2007 ORS 238.255¹
Credits to regular accounts when earnings less than assumed interest rate

(1) The regular account for members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), and for alternate payees of those members, shall be examined each year. If the regular account is credited with earnings for the previous year in an amount less than the earnings that would have been credited pursuant to the assumed interest rate for that year determined by the Public Employees Retirement Board, the amount of the difference shall be credited to the regular account and charged to a reserve account in the fund established for the purpose. In years following the year for which a charge is made to the reserve account, all earnings on the regular accounts of members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), and of alternate payees of those members, shall first be applied to reduce or eliminate the amount of a deficit. Only earnings on the regular accounts of members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), and of alternate payees of those members, may be used to reduce or eliminate the amount of a deficit.

(2) Notwithstanding subsection (1) of this section and except as provided in subsection (5) of this section, the board may not credit any earnings to the regular accounts of members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), or of alternate payees of those members, in any year in which there is a deficit in the reserve account established under subsection (1) of this section, or credit any earnings to the regular accounts of those members, or alternate payees, that would result in a deficit in that reserve account. In any year in which the fund experiences a loss, the board shall charge the amount of the loss attributable to the regular accounts of members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), against the reserve account.

(3) The regular account for members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), and for alternate payees of those members, may not be credited with earnings in excess of the assumed interest rate until:

(a) The reserve account established under subsection (1) of this section is fully funded with amounts determined by the board, after consultation with the actuary employed by the board, to be necessary to ensure a zero balance in the account when all members who established membership in the system before January 1, 1996, as described in ORS 238.430 (Limitation on benefits payable to persons establishing membership on or after January 1, 1996), have retired; and

(b) The reserve account established under subsection (1) of this section has been fully funded as described in paragraph (a) of this subsection in each of the three immediately preceding calendar years.

(4) The board may divide the reserve account established under subsection (1) of this section into one or more subaccounts for the purpose of implementing the provisions of this section.

(5) Subsection (2) of this section does not apply to a person who is a judge member of the system on June 30, 2003. [Formerly 237.277; 2001 c.945 §4; 2003 c.3 §1; 2003 c.67 §5; 2003 c.625 §10]

Notes of Decisions

State-guaranteed rate of return on pension account is contractual offer accepted by employee at time of commencing employ­ment and may not be terminated or reduced at later time. Oregon State Police Officers' Assn. v. State of Oregon, 323 Or 356, 918 P2d 765 (1996)

Public employees do not have contract right to receive particular rate of earnings on account balances. Robertson v. Kulongoski, 359 F. Supp. 2d 1094 (D. Or. 2004)

Amend­ments making prospective change in basis for crediting of employee accounts did not violate Contract Clause of United States Constitu­tion. Robertson v. Kulongoski, 359 F. Supp. 2d 1094 (D. Or. 2004)

Allowing crediting of member accounts in certain years with earnings at less than assumed interest rate unconstitu­tionally alters state's contract obliga­tion. Strunk v. Public Employees Retire­ment Board, 338 Or 145, 108 P3d 1058 (2005)

Legislature may direct disposi­tion of earnings in excess of amount necessary for crediting member accounts at assumed interest rate. Strunk v. Public Employees Retire­ment Board, 338 Or 145, 108 P3d 1058 (2005)

Atty. Gen. Opinions

Method to eliminate deficit, (1976) Vol 38, p 41; exclusive source of yearly install­ment, (1976) Vol 38, p 41; identity of assumed interest rate es­tab­lished by this sec­tion to "assumed interest rate" utilized to evaluate projected earnings and income of Fund, (1977) Vol 38, p 880; limita­tions on contracts affecting contribu­tion, sick pay cash out and min­i­mum account earnings, (1994) Vol 47, p 176

1 Legislative Counsel Committee, CHAPTER 238—Public Employees Retirement System, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­238.­html (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 238, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­238ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.