemed filed and received when originally transmitted if the sender can establish by affidavit the proof of sending and correct addressing, together with a copy of any activity report from the sender’s electronic device, and a duplicate of the original report or document.

(10) A report or document transmitted by fax or e-mail must be transmitted in accordance with the provisions of this rule and OAR 459-005-0215 and must be received by PERS before midnight on the due date.

(11) When transmitting a document or report by use of fax or e-mail, the sender bears the risk of failure of the transmission.

Stat. Auth.: ORS 238.650

Stats. Implemented: ORS 238, 238A

Hist.: PERS 6-1999, f. & cert. ef. 11-22-99; PERS 21-2005, f. & cert. ef. 11-1-05; PERS 10-2007, f. & cert. ef. 7-26-07; PERS 7-2014, f. & cert. ef. 3-31-14

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, 2013.

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

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