ORS 238.305
Optional service retirement allowance calculations

(1)

Not later than 60 days after the first benefit payment is made to a retired member of the Public Employees Retirement System, the member may elect to convert the allowance described by ORS 238.300 (Service retirement allowance) as payable after retirement into a service retirement annuity of equivalent actuarial value of one of the optional forms named below. The election of Option 2, 2A, 3 or 3A shall be effective immediately upon the member’s retirement.
Option 1. (a) A life annuity (nonrefund) payable during the member’s life only, which shall be the actuarial equivalent of accumulated contributions by the member under this chapter and interest thereon credited at the time of retirement (if death occurs before the first payment is due, the member account shall be treated as though death had occurred before retirement); (b) a life pension (nonrefund) provided by the contributions of employers as provided in ORS 238.300 (Service retirement allowance) (2) and, for pension benefits that accrue on or after July 1, 2020, amounts in the employee pension stability account established for the member under ORS 238A.353 (Employee pension stability accounts established); (c) an additional nonrefund pension for prior service credit, including military service, credited to the member at the time of first becoming a member of the system, as elsewhere provided in this chapter, which pension shall be provided by the contributions of the employer; or
Option 2. A reduced service retirement allowance payable during the member’s life, with the provision that it continue after death for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the Public Employees Retirement Board at the time of election, should the beneficiary survive the member; or
Option 2A. A reduced service retirement allowance payable during the member’s life which, unless modified under subsection (6) of this section, continues after death for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or
Option 3. A reduced service retirement allowance payable during the member’s life, with the provision that it continue after death at one-half the rate paid to the member and be paid for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or
Option 3A. A reduced service retirement allowance payable during the member’s life which, unless modified under subsection (6) of this section, continues after death at one-half the rate paid to the member and is paid for the life of the beneficiary the member nominates by written designation duly acknowledged and filed with the board at the time of election, should the beneficiary survive the member; or
Option 4. A reduced service retirement allowance payable during the member’s life, with the provisions that if the member dies before a total of 180 monthly payments is made, the remainder of the 180 monthly payments shall be paid monthly to the beneficiary the member nominates by written designation duly acknowledged and filed with the board at any time before the member’s death; and that if the member designates no beneficiary to receive the monthly payments or no such beneficiary is able to receive the monthly payments, an amount equal to the actuarial value, on the date of the member’s death, of the total of the monthly payments not made to the member shall be paid according to ORS 238.390 (Death benefit) for disposal of an amount credited to the member account of a member at the time of death; and that if the beneficiary receiving monthly payments dies before the total number of monthly payments to which the beneficiary is entitled is made, an amount equal to the actuarial value, on the date of the beneficiary’s death, of the total of the monthly payments not made to the member and beneficiary shall be paid according to ORS 238.390 (Death benefit) for disposal of an amount credited to the member account of a member at the time of death and as if the beneficiary had been a member.

(2)

Not later than 60 days after the first benefit payment is made to a retired member of the system, the member may elect, in lieu of the allowance described by ORS 238.300 (Service retirement allowance) as payable after retirement, a service retirement benefit consisting of:

(a)

A refund of accumulated contributions by the member under this chapter and interest thereon credited at the time of refund; and

(b)

A life pension (nonrefund) provided by the contributions of employers as provided in ORS 237.147 (2) (1979 Replacement Part) and, for pension benefits that accrue on or after July 1, 2020, amounts in the employee pension stability account established for the member under ORS 238A.353 (Employee pension stability accounts established), and an additional life pension (nonrefund) for prior service credit as provided in ORS 238.300 (Service retirement allowance) (3). At the same time as making the election under this subsection, the member may elect to convert the pensions described by this paragraph into a service retirement annuity of equivalent actuarial value of one of the optional forms named as Option 2, 2A, 3 or 3A under subsection (1) of this section.

(3)

Not later than 60 days after the first benefit payment is made to a retired member of the system, the member may elect in lieu of the allowance described by ORS 238.300 (Service retirement allowance) a refund service retirement benefit consisting of:

(a)

A refund of accumulated contributions by the member under this chapter and interest thereon credited at the time of retirement;

(b)

An amount that matches the amount of accumulated contributions by the member and interest thereon, provided by the contributions of employers and, for pension benefits that accrue on or after July 1, 2020, amounts in the employee pension stability account established for the member under ORS 238A.353 (Employee pension stability accounts established); and

(c)

Interest on the amounts described in paragraphs (a) and (b) of this subsection from the effective date of retirement until the amounts are paid.

(4)

Intentionally left blank —Ed.

(a)

If the member elects to receive the service retirement benefit described in subsection (2) or (3) of this section, the member shall elect at the same time to receive the refund described in subsection (2)(a) or (3) of this section in one lump sum payment or in more than one but not more than five installment payments. If the member elects installment payments:

(A)

The amount to be paid under subsection (3)(b) of this section by employer contributions and amounts in the employee pension stability account established for the member under ORS 238A.353 (Employee pension stability accounts established) shall be transferred to the individual account of the member in the Public Employees Retirement Fund as of the effective date of retirement.

(B)

The installment payments shall be paid once each year for the number of consecutive years equal to the number of installment payments elected.

(C)

The amount of each installment payment shall be designated by the member at the time of making the election, but the last installment payment shall be the unrefunded balance remaining in the member account of the member in the fund.

(D)

The member account of the member in the fund shall be maintained until the last installment payment is paid. The board shall establish procedures for computing and crediting interest annually on the unrefunded balance of the member account.

(E)

A yearly installment payment shall be paid on the anniversary of the date of the first installment payment.

(F)

The member is considered to have elected to transfer any balance in the variable account of the member to the regular account of the member.

(G)

If the member dies before payment of all installment payments, the unrefunded balance in the member account of the member plus interest to date of disbursement is payable as provided in ORS 238.390 (Death benefit) (4).

(b)

If a member elects to receive the refund service retirement benefit described in subsection (3) of this section, and does not elect to receive those amounts in installments under the provisions of this subsection, all rights of the member in the system shall terminate upon the payment of the amounts provided for in subsection (3) of this section, except as provided in paragraph (c) of this subsection. If a member elects to receive the refund service retirement benefit described in subsection (3) of this section, and also elects to receive those amounts in installments under the provisions of this subsection, all rights of the member in the system shall terminate upon the making of the first payment, except as provided in paragraph (c) of this subsection.

(c)

A member who elects to receive the refund service retirement benefit described in subsection (3) of this section, and any eligible spouse or dependent of the member, shall continue to be eligible for insurance under ORS 238.410 (Board may contract for insurance for retirees), and for any premium payments the member may be entitled to under ORS 238.415 (Payment toward cost of pre-Medicare insurance) and 238.420 (Payment toward cost of Medicare supplemental insurance).

(5)

The designation of a beneficiary, the election of an option or any other election or designation under subsection (1), (2), (3) or (4) of this section may be changed by the member within 60 days after the date of the first benefit payment, except that the designation of a beneficiary under Option 4 may be changed by the member at any time before the member’s death.

(6)

If a retired member has elected to receive a service retirement allowance under Option 2A or Option 3A as provided in subsection (1) of this section, and if the beneficiary under that option dies after the expiration of the time within which the member could change the election of an option or if the beneficiary is the spouse of the member and the marriage relationship is terminated as provided by law after the expiration of the time within which the member could change the election of an option, the member may elect to receive, in lieu of the optional form of allowance previously elected, the allowance that the member would have received on the effective date of retirement under Option 1 as provided in subsection (1) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original allowance since the effective date of retirement. Notice of election under this subsection must be in a form approved by the board. If an election is made under this subsection, the Option 1 payment amount is applicable to the first full month after the death of the beneficiary, or the first full month after entry of the judgment of divorce, and payable the first day of the month thereafter. If the increased amount is not paid in any month in which the increased amount is due, the board shall make a lump sum payment to the retired member that is equal to the difference between the amount paid to the member for that month and the amount that should have been paid under the provisions of this subsection.

(7)

Notwithstanding any other provision of this section, any member of the system who retired before October 3, 1989, and elected to receive a service retirement allowance under either Option 2 or 3 as provided in subsection (1) of this section shall be entitled to receive a service retirement allowance equal to that which the member would have received on the effective date of retirement under Option 1 as provided in subsection (1) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original allowance since the effective date of retirement if:

(a)

The member has attained 80 years of age;

(b)

The person designated by the member as the member’s beneficiary has predeceased the member; and

(c)

The member gives written notice to the board of the death of the member’s beneficiary.

(8)

Notwithstanding any other provision of this section, any member of the system who retired before October 3, 1989, who elected to receive a refund of accumulated employee contributions and a life pension or pensions under subsection (2) of this section, and who elected to convert the life pension or pensions provided for in subsection (2) of this section into a service retirement annuity under Option 2 or 3 under subsection (1) of this section, shall be entitled to receive a life pension or pensions equal to that which the member would have received on the effective date of retirement under subsection (2) of this section and adjusted by the actual amount of any cost-of-living or other post-retirement adjustments made to the original life pension or pensions since the effective date of retirement if:

(a)

The member has attained 80 years of age;

(b)

The person designated by the member as the member’s beneficiary has predeceased the member; and

(c)

The member gives written notice to the board of the death of the member’s beneficiary.

(9)

The service retirement allowance provided in subsection (7) or (8) of this section shall be applicable to the first full month after the death of the member’s beneficiary, or the first full month after the member attains 80 years of age, whichever is later.

(10)

The board may deny an election to convert a service retirement allowance under this section, a change of beneficiary under this section or a change in benefit options under this section if that denial is required to maintain the status of the system and the Public Employees Retirement Fund as a qualified governmental retirement plan and trust under the Internal Revenue Code and under regulations adopted pursuant to the Internal Revenue Code. [Formerly 237.155; 1997 c.180 §1; 1999 c.317 §10; 2001 c.945 §§8,68; 2003 c.625 §3; 2005 c.138 §1; 2019 c.355 §14]
Note: Section 3, chapter 180, Oregon Laws 1997, provides:
Sec. 3. (1) If on October 4, 1997, a retired member is eligible for the service retirement allowance provided by ORS 238.305 (Optional service retirement allowance calculations) (7) or (8) but was not eligible under ORS 238.305 (Optional service retirement allowance calculations) (1995 Edition):

(a)

The member may give written notice of the member’s eligibility to the Public Employees Retirement Board at any time after October 4, 1997; and

(b)

The service retirement allowance of the retired member under ORS 238.305 (Optional service retirement allowance calculations) (7) or (8) is first applicable to the first full month after the death of the member’s beneficiary, or the first full month after the member attained 80 years of age, whichever is later.

(2)

As soon as possible after October 4, 1997, the board shall calculate and mail a check for the amount of any retroactive payment required under subsection (1) of this section. The retroactive payment shall represent the difference between the total of all monthly amounts paid to the member before the first recalculated monthly payment is made under subsection (1) of this section, and the total of all monthly amounts that would have been paid to the member if ORS 238.305 (Optional service retirement allowance calculations), as amended by section 1, chapter 180, Oregon Laws 1997, had been in effect on and after October 3, 1989. In no event shall the increased service allowance under ORS 238.305 (Optional service retirement allowance calculations) (7), or the increased life pension or pensions under ORS 238.305 (Optional service retirement allowance calculations) (8), be applicable to any monthly payment that was made before the first full month following October 3, 1989, and no retroactive payment shall be made under this section for any monthly payment that was made before the first full month following October 3, 1989. [1997 c.180 §3; 2001 c.945 §9]

Source: Section 238.305 — Optional service retirement allowance calculations, https://www.­oregonlegislature.­gov/bills_laws/ors/ors238.­html.

(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)

Attorney General Opinions

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

238.005
Definitions 238.008
Computation of salary 238.015
Membership generally 238.025
Effect of service interruptions on membership 238.035
Membership of part but not all employees of a public employer 238.045
Membership of certain circuit court judges 238.055
Membership of judges previously receiving retirement pay from Judges’ Retirement Fund 238.062
Membership of deputy district attorneys 238.068
Membership of legislators 238.072
Membership of certain legislative employees 238.074
Membership of community college employees 238.078
Reemployment of retired members 238.082
Limits on hours worked by retired members 238.088
Appointment or election of retired member to public office 238.092
Option of legislators to receive certain benefits 238.095
Termination of membership 238.105
Restoration of credit forfeited by reason of termination of membership 238.115
Alternate method of restoring credit forfeited by reason of termination of membership 238.125
Credit for probationary period of employment 238.135
Credit for probationary periods in seasonal positions 238.145
Credit for service as police officer or firefighter with nonparticipating employer 238.148
Credit for service as public safety officer in another state 238.156
Contributions, benefits and retirement credit for periods of service in uniformed services or Armed Forces 238.157
Alternative provision for retirement credit for periods of service in uniformed services 238.160
Retirement credit for service while on loan to federal government 238.162
Retirement credit for service as teacher in public schools of another state 238.165
Credit for certain periods of employment by Legislative Assembly 238.175
Retirement credit for periods of disability 238.200
Employee contributions generally 238.205
Payment of employee contribution by employer 238.210
Payment of certain circuit court judge employee contributions by employer 238.215
Contributions by certain higher education employees 238.220
Employee rollover contributions 238.222
Trustee-to-trustee transfers to fund restoration of forfeited service or purchase of retirement credit 238.225
Employer contributions 238.227
Pooling of employers for purpose of computing employer contributions 238.229
Effect of lump sum payment to side account on contributions of pooled employer 238.232
Choice of amortization period for certain lump sum payments to side accounts 238.235
Unfunded liability or surplus after employee transfer or employer merger, consolidation or split 238.250
Regular accounts 238.255
Credits to regular accounts when earnings less than assumed interest rate 238.260
Variable Annuity Account 238.265
Withdrawal of member account 238.270
Transfer of member account to other public employee retirement system 238.280
Eligibility for retirement 238.285
Verification of retirement data 238.300
Service retirement allowance 238.305
Optional service retirement allowance calculations 238.310
Minimum service retirement allowance 238.315
Lump sum payment in lieu of small allowance 238.320
Disability retirement allowance 238.325
Optional disability retirement allowance calculations 238.330
Minimum disability retirement allowance 238.335
Medical examination for disability retirement allowance 238.340
Return to work 238.345
Optional service-connected disability retirement allowance for police officers and firefighters 238.350
Use of unused leave to increase retirement allowance 238.355
Computation of unused sick leave for community college employees 238.360
Cost-of-living adjustments 238.361
Consumer price index for calculation of cost of living adjustments 238.362
Increased benefits payable in compensation for certain damages attributable to taxation of benefits 238.364
Calculation of increased benefit payable under ORS 238.362 238.366
Retirement allowance increase based on years of service 238.368
Retirement allowance increases for members who retired before January 1, 1991 238.372
Increased benefits not payable to nonresidents 238.374
Applicant’s statement 238.376
Nonresidency after benefits commenced 238.378
Information from Department of Revenue 238.382
Statements constitute declaration under penalty of perjury 238.384
Rules 238.390
Death benefit 238.395
Additional death benefit 238.400
Payment upon death of retired member who dies before making election of retirement benefits 238.405
Death benefit payable to survivors of certain police officers or firefighters 238.407
Distribution of death benefit as rollover distribution 238.410
Board may contract for insurance for retirees 238.415
Payment toward cost of pre-Medicare insurance 238.420
Payment toward cost of Medicare supplemental insurance 238.425
Benefits payable to vested inactive member 238.430
Limitation on benefits payable to persons establishing membership on or after January 1, 1996 238.435
Provisions applicable to persons establishing membership on or after January 1, 1996 238.440
Optional purchase of benefit units by police and firefighters 238.442
Prior service credit 238.445
Benefits exempt from execution, bankruptcy and certain taxes 238.447
Execution or assignment of benefits to collect restitution or compensatory fine for felony 238.450
Computation of retirement allowance or benefit 238.455
Estimated benefit payments 238.458
Unclaimed benefits 238.460
Waiver of retirement allowance 238.462
Spousal consent required for certain optional forms of retirement allowance 238.465
Benefits payable to others under certain judgments 238.470
Interest on payments from fund 238.475
Effect of transfer of employee to another participating employer 238.480
Effect of change to calendar year on contributions and credit of members 238.485
Fund established 238.488
Payment of benefits 238.490
Administrative expenses 238.492
Rules for administration of fund 238.500
Definitions for ORS 238.500 to 238.585 238.505
Judges as PERS members 238.515
Contributions 238.525
Compulsory retirement age 238.535
Service retirement allowance 238.538
Health benefit plans for certain retired judge members 238.545
Withdrawal of member account 238.555
Disability retirement allowance 238.565
Judge’s beneficiaries 238.575
Cost-of-living adjustments 238.580
Application of PERS laws to judges 238.585
Use of creditable service by person who serves as both member and judge member 238.600
System established 238.601
Legislative findings and intent 238.605
Actuarial report on system 238.606
Independent review of actuarial report on system 238.607
Actuarial equivalency factor tables 238.608
Separate actuarial equivalency factor tables for certain police officers and firefighters 238.610
Administrative expenses of system 238.615
Revolving fund for payment of administrative expenses 238.618
Exclusion of employer or employee from system to maintain tax qualification 238.622
Report on changes to actuarial methods and assumptions 238.630
Board generally 238.635
Board consideration of system goals and objectives 238.640
Qualifications of board members 238.645
Director and staff 238.646
Authority of Director of Public Employees Retirement System to require fingerprints 238.650
Rules of board 238.655
Procedure for board hearings 238.657
Board counsel 238.660
Fund generally 238.661
Moneys in fund appropriated to board 238.665
Contributions and interest not included in board’s budget 238.670
Reserve accounts in fund 238.671
Proposal to legislative review agency for crediting of interest or income 238.672
Crediting of earnings to employer upon death or retirement of member 238.675
Transfer of unclaimed death benefit or account balance to other account or reserve 238.680
Integration of other retirement systems 238.685
Method of payment of unfunded obligation under integration contract 238.690
Integration of retirement plan of mass transit district 238.692
Definitions for ORS 238.692 to 238.698 238.694
Certain public bodies authorized to issue bonds to finance pension liabilities 238.695
Intergovernmental agreements for collective issuance, administration or payment of bonds 238.696
Debt service trust fund 238.697
Requirements for issuance of bonds 238.698
Funds diversion agreement 238.700
Enforcement of requirements of ORS chapters 238 and 238A 238.705
State departments to remit contributions and furnish reports 238.710
Mandamus against defaulting employer 238.715
Recovery of overpayments 238.720
Rollover contributions 238.730
Unfunded Actuarial Liability Resolution Program 238.750
Short title
Green check means up to date. Up to date

Current through early 2024

§ 238.305’s source at oregon​.gov