Oregon Administrative Rules
Chapter 459 - OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM
Division 9 - PUBLIC EMPLOYER
Section 459-009-0090 - Surplus Lump-Sum Payments by Employers

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

(2) For employers with an existing UAL that wish to make a payment in excess of the existing UAL, the surplus lump-sum payment must be made after and separately from the UAL lump-sum payment. The provisions of this rule apply only to the surplus lump-sum payment.

(3) Limitation on surplus lump-sum payments. An employer may make only one payment per every three calendar years under the provisions of this rule.

(4) Minimum surplus lump-sum payment amount. If an individual employer elects to make a surplus lump-sum payment under this rule, the payment must result in a 50 basis point reduction in the employer's pension program contribution rate based on the individual employer's reported payroll in the most recent actuarial valuation.

(5) Maximum surplus lump-sum payment amount. If an individual employer elects to make a surplus lump-sum payment under this rule, the payment may not be greater than the amount required to bring the employer's lowest pension program contribution rate to zero based upon the individual employer's reported payroll in the most recent actuarial valuation.

(6) Requirements. In order to make a surplus lump-sum payment, an employer must comply with the process described in sections (7) through (15) of this rule.

(7) Initiating surplus lump-sum payment process. At least 45 calendar days before the date the employer intends to make a surplus lump-sum payment, the employer must notify PERS Actuarial Services in writing that it intends to make a surplus lump-sum payment. The notification must specify:

(8) PERS staff must notify the employer within five business days of receipt of the notification if the notification is incomplete or the process cannot be completed by the earliest intended date of the surplus lump-sum payment.

(9) Payment to the actuary. The PERS consulting actuary must provide an invoice charging the employer for the cost of the rate reduction calculation requested by the employer. At least 30 calendar days before the date the employer intends to make a surplus lump-sum payment, the employer must remit payment for the cost of the rate reduction calculation directly to the PERS consulting actuary according to the instructions on the invoice. Failure to remit payment according to the terms of this section may result in the PERS consulting actuary not completing the employer's rate reduction calculation by the proposed surplus lump-sum payment date.

(10) Calculation of the individual employer's actuarial liability. Upon receipt of notification that the employer has submitted payment in full to the PERS actuary for the requested UAL calculation, PERS staff shall request that the PERS consulting actuary calculate:

(11) The calculations described in section (10) of this rule must be:

(12) Notification of calculation. PERS staff must notify the employer in writing of the results of the individual employer's calculation under section (10). In addition, PERS must send the employer a notification describing risks and uncertainties associated with making a lump-sum payment.

(13) Notification of payment. The employer must notify PERS Actuarial Services in writing at least five business days before making a surplus lump-sum payment. This notification must be in addition to the notification in section (7) of this rule and must specify the dollar amount of the payment and the date the employer intends to make the payment.

(14) Method of payment. A surplus lump-sum payment must be made by either wire transfer or check payable to the Public Employees Retirement System.

(15) Receipt of payment. In order to adjust the employer contribution rate to that reported by PERS in section (12) of this rule, PERS must receive the correct funds no later than five business days after the corresponding intended date of the surplus lump-sum payment specified in the notification described in section (13) of this rule.

(16) Actuarial treatment of the payment. For actuarial purposes, the surplus lump-sum payment made by the employer shall be treated as pre-funded contributions and additional assets for the payment of obligations of the employer under ORS Chapters 238 or 238A, rather than as a reduction of those obligations.

(17) Side account. The surplus lump-sum payment shall be held in a side account for the benefit of the employer making the surplus lump-sum payment. The amortized amount for each payroll reporting period shall be applied from the side account to the employer reserve.

(18) Crediting earnings or losses. Side accounts shall be credited with earnings and losses in accordance with OAR 459-007-0530.

(19) Nothing in this rule shall be construed to convey to an employer making a surplus lump-sum payment any proprietary interest in the Public Employees Retirement Fund or in the surplus lump-sum payment made to the fund by the employer.