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 26, 2004

From: Denise Yunker, Retirement Committee

OUS Human Resources Division

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

Issue

Inclusion of indirect contributions in ORP contribution rates with continued coupling to PERS Total Employer Contribution Rate

Proposal Summary

Amend ORS 243.800(8) and (9) to acknowledge contribution payments other than those made directly to PERS, as in debt service payments on bond issues.

Policy Implications

If PERS and ORP contributions continue to be coupled, this amendment is necessary to allow contributions for PERS and ORP participants to comply with ORS 243.800(9). Currently, PERS employer contribution rates plus debt service exceed the ORP contribution rate based on the amortized bond issue payments. Current provisions are the closest approximation of equal rates permitted under statute.

Proposal Language

ORS 243.800

(8) An employee participating in the optional retirement plan authorized by this section shall contribute monthly an amount equal to the percentage of the employee’s salary that the employee would otherwise have contributed under ORS 238.200 and 238A.330 to the Public Employees Retirement System if the employee had not elected to participate in the optional retirement plan.

(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 percentage of salary that would otherwise have been contributed as an employer contribution on behalf of the employee under ORS 238.225 and 238A.220 to the Public Employees Retirement System if the employee had not elected to participate in the optional retirement plan.

Fiscal Impact

Variable, depending on cost of bond debt service compared to actuarially determined amortized payments transferred from the PERS lump sum side account to employer contribution accounts.

Legal Review

Pending