OAR 459-007-0090: Crediting Earnings upon Tier One Service Retirement, Two or More Installment Payments

Notwithstanding OAR 459-007-0070, if a Tier One member retires and elects to receive installment payments under ORS 238.305(4), earnings shall be credited from the effective date of the last annual rate to the date of distribution of the final installment payment in the manner specified in this rule. (1) Regular account. Earnings shall be credited to the member’s regular account as follows: (a) Prior year earnings. If earnings for the calendar year before the effective retirement date have not yet been credited, earnings shall be credited for that year based on the latest year-to-date calculation available for that year. (b) Retirement year earnings. Earnings for the calendar year of the effective retirement date shall be based on the latest year-to-date calculation as of the effective retirement date. (2) Variable account. If the member is participating in the Variable Annuity Account, earnings or losses shall be applied to the member’s variable account as follows: (a) Prior year earnings. If earnings or losses for the calendar year before the effective retirement date have not yet been credited to the member’s variable account, earnings or losses for that year shall be credited based on the latest year-to-date calculation available for that year. (b) Retirement year earnings. Earnings or losses for the calendar year of the effective retirement date shall be credited based on the latest year-to-date calculation as of the effective retirement date. (c) In accordance with ORS 238.305(4)(a)(F), after crediting earnings or losses as provided in subsections (a) and (b) of this section, and before the distribution of the first installment, the adjusted balance of the member’s variable account shall be transferred to the member’s regular account as of the effective retirement date. (3) Initial installment. Earnings shall be credited to the initial installment as follows: (a) If the initial installment is distributed in the same year as the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from the effective retirement date to the date of distribution of the initial installment. (b) If the initial installment is distributed in the year following the effective retirement date, earnings shall be paid with the initial installment based on the average annualized rate prorated from January 1 of the year following the effective retirement date to the date of distribution of the initial installment. (4) Annual earnings — initial year. Earnings from the effective retirement date to December 31 of the year of retirement shall be credited to the member’s regular account in the following amount: (a) The member’s regular account balance as of December 31 of the year of retirement, excluding the remaining earnings credited to the member’s regular account under subsection (1)(b) of this rule and to the member’s variable account under subsection (2)(b) of this rule; multiplied by (b) The annual rate for that year less the latest year-to-date calculation as of the effective retirement date. (5) Annual earnings — subsequent years. Earnings shall be credited to the member’s regular account as of December 31 of each calendar year subsequent to the effective retirement date in the manner specified in this section. (a) Earnings from January 1 to the date of distribution of the annual installment shall be credited in the following amount: (A) The member’s regular account balance as of the date of distribution of the annual installment; multiplied by (B) The latest year-to-date calculation as of the date of distribution. (b) Earnings from the date of distribution of the annual installment to December 31 shall be credited in the following amount: (A) The member’s regular account balance as of December 31; multiplied by (B) The latest year-to-date calculation as of the date of distribution. (6) Final installment. The final installment shall include the remaining balance of the member’s regular account as of the date of distribution of the final installment, plus earnings credited as follows: (a) If earnings for the calendar year before the year of the final installment have not yet been credited to the member’s regular account, earnings shall be credited based on the latest year-to-date calculation available for that year. (b) Earnings for the calendar year of the final installment shall be credited based on the latest year-to-date calculation as of the date of distribution of the final installment. (7) The provisions of this rule shall be applied retroactively to April 1, 2004.