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The Oregon Administrative Rules contain OARs filed through November 15, 2014
 
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OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM

 

DIVISION 7

EARNINGS AND INTEREST DISTRIBUTION

459-007-0001

Definitions

The words and phrases used in this division have the same meaning given them in ORS Chapter 238, 238A and OAR 459-005-0001. Specific and additional terms for purposes of this division are defined as follows unless context requires otherwise:

(1) “Annual rate” means the rates determined by the Board for crediting earnings to Tier One regular accounts, Tier Two regular accounts, IAP accounts, judge member regular accounts and member variable accounts, effective as of December 31 of each year.

(2) “Assumed rate” means the actuarial assumed rate of return on investments as adopted by the Board for the most recent actuarial valuation.

(3) “Average annualized rate” means the monthly rate provided by the Oregon State Treasury representing the rate credited to cash accounts.

(4) “Benefits-in-Force Reserve” or “BIF Reserve” means the reserve established under ORS 238.670(2).

(5) “Capital Preservation Reserve” means the reserve established under ORS 238.670(3).

(6) “Contingency Reserve” means the reserve established under ORS 238.670(1).

(7) “Date of distribution” is the date inscribed on the check, warrant, or electronic transfer issued to or on behalf of the member, the member’s beneficiary, or an alternate payee.

(8) “Date of payment” means the date a payment is received by PERS.

(9) “Earnings” means all income or losses to the Fund from investments and other sources, but does not include member or employer contributions.

(10) “Tier One Member Rate Guarantee Reserve” and “Rate Guarantee Reserve” mean the reserve referenced in ORS 238.255(1) that enables the Board to credit earnings at or above the assumed rate under the conditions specified in 238.255.

(11) “Year-to-date calculation” means the rates used to credit a pro-rata distribution of year-to-date earnings, allowing for reserves and expenses, to Tier One regular accounts, Tier Two regular accounts, IAP accounts, judge member regular accounts or member variable accounts. These rates are calculated by staff on a monthly basis using the market value of investments in the Fund as supplied by the Oregon State Treasury. Year-to-date calculations for Tier One member regular accounts will be determined in accordance with OAR 459-007-0003.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(1); PERS 6-1998, f. & cert. ef. 5-22-98, Renumbered from 459-007-0010; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 24-2003, f. & cert. ef. 12-15-03; PERS 18-2005(Temp), f. & cert. ef. 10-26-05 thru 4-19-06; PERS 1-2006, f. & cert. ef. 2-1-06; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0003

Determination of Tier One Year-to-Date Calculation

(1) Any year-to-date calculation ("factor") used to credit earnings to Tier One member regular accounts shall be a pro-rate of the assumed interest rate and cannot be greater unless and until the conditions in ORS 238.255 have been met.

(2) The provisions of this rule shall be applied retroactively to July 1, 2003.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PERS 24-2003, f. & cert. ef. 12-15-03; PERS 18-2005(Temp), f. & cert. ef. 10-26-05 thru 4-19-06; PERS 1-2006, f. & cert. ef. 2-1-06

459-007-0005

Annual Earnings Crediting

(1) For purposes of this rule, “remaining earnings” means earnings available for distribution to a particular account or reserve after deduction of amounts required or authorized by law for other purposes.

(2) Except as otherwise specified in this division, earnings on all accounts and reserves in the Fund shall be credited as of December 31 of each calendar year in the manner specified in this rule.

(3) Health insurance accounts. All earnings attributable to the Standard Retiree Health Insurance Account (SRHIA), Retiree Health Insurance Premium Account (RHIPA) or Retirement Health Insurance Account (RHIA) shall be credited to the account from which they were derived, less administrative expenses incurred by each account, as provided in ORS 238.410, 238.415 and 238.420, respectively.

(4) Employer lump sum payments. All earnings or losses attributable to the employer lump sum payment accounts established under ORS 238.229 shall be credited to the accounts from which they were derived.

(5) Member variable accounts. Earnings on the Variable Annuity Account shall first be used to pay a pro rata share of administrative expenses in accordance with ORS 238.260(6). If the annual earnings from the Variable Annuity Account are insufficient to pay for the pro rata share of administrative expenses, those administrative expenses shall be paid from earnings on other accounts within the Public Employees Retirement Fund (PERF), if available. If earnings from those accounts within the PERF are insufficient to pay for the administrative expenses, those expenses shall be paid from employer accounts as required by ORS 238.610. All remaining earnings or losses attributable to the Variable Annuity Account shall be credited to the participants of that account, as provided under 238.260(6) and (7)(b).

(6) Individual Account Program accounts. Earnings on the Individual Account Program accounts shall first be used to pay a pro rata share of administrative expenses in accordance with ORS 238A.350(1). If the Individual Account Program experiences a loss, the loss shall be increased to pay a pro rata share of administrative expenses. All remaining earnings or losses attributable to the Individual Account Program shall be credited to the participant accounts of that program, as provided under 238A.350.

(7) Administrative expenses. Earnings attributable to Tier One regular accounts, the Tier One Rate Guarantee Reserve, Tier Two member regular accounts, judge member regular accounts, the OPSRP Pension Program reserve, employer contribution accounts, the Contingency Reserve, the Benefits-in-Force Reserve and the Capital Preservation Reserve shall first be used to pay the system’s remaining administrative expenses under ORS 238.610.

(8) Contingency Reserve.

(a) In any year in which total earnings on the Fund equal or exceed the assumed rate, an amount not exceeding seven and one-half percent of remaining earnings attributable to Tier One regular accounts, the Tier One Rate Guarantee Reserve, Tier Two regular accounts, Judge member regular accounts, the OPSRP Pension Program reserve, the Benefits-in-Force Reserve, employer contribution accounts, the Capital Preservation Reserve and the Contingency Reserve shall be credited to the Contingency Reserve to the level at which the Board determines it is adequately funded for the purposes specified in ORS 238.670(1).

(b) The portion of the Contingency Reserve allowed under ORS 238.670(1)(a) for use in preventing a deficit in the fund due to employer insolvency may only be credited using earnings attributable to employer contribution accounts.

(9) Tier One Member Rate Guarantee Reserve. All remaining earnings attributable to Tier One regular accounts, the Tier One Member Rate Guarantee Reserve, Judge member regular accounts, the Benefits-in-Force Reserve, and the Contingency Reserve may be credited to the Tier One Member Rate Guarantee Reserve established under ORS 238.255(1).

(10) Capital Preservation Reserve. Remaining earnings attributable to the Tier Two member regular accounts, Judge member regular accounts, OPSRP Pension Program reserve, employer contribution accounts, the Benefits-in-Force Reserve, the Contingency Reserve and the Capital Preservation Reserve may be credited from those sources to one or more reserve accounts that may be established under ORS 238.670(3) to offset gains and losses of invested capital.

(11) Tier One regular accounts. All remaining earnings attributable to Tier One regular accounts and the Tier One Rate Guarantee Reserve shall be credited to Tier One member regular accounts at the assumed rate in any year in which the conditions set out in ORS 238.255 have not been met. Crediting under this subsection shall be funded first by all remaining earnings attributable to Tier One regular accounts and the Tier One Rate Guarantee Reserve, then moneys in the Tier One Rate Guarantee Reserve.

(12) Judge member regular accounts. All remaining earnings attributable to Judge member regular accounts shall be credited to all active and inactive Judge member regular accounts at the Judge member rate. Crediting under this subsection shall be funded first by all remaining earnings attributable to the Judge member regular accounts and the Tier One Rate Guarantee Reserve, then moneys in the Tier One Rate Guarantee Reserve.

(13) Tier Two member regular accounts. All remaining earnings or losses attributable to Tier Two member regular accounts shall be credited to all active and inactive Tier Two member regular accounts under ORS 238.250.

(14) OPSRP Pension Program Reserve. Remaining earnings attributable to the OPSRP Pension Program Reserve, the Contingency Reserve, and the Capital Preservation Reserve may be used to credit the OPSRP Pension Program reserve.

(15) Benefits-in-Force Reserve. Remaining earnings attributable to the Benefits-in-Force Reserve, the Contingency Reserve, the Capital Preservation Reserve and employer contribution accounts, in that order, shall be used, to the extent available, to credit the Benefits-in-Force Reserve with earnings up to the assumed rate for that calendar year in accordance with ORS 238.670(2).

(16) Employer contribution accounts. All remaining earnings attributable to employer contribution accounts shall be credited to employer contribution accounts.

(17) Remaining earnings. Any remaining earnings shall be credited to accounts and reserves in the Fund at the Board’s discretion.

Stat. Auth.: ORS 238.650, 238A.450
Stats. Implemented: ORS 238, 238A.350
Hist.: PERS 8-2004, f. & cert. ef. 4-15-04; PERS 18-2005(Temp), f. & cert. ef. 10-26-05 thru 4-19-06; PERS 1-2006, f. & cert. ef. 2-1-06; PERS 4-2009, f. & cert. ef. 4-6-09; PERS 9-2012, f. & cert. ef. 5-24-12

459-007-0007

Assumed Rate

(1) The Board will review the assumed rate in odd-numbered years as part of the Board’s review and adoption of actuarial assumptions and methods.

(2) The Board may adopt a change in the assumed rate at any time. A change in the assumed rate is effective the first of the year following the Board’s adoption of the change.

(3) The assumed rate is set at 7.75 percent, effective on January 1, 2014.

Stat. Auth.: ORS 238.650 & 238A.450
Stats. Implemented: ORS 238 & 238A
Hist.: PERS 9-2013, f. & cert. ef. 9-27-13

459-007-0009

Allocating Costs of Compliance with Generally Accepted Accounting Principles

(1) Pursuant to ORS 238.610(1)(b), PERS will provide employers with audited financial data each year to comply with generally accepted accounting principles as established by the Government Accounting and Standards Board (GASB) standards.

(2) Prior to earnings crediting each year, PERS shall compile the actuarial, auditing, and internal staff costs of providing the audited financial data it will provide to employers. Earnings on employer contribution accounts shall be reduced by the amount of those costs. In any year in which earnings on those accounts are not sufficient to recover those costs, employer contribution accounts will be reduced by the amount of those costs.

Stat. Auth.: ORS 238.650, 238A.450
Stats. Implemented: ORS 238.610(1)(b)
Hist.: PERS 9-2014, f. & cert. ef. 7-25-14

459-007-0015

Interest Rate Applied to Underpayment of Estimated Benefits

In accordance with ORS 238.455(5), earnings credited to an underpayment of either Tier One or Tier Two estimated benefits shall be simple interest, prorated from date of underpayment to date of distribution by PERS of the underpaid amount based on:

(1) The rate credited to the respective tier in the Fund for the prior calendar year for members who have effective dates of retirement before January 1, 2006;

(2) The average annualized interest rate, as defined in OAR 459-007-0001(3), in effect as of the date of distribution for members who have effective dates of retirement on and after January 1, 2006.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.455
Hist.: PERS 6-1998, f. & cert. ef. 5-22-98; PERS 22-2005, f. & cert. ef. 12-7-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0020

Statutory Limitation on the Crediting of Earnings

No earnings shall be credited to any payment from the Fund unless specifically provided for in ORS Chapters 238, 238A and OAR chapter 459, divisions 007 and 009.

Stat. Auth.: ORS 238.650 & 238A
Stats. Implemented: ORS 238 & 238A
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(2); PERS 6-1998, f. & cert. ef. 5-22-98; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0025

Crediting Earnings to a Member Lump Sum Payment

(1) Definition.

(a) “Member lump sum payment” means any payment received by PERS that:

(A) Is not regularly scheduled;

(B) Is not paid as a statutorily fixed percentage of salary; and

(C) Is paid voluntarily by the member or payer.

(b) Member lump sum payments include, but are not limited to:

(A) Retirement credit purchases.

(B) Voluntary redeposits, as provided under ORS 238.105.

(C) Account balances transferred to PERS pursuant to an integration under ORS 238.680.

(2) No earnings may be credited to a member lump sum payment that:

(a) Is paid within 90 days before of after the member’s effective retirement date; or

(b) May be paid only within 90 days before or after the member’s effective retirement date.

(3) Earnings from the date of payment to December 31 of the calendar year of the date of payment or the member’s effective retirement date, whichever occurs first, must be credited to the member’s lump sum payment based on the rate derived from the formula:

(Y - X)(R/T) + (Z - Y), where:

R = The number of days from the date of payment through the last day of the month the payment is received;

T = The total number of days in the month the payment is received;

X = The year-to-date calculation applicable to the member’s regular account as of the first of the month of the date of payment;

Y = The year-to-date calculation as of the first of the month following the date of payment; and

Z = The year-to-date calculation as of the member’s effective retirement date if such date occurs during the calendar year the payment is received, or, in all other cases, the annual rate applicable to the member’s regular account as of December 31 of the year the payment is received.

Example: A member lump sum payment is received by PERS on May 12, 2002, from a Tier One member whose effective retirement date is August 1, 2003. The Tier One regular account year-to-date calculation as of May 1, 2002, is 1.0263, the Tier One year-to-date calculation as of June 1, 2002, is 1.0330, and the Tier One regular account annual rate for 2002 is 1.0800. Therefore, R = 20, T = 31, X = 1.0263, Y = 1.0330, Z = 1.0800 and the earnings crediting rate is:

(1.0330 - 1.0263)(20/31) + (1.0800 – 1.0330)

= (0.0067)(0.6452) + .0470

= 0.0043 + .0470

= 0.0513

(4) If the member’s effective retirement date does not occur in the same calendar year as the date of payment, and the payment is not subject to the provisions of section (2) of this rule, the member lump sum payment must be made a part of the member’s regular account as of January 1 of the year following the date of payment.

Stat. Auth: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PERS 9-2000, f. 12-15-00 cert. ef. 1-1-01; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 13-2003, f. & cert. ef. 11-14-03; PERS 1-2007, f. & cert. ef. 1-23-07; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0040

Crediting Earnings upon Withdrawal of a Tier One Member's Account

When a Tier One member withdraws his or her member account under ORS 238.265, earnings from the effective date of the last annual rate to the date of distribution shall be credited in the manner specified in this rule.

(1) Earnings on the member's regular account shall be credited as follows:

(a) If earnings for the calendar year prior to the effective date of withdrawal have not yet been credited, earnings for that year shall be credited to the member's regular account based on the latest year-to-date calculation available for that year.

(b) Earnings from January 1 of the calendar year of the effective date of withdrawal to the effective date of withdrawal shall be credited to the member's regular account based on the latest year-to-date calculation as of the effective date of withdrawal.

(2) If the member is participating in the Variable Annuity Account, earnings or losses of the Variable Annuity Account shall be credited as follows:

(a) If earnings or losses for the calendar year prior to the effective date of withdrawal have not yet been credited, earnings or losses for that year shall be credited to the member's variable account based on the latest year-to-date calculation available for that year.

(b) Earnings or losses from January 1 of the calendar year of the effective date of withdrawal to the effective date of withdrawal shall be credited to the member's variable account based on the latest year-to-date calculation as of the first of the month of the effective date of withdrawal.

(3) After earnings and losses have been credited in accordance with sections (1) and (2) of this rule, the value of the variable account shall be added to the value of the regular account and the sum shall constitute the withdrawal amount.

(4) Earnings on the withdrawal amount from the effective date of withdrawal to the date of distribution shall be paid to the member based on the average annualized rate prorated for that period.

(5) The provisions of this rule are effective on July 1, 2003.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.265
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(5); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-00; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 24-2003, f. & cert. ef. 12-15-03

459-007-0050

Crediting Earnings for a Deceased Tier One Active or Inactive Member

Upon the death of an active or inactive Tier One member, earnings from the date of death to the date of distribution shall be credited as specified in this rule.

(1) Definitions. For purposes of this rule:

(a) “Death benefit amount” means the sum of the member’s regular account and variable account as of the first of the month of the member’s death and held by PERS for the beneficiary or beneficiaries of a deceased member until benefits are distributed.

(b) “Effective date of request” means the first of the month in which PERS receives a valid request for distribution of the death benefit amount.

(2) For a member whose date of death is on or after January 1, 2000:

(a) If the member’s death is before July 1, 2003, earnings shall be credited to the member’s regular account as follows:

(A) If earnings for the calendar year before the date of the member’s death have not yet been credited, earnings for that year shall be credited based on the greater of the assumed rate or the latest year-to-date calculation available for that year.

(B) Earnings for the calendar year of the member’s death shall be credited based on the greater of the assumed rate, prorated from January 1 to the first of the month of the member’s death, or the latest year-to-date calculation as of the first of the month of the member’s death.

(b) If the member’s death is on or after July 1, 2003, earnings shall be credited to the member’s regular account as follows:

(A) If earnings for the calendar year before the date of the member’s death have not yet been credited, earnings for that year shall be credited based on the latest year-to-date calculation available for that year.

(B) Earnings for the calendar year of the member’s death shall be credited based on the latest year-to-date calculation as of the first of the month of the member’s death.

(c) If the member was participating in the Variable Annuity Account, earnings shall be credited to the member’s variable account as follows:

(A) If earnings for the calendar year before the calendar year of the member’s death have not yet been credited, earnings for that year shall be credited based on the latest year-to-date calculation available for that year.

(B) Earnings for the calendar year of the member’s death shall be credited based on the latest year-to-date calculation as of the first of the month of the member’s death.

(d) After earnings have been credited in accordance with subsections (a), (b) and (c), the value of the member’s variable account shall be added to the value of the member’s regular account and the sum shall constitute the death benefit amount as of the first of the month of the member’s death.

(e) If the effective date of request occurs within the same year as the date of death, earnings from the first of the month of the member’s death to the effective date of request shall be credited based on the latest year-to-date calculation for Tier Two regular accounts as of the effective date of request less the latest year-to-date calculation for Tier Two regular accounts as of the first of the month of the member’s death, and subsections (f) through (h) of this section do not apply.

(f) Earnings on the death benefit amount from the first of the month of the member’s death to the end of the calendar year shall be credited based on the Tier Two annual rate less the latest year-to-date calculation for Tier Two as of the first of the month of the member’s death.

(g) Earnings on the death benefit amount for calendar years following the year of the member’s death and before the year funds are requested shall be credited in accordance with OAR 459-007-0005 for Tier Two regular accounts.

(h) Earnings on the death benefit amount from January 1 of the year funds are requested to the effective date of request shall be based on the latest year-to-date calculation for Tier Two regular accounts.

(i) Earnings from the effective date of request to the date of distribution shall be based on the average annualized rate.

(3) If a member’s date of death is before July 1, 2003, and the effective date of request is before December 31, 2004, earnings shall be credited as follows:

(a) Earnings from the date of death through December 31, 1999, shall be credited to the member’s regular account as of December 31, 1999, in accordance with the provisions of this rule in effect from the date of death through December 31, 1999.

(b) Earnings from January 1, 2000, to the date of distribution shall be credited in accordance with ORS 238.390 as simple interest prorated for that period based on the assumed rate.

(4) If a member’s date of death is before January 1, 2000, but the effective date of request is on or after December 31, 2004, earnings shall be credited as follows:

(a) Earnings shall be credited in accordance with the version(s) of OAR 459-007-0050 in effect up to January 1, 2000.

(b) As of January 1, 2000, the deceased member’s account(s) shall be converted to a death benefit amount under subsection (2)(d) of this rule.

(c) Earnings on the death benefit amount from January 1, 2000, to the date of distribution shall be credited in accordance with subsections (2)(e) through (2)(h) of this rule.

(5) If a beneficiary elects a monthly payment, earnings shall be credited to the death benefit amount from the first of the month of the member’s date of death to the effective date of the monthly payment, which is the first of the month following the member’s date of death, as follows:

(a) Subtract the latest Tier Two regular account year-to-date calculation available as of the first of the month of the member’s death, from the latest Tier Two regular account year-to-date calculation available as of the effective date of the monthly payment.

(b) Multiply the beneficiary’s death benefit amount as of the first of the month of the member’s death by the rate calculated in subsection (a) of this section.

(6) The provisions of this rule are effective on July 1, 2003.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.390, 238.430 & 238.435
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(6); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-00; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 24-2003, f. & cert. ef. 12-15-03; PERS 16-2004, f. & cert. ef. 6-15-04; PERS 21-2005, f. & cert. ef. 11-1-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0060

Crediting Earnings to the Tier One Employer Death Benefit

(1) Upon the death of a Tier One member who is entitled to an employer death benefit under ORS 238.395, the amount of the employer benefit shall be added to the death benefit amount, as defined in OAR 459-007-0050(1), as of the first of the month of the member’s death.

(2) Earnings shall thereafter be credited to the employer death benefit amount in accordance with OAR 459-007-0050(2)(e) through (i).

(3) If a beneficiary elects to receive a monthly benefit, earnings are credited in accordance with OAR 459-007-0050(5).

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.390 & 238.395
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(7); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-00; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 24-2003, f. & cert. ef. 12-15-03; PERS 21-2005, f. & cert. ef. 11-1-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0070

Crediting Earnings at Tier One Service or Disability Retirement

Upon the service retirement or disability retirement of a Tier One member, earnings from the effective date of the last annual rate to the effective retirement date shall be credited to the member account in the manner specified in this rule.

(1) Earnings shall be credited to the member's regular account as follows:

(a) If earnings for the prior calendar year have not yet been credited, earnings shall be credited for that year based on the latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of the effective retirement date shall be credited based on the latest year-to-date calculation as of the effective retirement date.

(2) If the member is participating in the Variable Annuity Account at time of retirement, earnings or losses shall be credited to the member's variable account as follows:

(a) If earnings or losses for the calendar year prior to the effective retirement date have not yet been credited, earnings or losses for that year shall be credited based on the latest year-to-date calculation available for that year.

(b) Earnings or losses for the calendar year of the effective retirement date shall be credited based on the latest year-to-date calculation as of the effective retirement date.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300, 238.305 & ORS 238.315
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(8); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-2000; PERS 20-2003, f. 12-15-03 cert. ef. 4-1-04

459-007-0080

Crediting Earnings at Tier One Service Retirement, Single Payment

Notwithstanding OAR 459-007-0070, when a Tier One member retires and elects to receive a single payment of benefits under ORS 238.305(2)(a) or (3), or receives a single payment of benefits under 238.315, earnings from the effective date of the last annual rate to the date of distribution shall be credited in the manner specified in this rule.

(1) Earnings on the member’s regular account shall be credited as follows:

(a) If earnings for the calendar year before the effective retirement date have not yet been credited, earnings for that year shall be credited to the member’s regular account based on the latest year-to-date calculation available for that year.

(b) Earnings credited for the calendar year of the effective retirement date shall be credited to the member’s regular account based on the latest year-to-date calculation as of the effective retirement date.

(2) If the member is participating in the Variable Annuity Account at retirement, earnings shall be credited as follows:

(a) If earnings for the calendar year before the effective retirement date have not yet been credited, earnings for that year shall be credited to the member’s variable account based on the latest year-to-date calculation available for that year.

(b) Earnings from January 1 of the year of the effective retirement date to the effective retirement date shall be credited to the member’s variable account based on the latest year-to-date calculation as of the effective retirement date.

(3) Earnings on the combined amount of the accounts credited under sections (1) and (2) of this rule from the effective retirement date to the date of distribution shall be paid to the member based on the average annualized rate prorated for that period.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300, 238.305 & 238.315
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(9); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-00; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 20-2003, f. 12-15-03 cert. ef. 4-1-04; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0090

Crediting Earnings upon Tier One Service Retirement, Two or More Installment Payments

Notwithstanding OAR 459-007-0070, if a Tier One member retires and elects to receive installment payments under ORS 238.305(4), earnings shall be credited from the effective date of the last annual rate to the date of distribution of the final installment payment in the manner specified in this rule.

(1) Regular account. Earnings shall be credited to the member’s regular account as follows:

(a) Prior year earnings. If earnings for the calendar year before the effective retirement date have not yet been credited, earnings shall be credited for that year based on the latest year-to-date calculation available for that year.

(b) Retirement year earnings. Earnings for the calendar year of the effective retirement date shall be based on the latest year-to-date calculation as of the effective retirement date.

(2) Variable account. If the member is participating in the Variable Annuity Account, earnings or losses shall be applied to the member’s variable account as follows:

(a) Prior year earnings. If earnings or losses for the calendar year before the effective retirement date have not yet been credited to the member’s variable account, earnings or losses for that year shall be credited based on the latest year-to-date calculation available for that year.

(b) Retirement year earnings. Earnings or losses for the calendar year of the effective retirement date shall be credited based on the latest year-to-date calculation as of the effective retirement date.

(c) In accordance with ORS 238.305(4)(a)(F), after crediting earnings or losses as provided in subsections (a) and (b) of this section, and before the distribution of the first installment, the adjusted balance of the member’s variable account shall be transferred to the member’s regular account as of the effective retirement date.

(3) Initial installment. Earnings shall be credited to the initial installment as follows:

(a) If the initial installment is distributed in the same year as the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from the effective retirement date to the date of distribution of the initial installment.

(b) If the initial installment is distributed in the year following the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from January 1 of the year following the effective retirement date to the date of distribution of the initial installment.

(4) Annual earnings — initial year. Earnings from the effective retirement date to December 31 of the year of retirement shall be credited to the member’s regular account in the following amount:

(a) The member’s regular account balance as of December 31 of the year of retirement, excluding the remaining earnings credited to the member’s regular account under subsection (1)(b) of this rule and to the member’s variable account under subsection (2)(b) of this rule; multiplied by

(b) The annual rate for that year less the latest year-to-date calculation as of the effective retirement date.

(5) Annual earnings — subsequent years. Earnings shall be credited to the member’s regular account as of December 31 of each calendar year subsequent to the effective retirement date in the manner specified in this section.

(a) Earnings from January 1 to the date of distribution of the annual installment shall be credited in the following amount:

(A) The member’s regular account balance as of the date of distribution of the annual installment; multiplied by

(B) The latest year-to-date calculation as of the date of distribution.

(b) Earnings from the date of distribution of the annual installment to December 31 shall be credited in the following amount:

(A) The member’s regular account balance as of December 31; multiplied by

(B) The latest year-to-date calculation as of the date of distribution.

(6) Final installment. The final installment shall include the remaining balance of the member’s regular account as of the date of distribution of the final installment, plus earnings credited as follows:

(a) If earnings for the calendar year before the year of the final installment have not yet been credited to the member’s regular account, earnings shall be credited based on the latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of the final installment shall be credited based on the latest year-to-date calculation as of the date of distribution of the final installment.

(7) The provisions of this rule shall be applied retroactively to April 1, 2004.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300 & 238.305
Hist.: PER 8, f. 12-15-55; PER 4-1980(Temp), f. 11-26-80, ef. 12-1-80; PER 1-1984(Temp), f. & ef. 6-29-84; PER 2-1984(Temp), f. & ef. 9-26-84; PER 1-1985, f. & ef. 3-22-85; PERS 1-1995, f. 9-12-95, cert. ef. 1-1-96; PERS 1-1996, f. & cert. ef. 3-26-96; Renumbered from 459-010-0135(10); PERS 9-1998, f. 5-22-98, cert. ef. 1-1-00; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 20-2003, f. 12-15-03 cert. ef. 4-1-04; PERS 18-2005(Temp), f. & cert. ef. 10-26-05 thru 4-19-06; PERS 1-2006, f. & cert. ef. 2-1-06; PERS 5-2012, f. & cert. ef. 3-28-12

459-007-0110

Crediting Earnings at Tier One Loss of Membership

When a Tier One member’s membership terminates under ORS 238.095(2), earnings from the effective date of the last annual rate to the first of the month following the month of loss of membership shall be credited to the member account in the manner specified in this rule.

(1) Earnings on the former member’s regular account shall be credited as follows:

(a) If earnings for the calendar year before the date of loss of membership have not yet been credited, earnings shall be credited for that year based on the Tier One latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of loss of membership shall be credited based on the Tier One latest year-to-date calculation as of the first of the month following the date of loss of membership.

(2) If the former member is participating in the Variable Annuity Account, earnings on the Variable Annuity Account shall be credited to the former member’s variable account as follows:

(a) If earnings for the calendar year before the date of loss of membership have not yet been credited, earnings for that year shall be credited based on the Tier One latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of loss of membership shall be credited as of the end of the calendar month of loss of membership based on the Tier One latest year-to-date calculation as of the first of the month following the date of loss of membership

(3) Except as provided in OAR 459-007-0160, no earnings shall be credited for any period following the calendar month of loss of membership.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.095 & 238.435
Hist.: PERS 9-1998, f. 5-22-98, cert. ef. 1-1-2000; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 13-2003, f. & cert. ef. 11-14-03; PERS 12-2007, f. & cert. ef. 11-23-07; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0160

Crediting Earnings to Loss of Membership Account for Periods of Active Membership

In accordance with ORS 238.095(5), when a former member establishes membership in the system and has a Loss of Membership account, earnings or losses during dates of active membership will be credited to the Loss of Membership account in the manner specified in this rule.

(1) Partial year crediting.

(a) If active membership begins after the first of the year and continues through the end of the calendar year, earnings or losses from the date of active membership to December 31 of that calendar year shall be credited to the Loss of Membership account based on the Tier Two rate for the calendar year less the latest year to date Tier Two rate on the date of active membership.

(b) If the member is active on January 1 of the calendar year and active membership ends before December 31 of that calendar year, earnings or losses shall be credited to the Loss of Membership account based on the latest year to date Tier Two rate available as of the first of the month in which active membership ends.

(c) If active membership begins after the first of the year and ends before December 31 of that calendar year, earnings or losses shall be credited to the Loss of Membership account based on the latest year to date Tier Two rate available as of the first of the month in which active membership ends less the latest year to date Tier Two rate available on the date of active membership.

(2) Full year crediting. Earnings or losses for full calendar years of active membership will be credited based on the Tier Two rate for the year.

(3) The effective date of this rule is July 17, 2007. No earnings or losses will be credited to a Loss of Membership account for periods of active membership before July 17, 2007.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.095, 238.435 & OL 2007 Ch. 776
Hist.: PERS 12-2007, f. & cert. ef. 11-23-07

459-007-0220

Distribution of Earnings for Withdrawal of Member's Account -- Tier Two

When a Tier Two member withdraws his or her member account under ORS 238.265, earnings or losses from the effective date of the last annual rate to the date of distribution shall be credited in the manner specified in this rule.

(1) Earnings or losses on the member's regular account shall be credited as follows:

(a) If earnings or losses for the calendar year prior to the effective date of withdrawal have not been credited, earnings or losses for that year shall be credited to the member's regular account based on the latest year-to-date calculation for that year.

(b) Earnings or losses from January 1 of the calendar year of the effective date of withdrawal to the effective date of withdrawal shall be credited to the member's regular account based on the latest year-to-date calculation as of the effective date of withdrawal.

(2) If the member is participating in the Variable Annuity Account, earnings or losses of the Variable Annuity Account shall be credited as follows:

(a) If earnings or losses for the calendar year prior to the effective date of withdrawal have not been credited, earnings or losses for that year shall be applied based on the latest year-to-date calculation for that year.

(b) Earnings or losses from January 1 of the calendar year of the effective date of withdrawal to the effective date of withdrawal shall be credited to the member's variable account based on the latest year-to-date calculation as of the effective date of withdrawal.

(3) After earnings and losses have been credited in accordance with sections (1) and (2) of this rule, the value of the variable account shall be added to the value of the regular account and the sum shall constitute the withdrawal amount.

(4) Earnings on the withdrawal amount from the effective date of withdrawal to the date of distribution shall be paid to the member based on the average annualized rate prorated for that period.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.265, 238.430 & 238.435
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05

459-007-0230

Crediting Earnings for a Deceased Tier Two Active or Inactive Member

Upon the death of an active or inactive Tier Two member, earnings from the date of death to the date of distribution shall be credited as specified in this rule.

(1) Definitions. For purposes of this rule:

(a) “Death benefit amount” means the sum of the member’s regular account and variable account as of the first of the month of the member’s death and held by PERS for the beneficiary or beneficiaries of a deceased member until benefits are distributed.

(b) “Effective date of request” means the first of the month in which PERS receives a valid request for distribution of the death benefit amount.

(2) For members whose date of death is on or after January 1, 2000, earnings shall be credited to the member’s regular account as follows:

(a) If earnings for the calendar year before the date of the member’s death have not yet been credited, earnings shall be applied for that year based on the latest year-to-date calculation for that year.

(b) Earnings for the calendar year of the member’s death shall be credited based on the latest year-to-date calculation for that year as of the first of the month of the member’s death.

(3) If the member was participating in the Variable Annuity Account, earnings shall be credited to the member’s variable account as follows:

(a) If earnings for the calendar year before the member’s death have not been credited, earnings for that year shall be based on the latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of the member’s death shall be applied based on the latest year-to-date calculation for that year as of the first of the month of the member’s death.

(4) After earnings have been credited in accordance with sections (2) and (3) of this rule, the value of the member’s variable account shall be added to the value of the member’s regular account and the sum shall constitute the death benefit amount as of the first of the month of the member’s death.

(5) Earnings on the death benefit amount from the first of the month of the member’s death to the end of that calendar year shall be credited based on the Tier Two annual rate less the Tier Two latest year-to-date-calculation as of the first of the month of the member’s death.

(6) Earnings on the death benefit amount for calendar years following the year of the member’s death and before the year funds are requested shall be credited in accordance with OAR 459-007-0005 for Tier Two regular accounts.

(7) Earnings on the death benefit amount from January 1 of the year funds are requested to the effective date of request shall be based on the Tier Two latest year-to-date calculation.

(8) Earnings from the effective date of request to the date of distribution shall be based on the average annualized rate prorated for that period.

(9) If the member’s date of death is before January 1, 2000, earnings shall be credited in accordance with the rules applicable to Tier Two members in effect up to January 1, 2000. As of January 1, 2000, the deceased member’s account shall be converted to a death benefit amount. Earnings on the death benefit amount from January 1, 2000 to the date of distribution shall be credited in accordance with sections (5) through (8) of this rule.

(10) If a beneficiary elects a monthly payment, earnings shall be credited to the death benefit amount from the first of the month of the member’s date of death to the effective date of the monthly payment, which is the first of the month following the member’s date of death, as follows:

(a) Subtract the latest Tier Two regular account year-to-date calculation available as of the first of the month of the member’s death from the latest Tier Two regular account year-to-date calculation available as of the effective date of the monthly payment.

(b) Multiply the beneficiary’s death benefit amount by the Tier Two rate calculated in subsection (a) of this rule.

(11) The provisions of this rule apply to requests for distribution received on or after March 15, 2005.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.390, 238.430 & 238.435
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0240

Crediting Earnings to the Tier Two Employer Death Benefit

(1) Upon the death of a Tier Two member who is entitled to an employer death benefit under ORS 238.395, the amount of the employer benefit shall be added to the death benefit amount, as defined in OAR 459-007-0230(1), as of the first of the month of the member’s death.

(2) Earnings shall thereafter be credited to the employer death benefit amount in accordance with OAR 459-007-0230(5) to (8).

(3) If a beneficiary elects to receive a monthly benefit, earnings are credited in accordance with OAR 459-007-0230(10).

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.390, 238.395, 238.430 & 238.435
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0250

Crediting Earnings at Tier Two Service or Disability Retirement

Upon the service or disability retirement of a Tier Two member, earnings from the effective date of the last annual rate to the effective retirement date shall be credited to the member account in the manner specified in this rule.

(1) Earnings shall be credited to the member’s regular account as follows:

(a) If earnings for the prior calendar year have not yet been credited, earnings for that year shall be credited based on the Tier Two latest year-to-date calculation for that year.

(b) Earnings for the calendar year of the effective retirement date shall be credited based on the Tier Two latest year-to-date calculation for that year.

(2) If the member is participating in the Variable Annuity Account at retirement, earnings shall be credited to the member’s variable account as follows:

(a) If earnings for the calendar year before the effective retirement date have not yet been credited, earnings for that year shall be credited based on the Tier Two latest year-to-date calculation for that year.

(b) Earnings for the calendar year of the effective retirement date shall be credited based on the Tier Two latest year-to-date calculation as of the effective retirement date.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300, 238.305 & 238.315
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0260

Crediting Earnings at Tier Two Service Retirement, Single Payment

Notwithstanding OAR 459-007-0250, when a Tier Two member retires and elects to receive a single payment under provisions of ORS 238.305(2) or (3), earnings or losses from the effective date of the last annual rate to the date of distribution shall be credited in the manner specified in this rule.

(1) Earnings or losses on the member's regular account shall be credited as follows:

(a) If earnings or losses for the calendar year prior to the effective retirement date have not yet been credited, earnings or losses shall be credited to the member's regular account based on the latest year-to-date calculation for that year.

(b) Earnings or losses credited for the calendar year of the effective retirement date shall be applied based on the latest year-to-date calculation as of the effective retirement date for that year.

(2) If the member is participating in the Variable Annuity Account at time of retirement, earnings or losses shall be credited to the member's variable account as follows:

(a) If earnings or losses for the calendar year prior to the effective retirement date have not been applied to the member's variable account as of December 31 of that year, earnings or losses for that year shall be applied based on the latest year-to-date calculation for that year.

(b) Earnings or losses for the calendar year of the effective date of retirement shall be applied based on the latest year-to-date calculation as of the effective date of retirement for that year.

(3) Upon applying the earnings or losses as provided in section (2) of this rule, the balance of the member's variable account shall be transferred to the member's regular account as of the effective date of retirement.

(4) Earnings from the effective date of retirement to the date of distribution shall be credited based on the average annualized rate prorated for that period.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300, 238.305 & 238.315
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05

459-007-0270

Crediting Earnings upon Tier Two Service Retirement, Two or More Installment Payments

Notwithstanding OAR 459-007-0250, when a Tier Two member retires and elects to receive installment payments under ORS 238.305(4), earnings shall be credited from the effective date of the last annual rate to the date of distribution of the final installment payment in the manner specified in this rule.

(1) Regular account. Earnings shall be credited to the member’s regular account as follows:

(a) Prior year earnings. If earnings for the calendar year before the effective retirement date have not yet been credited, earnings shall be credited for that year based on the latest year-to-date calculation available for that year.

(b) Retirement year earnings. Earnings for the calendar year of the effective retirement date shall be based on the latest year-to-date calculation as of the effective retirement date.

(2) Variable account. If the member is participating in the Variable Annuity Account, earnings or losses shall be applied to the member’s variable account as follows:

(a) Prior year earnings. If earnings or losses for the calendar year before the effective retirement date have not yet been credited to the member’s variable account, earnings or losses for that year shall be credited based on the latest year-to-date calculation available for that year.

(b) Retirement year earnings. Earnings or losses for the calendar year of the effective retirement date shall be credited based on the latest year-to-date calculation as of the effective retirement date.

(c) In accordance with ORS 238.305(4)(a)(F), after crediting earnings or losses as provided in subsections (a) and (b) of this section, and before the distribution of the first installment, the adjusted balance of the member’s variable account shall be transferred to the member’s regular account as of the effective retirement date.

(3) Initial installment. Earnings shall be credited to the initial installment as follows:

(a) If the initial installment is distributed in the same year as the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from the effective retirement date to the date of distribution of the initial installment.

(b) If the initial installment is distributed in the year following the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from January 1 of the year following the effective retirement date to the date of distribution of the initial installment.

(4) Annual earnings — initial year. Earnings from the effective retirement date to December 31 of the year of retirement shall be credited to the member’s regular account in the following amount:

(a) The member’s regular account balance as of December 31 of the year of retirement, excluding the remaining earnings credited to the member’s regular account under subsection (1)(b) of this rule and to the member’s variable account under subsection (2)(b) of this rule; multiplied by

(b) The annual rate for that year less the latest year-to-date calculation as of the effective retirement date.

(5) Annual earnings — subsequent years. Earnings shall be credited to the member’s regular account as of December 31 of each calendar year subsequent to the effective retirement date in the manner specified in this section.

(a) Earnings from January 1 to the date of distribution of the annual installment shall be credited in the following amount:

(A) The member’s regular account balance as of the date of distribution of the annual installment; multiplied by

(B) The latest year-to-date calculation as of the date of distribution.

(b) Earnings from the date of distribution of the annual installment to December 31 shall be credited in the following amount:

(A) The member’s regular account balance as of December 31, multiplied by;

(B) The latest year-to-date calculation as of the date of distribution.

(6) Final installment. The final installment shall include the remaining balance of the member’s regular account as of the date of distribution of the final installment, plus earnings credited as follows:

(a) If earnings for the calendar year before the year of the final installment have not yet been credited to the member’s regular account, earnings shall be credited based on the latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of the final installment shall be credited based on the latest year-to-date calculation as of the date of distribution of the final installment.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.260, 238.300 & 238.305
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 1-2000, f. & cert. ef. 1-7-00; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05; PERS 5-2012, f. & cert. ef. 3-28-12

459-007-0290

Crediting Earnings at Tier Two Loss of Membership

When a Tier Two member's membership terminates under ORS 238.095(2), earnings from the effective date of the last annual rate through the end of the month of loss of membership shall be credited to the member account in the manner specified in this rule.

(1) Earnings or losses on the former member's regular account shall be credited as follows:

(a) If earnings or losses for the calendar year prior to the date of loss of membership have not yet been credited, earnings or losses shall be credited for that year based on the latest year-to-date calculation available for that year.

(b) Earnings or losses for the calendar year of loss of membership shall be credited based on the latest year-to-date calculation as of the end of the month of the date of loss of membership

(2) If the former member is participating in the Variable Annuity Account, earnings or losses of the Variable Annuity Account shall be credited to the former member's variable account as follows:

(a) If earnings or losses for the calendar year prior to the date of loss of membership have not yet been credited, earnings or losses for that year shall be credited based on the latest year-to-date calculation for that year.

(b) Earnings or losses for the calendar year of loss of membership shall be credited as of the end of the month of loss of membership based on the latest year-to-date calculation as of the first of the month following the date of loss of membership.

(3) Except as provided in 459-007-0160, no earnings or losses shall be credited for any period following the calendar month of loss of membership.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.095
Hist.: PERS 7-1998, f. & cert. ef. 5-22-98; PERS 26-2004, f. 11-23-04, cert. ef. 3-15-05; PERS 12-2007, f. & cert. ef. 11-23-07

459-007-0300

Crediting Earnings to Police Officer and Firefighter Unit Accounts in the Fund

(1) Definitions. For the purpose of this rule:

(a) “Effective date of unit benefits” means the date the member elects to begin receiving unit benefits.

(b) “End date” means the date after which earnings are no longer credited to the unit account and is the later of:

(A) The first of the calendar month following the date the member reaches age 65; or

(B) The first of the calendar month following the date the member separates from the service of all participating employers.

(c) “Unit” means a unit of additional benefits purchased under ORS 238.440.

(d) “Unit account” means the member’s account in the Fund that is used to purchase unit benefits, which includes actuarially determined member additional contributions (ORS 238.440(1)) and earnings.

(e) “Unit benefits” means the increased benefits a police officer or firefighter may purchase under ORS 238.440.

(2) Crediting annual earnings. Annual earnings will be credited to the unit account as follows:

(a) For a Tier One member, in the same manner as provided for Tier One member regular accounts in OAR 459-007-0005.

(b) For a Tier Two member, in the same manner as provided for Tier Two member regular accounts in OAR 459-007-0005.

(3) Crediting earnings to a withdrawal. If the unit account is withdrawn under ORS 238.440(4), earnings will be credited to the unit account as follows:

(a) For a Tier One member, in the same manner as provided in OAR 459-007-0040(1).

(b) For a Tier Two member, in the same manner as provided in OAR 459-007-0220(1).

(4) Crediting earnings to unit account upon refund under ORS 238.440(6). If a member is no longer eligible to purchase police officer and firefighter units under 238.440(6), distribution interest shall be credited to the unit account from the first of the month following the date the member has been absent from P&F qualified employment for 5 consecutive years to the date of distribution based on the average annualized rate.

(5) Crediting earnings on a lump sum purchase.

(a) If a member makes a lump sum purchase under ORS 238.440(2) and elects an effective date of unit benefits that is the same date as the member’s effective retirement date, earnings will not be credited on the lump sum purchase.

(b) If a member makes a lump sum purchase under ORS 238.440(2) and elects an effective date of unit benefits that is later than the member’s effective retirement date, earnings on the member’s lump sum purchase from the date of receipt to the effective date of unit benefits shall be credited to the unit account as follows:

(A) Earnings from the date of payment to December 31 of the calendar year of the date of payment, or the member’s effective date of unit benefits, whichever occurs first, shall be credited to the member’s lump sum payment based on the rate derived from the formula provided in 459-007-0025(3).

(B) Earnings for subsequent calendar years shall be credited as set forth in section (6) of this rule.

(6) Crediting earnings to effective date of unit benefits. When a retired member elects to begin receiving unit benefits under ORS 238.440(1) or (2), earnings will be credited to the member’s unit account as of the effective date of unit benefits as follows:

(a) For a Tier One member, in the same manner as provided in the version of OAR 459-007-0070(1) in effect on the effective date of unit benefits.

(b) For a Tier Two member, in the same manner as provided in OAR 459-007-0250(1).

(7) If, after the crediting of earnings under section (5) of this rule, the amount in the unit account is greater than the actuarially determined amount required at the time of retirement to purchase the number of units elected, the difference will be returned to the member in a lump sum. The lump sum shall be credited with earnings from the effective date of unit benefits to the date of distribution based on the average annualized rate.

(8) Crediting earnings to end date. If a member’s effective date of unit benefits does not occur before the end date, earnings from the last annual earnings crediting to the end date shall be credited to the unit account as follows:

(a) If earnings for the calendar year before the end date have not yet been credited to the member’s unit account, earnings shall be credited for that year based on the latest year-to-date calculation available for that year.

(b) Earnings for the calendar year of the end date shall be credited to the unit account based on the latest year-to-date calculation as of the end date.

(9) Crediting earnings in the event of death before the effective date of unit benefits. Upon the death of a member before the member’s effective date of unit benefits, earnings shall be credited to the unit account:

(a) For a Tier One member, in the same manner as provided in OAR 459-007-0050 for Tier One regular accounts.

(b) For a Tier Two member, in the same manner as provided in OAR 459-007-0230 for Tier Two regular accounts.

(10) Crediting earnings in the event of death after the effective date of unit benefits. Upon the death of a member who is receiving unit benefits, the actuarial present value of the remaining unit benefits is paid to the member’s beneficiary in a lump sum. No earnings shall be credited to the unit account.

[ED. NOTE: Example & Formula referenced are available from the agency.]

Stat. Auth: ORS 238.650
Stats. Implemented: ORS 238.440
Hist.: PERS 8-2000, f. & cert. ef. 12-5-00; PERS 8-2004, f. & cert. ef. 4-15-04; PERS 1-2007, f. & cert. ef. 1-23-07; PERS 3-2009, f. & cert. ef. 4-6-09

459-007-0320

Crediting Earnings for IAP Account Lump Sum Payments

(1) When an IAP member retires and elects to receive a lump sum payment of their account(s) under ORS 238A.400(1), earnings will be credited in the manner specified in this section.

(a) If earnings for the calendar year before the date of distribution have not been credited, earnings for that year will be credited based on the latest IAP year-to-date calculation available for that year.

(b) Earnings credited for the calendar year of distribution will be credited based on the latest IAP year-to-date calculation as of the date of distribution.

(2) When an IAP member elects to withdraw their account(s) under ORS 238A.375, earnings will be credited in the manner specified in this section.

(a) If earnings for the calendar year before the date of distribution have not been credited, earnings for that year will be credited based on the latest IAP year-to-date calculation available for that year.

(b) Earnings credited for the calendar year of distribution will be credited based on the latest IAP year-to-date calculation as of the date of distribution.

Stat. Auth.: ORS 238A.450
Stats. Implemented: ORS 238A.350, 238A.375 & 238A.400
Hist.: PERS 4-2009, f. & cert. ef. 4-6-09

459-007-0330

Crediting Earnings for IAP Account Installment Payments

(1) For the purposes of this rule, “monthly change rate” means the monthly earnings rate for IAP account(s) when a retiree elects installment payments.

(2) When an IAP member retires and elects to receive installment payments under ORS 238A.400(2), earnings will be credited in the manner specified in this rule:

(a) For the initial installment payment:

(A) If earnings for the calendar year before the date of distribution have not been credited, earnings for that year shall be credited based on the latest IAP year-to-date calculation available for that year.

(B) Earnings credited for the calendar year of distribution will be credited based on the latest IAP year-to-date calculation as of the initial date of distribution.

(b) After the initial installment payment is made, earnings will be credited monthly using the latest monthly change rate beginning with the first of the month after the initial date of distribution.

Stat. Auth.: ORS 238A.450
Stats. Implemented: ORS 238A.350 & 238A.400
Hist.: PERS 4-2009, f. & cert. ef. 4-6-09

459-007-0340

Crediting Earnings for an OPSRP Pension Program Cash Out of Small Benefits or Withdrawal

(1) No earnings or distribution interest from the effective date of retirement to the date of distribution shall be credited to the amount of a cash out of small benefits under ORS 238A.195.

(2) No earnings or distribution interest from the effective date of withdrawal to the date of distribution shall be credited to the amount of a withdrawal under ORS 238A.120

Stat. Auth.: ORS 238A.450
Stats. Implemented: ORS 238A.120, 238A.195
Hist.: PERS 5-2009, f. & cert. ef. 4-6-09

459-007-0400

Crediting Earnings Upon Withdrawal of a Judge Member Account

Upon withdrawal of a judge member account under ORS 238.545, earnings from the last judge member annual rate to the date of distribution will be credited as specified in this rule.

(1) Earnings will be credited to the judge member regular account as follows:

(a) If earnings for the calendar year before the calendar year of the withdrawal have not yet been credited, earnings for that year will be credited based on the latest judge member regular account year-to-date calculation available for that year.

(b) Earnings for the calendar year of the withdrawal will be credited from January 1 to the effective date of withdrawal based on the latest judge member regular account year-to-date calculation as of the effective date of withdrawal.

(2) If the judge member is participating in the Variable Annuity Account, earnings will be credited to the variable account as follows:

(a) If earnings for the calendar year before the calendar year of the withdrawal have not yet been credited, earnings for that year will be credited based on the latest variable account year-to-date calculation available for that year.

(b) Earnings for the calendar year of the withdrawal will be credited from January 1 to the effective date of withdrawal based on the latest variable account year-to-date calculation as of the effective date of withdrawal.

(3) After earnings have been credited in accordance with sections (1) and (2) of this rule, the balance of the variable account shall be added to the balance of the judge member regular account and the sum shall constitute the withdrawal amount.

(4) Earnings on the withdrawal amount from the effective date of withdrawal to the date of distribution will be credited based on the average annualized rate, prorated for that period.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.250, 238.255, 238.260, 238.515, 238.545, OL 2003 Ch. 625
Hist.: PERS 5-2009, f. & cert. ef. 4-6-09

459-007-0410

Crediting Earnings Upon the Death of a Judge Member

Upon the death of a judge member, earnings will be credited to the judge member account as specified in this rule.

(1) If a judge member dies before retirement, earnings from the last judge member annual rate will be credited as follows:

(a) Judge member regular account.

(A) If earnings for the calendar year before the calendar year of the judge member’s death have not yet been credited, earnings for that year will be credited based on the latest judge member regular account year-to-date calculation available for that year.

(B) Earnings for the calendar year of the judge member’s death will be credited from January 1 to the first of the month of the judge member’s death based on the latest judge member regular account year-to-date calculation as of the first of the month of the judge member’s death.

(b) If the judge member was participating in the Variable Annuity Account:

(A) If earnings for the calendar year before the calendar year of the judge member’s death have not yet been credited, earnings for that year will be credited based on the latest variable account year-to-date calculation available for that year.

(B) Earnings for the calendar year of the judge member’s death will be credited from January 1 to the first of the month of the judge member’s death based on the latest variable account year-to-date calculation as of the first of the month of the judge member’s death.

(c) After earnings have been credited in accordance with this section, the balance of the variable account shall be added to the balance of the judge member regular account and the sum shall constitute the judge member account balance as of the judge member’s date of death. No earnings or interest may be credited to the judge member account after the judge member’s date of death.

(2) If a judge member dies after the judge member’s effective retirement date, the judge member account balance at retirement must be determined under the provisions of OAR 459-007-0420.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.250, 238.255, 238.260, 238.515, 238.565, OL 2003 Ch. 625
Hist.: PERS 5-2009, f. & cert. ef. 4-6-09

459-007-0420

Crediting Earnings at Judge Member Service or Disability Retirement

Upon retirement of a judge member for service or disability, earnings from the effective date of the last judge member annual rate to the effective date of retirement will be credited to the judge member account as specified in this rule.

(1) Judge member regular account.

(a) If earnings for the calendar year before the calendar year of the judge member's retirement have not yet been credited, earnings for that year will be credited based on the latest judge member regular account year-to-date calculation available for that year.

(b) Earnings for the calendar year of the judge member's retirement will be credited from January 1 to the judge member’s effective retirement date based on the latest judge member regular account year-to-date calculation as of the judge member's effective retirement date.

(2) If the judge member is participating in the Variable Annuity Account:

(a) If earnings for the calendar year before the calendar year of the judge member's retirement have not yet been credited, earnings for that year will be credited based on the latest variable account year-to-date calculation available for that year.

(b) Earnings for the calendar year of the judge member's retirement will be credited from January 1 to the judge member’s effective retirement date based on the latest variable account year-to-date calculation as of the judge member's effective retirement date.

(3) After earnings have been credited in accordance with sections (1) and (2) of this rule, the sum of the variable account balance and the judge member regular account balance shall constitute the judge member account balance as of the judge member’s effective retirement date. No earnings or interest may be credited to the judge member account after the judge member’s effective retirement date. If, however, the judge member elects to continue participation in the Variable Annuity Account after retirement, the portion of the allowance payable from the Variable Annuity Account will be adjusted for changes in that account’s value in accordance with ORS 238.260(10).

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.250, 238.255, 238.260, 238.515, 238.565 & OL 2003 Ch. 625
Hist.: PERS 5-2009, f. & cert. ef. 4-6-09

459-007-0510

Crediting Earnings to Employer Contribution Accounts

When funds are transferred from an employer contribution account to the Benefits-In-Force Reserve due to a member’s death, disability retirement, service retirement or other purpose, earnings shall be credited to the employer contribution account in the manner specified in this rule.

(1) Earnings shall be credited based on the same method used to determine the rate of earnings to be credited to member accounts upon a member’s death or retirement.

(2) Earnings shall be credited at year-end closing on a retroactive basis, effective as of the first of the calendar month following the date of the transfer.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PERS 3-1999, f. & cert. ef. 7-27-99; PERS 8-2004, f. & cert. ef. 4-15-04

459-007-0530

Crediting Earnings To Employer Lump Sum Payments

(1) Definitions. For the purposes of this rule:

(a) "Allocated Earnings" means the actual investment earnings or losses of the Public Employees Retirement Fund (PERF), apportioned based upon the proportionate size of the side account in relation to the PERF and adjusted for administrative costs as described in ORS 238.229(3). These earnings are exempt from funding requirements of the Contingency or Capital Preservation Reserves.

(b) "Amortized Amount" means the amount of a Side Account used to offset contributions due from the employer.

(c) "Employer lump-sum payment" means any employer payment that is:

(A) Not regularly scheduled;

(B) Not paid as a percentage of salary; and

(C) Paid at the employer's election instead of at the PERS Board's direction.

(d) "UAL factor" means the monthly or annual rate based upon allocated side account earnings.

(2) Subject to ORS 238.229(4), the employer lump-sum payment shall first be applied to liabilities attributable to creditable service by employees of the employer before the employer was grouped with other public employers. Earnings on these amounts shall be credited based on the following:

(a) For the month in which the employer lump-sum payment is received, earnings shall be credited based on the average annualized rate, prorated for the number of days from date of receipt to the end of the month.

(b) For the remainder of the year, the employer lump-sum payment shall receive earnings based on the difference between the final Tier Two annual earnings rate and the Tier Two earnings rate in effect as of the first of the month after receipt of the payment.

(c) In subsequent calendar years, earnings or losses shall be credited to the employer lump-sum payment in accordance with OAR 459-007-0005(14).

(3) Earnings on an employer lump-sum payment held in a separate Side Account shall be credited to the Side Account based on the following:

(a) For the month in which the employer lump-sum payment is received, earnings shall be credited based on the average annualized rate, prorated for the number of days from date of receipt to the end of the month.

(b) For the remainder of the year, the employer lump-sum payment shall receive earnings based on the difference between the annual UAL factor and the UAL factor in effect as of the first of the month after receipt of the payment.

(4)(a) Amortized amounts to be applied to the Employer Contribution Account shall receive earnings or losses based on the UAL factor, effective as of the first of the calendar month following the date of the application of the amortized amount.

(b) In subsequent calendar years, earnings shall be credited to the remaining balance of the employer's side account created when the lump-sum payment was received on an annual basis in accordance with OAR 459-007-0005(4).

(5) The provisions of this rule are effective on January 1, 2008.

Stat. Auth.: ORS 238.650
Stats. Implemented: ORS 238.225 - 238.229
Hist.: PERS 9-2000, f. 12-15-00 cert. ef. 1-1-01; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 13-2003, f. & cert. ef. 11-14-03; PERS 27-2004, f. & cert. ef. 11-23-04; PERS 20-2005, f. 11-1-05, cert. ef. 11-4-05; PERS 13-2007, f. & cert. ef. 11-23-07

459-007-0900

Crediting Earnings To Integration Lump Sum Payments

(1) For the purposes of this rule, “integration lump sum payment” means any funds received from an employer as the transfer of any prior plan assets under ORS 238.680, excluding any member account balances.

(2) If the integrating employer’s members have no prior plan assets to transfer, the integration contract will state what portion of the integration lump sum payment is attributable to member regular accounts.

(3) Pursuant to ORS 238.229(4), the integration lump sum payment shall first be applied to liabilities attributable to creditable service by employees of the employer before the employer was grouped with other public employers. Earnings on these amounts shall be credited based on the following:

(a) For the month in which the integration lump sum payment is received, earnings shall be credited based on the average annualized rate, prorated for the number of days from date of receipt to the end of the month.

(b) For the remainder of the year, the integration lump sum payment shall receive earnings based on the difference between the December latest year-to-date calculation for Tier Two annual earnings and the Tier Two year-to-date calculation in effect as of the first of the month following the payment date.

(c) In subsequent calendar years, earnings shall be credited to the integration lump sum payment in accordance with OAR 459-007-0530(2).

Stat. Auth: ORS 238.650
Stats. Implemented: ORS 238
Hist.: PERS 9-2000, f. 12-15-00 cert. ef. 1-1-01; PERS 4-2003(Temp), f. 6-13-03, cert. ef. 7-1-03 thru 12-26-03; PERS 13-2003, f. & cert. ef. 11-14-03; PERS 3-2009, f. & cert. ef. 4-6-09

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