Current through Register Vol. 63, No. 9, September 1, 2024
(1) Definitions. Definitions as used in this
rule:
(a) "Actuarial Surplus" means the
excess of the fair market actuarial value of assets over the actuarial
liabilities.
(b) "Consolidation"
means the uniting or joining of two or more political subdivisions into a
single new successor political subdivision.
(c) "Liability" or "Liabilities" means any
costs assigned by the Board to a specific employer or to a pool of employers to
provide PERS benefits.
(d) "Local
government" shall have the same meaning as in subsection (f) of this
section.
(e) "Merger" means the
extinguishment, termination and cessation of the existence of one or more
political subdivisions by uniting with and being absorbed into another
political subdivision.
(f)
"Political subdivision" means any city, county, municipal or public
corporation, any other political subdivision as provided in Oregon Law, or any
instrumentality thereof, or an agency created by one or more political
subdivisions to provide themselves governmental service. Political subdivision
does not mean a school district or a community college.
(g) "Pooled" or "pooling" means the combining
or grouping of public employers participating in PERS for the purposes of
determining employer liability for retirement or other benefits under ORS
Chapter 238.
(h) "School district"
means a common school district, a union high school district, or an education
service district, including chartered schools authorized under Oregon
law.
(i) "Transition Unfunded
Actuarial Liabilities or Surplus" means the unfunded actuarial liability or
actuarial surplus, attributed to an individual employer for the period of time
the employer was not participating in a pool, prior to entry into the Local
Government Rate Pool or the State and Local Government Rate Pool.
(j) "Unfunded Actuarial Liabilities" or "UAL"
means the excess of the actuarial liabilities over the fair market actuarial
value of assets.
(2) Two
employer pools. In accordance with ORS
238.225 and only for the purposes of determining the amounts that are actuarially
necessary to adequately fund the benefits provided by the contributions of PERS
participating employers, employers will be pooled as a single employer as
follows:
(a) The State and Local Government
Rate Pool, which consists of the following employers:
(A) The State of Oregon, excluding the state
judiciary under ORS
238.500;
(B) All community colleges; and
(C) All political subdivisions which elect to
join the pool; or
(b)
The School District Pool, which consists of all school districts of the
state.
(3) The Local
Government Rate Pool established as of January 1, 2000, and certified by the
Board on June 12, 2001, for political subdivisions was dissolved as of December
31, 2001.
(4) Political subdivision
participation. Political subdivisions may elect to participate in the State and
Local Government Rate Pool by the adoption of a resolution or ordinance by the
governing body of the political subdivision and submitting a copy of the
resolution or ordinance to the Board. The effective date of the election is
established as follows:
(a) If the election is
received, in accordance with OAR 459-005-0220, by December 31, 2001, the
political subdivision will join the pool effective January 1, 2002. Its
liability as a member of the pool, from the effective date of entering the
pool, will be based on the actuarial valuation period beginning on January 1,
2002; or
(b) If the election is
received, in accordance with OAR 459-005-0220, on or after January 1, 2002, the
political subdivision will join the pool effective the first day of the next
actuarial valuation period following the date of receipt of the
election.
(c) Prior to entering the
pool, any unfunded actuarial liabilities or surplus of such employers will be
actuarially accounted for as provided in section (10) of this rule.
(d) Participation in the pool, as provided in
this section, is irrevocable by the employer.
(e) Political subdivisions that do not elect
to participate in the State and Local Government Rate Pool, as provided in this
section, shall be regarded as individual employers for actuarial
purposes.
(5) Employer
rates. The basis for any actuarial computation required under ORS
238.225 or
this rule will be the actuarial report on PERS prepared in accordance with ORS
238.605.
(6) In determining the amounts to be paid to
PERS by a public employer pooled as provided in section (2) of this rule, the
PERS consulting actuary will express those amounts as a rate or percentage of
PERS covered payroll.
(7) In
determining the amounts to be paid to PERS by employer participants in the
Local Government Rate Pool, the State and Local Government Rate Pool, and the
School District Pool, the PERS Board will issue rate(s) representing the amount
necessary to provide benefits as provided in ORS
238.225,
for all members of that pooled group. The rates, at a minimum, shall include:
(a) Rates representing the amount necessary
to provide benefits as provided in ORS
238.225,
for all Tier One and Tier Two police officer and firefighter members of that
pooled group.
(b) Rates
representing the amount necessary to provide benefits as provided in ORS
238.225,
for all Tier One and Tier Two general service members of that pooled
group.
(c) In addition to the
rate(s) in this section, the State of Oregon will be charged the additional
amount necessary to fund the Retiree Health Insurance Premium Account as
provided in ORS
238.415(5).
(8) A public employer employing a
retired member shall apply the employer's contribution rate for its covered
payroll to the wages paid to the retired member based upon the employee's
pension program membership at the time of the member's retirement and the job
classification of the position in which the retired member is employed. Such
employer shall make a payment to the Public Employees Retirement Fund. This
payment is in addition to the employer's contribution required under ORS
238.225 or
238A.220.
(a) Retired member wages will not be included
in covered payroll for purposes of determining the employer's contribution
rate.
(b) The additional payment
will be applied to the employer's rate pool's liabilities, including pension
benefit costs and retiree medical benefit costs.
(c) If the employer has a side account
established under ORS
238.229,
or any other individual surplus or liability that applies to the employer's
contribution rate for its active members, that surplus or liability will be
applied to the employer's contribution rate for its retired members.
(9) For each participant in the
State and Local Government Rate Pool:
(a) Each
employer's police officer and firefighter payroll as reported for the actuarial
valuation will be multiplied times the rate described in subsection (7)(a) of
this rule;
(b) Each employer's
general service payroll as reported for the actuarial valuation will be
multiplied times the rate described in subsection (7)(b) of this
rule.
(c) By dividing the sum of
the amounts in subsections (a) and (b) of this section by the employer's total
payroll as reported for the actuarial valuation, a composite employer
contribution rate is derived, which will be the basis for the employer
contributions.
(10)
Unfunded actuarial liabilities or surplus.
(a)
If a political subdivision elected to join the Local Government Rate Pool
described in section (3) of this rule, any transition unfunded actuarial
liabilities or surplus as of December 31, 1999, will remain part of the
actuarial calculation of employer costs for the individual political
subdivision, until fully amortized, and will not be pooled with other public
employers. However, the political subdivision will continue to be pooled for
the purpose of funding the resulting unfunded actuarial liabilities associated
with the Local Government Rate Pool from January 1, 2000 to December 31,
2001.
(b) If a political
subdivision elects to join the State and Local Government Rate Pool as provided
in section (4) of this rule, any transition unfunded actuarial liabilities or
surplus as of the day immediately preceding the effective date of entering the
pool will remain part of the actuarial calculation of employer costs for each
individual political subdivision, until fully amortized, and will not be pooled
with other public employers in the State and Local Government Rate
Pool.
(c) The pooled unfunded
actuarial liability or surplus for the community colleges and the State of
Oregon as of December 31, 2001, will remain part of the actuarial calculation
of employer costs for community colleges and the State of Oregon combined until
fully amortized, and will not be pooled with any political
subdivision.
(d) Any unfunded
actuarial liability or surplus for the State and Local Government Rate Pool
that accrues during a valuation period occurring after December 31, 2001, will
become part of the actuarial calculation of employer costs for only those
employers who participated in the pool during that valuation period.
(e) Any unfunded actuarial liabilities or
surplus of individual employers being amortized as provided for in subsection
(a), (b), or (c) of this section, will be amortized based on the Board's
adopted assumed earnings rate and amortization period. If at the end of the
amortization period a surplus remains, the surplus will continue to be
amortized as determined by the Board.
(f) If the PERS Board should change the
assumed earnings rate, as it applies to ORS
238.255,
in effect at the time of the amortization provided for in subsection (a), (b),
or (c) of this section, the actuary will recalculate the remaining liability or
surplus being amortized using the new assumed earnings rate. The amortization
period provided in subsection (e) of this section will not change due to this
recalculation.
(11)
Employer UAL lump-sum payment. If an employer elects to make a UAL lump-sum
payment to offset the unfunded actuarial liabilities under subsection (10)(a),
(b), (c), or (d) of this rule, or as provided under ORS
238.225(8),
the payment shall be made in accordance with ORS
238.225 and OAR 459-009-0084.
(12) New
employers and integrations. Political subdivisions entering PERS, as provided
in ORS
238.015(3),
238.035,
or
238.680,
will be pooled upon election to join the State and Local Government Rate Pool
as follows:
(a) To join the pool upon entering
PERS, the election as well as the methods and effective date of entry, must be
included in the coverage agreement or contract of integration. If the election
is made after the effective date of joining PERS, the political subdivision
will join the pool effective the first day of the next actuarial valuation
period following the date of receipt of the election.
(b) An election completed by an integrating
employer or a partially integrated employer will apply to all current and
future groups of employees who are integrated into PERS by the employer. Upon
entering the respective pool, any unfunded actuarial liabilities or surplus of
such employers will be actuarially accounted for as provided in section (10) of
this rule.
(13)
Dissolution of an employer or non-participating employer. In the event a public
employer is dissolved, no longer has PERS eligible employees, or is no longer
eligible to participate in PERS, the employer or its successor will be required
to make the contributions necessary to fund any remaining unfunded actuarial
liability, as provided for in subsection (10)(a), (b), or (c) of this rule, for
PERS benefits. The Board will determine the method and amount of funding this
unfunded actuarial liability or the return of any surplus, as well as the
determination of the employer's successor.
(14) Consolidation of political subdivisions.
In the event a political subdivision consolidates with another political
subdivision, the succeeding employer will determine the status in the pool by
election into the pool.
(a) If the succeeding
employer has not elected to join the pool as of the effective date of the
consolidation, the following will occur:
(A)
The pooled and non-pooled assets, liabilities, and employees of the former
employers will continue as they were prior to the consolidation;
(B) Any unfunded actuarial liability or
surplus of the former employers as of the effective date of the consolidation
will be combined and assumed by the succeeding employer;
(C) New hires will not be pooled;
and
(D) If the succeeding employer
consists of pooled and non-pooled employees, separate payrolls must be
maintained for each and reported to PERS.
(E) At any time after the consolidation, the
succeeding employer may elect to join the pool and the effective date will be
the first day of the next actuarial valuation period following the date of
receipt of an election.
(b) If the succeeding employer elects to join
the pool as of the effective date of the consolidation, the following will
occur:
(A) Any non-pooled assets, liabilities,
and employees of the former employers will be added to the pool;
(B) Any unfunded actuarial liability or
surplus of the former employers as of the effective date of the consolidation
will be combined and assumed by the succeeding employer and provided for as in
subsection (10)(a) or (b) of this rule; and
(C) New hires will be pooled.
(c) The succeeding employer must
join the pool as of the effective date of the consolidation if it consists of
only pooled employers. Any unfunded actuarial liability or surplus of the
former employers as of the effective date of the consolidation will be combined
and assumed by the succeeding employer.
(15) Merger of political subdivisions. In the
event a political subdivision merges with another political subdivision, the
status of the surviving employer in the pool depends on its status prior to the
merger.
(a) If the surviving employer was not
in the pool and has not elected to join the pool as of the effective date of
the merger, the following will occur:
(A) The
pooled and non-pooled assets, liabilities, and employees of the former
employers will continue as they were prior to the merger;
(B) Any unfunded actuarial liability or
surplus of the former employers as of the date of the merger will be
transferred to the surviving employer;
(C) New hires will not be pooled;
and
(D) If the surviving employer
consists of pooled and non-pooled employees, separate payrolls must be
maintained for each and reported to PERS.
(E) At any time after the merger, the
surviving employer may elect to join the pool and the effective date will be
the first day of the next actuarial valuation period following the date of
receipt of an election.
(b) If the surviving employer was in the pool
as of the effective date of the merger, the following will occur:
(A) Any non-pooled assets, liabilities, and
employees of the former employers will be added to the pool as of the effective
date of the merger;
(B) Any
unfunded actuarial liability or surplus of the former employers as of the
effective date of the merger will be transferred to the surviving employer and
provided for in subsection (10)(a) or (b) of this rule; and
(C) New hires will be pooled.
(16) In the event of
any legal mandates or changes adopted by the Board:
(a) If the change provides for an increased
or decreased benefit to police officer and firefighter members, but is not
applicable to general service members, the PERS Board will direct the actuary
to attribute the cost or savings of the change to the rate indicated in
subsection (7)(a) of this rule.
(b)
If the change provides for an increased or decreased benefit to general service
members, but is not applicable to police officer or firefighter members, the
PERS Board will direct the actuary to attribute the cost or savings of the
change to the rate indicated in subsection (7)(b) of this rule.
(17) Section (8) of this rule is
repealed effective January 2, 2025.
Statutory/Other Authority: ORS
238.650
Statutes/Other Implemented: 2005 OL, Ch. 808, Sec. 12, 13
& 14, ORS
238.225,
ORS
238.605 & 2019 OL, Ch. 355, Sec. 35 & 37
