OAR 459-007-0530: Crediting Earnings To Employer Lump-Sum Payments

(1) Definitions. For the purposes of this rule: (a) “Allocated Earnings” means the actual investment earnings or losses of the Public Employees Retirement Fund (PERF), apportioned based upon the proportionate size of the side account in relation to the PERF and adjusted for administrative costs as described in ORS 238.229(3). These earnings are exempt from funding requirements of the Contingency or Capital Preservation Reserves. (b) “Amortized Amount” means the amount of a Side Account used to offset contributions due from the employer. (c) “Employer lump-sum payment” means: (A) Any employer payment that is: (i) Not regularly scheduled; (ii) Not paid as a percentage of salary; (iii) Paid at the employer’s election instead of at the PERS Board’s direction; and (B) Any payment deposited into a side account for the benefit of an employer. (d) “UAL factor” means the monthly or annual rate based upon allocated side account earnings. (2) Subject to ORS 238.229(4), the employer lump-sum payment shall first be applied to liabilities attributable to creditable service by employees of the employer before the employer was grouped with other public employers. Earnings on these amounts shall be credited based on the following: (a) For the month in which the employer lump-sum payment is received, earnings shall be credited based on the average annualized rate, prorated for the number of days from date of receipt to the end of the month. (b) For the remainder of the year, the employer lump-sum payment shall receive earnings based on the difference between the final Tier Two annual earnings rate and the Tier Two earnings rate in effect as of the first of the month after receipt of the payment. (c) In subsequent calendar years, earnings or losses shall be credited to the employer lump-sum payment in accordance with OAR 459-007-0005(14). (3) Earnings on an employer lump-sum payment held in a separate Side Account shall be credited to the Side Account based on the following: (a) For the month in which the employer lump-sum payment is received, earnings shall be credited based on the average annualized rate, prorated for the number of days from date of receipt to the end of the month. (b) For the remainder of the year, the employer lump-sum payment shall receive earnings based on the difference between the annual UAL factor and the UAL factor in effect as of the first of the month after receipt of the payment. (4)(a) Amortized amounts to be applied to the Employer Contribution Account shall receive earnings or losses based on the UAL factor, effective as of the first of the calendar month following the date of the application of the amortized amount. (b) In subsequent calendar years, earnings shall be credited to the remaining balance of the employer’s side account created when the lump-sum payment was received on an annual basis in accordance with OAR 459-007-0005(4). (5) The provisions of this rule are effective on January 1, 2008.