OAR 459-013-0280: Calculation of Variable Match

This rule will be used to determine the member’s retirement allowance under the Money Match method provided for in ORS 238.300(2)(b)(A) for members that are subject to the variable annuity adjustment provided under ORS 238.260(12). To calculate these members’ retirement allowance, the following process will be used: (1) Annuity Calculation. The balance in the member’s regular account will be combined with a projected balance based on what the member’s variable account balance would have been had the member’s contributions to the variable account been made to the regular account instead. If the member chooses a retirement allowance that includes an annuity, this combined balance will be converted to an annuity using the appropriate actuarial equivalency factor to determine that annuity. (2) Pension Calculation. The pension provided for in ORS 238.300(2)(b)(A) will be determined by applying an actuarial equivalency factor to the combined balance determined in accordance with section (1). (3) Variable Adjustment. The retirement allowance calculated under sections (1) and (2), as applicable, will be increased or decreased by applying an actuarial equivalency factor to the difference between the actual balance in the member’s variable account on their effective retirement date and the projected balance determined under section (1) above. (4) The provisions of this rule only apply to members who participated in the variable account program by making contributions to their variable account on or after January 1, 1982. The adjustment provided for by ORS 238.260(12) and this rule will apply only to those contributions and associated earnings after that date. (5) In determining “the portion of the annuity payable from the Variable Annuity Account” as required by ORS 238.260(10) and (11), all of the member’s variable account will be included, including the portion that is included in calculating the variable adjustment at retirement specified in ORS 238.260(12). (6) The method described in this rule to calculate a member’s allowance will also be followed to calculate the “look-back” benefit as described in section 4 of chapter 68, Oregon Laws 2003 (HB 2004). The difference in value between the member’s variable and what those contributions would have earned in the regular account as of June 30, 2003 will be used as the basis for the “look-back” comparison. (7) If a member who has a variable account elects to transfer that account balance to the regular account under ORS 238.260(14), the difference between the amount in the variable account (subject to the limitations in section (4) of this rule) and what that portion of the variable account would have been had the member instead invested solely in the regular account shall be determined as of the date of the transfer. That difference will be applied to the member’s regular account as described in section (1) of this rule and also pursuant to ORS 238.260(12)(b) or (c) to increase or decrease the member’s retirement allowance. (8) The provisions of this rule are effective July 1, 2004. [ED. NOTE: Example referenced is available from the agency.]