OAR 459-005-0535
Annual Benefit Limitation

(1)

Applicable Law. This administrative rule shall be construed consistently with the requirements of the Internal Revenue Code (IRC) Section 415(b) and the Treasury regulations and Internal Revenue Service rulings and other interpretation issued thereunder.

(2)

Annual Benefit Limitation. The benefits payable to any member for a calendar year, when expressed as an annual benefit, shall not exceed the applicable dollar limitation for that year.

(3)

Applicable Dollar Limitation. For purposes of this rule, the “applicable dollar limitation” for each calendar year is the limitation in effect under IRC Section 415(b)(1)(A), with the adjustment described as follows:
(a) Cost-of-Living Adjustments. The limitation under IRC Section 415(b)(1)(A) shall be adjusted for cost of living in accordance with IRC Section 415(d) and Treasury Regulation Section 1.415 (Powers and duties of commission)(a)-1(d)(3)(v)(C). The adjustment applies to the applicable dollar limitation for years:
(A) Between separation and retirement of a member; and
(B) After the member’s effective retirement date.

(b)

Reduction for Retirement Before Age 62. Except as otherwise provided in the paragraphs (A), (B), and (C) of this subsection, if the member’s benefit begins before the member reaches 62 years of age, the applicable dollar limitation shall be adjusted as provided for in IRC Section 415(b)(2)(C).

(A)

This reduction shall not apply to any member who has at least 15 years of creditable service as a full-time employee of a police department or fire department which is organized and operated by the state or a political subdivision of the state to provide police protection, firefighting services, or emergency medical services for any area within the jurisdiction of the state or political subdivision.

(B)

This reduction shall not apply to disability retirement allowances or death benefits.

(C)

This reduction shall not apply to any portion of a member’s annual benefit that is derived from contributions to purchase service credit, as defined in OAR 459-005-0540 (Permissive Service Credit), Permissive Service Credit.

(c)

Reduction for Less than 10 Years of Membership. Except as provided in paragraphs (A) and (B) of this subsection, if the member has less than 10 years of active membership in PERS, the applicable dollar limitation shall be reduced as provided for under IRC Section 415(b)(5)(A).

(A)

For the purposes of this section, a member with less than one year of active membership shall be treated as having one year of active membership.

(B)

The reduction under this section shall not apply to disability retirement allowances or death benefits.

(d)

Increase for Retirement After Age 65. If the member’s benefit begins after the member reaches 65 years of age, the applicable dollar limitation shall be increased as provided for under IRC Section 415(b)(2)(D).

(4)

Annual Benefit. For purposes of this rule, the “annual benefit” is the benefit payable to a member under ORS Chapter 238 (Public Employees Retirement System) and the pension program under Chapter 238A for a calendar year, excluding any benefit payable under 238.485 (Fund established) through 238.492 (Rules for administration of fund), and adjusted as described in this section.

(a)

Excludable Benefits. The annual benefit shall not include the portion of the member’s benefit that is attributable to:

(A)

After-tax member contributions, other than member payments to purchase permissive service credit as defined in OAR 459-005-0540 (Permissive Service Credit), Permissive Service Credit;

(B)

Rollover contributions, if such contributions are permitted;

(C)

A transfer of assets from another qualified retirement plan; and

(D)

Purchases of permissive service credit, as defined in OAR 459-005-0540 (Permissive Service Credit), Permissive Service Credit, if all of the member’s payments to purchase permissive service credit are treated as annual additions for purposes of 459-005-0545 (Annual Addition Limitation), Annual Addition Limitation, in the year purchased.

(b)

Adjustment to Straight Life Annuity. The member’s benefit shall be adjusted to an actuarially equivalent straight life annuity beginning at the same age. For purposes of this adjustment, the following values are not taken into account:

(A)

The value of a qualified spouse joint and survivor annuity to the extent that the value exceeds the sum of the value of a straight life annuity beginning on the same day, and the value of any post-retirement death benefits that would be payable even if the annuity was not in the form of a joint survivor annuity.

(B)

The value of benefits that are not directly related to retirement benefits, such as pre-retirement disability benefits and post-retirement medical benefits.

(C)

The value of post-retirement cost of living increases, to the extent they do not exceed the increase provided under IRC Section 415(d) and Treasury Regulation Section 1.415 (Powers and duties of commission)(d)-1.

(5)

Interest Rates. The following interest rates shall apply for purposes of adjusting the applicable dollar limitation under section (3) of this rule and the annual benefit under section (4) of this rule.

(a)

For purposes of reducing the applicable dollar limitation for retirement before 62 years of age under subsection (3)(b) of this rule, the interest rate shall be the greater of five percent or PERS’ assumed earnings rate.

(b)

For purposes of determining the portion of a member’s benefits attributable to after-tax member contributions under paragraph (4)(a)(A) of this rule, the interest rate shall be the greater of 5 percent or the PERS’ assumed earnings rate.

(c)

For purposes of adjusting the member’s annual benefits under section (4) of this rule (other than the adjustment for after-tax member contributions), the interest rate shall be the greater of five percent or PERS’ assumed earnings rate.

(d)

For purposes of increasing the applicable dollar limitation for retirement after 65 years of age under subsection (3)(d) of this rule, the interest rate shall be the lesser of five percent or PERS’ assumed earnings rate.

(6)

Mortality Table. For purposes of adjusting the applicable dollar limitation and annual benefit under sections (3) and (4) of this rule, the mortality table used shall be the table prescribed pursuant to the Internal Revenue Code.

(7)

The provisions of this rule are effective on January 1, 2004.

Source: Rule 459-005-0535 — Annual Benefit Limitation, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=459-005-0535.

459‑005‑0001
Definitions, Generally 459‑005‑0005
Amendments to Retirement Law 459‑005‑0010
Public Employees Retirement Fund, A Trust 459‑005‑0025
Student Employee 459‑005‑0030
Payments of Sums to Persons Entitled Thereto 459‑005‑0040
Verification of Retirement Data 459‑005‑0055
Actuarial Equivalency Factors 459‑005‑0060
Standards for the Adoption of New Actuarial Equivalency Factors 459‑005‑0100
Definitions — Member’s Fiduciary 459‑005‑0110
Fiduciary Document Requirements 459‑005‑0130
Termination of Member’s Fiduciary 459‑005‑0140
Permissible Actions Under A Fiduciary Document 459‑005‑0150
Effective Date of Fiduciary Document Rules 459‑005‑0180
Incapacity of Members, Beneficiaries, and Alternate Payees 459‑005‑0210
Transmittal of Reports and Documents 459‑005‑0215
Transmittal of Remittances or Payments 459‑005‑0220
Receipt Date for Reports, Documents, Remittances, Payments, Data, and Requests 459‑005‑0225
Requirement to Make Payments by Electronic Funds Transfer 459‑005‑0250
Recovery of Administrative Costs 459‑005‑0260
Accounts Receivable — Fraud 459‑005‑0300
Post-Doctoral Scholar 459‑005‑0310
Date of Participation and Transfer of Employee Funds to the Optional Retirement Plan 459‑005‑0350
Membership Status of Persons in Concurrent Employment Eligible to Participate in an Optional or Alternative Retirement Plan 459‑005‑0370
Date of Participation and Transfer of Employee Funds to an Alternative Retirement Plan — OHSU 459‑005‑0400
General Applicability of Attorney General’s Model Public Contract Rules 459‑005‑0506
Plan Compliance with Federal Statutes and Regulations 459‑005‑0510
Cost-of-Living Adjustment 459‑005‑0525
Ceiling on Compensation for Purposes of Contributions and Benefits 459‑005‑0530
Limitation for Employers with Multiple Retirement Plans — for Contributions and Distributions Before January 1, 2000 459‑005‑0535
Annual Benefit Limitation 459‑005‑0540
Permissive Service Credit 459‑005‑0545
Annual Addition Limitation 459‑005‑0560
Required Minimum Distributions, Generally 459‑005‑0580
Trustee-to-Trustee Transfers 459‑005‑0590
General Provisions and Applicability Date — Direct Rollovers 459‑005‑0591
Definitions — Direct Rollovers 459‑005‑0595
Limitations — Direct Rollovers 459‑005‑0599
Election Procedures — Direct Rollovers 459‑005‑0600
Precedence for Pre-Tax and Post-Tax Deductions from Benefit Payment 459‑005‑0605
Reimbursement for Medical Records Requested by PERS 459‑005‑0610
Recovery of Overpayments 459‑005‑0615
Minimum Retroactive Payment 459‑005‑0620
Uncollectible Debt Owed to PERS
Last Updated

Jun. 8, 2021

Rule 459-005-0535’s source at or​.us