Chapter 238

LAW REVIEW CITATIONS: 96 OLR 249 (2017)

238.005

(formerly 237.003)

NOTES OF DECISIONS

Imposition of salary cap on future wages for determining pension benefits did not violate contract clause of Oregon Constitution. James v. State of Oregon, 366 Or 732, 471 P3d 93 (2020)

ATTY. GEN. OPINIONS: Final average salary for police officer retained after age 60, (1972) Vol 35, p 1215; Determination of which “other advantages” shall be included as “salary” for purposes of Retirement Act, (1981) Vol 41, p 355; administrator of Otter Trawl Commission as “public employe” in PERS, (1981) Vol 42, p 118; computation of “final average salary” where member worked less than full calendar year in last year, (1982) Vol. 42, p 356

238.015

(formerly 237.011)

NOTES OF DECISIONS

Petitioner, who became an eligible employee under ORS 9.080, is eligible for Public Employees Retirement System as of date petitioner became employee under that section and not on the date specified in this section. Riemer v. Oregon Public Employees Retirement Board, 258 Or App 665, 310 P3d 1181 (2013), Sup Ct review denied

Under 1982 version of statute, legislature likely intended person “in the service of a public employer” to mean PERS-eligible employee who is on public employer’s payroll and who has known salary for purposes of computing PERS contribution amounts. Eugene Water and Electric Board v. PER, 365 Or 59, 442 P3d 596 (2019)

ATTY. GEN. OPINIONS: Period of eligibility as applied to legislators, (1971) Vol 35, p 796; application of 1971 amendments to benefits under this chapter to retired teachers, (1972) Vol 35, p 1243; eligibility of employees of the Legislative Assembly for participation in the Public Employes’ Retirement System, (1973) Vol 36, p 491; retirement benefit credit for unused sick leave, request by school district, (1973) Vol 36, p 665; retroactive establishment of retirement account of state employee based on legislative service, (1973) Vol 36, p 704; withdrawal of a participating political subdivision under Public Employes’ Retirement System, (1975) Vol 37, p 714

LAW REVIEW CITATIONS: 50 WLR 619 (2014)

238.055

See annotations under ORS 1.310 to 1.390.

238.068

(formerly 237.029)

ATTY. GEN. OPINIONS: Compensatory effect of legislators’ per diem, (1976) Vol 38, p 14

238.072

(formerly 237.019)

ATTY. GEN. OPINIONS: Eligibility of employees of the Legislative Assembly for participation in the Public Employes’ Retirement System, (1973) Vol 36, p 491

238.088

(formerly 237.133)

ATTY. GEN. OPINIONS: Formula for retirement allowance of police officer retained after age 60, (1972) Vol 35, p 1215; employment of nonmember of the Public Employes’ Retirement System over 65 years, (1974) Vol 37, p 94

238.095

(formerly 237.109)

NOTES OF DECISIONS

Under 1989 version of statute, “absent from the service” does not connote that member must be absent from service for certain amount of time. Aronson v. Public Employees Retirement Board, 236 Or App 17, 236 P3d 731 (2010)

238.105

NOTES OF DECISIONS

Employee’s restored rights in system are shaped by statutory and regulatory schemes that governed Public Employees Retirement System at time that rights were forfeited. Smith v. Public Employees Retirement Board, 235 Or App 159, 230 P3d 88 (2010)

238.165

(formerly 237.095)

ATTY. GEN. OPINIONS: Participation of staff of Legislative Committee on Foreign Trade in system, (1975) Vol 37, p 670

238.200

NOTES OF DECISIONS

State offer to pick up fund contribution 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)

Amendments providing for benefits earned in future to be placed in account separate from member account containing existing employee contributions and earnings did not violate Contract Clause of United States Constitution. Robertson v. Kulongoski, 359 F. Supp. 2d 1094 (D. Or. 2004)

Termination of employee ability to contribute to regular account did not violate Contract Clause of United States Constitution. Robertson v. Kulongoski, 466 F3d 1114 (9th Cir. 2006)

238.205

(formerly 237.075)

NOTES OF DECISIONS

Six-year statute of limitations provided by ORS 12.080 (1) applies to alleged violations of contract between members of Public Employes’ Retirement System and state based on this section. Alderson v. State of Oregon, 105 Or App 574, 806 P2d 142 (1991)

ATTY. GEN. OPINIONS: Limitations on contracts affecting pension contribution, sick pay cash out and minimum account earnings, (1994) Vol 47, p 176

238.225

(formerly 237.081)

NOTES OF DECISIONS

Ability of Public Employees Retirement Board to set PERS contribution rates based on employer liability implies board’s authority to evaluate other statutes that may impact liability, including determining liabilities for successors of insolvent intergovernmental entity under ORS 190.080. Josephine County v. PERB, 316 Or App 150, 504 P3d 624 (2021)

ATTY. GEN. OPINIONS: Retirement benefit credit for unused sick leave, request by school district, (1973) Vol 36, p 665

238.255

(formerly 237.277)

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

238.260

NOTES OF DECISIONS

Elimination of ability to continue making purchases of variable annuity did not violate Contract Clause of United States Constitution. Robertson v. Kulongoski, 359 F. Supp. 2d 1094 (D. Or. 2004)

Amendment terminating member ability to make further contributions to variable annuity account is consistent with earlier legislative promise to reserve moneys contributed to variable annuity account for purpose of purchasing variable annuity. Strunk v. Public Employees Retirement Board, 338 Or 145, 108 P3d 1058 (2005)

When interest earned on Variable Annuity Account cannot pay for account’s pro rata share of administrative expenses of Public Employees Retirement System, difference must be paid by interest earned on Public Employees Retirement Fund and employer contributions. Murray v. Public Employees Retirement Board, 235 Or App 262, 230 P3d 993 (2010), Sup Ct review denied

238.265

(formerly 237.111)

ATTY. GEN. OPINIONS: Retroactive credit for employees of the Legislative Assembly for benefits of the Public Employes’ Retirement System, (1973) Vol 36, p 491

238.280

(formerly 237.121)

ATTY. GEN. OPINIONS: School nurse’s eligibility to retire with full benefits at age 58, (1980) Vol 40, p 443

238.300

(formerly 237.147)

NOTES OF DECISIONS

Retirement differential favoring police and firefighters is rational way to encourage recruitment, reward performance of difficult duties and encourage retirement before physical strength and rapid reactions erode, so this section does not violate equal protection under Fourteenth Amendment. Shaw v. State of Or. Public Emp. Retirement Bd., 887 F2d 947 (9th Cir. 1989)

Amendments redirecting future member contributions to individual account program do not impair member right to receive service retirement allowance calculated under formula yielding highest pension amount. Strunk v. Public Employees Retirement Board, 338 Or 145, 108 P3d 1058 (2005)

ATTY. GEN. OPINIONS: Formula for retirement allowance of police officer retained after age 60, (1972) Vol 35, p 1215; application of 1971 amendments to benefits under this chapter to retired teachers, (1972) Vol 35, p 1243; constitutionality of mortality tables which differentiate between males and females, (1973) Vol 36, p 449; retroactive credit for employees of the Legislative Assembly for benefits of the Public Employes’ Retirement System, (1973) Vol 36, p 491; availability of “lump sum refund” option at voluntary retirement, (1977) Vol 38, p 1391

238.305

(formerly 237.155)

NOTES OF DECISIONS

To deny retired member’s election to convert from one type of service retirement allowance to another type of service retirement allowance on basis that election will result in loss of tax-qualified status, Public Employment Retirement Board must determine in its findings that election will cause board to lose tax-qualified status. English v. Public Employees Retirement Board, 230 Or App 506, 216 P3d 342 (2009)

ATTY. GEN. OPINIONS: Acceptance of “lump sum refund” retirement allowance as forfeiture of all other retirement allowances, (1978) Vol 38, p 1944

238.320

(formerly 237.171)

NOTES OF DECISIONS

Injury is sustained in actual performance of duty if resulting from, aggravated by or accelerated by performance of duties in employment of participating public employer. Hoskinson v. PERB, 23 Or App 328, 542 P2d 157 (1975)

When an employee is injured in the service of an employer who later becomes a member of the system, and thereafter, while a member of the system, that employee is consequently found to be disabled, he is entitled to early retirement benefits. Begley v. Pub. Employes Retirement Bd., 26 Or App 869, 554 P2d 559 (1976)

Statutory presumption, under ORS 656.802, of occupational cause of firefighters’ heart disease is limited to Workers Compensation Law and inapplicable to public retirement disability benefits cases controlled by this section. Mitchell v. PERB, 28 Or App 339, 559 P2d 1325 (1977), Sup Ct review denied

ATTY. GEN. OPINIONS: Aggravation of preexisting condition or disease as injury, (1980) Vol 40, p 339

238.350

(formerly 237.153)

NOTES OF DECISIONS

Crediting of accumulated unused sick leave to 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)

ATTY. GEN. OPINIONS: Retirement benefit credit for unused sick leave, request by school district, (1973) Vol 36, p 665; sick leave and vacation leave provisions for exempt or unclassified academic service, (1974) Vol 36, p 1119; certification of amount of accumulated unused sick leave of retired legislative employee by letter written by current or former legislator, (1981) Vol 41, p 454; limitations on contracts affecting pension contribution, sick pay cash out and minimum account earnings, (1994) Vol 47, p 176

238.360

(formerly 237.060)

NOTES OF DECISIONS

In absence of specific contract rights outside Public Employees Retirement System, amendments to cost of living adjustment under this section, which reduce maximum cost of living adjustment cap, do not impair contract rights under Article I, section 21, Oregon Constitution, when applied to benefits earned on or after effective dates of amendments. Moro v. State of Oregon, 357 Or 167, 351 P3d 1 (2015)

ATTY. GEN. OPINIONS: Application of 1971 amendments to benefits under this chapter to retired teachers, (1972) Vol 35, p 1243

238.362

(formerly 238.375)

NOTES OF DECISIONS

Increase in state employee retirement benefits attributable to service before September 29, 1991, and linked to tax liability, was discriminatory tax rebate that required rebate of taxes paid by federal retirees. Vogl v. Dept. of Revenue, 327 Or 193, 960 P2d 373 (1998)

Under this section, income tax offset is not term of Public Employees Retirement System contract and amendments that eliminated tax offset do not impair contract for purposes of rights under Article I, section 21, Oregon Constitution. Moro v. State of Oregon, 357 Or 167, 351 P3d 1 (2015)

238.364

(formerly 238.380)

NOTES OF DECISIONS

Where petitioner, former state employee, is eligible for additional PERS benefit under this section, PERS calculation of additional benefit requires multiplying eligible benefit by 9.89 percent to offset state income tax imposed on eligible benefit. Sundermier v. PERS, 269 Or App 586, 344 P3d 1142 (2015), Sup Ct review denied

238.366

NOTES OF DECISIONS

238.368

NOTES OF DECISIONS

238.375

See annotations under ORS 238.362.

238.380

See annotations under ORS 238.364.

238.390

NOTES OF DECISIONS

Marriage dissolution does not affect validity of employee’s designation of spouse as beneficiary. Wilkinson v. Public Employees Retirement Board, 188 Or App 97, 69 P3d 1266 (2003)

Read with ORS 238.465, where, due to administrative reasons, Public Employees Retirement System (PERS) did not set up alternate payee account, death of alternate payee before establishment of that account does not result in forfeiture of benefits awarded to payee by dissolution judgment. Hamlin v. PERB, 273 Or App 796, 359 P3d 581 (2015)

238.420

(formerly 237.325, then 237.248)

ATTY. GEN. OPINIONS: Effect of diversions and transfers of employer and employee moneys on federal tax-exempt status of PERS and legislative remedy for breach of PERS contract and trust, (1989) Vol 46, p 180

238.445

(formerly 237.201)

NOTES OF DECISIONS

Trial court could not award wife one-half of husband’s accrued retirement benefits in Public Employes’ Retirement System, because court could only enforce decree by requiring husband to assign one-half interest in retirement fund to wife, and such assignment is prohibited by this section. Monaghan and Monaghan, 45 Or App 535, 609 P2d 822 (1980)

Tax exemption provided in this section before 1991 amendment contractually obligated state not to tax “accrued and accruing” PERS retirement benefits. Hughes v. State of Oregon, 314 Or 1, 838 P2d 1018 (1992)

LAW REVIEW CITATIONS: 72 OLR 487 (1993)

238.465

NOTES OF DECISIONS

Read with ORS 238.390, where dissolution judgment provided for division of Public Employees Retirement System (PERS) account to alternate payee and in absence of beneficiary designation, for interest to be paid to alternate payee’s estate, PERS was authorized under this statute to establish alternate payee account and pay that account to alternate payee’s estate when that payee died after dissolution judgment but before PERS established account. Hamlin v. PERB, 273 Or App 796, 359 P3d 581 (2015)

238.600

LAW REVIEW CITATIONS: 50 WLR 619 (2014)

238.610

NOTES OF DECISIONS

238.630

(formerly 237.251)

NOTES OF DECISIONS

Provision that adopted actuarial equivalency factors become part of system does not permanently lock in factors. Strunk v. Public Employees Retirement Board, 338 Or 145, 108 P3d 1058 (2005)

ATTY. GEN. OPINIONS: Statutory and fiduciary duties of PERB and staff to PERF, (1993) Vol 46, p 506

238.655

LAW REVIEW CITATIONS: 50 WLR 619 (2014)

238.660

(formerly 237.271)

NOTES OF DECISIONS

Provision does not create individual fiduciary relationships between PERB and every PERS member or impose tort liability for inaccurate account estimates. Bell v. PERB, 239 Or App 239, 247 P3d 319 (2010), Sup Ct review denied

ATTY. GEN. OPINIONS: Fiduciary duties of officers, public bodies and employees to PERF, (1993) Vol 46, p 506; distinction between participating employers and plan beneficiaries, (1997) Vol 49, p 1

238.670

(formerly 237.281)

ATTY. GEN. OPINIONS: Purpose of the Contingency Reserve, (1976) Vol 38, p 41; method to eliminate deficit, (1976) Vol 38, p 41

238.705

LAW REVIEW CITATIONS: 50 WLR 619 (2014)

238.710

(formerly 237.311)

NOTES OF DECISIONS

This section entitles Public Employes’ Retirement Board to mandamus against city to compel payment of unremitted employee contributions and equivalent of accrued earnings or delinquent employee contributions but not equivalent of earnings on arrearages in employer contributions. PERB v. City of Portland, 96 Or App 393, 773 P2d 7 (1989)

LAW REVIEW CITATIONS: 50 WLR 619 (2014)

238.715

NOTES OF DECISIONS

Reduction in earnings credit for past year and cost of living allowance for current year to recover benefits unlawfully accrued in past year did not violate Contract Clause of United States Constitution. Robertson v. Kulongoski, 359 F. Supp. 2d 1094 (D. Or. 2004)

Fact that subsection (7) of this section explicitly states that notice required under subsection (4) of this section commences recovery as to monthly payees does not prohibit Public Employees’ Retirement Board from determining that such notice also commences recovery with respect to lump-sum payees. Metje/Parks v. PERS, 291 Or App 338, 421 P3d 398 (2018)

Because notice required under subsection (4) of this section not only commences recovery as to monthly payees, but also with respect to lump-sum payees, notices sent to petitioners by Public Employees’ Retirement Board that notified petitioners of amounts of overpaid benefits and of opportunity to seek administrative review, were legally sufficient to timely “commence” administrative proceedings for collection of lump-sum payments within meaning of this section and, accordingly, board was not required to commence civil action in circuit court to recover overpayments. Metje/Parks v. PERS, 291 Or App 338, 421 P3d 398 (2018)