April 15, 2005 Legislative Highlights (67k )

The Senate Rules Committee this week held a public hearing on a series of bills related to the Public Employee Retirement System (PERS).

Several of the bills addressed the “break-in-service” change enacted by the 2003 Legislature for Tier 1 and Tier 2 PERS members. A “break-in-service” occurs when a member is not employed by a PERS-covered employer for longer than six months (with some exceptions). When that employee returns to work, he or she is no longer a Tier 1 or Tier 2 member, but earns benefits in the new Oregon Public Service Retirement Plan (OPSRP) created by the 2003 Legislature.

Public employee unions have argued that in certain circumstances this is unfair to employees.

Testifying on behalf of public employers, OSBA Senior Legislative Advocate Jim Green told the committee, “Public employers believe that there are certain instances where employees were treated unfairly due to the break-in-service issue and we believe those ought to rectified. However, we do not support all the bills before the committee on this issue. Employer contribution rates for school districts are expected to double in the next four years and costs of the system would go up if all these bills were enacted.”

OSBA and public employers support SB 105 which would eliminate the “break-in-service” rule for employees who leave work due to work-related injuries. The bill would also eliminate this practice for employees whose break-in-service was already in effect when the change began on Aug. 29, 2003. “We believe it is only fair for these employees not to have their retirement status changed,” Green added.

The other bill public employers support would eliminate the “break-in-service” for seasonal employees who return within 12 months to their employer. SB 188 would ensure that seasonal workers who stay with the same public employer do not get “bumped” into OPSRP. The bill attempts to correct this issue for Oregon Department of Forestry staff who fight wildfires and for seasonal employees of the Oregon Parks and Recreation Department.

Other PERS bills

The committee also heard testimony from public employee unions on several other PERS related bills.

“While OSBA supports portions of these bills, other provisions would drive up costs. However both parties have agreed to work on compromises,” Green said, noting Committee Chair Sen. Kate Brown (D-Portland) asked employer groups and employee unions to “discuss these bills and return to the committee in a timely fashion.”

The bills included:

• SB 1019 – Makes additional changes to “break-in-service”;
• SB 1020 – Allows an OPSRP retiree to continue receiving OPSRP pension while re-employed by a public employer;
• SB 1021 – Requires the PERS Board to credit community college teachers with hours of service in PERS based on the number of credit hours taught; 
• SB 1022 – Requires PERS Board to begin paying death benefit for OPSRP members on the date of death of the OPSRP member;
• SB 1023 – Allows PERS members to not have a “break-in-service” if the member leaves employment with a PERS-covered employer for up to two years if the employee and employer have a written agreement that the employee will return to work; and
• SB 1024 – Modifies the definition of “final average salary” used to compute retirement pensions.