NEW PERS RULES FOR-EQUAL-TO-OR-BETTER PLANS BEING WRITTEN

 

In 1973 the Oregon legislature provided that fire fighters and police officers were entitled either to be a member in PERS or alternatively be a member in a pension plan which was equal to or better than PERS. Over the years most of the fire departments around the state have become members of PERS but a few departments still have private plans that are outside of the PERS system. The 2007 Legislature made two significant changes to the equal-to-or-better-than statute.

 

 The first change is that the default position for employers who do not provide equal-to-or-better-plans is no longer mandatory participation in PERS.   At the inception of the equal-to-or-better-than requirements, requiring an employer who did not meet the test to integrate into PERS made good sense. However with the development of multiple PERS tiers, integration into PERS which can only be done on a prospective basis, no longer provided an adequate remedy to those firefighters and police officers whose plans were not deemed to be sufficient. In fact when we last reviewed the rules on equal-to-or-better-than (ETOB) it became clear that forcing participation in PERS could actually be harmful to the firefighters whose plans were no longer sufficient to meet the test. The new statute avoids the problem by eliminating integration into PERS as the default and now requiring that an employer whose plan is not deemed sufficient is required to make amendments to bring the plan up to sufficiency under the ETOB standard. 

 

The second significant change in the statute is the more specific direction given by the legislature that testing must be done by classes based on the tier that the participant would have been in, had they been a member of PERS.  This will require a fundamental restructuring of the test as the most recent test clearly would not be adequate under this more specific approach.

 

The Oregon State Fire Fighters Council will be following the proposed rule changes and will be attending a hearing on October 23, 2007. The ETOB rules are to go into effect on January 1, 2008.