Or. Admin. Code § 459-009-0084 - Employer Unfunded Actuarial Liability Lump-Sum Payments With an Actuarial Calculation
The words and phrases used in this rule have the same meaning given them in OAR 459-009-0086.
(1) An actuarial calculation is required
before an employer may make a UAL lump-sum payment if the employer:
(a) Has a transition liability;
(b) Intends to establish a new side account
with a new employer contribution rate as of a date specified by the
employer;
(c) Has requested an
actuarial calculation where a calculation is not otherwise required;
or
(d) Intends to make a UAL
lump-sum payment as specified in OAR
459-009-0086(9).
(2) At least 45 calendar days
before the date the employer intends to make a UAL lump-sum payment with an
actuarial calculation, the employer must notify PERS Actuarial Services in
writing that it intends to make such a UAL lump-sum payment. The notification
must specify:
(a) The amount of the intended
lump-sum payment;
(b) Whether it is
a lump-sum payment pursuant to OAR
459-009-0086(9),
and if so:
(i) The amortization period
elected, and
(ii) The year the
employer rate offset is to begin;
(c) At least one potential date for the
payment; and
(d) If the employer so
elects, a specific effective date for the contribution rate change resulting
from the UAL lump-sum payment, such date must be the first of any month
following the employer's intended payment date but may not be more than 12
months after the employer's intended payment date, except for UAL lump-sum
payments made pursuant to
459-009-0086(9).
(3) PERS staff must notify the
employer within five business days of receipt of a notification in section (2)
of this rule if the notification is incomplete or the process cannot be
completed by the earliest intended date of the UAL lump-sum payment.
(4) The PERS consulting actuary must provide
an invoice charging the employer for the cost of the UAL calculation requested
by the employer. At least 30 calendar days before the date the employer intends
to make a UAL lump-sum payment, the employer must remit payment for the cost of
the UAL calculation directly to the PERS consulting actuary according to the
instructions on the invoice. Failure to remit payment according to the terms of
this section may result in the PERS consulting actuary not completing the
employer's UAL calculation by the proposed UAL lump-sum payment date.
(5) Upon receipt of notification that an
employer has made payment in full for the requested UAL calculation, PERS staff
shall request that the PERS consulting actuary calculate:
(a) For an employer participating in an
employer actuarial pool, 100 percent of the employer's share of the UAL for the
employer actuarial pool. This calculation will be:
(A) Based on the fair value UAL of the
employer actuarial pool, from the most recent actuarial valuation;
(B) Based on the employer's covered salary,
as a proportion of the pool, as reported in the most recent actuarial
valuation; and
(C) Adjusted to
reflect the effect of time from the most recent actuarial valuation to the
intended date(s) of payment, using generally recognized and accepted actuarial
principles and practices.
(b) For an employer not participating in an
employer actuarial pool, 100 percent of the individual employer's UAL. This
calculation will be:
(A) Based on the fair
value UAL of the individual employer, from the most recent actuarial valuation;
and
(B) Adjusted to reflect the
effect of time from the most recent actuarial valuation to the intended date(s)
of payment, using generally recognized and accepted actuarial principles and
practices.
(c) For a UAL
lump-sum payment to establish a new side account, the effect of the following
UAL lump-sum payment amounts on the individual employer's contribution rates
using the information specified by the employer in its notification in section
(2) of this rule:
(A) 100 percent of the
individual employer's UAL calculated in subsection (5)(a) or (b) of this
rule;
(B) The UAL lump-sum payment
amount(s) specified by the employer in its notification, if provided;
and
(C) The minimum amount of the
UAL lump-sum payment, if any.
(d) For a UAL lump-sum payment as specified
in OAR 459-009-0086(9),
the maximum lump-sum payment amount that will not result in a contribution rate
of less than 0.00%, if the amount of the intended lump-sum payment specified by
the employer in subsection (2)(a) of this rule would in effect result in a
surplus lump-sum payment as defined under OAR
459-009-0090(1)(g).
(e) For a UAL lump-sum payment into an
existing side account, the estimated effect of the additional deposit on the
individual employer's contribution rates effective July 1 of the year following
publication of the actuarial valuation for the year in which the additional
deposit is made.
(6)
PERS staff must notify the employer in writing of the results of the individual
employer's calculation in section (5) of this rule otherwise designated by the
employer under subsection (2)(c) of this rule. In addition, PERS must send the
employer a notification describing risks and uncertainties associated with the
calculation of the individual employer's UAL if such notification has not
already been provided.
(7) The
employer must notify PERS Actuarial Services in writing at least three business
days before making a UAL lump-sum payment. This notification shall be in
addition to the notification in section (2) of this rule and must specify:
(a) The amount of the payment;
(b) The date the employer intends to make the
payment;
(c) Whether the payment is
to establish a new side account or to be deposited into an existing side
account; and
(d) If the payment is
to be deposited into an existing side account and the employer has more than
one side account, which side account is to receive the deposit.
(8) For a UAL lump-sum payment to
establish a new side account, PERS must receive the correct funds no later than
five business days after the intended date of the UAL lump-sum payment
specified by the employer in the notification described in section (7) of this
rule in order to adjust the employer contribution rate to that reported by PERS
in section (6) of this rule.
(a) If the UAL
lump-sum payment is received by PERS on or before the intended payment date
specified in the notification described in section (7) of this rule or within
the five business days following the intended payment date, the new employer
contribution rate shall be effective for payrolls dated on or after:
(A) The first of the month following receipt
of the UAL lump-sum payment by PERS; or
(B) The date specified by the employer in
subsection (2)(c) of this rule, whichever is later.
(b) If the UAL lump-sum payment is received
by PERS more than five business days after the intended payment date, the
employer's contribution rate shall be adjusted based on the next actuarial
valuation after the date of receipt of the UAL lump-sum payment and effective
July 1 of the year following publication of that valuation.
(c) If the UAL lump-sum payment received is
other than any amount specified in the notification under section (7) of this
rule, the employer's contribution rate shall be adjusted to the rate the
payment amount fully funds using the actuarial calculation in subsection (5)(c)
of this rule.
(d) If the UAL
lump-sum payment received is less than the minimum amount described in OAR
459-009-0086, the payment will
be returned to the employer and no adjustment will be made to the employer
contribution rate.
(9)
When an employer makes a UAL lump-sum payment into an existing side account:
(a) The final rate adjustment from the
additional UAL lump-sum payment(s) will be calculated in the actuarial
valuation for the year in which the payment is made, and will be effective on
July 1 of the year following publication of that valuation.
(b) The calculation in subsection (a) of this
section will supersede any estimate provided in an actuarial calculation under
subsection (5)(d) of this rule.
(10) Nothing in this rule shall be construed
to prevent the Board from:
(a) Adjusting
employer contribution rates based upon the date of receipt of funds or errors
in the notification described in section (7) of this rule; or
(b) Taking action pursuant to ORS
238.225.
Notes
Statutory/Other Authority: ORS 238.650
Statutes/Other Implemented: ORS 238.225 - 238.229
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