Office of the Chancellor

Human Resources Div.

P.O. Box 3175

Eugene, OR 97403-0175

Fax: (541) 346-5783

Phone: (541) 346-5766

http://www.ous.edu

Date: May 20, 2004

From: Denise Yunker, Retirement Committee

OUS Human Resources Division

Re: 2005 Legislative Concept to Amend the Optional Retirement Plan (ORP) Authorizing Statute

Issue

Adopt the normal cost rate for PERS and OPSRP.

Proposal Summary

Adopts a level percentage of pay that, if paid from date of entry, provides the projected retirement benefit. The normal cost rate is the “true cost” of benefits, unaltered by defined benefit plan balancing contributions.

Policy Implications

A fixed ORP employer contribution rate that varies from a PERS’ total employer contribution rate creates variations in total compensation and budget planning.

Proposal Language

ORS 243.800(9)

(9) The State Board of Higher Education shall contribute monthly to the optional retirement plan authorized under this section the percentage of salary of each employee participating in the plan equal to the normal cost rate for PERS and OPSRP pension benefits percentage of salary that would otherwise have been contributed as an employer contribution on behalf of the employee for PERS or OPSRP pension benefits as a contribution to the Public Employees Retirement System pension plan or Oregon Public Service Retirement Plan pension to the Public Employees Retirement System if the employee had not elected to participate in the optional retirement plan.

Fiscal Impact

Undetermined

Legal Review

Pending