LOCAL PUBLIC EMPLOYER RETIREMENT PLANS FOR
POLICE OFFICERS AND FIRE FIGHTERS
Contents of the Petition
(1) A petition for exemption of a public employer shall contain the following information:
(a) The name of the public employer;
(b) For current affected police officers and fire fighters; a list of the names, ages, sex, dates of employment and plan participation, annual employee contributions (withheld or picked up) to the employer's plan for each year of participation beginning in 1973 with total current account balances of employee contributions, if applicable, and total gross salaries paid in each of the three most recent calendar years;
(c) A copy of the plan including each written trust agreement, contract or insurance policy providing retirement benefits to the public employer's police officers and fire fighters;
(d) Such additional information as will assist an actuary retained by the Board in reviewing the retirement benefits to be provided the police officers and fire fighters.
(2) Information provided in the petition shall be current as of the valuation date.
Stat. Auth.: ORS 237
Hist.: PER 4-1978, f. & ef. 11-2-78; PER 13-1981, f. & ef. 11-23-81; PERS 1-1989, f. & cert. ef. 12-4-89
"Equal To or Better Than" Exemption
(1) A public employer that provides retirement benefits to its police officers and firefighters pursuant to ORS 237.620(2) is exempt from participation in PERS for such employees.
(2) An exemption under this division will continue until the Board, upon review of the public employer’s retirement plan, determines that the plan no longer meets the required standard.
(3) Whenever a change in benefits in the public employer’s retirement plan is adopted, the public employer must petition the Board for review of the employer’s plan within 60 days.
(4) Whenever a change in benefits in the PERS Plan is adopted, the Board will determine if the change increases benefits such that the public employer’s retirement plan must be reviewed.
(5) In any event, at least once every 12 years the Board will determine, pursuant to section (2) of this rule, whether an employer’s exemption should continue.
(6) The Board may delegate the determination of whether such an employer’s plan qualifies for an exemption to the PERS Executive Director.
Stat. Auth.: ORS 238.650
Stat. Implemented: ORS 237.620, 237.635 & 237.637
Hist.: PER 4-1978, f. & ef. 11-2-78; PERS 1-1989, f. & cert. ef. 12-4-89, Renumbered from 459-030-0020; PERS 9-2005, f. & cert. ef. 2-22-05; PERS 2-2009, f. & cert. ef. 2-12-09
(1) Upon the filing of a petition, the Board shall schedule an actuarial review of the public employer's retirement plan to be conducted by an actuary retained by the Board at the expense of the public employer.
(2) An actuary retained by the Board may require the public employer to provide such additional information as the actuary considers necessary. Failure to provide the actuary with the requested information on a timely basis shall constitute sufficient ground for the Board to dismiss the petition with prejudice.
Standards for Review of Police Officers and Firefighters Retirement Plans
(1) For purposes of this rule:
(a) “Assumed rate” has the same meaning as provided in OAR 459-007-0001.
(b) “Valuation date” means the date set by the Board as of which the retirement benefits under the public employer’s retirement plan and the retirement benefits under the PERS Plan shall be compared.
(2) A determination whether a public employer provides retirement benefits to its police officers and firefighters that are equal to or better than the benefits that would be provided to them by PERS will be made as of the valuation date.
(3) The Board will consider the aggregate total actuarial present value, as of the valuation date, of all retirement benefits accrued up to the valuation date and projected to be accrued thereafter to the date of projected retirement by the group of police officers and firefighters employed on the valuation date by the public employer. The Board will compare the retirement benefits provided under the public employer’s retirement plan for each of the following classes of employees to the retirement benefits provided to the equivalent class of employees participating in the PERS Plan:
(a) Police officers or firefighters who would have established membership in the system before January 1, 1996, as described in ORS 238.430(2), and would have been entitled to receive benefits under the PERS Plan;
(b) Police officers or firefighters who would have established membership in the system on or after January 1, 1996, as described in ORS 238.430, and before August 29, 2003, as described in 238A.025, and would have been entitled to receive benefits under the PERS Plan; and
(c) Police officers or firefighters who would have established membership in the system on or after August 29, 2003, and would have been entitled to benefits under the PERS Plan.
(4) For each class of employees described in section (3) of this rule:
(a) The aggregate total actuarial present value as of the valuation date of the projected full-career retirement benefits provided by the public employer must be equal to or better than those provided by PERS to the equivalent class of employees.
(b) The actuarial present value of projected retirement benefits for each individual employee need not be equal to or better than the present value that employee would have received as a member of that employee’s equivalent class in PERS.
(c) The public employer’s retirement plan or plans must provide at least eighty percent (80%) of the actuarial present value of projected retirement benefits in each of the major categories of retirement benefits available under PERS, namely: a service retirement benefit, including post retirement health care and a disability retirement benefit, also including post retirement health care.
(5) In adopting the following methods and assumptions, to be used in conducting an actuarial review of a public employer’s retirement plan, preference has been given to the simplest, least expensive methodology consistent with ORS 237.610 to 237.620 and applicable actuarial standards:
(a) Only employer funded benefits shall be used as the basis for the test comparison. Any contribution deemed as an employee contribution will be treated as an employee contribution for testing purposes, even if paid for by the employer unless the employer’s plan specifies that the employer is responsible to make the contribution on the employee’s behalf and that responsibility is nonelective.
(b) The Full Formula, Money Match, Formula Plus Annuity, and OPSRP Pension benefit formulas shall be used as the basis for valuing PERS benefits.
(c) Prior service benefits that depend on earnings shall be valued using the assumed rate, taking into consideration guaranteed plan returns.
(d) Future service benefits that depend on earnings shall be valued using the assumed rate, taking into consideration guaranteed plan returns.
(e) Benefits will be assumed to be paid in the typical and customary distribution form given the structure of the underlying plan. For example, PERS benefits will be paid using the most recent distribution assumption as of the valuation date, and benefits from a defined contribution program will be assumed to be paid as a lump sum at the date of projected retirement.
(f) Lump sum/annuity conversions, if needed, shall be calculated using the assumed rate.
(g) The assumed rate will be used to discount projected future benefits back to the valuation date.
(h) Benefit comparisons shall use a hypothetical PERS member data standard for each demographic group.
(6) In conducting an actuarial review of the public employer’s retirement plan, the actuary retained by the Board will use its current actuarial assumptions for police officers and firefighters of public employers participating in PERS for those employees, subject to any exceptions noted above.
(7) The Board will consider the estimated cost of the benefits to be provided, the estimated value of projected benefits to the employee, and the proportion of the cost being paid by the public employer and the participating police officers and firefighters. Whether the benefits are provided by contract, trust, insurance, or a combination thereof shall have no effect on the Board’s determination.
(8) In considering a public employer’s retirement plan provisions, the Board may not value portability of pension credits, tax advantages, Social Security benefits or participation, any worker’s compensation component of a public employer’s retirement plan as determined by the employer or any portion of a benefit funded by the member.
(9) The Board may not consider benefits provided by the PERS Plan under ORS 238.375–238.387 or benefits provided by the employer’s retirement plan under 237.635–237.637. The employer must identify benefits paid to comply with 237.635–237.637.
(10) Additional actuarial assumptions needed to evaluate the public employer’s retirement plan may be considered by the Board’s actuary to be consistent with assumptions specified in these rules. Any disputes as to the appropriateness of additional actuarial assumptions may be resolved by the Board in its sole discretion.
Stat. Auth: ORS 238.650
Stats. Implemented: ORS 237.620
Hist.: PER 4-1978, f. & ef. 11-2-78; PER 15-1981, f. & ef. 11-23-81; PERS 1-1989, f. & cert. ef. 12-4-89; PERS 9-2005, f. & cert. ef. 2-22-05; PERS 2-2009, f. & cert. ef. 2-12-09; PERS 8-2010, f. & cert. ef. 8-2-10
Board Action on Petition and Review of Order
(1) The actuary will issue a written report that concludes whether a public employer's plan meets the standards for receiving an exemption under OAR 459-030-0025. After receipt of the written actuarial review report and recommendations of staff, the Board will issue an order granting or denying the petition for exemption. No order denying a petition for exemption will be issued until at least 90 days after the actuary had delivered its report to the Board. During that period, the public employer may amend its plan to comply retroactive to the valuation date or file a written request for an extension. Upon filing of that request, the Board will not enter an order denying a petition for exemption for an additional 60 days after receiving the request. If a public employer submits an amended plan before the Board adopts an order denying the exemption, the actuary will submit a supplemental report on whether the amended plan meets the required standards under 459-030-0025. The Board may adopt an order at any time after receiving the supplemental report.
(2) Within 60 days of the effective date of any order issued under this rule, the public employer, the affected public employees, or their labor representative may file a petition for rehearing or reconsideration pursuant to OAR 459-001-0010 and 459-001-0040.
Stat. Auth: ORS 238.650
Stats. Implemented: ORS 237.620, 237.635 & 237.637
Hist.: PER 4-1978, f. & ef. 11-2-78; PERS 1-1989, f. & cert. ef. 12-4-89; PERS 9-2005, f. & cert. ef. 2-22-05; PERS 2-2009, f. & cert. ef. 2-12-09
State Archives • 800 Summer St. NE • Salem, OR 97310