city of portland answer brief

IN THE SUPREME COURT OF THE STATE OF OREGON

EVERICE MORO; TERRI DOMENIGONI; CHARLES CUSTER; JOHNHAWHINS; MICHAEL ARKEN; EUGENE DITTER; JOHN O'KIEF;

MICHAEL SMITH; LANE JOHNSON; GREG CLOUSER; BRANDONSILENCE; ALISON VICKERY; and JIN VOEK,

PETITIONERS,

v.

STATE OF OREGON; STATE OF OREGON, by and through theDepartment of Corrections; LINN COUNTY; CITY OF PORTLAND;

CITY OF SALEM; TUALATIN VALLEY FIRE. &RESCUE;ESTACADA SCHOOL DISTRICT; OREGON CITY SCHOOL

DISTRICT; ONTARIO SCHOOL DISTRICT; BEAVERTON SCHOOLDISTRICT; WEST LINN SCHOOL DISTRICT; BEND SCHOOLDISTRICT; and PUBLIC EMPLOYEES RETIREMENT BOARD,

RESPONDENTS,

and

LEAGUE OF OREGON CITIES; OREGON SCHOOL BOARDSASSOCIATION; and ASSOCIATION OF OREGON COUNTIES,

INTERVENORS,

and

CENTRAL OREGON IRRIGATION DISTRICT,

INTERVENOR BELOW.

Case No. S061452(Control)

August, 2014

August 25, 2014 11:58 AM

WAYNE STANLEY JONES,

PETITIONER,

v.

PUBLIC EMPLOYEES RETIREMENT BOARD, ELLEN ROSENBLUM,Attorney General; and JOHN A. KITZHABER, Governor,

RESPONDENTS.

Case No. S061431

MICHAEL D. REYNOLDS,

PETITIONER,

►•~

PUBLIC EMPLOYEES RETIREMENT BOARD, State of Oregon; andJOHN A. KITZHABER, Governor, State of Oregon,

RESPONDENTS.

Case No. S061454

GEORGE A. RIEMER,

PETITIONER,

v.

STATE OF OREGON; OREGON GOVERNOR JOHN KITZHABER,OREGON ATTORNEY GENERAL ELLEN ROSENBLUM; OREGON

PUBLIC EMPLOYEES RETIREMENT BOARD; and OREGONPUBLIC EMPLOYEES RETIREMENT SYSTEM,

RESPONDENTS.

Case No. 5061475

August, 2014

GEORGE A. RIEMER,

PETITIONER,

►~~

STATE OF OREGON, OREGON GOVERNOR JOHN KITZHABER,OREGON ATTORNEY GENERAL ELLEN ROSENBLUM; PUBLICEMPLOYEES RETIREMENT BOARD; and PUBLIC EMPLOYEES

RETIREMENT SYSTEM,

RESPONDENTS.

Case No. S061860

RESPONDENT CITY OF PORTLAND'S ANSWERING BRIEFAND EXCERPTS OF RECORD

Appeal from Judicial Review (Original Proceeding)Oregon Laws 2013, Chapter 53 (Senate Bill 822)

Oregon Laws 2013, Chapter 2 (Special Session) (Senate Bi11861)

HARRY AUERBACH, OSB #821830Chief Deputy City AttorneyKENNETH A. McGAIR, OSB #990148Deputy City AttorneyOffice of City Attorney1221 SW Fourth Avenue, Room 430Portland, OR 97204Telephone: (503) 823-4047Facsimile: (503) 823-3089Harrv.Auerbach(a,portlandore~on. o~v

Attorney fog RespondentCity of Portland

GEORGE A RIEMERArizona CJC1501 W. Washington Street, Suite 229Phoenix, AZ 85007Telephone: (623-238-5039Pao Se Petitioner

GREGORY HARTMAN, OSB #741283ARLTNA A. MASIH, OSB #973241Bennett, Hartman, Morris &Kaplan210 SW Morrison Street, Suite 500Portland, OR 97204Telephone: (503) 227-4600Facsimile: (503) 248-6800hartmangz(a~bennetthartman. commasiha(a~bennetthartman.co,

Attorneys fog Petitioners Aiken,Clouser, Custer, Ditte~, Domenigoni,Hawkins, Johnson, Moro, O'Kief,Silience, Smith, Vickery and Dock

August, 2014

ANNA M. JOYCE, OSB #013112Solicitor GeneralKEITH L. KUTLER, OSB #852626Assistant Attorney GeneralNIICHAEL A. GASPER, OSB #062000Assistant Attorney GeneralDepartment of Justice1162 Court Street NESalem, OR 97301Telephone: (503) 378-4402

MATTHEW MERRITT, OSB #122206Assistant Attorney GeneralDepartment of Justice1515 SW 5th Avenue, Suite 410Portland, OR 97201Telephone: (503) 378-4402

Attorneys fog Respondents EllenKosenblum, Public EmployeesRetirement System, John A.Kitzhaber, State of Oregon, PublicEmployees Retirement Board

WAYNE STANLEY JONES18 North Foxhill RoadNorth Salt Lake, UT 84054Telephone: (801) 296-1552Pro Se Petitioner

J. MICHAEL PORTER, OSB #003560Miller Nash LLP111 SW 5th Avenue, Suite 3400Portland, OR 97204Telephone: (503) 205-2330Attorney fog Respondent BeavertonSchool District

EDWARD H. TRONII'KE, OSB #843653Jordan Ramis PC2 Centerpointe Drive, 6th FloorLake Oswego, OR 97035Telephone: (503) 598-7070

Attorney fog Respondent TualatinValley Fire &Rescue

CRAIG CRISPIN, OSB #824852Crispin Employment Lawyers1834 SW 58~' Avenue, Suite 200Portland, OR 97221Telephone: (503) 293-5759

Attorney fog Amicus Curiae, AARP

LISA M. FREILEY, OSB #912763Qregon School Board Association1201 Court Street NEPO Box 1068Salem, OR 97308Telephone: (503) 588-2800

WILLIAM F. GARY, OSB #770325SHARON RUDIVICK, OSB #830835Harrang Long Gary Rudnick PC360 E. 10~' Avenue, Suite 300Eugene, OR 97401Telephone: (51) 485-0220

Attorneys for Respondents BeavertonSchool District, Estacada SchoolDistrict, Oregon City School District,Ontario School District, West LinnSchool District and Bend SchoolDistrict, and fog Intervenor OregonSchool Boards Association andAssociation of Oregon Counties

August, 2014

DAlvIEL B. ATCHISON, OSB #040424KENNETH S. MONTOYA, OSB#064467City Attorney's Office555 Liberty Street SE, Suite 205Salem, OR 97301Telephone: (503) 588-6003

Attorney for Respondent City ofSalem

EUGENE KARANDY II, OSB #972987Office of the Linn County Attorney104 4th SW, Room 123Albany, OR 97321Telephone: (541) 967-3840

ROB BOVETT, OSB #910267Association of Oregon Counties1201 Court Street NE, Suite 300Salem, QR 97301Telephone: (503) 585-8351

AttoNneys fog Respondent LinnCounty

MICHAEL D. REYNOLDSAttorney at Law8012 Sunnyside Avenue N.Seattle, WA 98103Telephone: (206) 910-6568Pro Se Petitioner

SARAH K. DRESCHER, OSB #042762Tedesco Law Group3021 NE BroadwayPortland, OR 97232Telephone: (503) 697-6015Attorney fo~Amicus CuriaeInternational Association of FireFighters

W. MICHAEL GILLETTE, OSB#660458SARA KOBAK, OSB #023495LEORA COLEMAN-FIRE, OSB#113581WILLIAM B. CROW, OSB #610180Schwabe Williamson &Wyatt PC1211 SW 5th Avenue, Suite 1900Portland, OR 97204Telephone: (503) 222-9981

Attorneys for Intervenor League ofOregon Cities

Hon. Stephen K. BushongSpecial MasterMultnomah County Circuit Court1021 SW 4th AvenuePortland, OR 97204

August, 2014

1

TABLE OF CONTENTS

Page

1STATEMENTOFTHE CASE .....................................................................

1. NATURE OF THE PROCEEDING AND THE RELIEF

SOUGHT....................................................................................................1

2. QiJESTIONS PRESENTED ON APPEAL ...............................................2

3. SUMMARY OF THE ARGUMENT .........................................................3

4. STATEMENT OF THE FACTS ................................................................5

ARGUIV~NT ................................................................................................. 6

A. The City Does Not Have A Statutory Contract With Petitioners........ 6

B. There Was No Legislative Promise To Maintain The COLA.......... 10

C. Petitioners Did Not Rely On The COLA .......................................... 13

D. SB 822 and SB 861 Do Not Impair The COLA ............................... 15

E. Pension Benefits Are Not "Wages." ................................................... 16

CONCLUSION............................................................................................ 21

EXCERPTS OF RECORD

APPENDIX

11

TABLE OF AUTHORITIES

Cases Page

Allen v. County of Jackson County,191 Or App 185, 82 Pad 628 (2003) ........................................................ 16, 17

Allen v. County of Jackson,169 Or App 116, 7 P3 d 739 (2001) .......................................................... 16, 17

Eckles v. State,306 Or 380, 760 P2d 846 (1988) .......................................................... 3, 11, 13

ForNester v. City of Hillsboro,156 Or 89, 66 P2d 496 (1937) .......................................................................... 9

Kantor v. Boise Cascade Copp.,75 Or App 698, 708 P2d 356 (1985), rev den, 300 Or 506,713 P2d 1058 (1986) ................................................................................ 17, 18

LaG~ande/Astoria v. PERK,281 Or 137, 576 P2d 1204, adhered to on ~^ehea~ing, 284 Or 173,586 P2d 765 (1978) .......................................................................................... 8

PGE v. SOLI,317 Or 606, 859 P2d 1143 (1993) .................................................................. 17

State ex gel Roberts v. Public Finance Co.,294 Or 713, 662 P2d 330 (1983) .................................................................... 13

State v. Cochran,55 Or 157, 104 P 884 (1909) .......................................................................... 11

Stovall v. State,324 Or 92, 922 P2d 646 (1996) ................................................................ 7, 8, 9

Stunk v. PERK,341 Or 175, 139 Pad 956 (2006) .................................................................... 20

Stunk v. PERS,338 Or 145, 108 Pad 1058 (2005) .................................................................. 16

Taylor v. Multnomah County Sheriff's Retirement Board,265 Or 445, 510 P2d 339 (1973) ................................................................ 7, 14

111

Walker v. American Optical Corp.,265 Or 327, 509 P2d 439 (1973) ...................................................:................ 17

Winklebleck v. City of Portland,147 Or 226 31 P2d 637 1934 .................... 9

Constitutional Provisions

Oregon Constitution, Article III, section 1 ........................................................ 11

Oregon Constitution, Article XI, section 2 ...................................................... 7, 8

Statutes

ORS 23 8.3 60 (2011) ................................................................................. 3, 5, 15

ORS 23 8A.210 (2011) .............................................................................. 3, 6, 15

ORS 238A.400 ......................................:............................................................ 16

ORS Chapter 652 .................:............................................................................. 20

ORS 652.110 to 652.200 .................................................................................... 21

ORS652.120 ...................................................................................................... 16

ORS652.140 .......................................................................................... 17, 18, 19

ORS652.190 ................................................................................................ 18, 19

ORS652.200 .................................................................................................. 1, 17

ORS 652.200(2) ...................................................................:........... 16, 17, 18, 19

ORS652.610(3) ................................................................................................. 17

ORS 652.615 ...................................................................................................... 16

ORS656.200(2) ......................................................................................... 2, 4, 21

Oregon Laws 1971, chapter 738, section 11 ....:................................................. 12

Oregon Laws 1973, chapter 695, section 1 ........................................................ 13

Oregon Laws 2013 (Special Session), chapter 2 ................................................. 1.

1V

Oregon Laws 2013, chapter 53 ............................................................................ 1

Senate Bill 822 ....................................................................... 1, 2, 4, 5, 15, 16, 21

Senate Bill 861 ....................................................................... 1, 2, 4, 5, 15, 16, 21

Other Authorities

Restatement of Contacts § 45 .............................................:......................... 7, 13

Restatement (Second) of Contracts § 45 ........................................................ 7, 13

Restatement (Second) of Contacts § 71(1) ....................................................... 14

Restatement (Second) of Contracts § 71(2) ....................................................... 14

Portland City Charter, Section 8-104 ................................................................... 8

Bureau of Labor Statistics, CPI Detailed Report, Data for February 2014....... 15

STATEMENT OF THE CASE

1. NATURE OF THE PROCEEDING AND THE RELIEF SOUGHT

This is an original proceeding, authorized by the 2013 Legislature,

through Senate Bi11822 and Senate Bi11861. SB 822 and SB 861 made changes

to the COLA and "tax remedy" provisions of the Public Employees Retirement

System (PERS). These consolidated petitions challenge the constitutionality of

SB 822 and SB 861.1

As to the City of Portland, claims are made by one retired employee

(Michael Arken) and one current employee (Jin Voeks).2 Petitioners Arken and

Voeks claim that the changes to the COLA in SB 822 and SB 861 impair the

obligations of contract in violation of the Oregon and United States

constitutions, take their property without compensation in violation of the

Oregon Constitution, and breach their PERS contracts. With respect to their

breach of contract allegations, petitioners style their claim as a wage claim, and

they assert an entitlement to an award of attorney fees under ORS 652.200, and,

alternatively, allege an entitlement to recover their attorney fees under the

"common fund" doctrine.

1 SB 822 and SB 861 were enacted, respectively, by Oregon Laws 2013,chapter 53, and by Oregon Laws 2013 (Special Session), chapter 2. Those actsare set out, infra, at App- l—App-12.

2 The caption of this case lists this petitioner as "Jin Voek," but his affidavitgives his name as "Jin Voeks." PER-7. The City will refer to him by the lattername.

2

Neither Arken nor Voeks, nor any other petitioner, makes any claim

against the City of Portland respecting the "tax remedy" provision of SB 822.

This Court appointed a Special Master, the Honorable Stephen Bushong,

Circuit Judge, who held a hearing and issued a Report, including Proposed

Findings of Fact.

2. QUESTIONS PRESENTED ON APPEAL

With respect to the City of Portland, this case presents the following

questions:

A. Do the COLA provisions of SB 822 and/or SB 861

unconstitutionally impair the obligation of any contract between petitioner

Arken or petitioner Voeks and the City of Portland?

B. Did the City of Portland unconstitutionally take any property of

petitioner Arken or petitioner Voeks through the Oregon Legislature's

enactment of SB 822 and/or SB 861?

C. Did the City of Portland breach any contract it had with either

petitioner Arken or petitioner Voeks when the Oregon Legislature enacted SB

822 andlor SB 861?

D. Are petitioners' claims with respect to the COLA increases to their

pension benefits "wage" claims, for which the Court may award attorney fees

under ORS 656.200(2)?

3

3. SUMMARY OF THE ARGUMENT

Except as more specifically set out in this Brief, the City of Portland

accepts and adopts the arguments in the Briefs filed by the State Respondents,

the County/School District Respondents, and the League of Oregon Cities.

To the extent the PERS statutes evidence a "contract," the obligor on that

contract is the State, and not the City. Petitioners Arken and Voeks have

submitted no evidence that the City of Portland ever promised them that PERS

or anybody else would always increase their retirement benefits by 2% per year.

In any event, the COLA provisions of ORS 238.360 (2011) and

238A.210 (2011) are not contractual obligations, because there is "nothing

indicative of a legislative commitment not to repeal or amend the statutes] in

the future." Eckles v. State, 306 Or 380, 391, 760 P2d 846 (1988). To the

contrary, the Legislature amended the original COLA provision in the very next

session after it first enacted it. Both petitioners Arken and Voeks went to work

for the City and became PERS members after the Legislature enacted and

amended the COLA provision. To the extent that either petitioner relied on the

statutory provision for COLA increases in his ultimate pension benefits at the

time he undertook and performed employment for the City, both petitioners

must be charged with knowing that, as the Legislature had amended these

provisions before they commenced their employment, it retained the authority

to amend them in the future.

0

But there is no evidence that either petitioner was even aware of, much

less that either petitioner relied on, the "promise" of statutory COLA increases

in ultimately earned pension benefits at the time-he undertook or performed

employment on behalf of the City. In the absence of reliance, there is no

bargained for contractual entitlement to COLA increases.

SB 822 and SB 861 did not substantially impair any obligation to pay

COLA increases. Petitioners' arguments and evidence assume that the cost of

living always will increase, and always by at least 2%. But, historically, there

have been extended periods of deflation, and it certainly is foreseeable that, at

some point, the Consumer Price Index could go down. SB 822 and SB 861

eliminate the possibility that such decreases in CPI could cause petitioners'

benefits to be reduced, and provide certain COLA increases, irrespective of any

changes in CPI. Such legislative smoothing of the COLA does not substantially

impair any obligation to pay COLA increases.

Petitioners' claims regarding their current or potential pension benefits

are not "wage" claims, and petitioners are not entitled to attorney fees under

ORS 656.200(2). The decisions of the Oregon Court of Appeals which have

held otherwise are erroneous as a matter of law, because those decisions have

not examined ORS in the context of the rest of the wage claim statute. Read in

proper context, "wages," for purposes of that statute, is limited to payment for

5

services rendered, due during the period of employment, and does not include

pension benefits payable after retirement.

4. STATEMENT OF THE FACTS

The City generally accepts the Statement of the Facts in the State'

Respondents' Answering Brief. As to the claims against the City of Portland,

the facts are:

Petitioner Michael Arken retired from employment with the City of

Portland effective March 1, 2002, with PERS creditable service of 21 years, 10

months. He has a PERS beneficiary, who is projected to outlive him and to live

until 2043. Petitioner Arken submitted an actuarial estimate of the impacts of

SB 822 and SB 861 that assumes that every year, from now through 2043, he or

his beneficiary would be entitled to the maximum 2% COLA provided under

ORS 238.360 (2011). PER-I—PER-6:3

Petitioner Jin Voeks became a member of PERS under the Oregon Public

Service Retirement Program (OPSRP) in 2011. He has a beneficiary, who is

projected to outlive him and to live unti12076. Petitioner Voeks submitted an

actuarial estimate of the effects of SB 822 and SB 861 that assumes that he will

continue to work for the City of Portland for another 22 years, that for each of

3 The City of Portland's Excerpts of Record are cited in this Brief as "PER."The State also submitted estimates for petitioners Arken and Voeks, which hadslightly different assumptions, but which projected benefits payable topetitioner Arken and his beneficiary through 2042, and to petitioner Voeks andhis beneficiary through 2075. PER-17—PER-24.

those 22 years, he will receive a 3.75% pay increase, that he will retire in 2036

(at the age of 53), and that he or his surviving beneficiary would be entitled to

the maximum 2% COLA provided under ORS 238A.210 (2011), every year

from 2037 through 2076. PER-7—PER-16.

Neither petitioner Arken nor petitioner Voeks submitted any evidence

demonstrating: that the City of Portland promised either of them that it would

pay 2% increases in their pension benefits for their lives and/or the lives of their

beneficiaries; that the Oregon Legislature promised them that it would never

amend the method by which COLAs were calculated or paid to PERS retirees

or their beneficiaries; or that either of them knew about or relied on the COLA

provisions when making their decisions to go to work for the City of Portland.

As far as the record discloses, none of those things happened.

ARGUMENT

The City of Portland joins in and adopts the arguments of the State

Respondents, the County/School District Respondents, and the League of

Oregon Cities, except as set out below. The City offers the following additional

argument, specific to the claims of petitioners Arken and Voeks.

A. The City Does Not Have a Statutory Contract with Petitioners.

Before there can be any impairment of a contract or breach of a contract,

there first must be a contract. Petitioners have pointed to no ordinance or

charter provision under which the City of Portland promised to pay them 2%

COLA adjustments every year on their retirement benefits.

To the extent that Stovall v. State, 324 Or 92, 120-25, 922 P2d 646

(1996), held that the City is a promisor of PERS benefits on the basis of its

statutory obligation to fund them, it was wrong, for the fundamental reason that

Stovall failed to identify any charter provision or ordinance by which the City

obligated itself to a particular amount or formula for determination or payment

of individual retirement benefits.

The underpinning of petitioners' claims is that there is a statutory

contract under which they have been promised 2% COLA increases every year

on their PERS benefits. That argument, of course, requires petitioners to

identify some statute that constitutes such a promise. A statutory contract is a

form of unilateral or option contract, under which a legislative body makes an

offer that is accepted by partial performance by the promisee. See Restatement

of Contracts § 45; Restatement (Second) of Contracts § 45; Taylor v.

Multnomah County Sheriff's Retirement Boa~^d, 265 Or 445, 452-53, 510 P2d

339 (1973).

While the PERS statutes may create contractual obligations on the part of

the State—although, for- the reasons set out in the State Respondents', the

County/School District Respondents', and LOC's Briefs and as amplified

below, they did not do so with respect to the COLA—and while, subject to the

home rule provisions of Oregon Constitution, Article XI, section 2,4 those

statutes may impose statutory obligations .on the City of Portland, the

Legislature cannot unilaterally create contractual obligations between the City

of Portland and anybody else.

To the contrary, Section 8-104 of the Charter of the City of Portland

provides, "The City of Portland shall not be bound by any contract nor in any

way liable thereon, unless the same is authorized by an ordinance and made in

writing and signed by some person or persons duly authorized by the Council."

Petitioners have identified no enactment by the City Council of the City of

Portland that promised them a 2% annual COLA increase in their PERS-

mandated pension benefits.

In Stovall, 324 Or at 124, this Court held, "Regardless of the reason that

led local defendants to participate in PERS, local defendants, as participating

PERS employers, themselves promised plaintiffs that plaintiffs would receive,

at a minimum, the retirement compensation provided in the PERS statutes.

4 Oregon Constitution, Article XI, section 2, provides, in pertinent part, "Thelegal voters of every city and town are hereby granted power to enact andamend their municipal charter, subject to the Constitution and criminal laws ofthe State of Oregon." LaGrande/Astoria v. PERK, 281 Or 137, 576 P2d 1204,adhered to on rehearing, 284 Or 173, 586 P2d 765 (1978), establishes that,notwithstanding this constitutional provision, the Legislature may impose uponthe City laws mandating retirement benefits for its employees, but that is a farcry from establishing that the Legislature may bind the City to contracts withoutthe City's consent.

Plaintiffs accepted that term by working for their employers." The Court did

not identify, with respect to the City of Portland, any charter provision,

ordinance, or written agreement by which the City purported to make such a

promise. It appears merely to have inferred the promise from the City's

participation in PERS.

By some feat of jurisprudential legerdemain, Stovall concluded that the

PERS statutes requiring local employers to fund their employees' benefits

created a statutory contract under which local governments were obligated to

pay those benefits to their retired employees, but that those statutes did not

create a statutory contract between PERS and the participating employers,

notwithstanding that it is the Legislature who defines how benefits are

calculated, and that it is PERS who determines both the individual benefits

payable to retirees and the contributions required from participating employers

to fund those benefits, and that it is PERS who makes the actual payments.

But contracts do not appear in a vacuum. There has to be some evidence

of an actual agreement on the part of the purportedly contracting parties.

Oregon law does not permit imposing implied contracts on the City of Portland,

whose charter plainly prohibits them. Fo~~este~ v. City of Hillsboro, 156 Or 89,

66 P2d 496 (1937). Although the Portland City Charter may admit of contracts

formed through "the instrumentality of an offer made by an ordinance and its

acceptance by the performance of the desired act," Winklebleck v. City of

10

Portland, 147 Or 226, 238, 31 P2d 637 (1934), there still needs to be some

ordinance that makes the supposed offer.

Certainly, petitioners in this case have identified no provision of the

Portland City Charter, no ordinance enacted by the City Council, and no

agreement signed by any person authorized by the City Council to bind the City

of Portland to any agreement, by which the City offered to pay COLA increases

on petitioners' pension benefits. While the Legislature may have imposed

statutory duties on the City to fund retirement benefits for public employees,

and may have made statutory provisions for the manner in which those benefits

will be paid to retired public employees, the PERS statutes, by themselves, do

not and cannot create contractual obligations between the City and its current or

retired employees.

There thus is no basis upon which the City can be liable for impairing the

obligations of contract, or for breaching a contract, or on any other basis arising

out of the Legislature's determination of how to calculate and pay COLA

increases for PERS retirees.

B. There Was No Legislative Promise To Maintain the COLA.

Due respect for the separation of powers, mandated in Article III of the

Oregon Constitution, requires this Court to exercise restraint in declaring laws

unconstitutional or in otherwise frustrating the judgment of the Legislature in

11

establishing public policy.5 Thus, this Court must uphold the constitutionality of

legislation unless the constitutional infirmity is "made to appear beyond a

reasonable doubt," State v. Cochran, 55 Or 157, 179, 104 P 884 (1909), and the

Court may not imply the existence of a statutory contract if there is "nothing

indicative of a legislative commitment not to repeal or amend the statute in the

future." Eckles v. State, 306 Or 380, 391, 760 P2d 846 (1988).

The need for such restraint is particularly acute when we are considering

the implications of statutes that can affect the financial obligations of the State

and its political subdivisions for fifty years or longer. For example, petitioner

Voeks was hired by the City of Portland in 2011, does not anticipate retirement

before 2036, and, by his own projection, his beneficiary is likely to live until

2076. Before this Court may determine that the Legislature has bound the

taxpayers of this State and of its subdivisions for so long a time, petitioners

must convince the Court, beyond a reasonable doubt, that the Legislature

intended to make such along-term commitment. This they simply cannot do.

Petitioners have not demonstrated, and the record does not establish,

beyond a reasonable doubt or otherwise, that the Legislature intended to

5 Oregon Constitution, Article III, section 1, provides: "The powers of theGovernment shall be divided into three separate branches, the Legislative, theExecutive, including the administrative, and the Judicial; and no person chargedwith official duties under one of these branches, shall exercise any of thefunctions of another, except as in this Constitution expressly provided."

12

commit never to repeal or amend the statutory provisions relating to COLA

adjustments to pension benefits. Steven Rodeman, the Deputy Director of

PERS, testified that in all the work he did on this issue, both in the Legislature

and in his work for PERS, he did not "come across any piece of paper by which

the legislature promised employees ...that they would not change the method

of calculating and paying COLAs." Tr.151 (PER-28). Matthew Larrabee, the

State's actuary, testified that, in all the work he did before the Legislature and

in preparing for this. litigation, he did not see "any piece of .paper by which the

legislature promised anybody, or in particular [the City's] two plaintiffs Mr.

Arken and Mr. Voeks that they would not change the method by which COLAs

were calculated." Tr. 105 (PER-27).

Not only is there no provision in the statute itself that constitutes a

commitment to maintain a 2% COLA in perpetuity, at the times petitioners

Arken and Voeks commenced their employment with the City of Portland, the

Legislature already had demonstrated that it had reserved the authority to

amend the COLA provisions.

The COLA originally was enacted by Oregon Laws 1971, chapter 73 8,

section 11. The original COLA provided that benefits could increase by as

much as 1.5%per year, or decrease by as much as 1.5%per year, depending on

changes in the Consumer Price Index, although the benefit never could be

reduced below the base amount at which the employee retired. At its very next

13

session, the Legislature amended that provision so that the increase or decrease

could be as much as 2%. Oregon Laws 1973, chapter 695, section 1.

By amending the statute so closely in time to when it first enacted it, the

Legislature demonstrated that it had made no "legislative commitment not to

repeal or amend the statute in the future." Eckles, 306 Or at 391. The 2%

COLA is not a term of any statutory contract.

C. Petitioners Did Not Rely on the COLA.

In order to prevail on a claim for a statutory contract, petitioners also

must prove that they performed "because of the original offer." State ex rel

Roberts v. Public Finance Co., 294 Or 713, 718, 662 P2d 330 (1983). The

original Restatement of Contacts § 45 explained (emphasis added):

If an offer for a unilateral contract is made, and part ofthe consideration requested in the offer is given ortendered by the offeree in response thereto, theofferor is bound by a contract, the duty of immediateperformance of which is conditional on the fullconsideration being given or tendered within the timestated in the offer, or, if no time is stated therein,within a reasonable time.

The Restatement (Second) of Contacts § 45 describes this type of

contract as an option contract, rather than as a unilateral contract:

(1) Where an offer invites an offeree to accept byrendering a performance and does not invite apromissory acceptance, an option contract is createdwhen the offeree tenders or begins the invitedperformance or tenders a beginning of it.

14

(2) The offeror's duty of performance under anyoption contract so created is conditional oncompletion or tender of the invited performance inaccordance with the terms of the offer.

This Court cited both statements of the law with approval in Taylor, 265

Or at 452-53. Restatement (Second) of Contracts § 71(1) explains that "a

performance or return promise must be bargained for," and Restatement

(Second) of Contracts § 71(2) makes clear that a "performance or return

promise is bargained for if it is sought by the promisor in exchange for his

promise and is given by the promise in exchange for that promise."

In other words, in order for the COLA statute to have formed the basis of

a statutory contract, petitioners must prove both that the City or the State sought

to induce them to work for the City in return for agreeing to provide the COLA

increases to the pension benefits they ultimately earned, and that petitioners in

fact went to work for the City in exchange for that COLA promise. This, too,

they wholly have failed to do.

The affidavits of petitioners Arken and Voeks are utterly devoid of any

testimony that they even were aware of, much less that they relied on, the

COLA provisions when they went to work for the City of Portland. Before this

Court can cabin the lawful exercise of the Legislature's constitutional authority,

before it can make the City of Portland answerable for the exercise by the

Legislature of that authority, and before it can irrevocably commit the resources

15

of Oregon taxpayers for the next 30 to 60 years or longer on the basis of a

supposed statutory contract, the Court must insist that petitioners prove the

formation of that contract. This petitioners have not done, and there is no

factual basis for their claim.

D. SB 822 and SB 861 Do Not Impair the COLA.

Petitioners' claims, and their evidence of impact, are based on the

assumption that CPI always will go up, and that they always will be entitled to

the maximum 2% increase provided under the prior statute. While it is true

that, for most of the last century, that has been the economic experience in the

United States, it is not a given. From 1920 through 1939, the country saw a

prolonged recession. In ten of those twenty years, CPI went down. In seven of

those years, it went down by more than 2%. In 1939, CPI was at 65% of what it

had been in 1920. Bureau of Labor Statistics, CPI Detailed Report, Data for

February 2014, http://www.bls.gov/cpi/cpid1402.pdf, at 87 (App-14).

It is eminently foreseeable, however likely it may or may not be, that the

economy could see another prolonged period of recession in our lifetimes.

Under ORS 238.360 (2011) and 238A.210 (2011), prior to their amendment by

SB 822 and SB 861, petitioners, in that event, would have seen reductions in

their pensions. SB 822 and SB 861 eliminated that possibility, because the

Legislature untethered the COLA from CPI, established permanent increases

16

based on the level of benefits, and eliminated the provision for reductions when

CPI goes down.

The actual impact, if any, of SB 822 and SB 861 on petitioners is wholly

speculative, affecting only the potential increase (and, as has been said,

eliminating any potential for decrease) in their benefits, depending on the actual

performance of the economy over the coming years. But SB 822 and SB 861

do not have any impact at all on what this Court has described as the

fundamental PERS statutory promise. Petitioner Arken, who was a PERS

member prior to August 29, 2003, will continue to "receive a service retirement

allowance calculated under the formula [whether full formula or Money Match]

yielding the highest pension amount." Strunk v. PERS, 338 Or 145, 193, 108

Pad 1058 (2005); petitioner Voeks, who was not a PERS member prior to

August 29, 2003, will receive what the Legislature promised him, namely, the

defined contribution benefit established under ORS 238A.400. SB 822 and SB

861 do not significantly or substantially impair the obligations of the PERS

contract.

E. Pension Benefits Are Not "Wages•„

ORS 652.200(2) only entitles a party to attorney's fees "in any action for

the collection of wages." An employee may bring an action for unpaid wages

under either ORS 652.120 or ORS 652.615. Allen v. County of Jackson County,

191 Or App 185, 201, 82 Pad 628 (2003), citing Allen v. County of.Iackson,

~~l

169 Or App 116, 134, 7 Pad 739 (2001). "Wages," for purposes of ORS

652.610(3), comprises the total pecuniary compensation owed to an employee

for services; "wages" are "`compensation' for services provided by an

employee to his employer." Allen, 191 Or App at 200; citing Walker v.

American Optical Copp., 265 Or 327, 333, 509 P2d 439 (1973). Similarly, for

purposes of ORS 652.200, "wages" means "any compensation for an

employe[e]'s services." Kantor v. Boise Cascade Copp., 75 Or App 698, 709,

708 P2d 356 (1985), rev den, 300 Or 506, 713 P2d 1058 (1986). Only when an

employer/employee relationship exists does a "wage" claim become viable.

In KantoN, the Oregon Court of Appeals held that pension benefits were

"wages" for purposes of the attorney fee provision of the wage claim statute,

ORS 652.200(2). This Court should disavow that holding, because the Court of

Appeals did not apply the correct methodology for interpretation of statutes.

Specifically, the Court of Appeals did not examine the text of ORS 652.200(2)

in the context of the rest of the wage claim statute. PGE v..BOLI, 317 Or 606,

611, 859 P2d 1143 (1993) ("[A]t the first level of analysis, the court considers

the context of the statutory provision at issue, which includes other provisions

of the same statute and other related statutes.").

To the contrary, instead of looking at ORS 652.200(2) in the context of

ORS 652.140 to determine what the Legislature meant by "wages" payable to

employees upon retirement, the Court dismissed the relevance of ORS 652.140

because "[p]laintiff does not base his claim for attorney fees on that statute. He

relies solely on ORS 652.200(2)." Kanto, 75 Or App at 711. But read in

context, not only of ORS 652.140, but also of ORS 652.190, the meaning of

"wages" under ORS 652.200(2) clearly is limited to payment for services

rendered, due during the period of employment, and does not include pension

benefits payable after retirement.

ORS 652.140 provides, in pertinent part (emphasis added):

(1) When an employer discharges an employee orwhen employment is terminated by mutual agreement, allwages earned and unpaid at the time of the discharge ortermination become due and payable not later than theend of the first business day after the discharge ortermination.

(2)(a) When an employee who does not. have acontract for a definite period quits employment, all wagesearned and unpaid at the time of quitting become dueand payable immediately if the employee has given tothe employer not less than 48 hours' notice, excludingSaturdays, Sundays and holidays, of intention to quitemployment.

ORS 652.190 provides (emphasis added):

All wages earned by an employee, not exceeding$10,000, shall, upon the employee's death, become dueand payable to the employee's surviving spouse, or ifthere is no surviving spouse, the dependent children, ortheir guardians or the conservators of their estates, inequal shares, to the same extent as if the wages had beenearned by such surviving spouse or dependent children.As used in this section, "wages" means compensation ofemployees based on time worked or output ofproduction and includes every form of remunerationpayable for a given period to an individual for personal

19

services.

ORS 652.200(2) provides (emphasis added):

In any action for the collection of wages, if it is shownthat the wages were not paid for a period of 48 hours,excluding Saturdays, Sundays and holidays, after thewages became due and payable, the court shall, uponentering judgment for the plaintiff, include in thejudgment, in addition to the costs and disbursementsotherwise prescribed by statute, a reasonable sum forattorney fees at trial and on appeal for prosecuting theaction, unless it appears that the employee has willfullyviolated the contract of employment or unless the courtfinds that the plaintiff s attorney unreasonably failed togive written notice of the wage claim to the employerbefore filing the action.

A claim for which attorney fees are recoverable under ORS 652.200(2),

is a claim for "wages," as that term is used in ORS 652.110 to 652.200. ORS

652.200(2) authorizes attorney fees in claims in which wages were not paid

within 48 hours after they "became due and payable." When "wages" become

"due and payable" to employees who leave employment is ,governed by ORS

652.140. By the plain language of ORS 652.140, "wages" payable to an

employee who voluntarily leaves employment are those sums which the

employee has earned and which are payable immediately, and does not include

pension benefits payable over time, after retirement.

As ORS 652.140 and 652.190 demonstrate, "wages" means remuneration

for services provided to an employer during a discrete period of time, for which

payment is due on or before the termination of the employment relation. The

20

award which the petitioners seek is the payment of a retirement benefit pursuant

to a retirement plan qualified under Internal Revenue Code Section 401(a), not

wages from an employer. The PERS system and trust is not an "employer" for

purposes of ORS Chapter 652 and the payments are not "wages" because they

are not part of the pecuniary compensation owed to an employee by an

employer.

PERS retirement benefits, including any applicable COLA increases, are

owed to retirees, who by definition are former employees. For example,

petitioner Arken terminated his employment with the City in 2002, and has

been receiving benefit payments (including COLA increases), not wages, from

the PERS system since then. Petitioner Voeks, on the other hand, will not be

due any COLA increases unless he retires as a qualifying PERS member, and

then only on his benefits as a retiree, not on his wages as an employee.

As this Court previously noted, PERS is a "trust fund, separate and

distinct from the General Fund." Stunk v. PERK, 341 Or 175, 184, 139 Pad 956

(2006). Once petitioner Arken retired, the City of Portland, as his former

employer, had no control over the issuance of retirement benefit checks coming

out of a trust fund administered by PERS. Similarly, as long as the City of

Portland satisfies its contribution requirements on behalf of its current

employee petitioner Voeks, there will be no employer action that invokes the

21

"wage" claim statutes because petitioner Voeks will have received all pecuniary

compensation the City owes as his employer.

A claim for pension benefits is not a wage claim under ORS 652.110 to

652.200, and ORS 652.200(2) does not authorize the imposition of an attorney

fee award in a case of this nature.

CONCLUSION

There is no statutory contract between the City of Portland and

petitioners. There is no statutory contract under which anybody has promised to

pay in perpetuity annual 2% COLA increases on petitioners' retirement

benefits. The Legislature never promised that it would not amend or repeal the

COLA, and, in any event, petitioners have not established that they relied on the

COLA when they made their decisions to work for the City of Portland. The

changes made to the COLA by SB 822 and SB 861 do not substantially impair

the basic promise of PERS.

In short, there is rio unconstitutional impairment of any contract, nor any

other basis upon which petitioners are entitled to any relief.

Respectfully submitted,

s/Har~Aue~bachHarry Auerbach, OSB #821830Chief Deputy City AttorneyKenneth A. McGair, OSB #990148Deputy City AttorneyAttorneys for Respondent City of Portland

CERTIFICATE OF COMPLIANCE

Pursuant to OR.AP 5.05, I certify that the word count of this brief is

5,101, and the size of the type is not smaller than 14 point for both the text of

the brief and the footnotes.

s/ Har~^y Auerbach

HARRY AUERBACH, OSB # 821830Chief Deputy City AttorneyAttorney for RespondentCity of Portland

INDEX OF EXCERPTS OF RECORD

Affidavit of Michael Arken (Petitioners' Exhibit 5) ..................................PER-1

Affidavit of Jin Voeks (Petitioners' Exhibit 13) .........................................PER-7

Benefit Projections (Arken) (State's Exhibit S13) ...................................PER-17

Benefit Projections (Voeks) (State's Exhibit S21) ...................................PER-21

Excerpt of Testimony of Matthew Larabee ..............................................PER-25

Excerpt of Testimony of Steven Rodeman ..................`.............................PER-28

AFFIDAVIT OF MICHAEL ARKEN

STATE ~F OREGON )ss.

County of MuItnoinah )

I, MICHA,E~ ARKEN, being duty sworn, depose and say:

I am a petitioner in the above action and I make this Affidavit in support of

my position that the recent legislation passed by tine 2013 Oregon Legislature (SB 822 and

SB 861) has adversely affected the value of my PERS pension. I make this Affidavit based

on personal knowledge to comply with the requirements for filing a direct challenge in the

Oregon Supreme Court.

2. i retired. from PERS employment in 2002. Prior to retirement T was empYoyed

by the City of Portland and was a member of the Oregon AFSCME Counci175.

3. Attached as EXI3IBIT 1 to this davit is a copy of the Notice of

Entitlement I received from PERS outlining the retirerr~ent benefits to which I was entitled at

the time of retirement These benefits included an amount under SB 656 (1991) based on my

total years of service at retirement. In addition, Y was proimi~seii.that every August, I would

receive a Cost of Living Adjustment (COLA} calculated under the version of ORS 238.360

in effect during my employment. As a practical matter, this has meant a 2.0%annual COLA.

4. Under the recently passed legislation, I will not receive the Cost of Living

Adjustment (COLA) benefits which were promised to ine at the time of my retirement.

Under SB 822, iii August of 2013, I only received a 1.5%COLA and in the years thereafter,

under SB 822 and/or SB 861 my COLA will be reduced even further.

Page 1 -AFFIDAVIT OF MICHAEL ARKENc

PER-1

Petitioner Exhibit 5, p. 1 of 6

PER-2

• 5. In addition, under SB 822; if I were to even choose to live outside the State of

Oregon, Y would no longer be eligible to receive benefits under SB 656 (1991).

6. Attached as EXHIBIT 2 to this davit is an analysis of my PERS benefits

under the statutes prior to amendment and my anticipated entitlement after the SB 822 axed

SB 861 changes prepared by actuary David MacLennan. As can be seen from this analysis,

SB 822 and SB 861 passed by tt~e 2013 Oregon Legislature wi111aave a substantial

detrrimental. iunpact on ~my retirement benefits.

Dated this ~~h ~~ day of~ L~ C ~ M ~ ~ ~ ~ - _--, 2013.

SUBSCRIBED AND SWORN TO bej

~" r~~.~ rIr-.,,. ~ .• ~ c ~

~~

J ~, i y • - i i

Page 2 -AFFIDAVIT OF MICHAEL ARKENc

i

Petitioner Exhibit 5, p. 2 of:6

ER-3llal0 5w 68th Partcw~,T' d,oR ~ I

Mailing Atfdresn - P.O. Hox 23700Tige , 097281-3700 - Phone (503) 598-7377 J

NOTICE OF ENTITLEMENT

~N MICHAEL R ~ Date: OA/if/2002

p0 BOX 33131

PORTLAND QR 97292-3 13 1 Soc. Sec. No.:

L ~ PER51vo.: 3a6sa5

LQ;~ttcm~ni.l~ncfit,~ 5.:..a c~icclated aad you: first chccs(,) R~iil bo sent o~ aPR 1~. 2002If you decide to ohanga your option, your written request must be received in a PERS officewithin 60 days after tfie date of your first check(s). Please refer to your Sac. Sec. No. andPERS ~eneflt No. if you write or telephone our office.

YOUR BENEFIT OPTiOl11:

Gross Amount

t~REGON~AX yV/Fi:nsurance errMurr~

Federal Tax ~thhaldin$:Met Amount

OPTIQN 2 ANNTY

$2,5x4.60$144.01

$169.91

Employee Contributions;far tax purposesk $210.96

MON-i'AXABLE: $0.51

Effective Retirement pate: Qg~d 1 ~2dd2

Best Cataatation Method MpNEY MATCH

GROS5 AMOUI►1~5 UNp~R ALL OP710N5

Refund Annuity: $2 ,X39.45Option 1 (non—refund): $2 ~,~$2 ; 88

15 Year Certain: $2.633.48Option - 2: $2 , 504.60Option 2A.: a2 , 476.77~P~ ~ $2 , 6~t3.74Option 3A: $2,615.91

tamp Sum Opfian 1: $ ~ ~ 39 i . 44dump Sum Option 2: $ ~ , 252.30lump Sum Option 2l~ .$1.238.38Rump Sum Option 3: $1 , 321 .87Lump Sum Option 3A: $1 , $Qq., g5

INFOaMATI(?N USEDIf you purchased additional service credit, it is. included in the information listed below

Current Servfcec2 ~ years ~ 0 months Account 6atance:Prior Service p years $165 ~ 171.80

Sick !.save Howe: r~

6eneflcrary:p~NNY ~ ARKENBlrthdates: Member: p ~ ~2g~ 1 g46

8aneflciarY 05/ 18/ f 95~

Nigh• 3 years salaries:Year: 240 +a►mourrt $46 , 1 15.36

2000 $43,161.091999 $40,584.69

tart 36 months sa~ary: $135.736.59

You have the right to contest the information used to calculate your retirement benefits. ~f youchoose to do so, you must submit a signed letter dstaiiing the specific items) you are contesting.Your signed fetter must be received by PEAS witF~in 240 days after the date of this notice.M RRII }(N .


PER-4

Alka MacLennan, MBA Bradford Creveling, EA

David MacLennan, ASA, eA THE CREVEL.ING MACLENNAN COMPANY (Advisor)

November 24, 2013

Greg HartmanBennett, Hartman, Morris &Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204

Re: Michael Arken —Estimated PERS benefit loss attributable to Senate Bills 822 & 861

Dear Greg:

At your request, I have determined the estimated loss of PERS pension benefits retired Member

Michael Arken and his beneficiaries will experience due to the enactment of Senate Bills 822 and

861.

The method used to compute the estimated loss is based upon Michael Arken's life expectancycombined with his survivor beneficiary's life expectancy. The respective totals of the expectedfuture benefit payments under SB 822,- SB 861, and old law were determined assuming the dates ofdeath correspond with their life expectancies. The difference between the old-law total and theSenate Bill total is the estimated average benefit loss attributable to that Senate Bill for PERSMembers with similar ages and benefit levels. Note that actuarial present values are not used —onlyexpected benefit payment totals are employed. Also, the loss for SB 861 shown below includes theloss ariributable to the 1.5%COLA under SB 822 for the one year period beginning August 1, 2013.

The mortality assumptions used in computing life expectancy are identical to those used to computePERS system costs in the December 31, 2011 actuarial report (the most recent report available).

Old-law COLA Bank and COLA assumption. If the Portland-Salem CPI used to deternune the oldlaw COLA. exceeds 2%, the excess for each year for a given retiree is accumulated in a "COLABank" that can be used when the CPI is less than 2%. In the 40 years since the COLA wasestablished in 1972, there have only been seven yeazs where the Portland-Salem .CPI was below the2% COLA .cap (1983, 1986, 1998, 2002, 2009, and 2010). Because of this, it leas historically beenthe case that retirees, after the first year or two of retirement, have a large enough-COLA bank tovirtually ensure that they have a 2%COLA every year. For this reason the Old-Law COLA wasassumed to be 2%. This is identical to the assumption used to compute PERS system costs in theDecember 31, 2Q11 actuarial report. Michael Arken's COLA Bank "balance" is currently 3.64%.

A summary of the year by year loss is provided in the attached report. The results of my calculationsare summarized in the table below:

Dollar PercentageMichael Arken's Estimated Benefit Loss Loss Loss

Attributable to SB 822:

Attributable to SB 861:

$59,767 4.48%

$147,540 11.06%

Tel &Fax: (503) 246-1654 1752 5E 25th Ave Portland OR 97214-4905 www.pen-val.com

Exhibit 2, Page 1 of 3


Greg HartmanNovember 24, 2013Page 2 of 2Re: Michael Arken —Estimated PERS benefit loss attributable to Senate Bills 822 & 861

Calculation Data

Michael Arken:

Birth Date:

Retirement Date:

Benefit Amount:

Benefit Form:

Employment Classification:

Oregon Residency

Penny Arken:

January 28, 1946.

March 1, 2002.

$2,778.01 per month as of August 1, 2012.

PERS Option 2 — 100% Joint &Survivor Annuity.

Genera! Service.

In-state.

PER-5

Birth Date: May 18, 1954.

Survivorship Benefit: 100% of Michae(Arken's benefit.

Source of Information: Office of Greg Hartrnan,.PERS Notice of Entitlement dated April 11, 2002.PERS retiree Internet database.

Actuarial Assumptions

Valuation Date: August 1, 2013.

Mortality: RP-2000 (generational mortality projection using scale AA).Michael Arken: 25%blue collar (male) with l.2-month setback.Penny Arken: white collar (female), no set-back.

Interest: ~ Not applicable.

Old-law COLA:(Cost-of-Living Adjustment) 2%per year.

Statement of Qualifications: I am a consulting actuary who has been employed in pension-zelatedactuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow o£the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an EnrolledActuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this Letter. Yam not aware of any actual or potential conflict of interestthat would impair my objectivity.

Please contact me if you have any questions.

Sincerely,

C! Y r~/~d ~ ~~~l ~t~ t~David MacLennan, ASA, MSPA, FCA, EAConsulting Actuarydavid(~~en-val.com

THE CREVELING MPiCLENNAN COMPANY


Petitioner Exhibit S, p. 5 of 6

PER-6

Member: Michael Arken

c e c nay.- --- -

Survivor's expected payment period: 10.72 yearsTotal expected payment period: 29.25 years

SB 822 SB 861 SB 861 Yearly SupplementalYear ending Loss Loss .Loss Percentage Payment

7/31/2014 $167 $167 ~ 0.5% $07/31/2015 $239 $339 1.0% $857131/2016 $316 $603 1.7% $867/31/2017 $398 $876 2.4% $877/31 /2018 $484 $1,158 3.1 % $887/31 /2019 $576 $1,448 3.9% $897/31/2020 $672 $1,748 4.6% $307/31/2021 $773 $2,149 5.5% $07/31 /2022 $880 $2.469 6.2% $07/31%2023 $993 $2,798 6.9% $07/31/2024 $9,111 $3,1'38 7.6°/a $07/31/2025 $1,236 $3,488 8.3% $07/31/2026 $1,372 $3,849 8.9% $07/31/2027 $1,516 $4,220 9.6% $07/31/2028 $1,671 $4,603 10.3% $07/31/2029 $1,837 $4,997 10.9% $07/31/2030 $2,013 $5,403 11.6°/a $07/31/2031 $2,200 $5,820 12.2% $07/31/2032 $2,398 $6,250 12.9% $07/31/2033 ~ $2,608 $6,692 13.5% $07/31/2034 $2,829 $7,148. 14.1% $07/31/2035 $3,063 $7,616 14.8% $07/31/2036 $3,348 $8,098 ~ 15.4% $07/31/2037 $3,567 $8,593 16.0% $07/31/2038 $3,839 $9,103 16.6% $07/31/2039 $4,124 $9,626 17.3% $07/31/2040 $4,424 $10,165 17.9% $07/31/2041 $4,737 $10,719 18.5% $07/31/2042 $5,065 $11,288 19.1% $07/31/2043 $1,352 $2,968 79.7% $0

TOTAL .$59,767 $147,540 $465

THE CREVELING MACLENNAN COMPANY ~~



AFFIDAVIT OI' JIN VOEKS

STATE OF OREGON )ss.

County of Mniknomah )

I, JIN VOEKS, being duly sworn, depose and say:

I . I am a petitioner in the above action and Y make this Affidavit in support of

my position that the recent legislation by the 2013 Oregon Legislature (SB 822 and SB 861)

has adversely affected the value of my PERS pension. Y make this Affidavit based on

personal knowledge to comply with the requirements for f ling a direct challenge in the

Oregon Supreme Court.

2: I am currently employed by the City of Portland as a fire fighter, and I am a

member o~the International Association of Fire Fighters (IAFF)_

3. I became a membez of PERS-OPSRP in 2011. Attached as CXHISIT 1 is a

copy of the print-out gf.tt~e PAS benefit.estimate calculator of the benefits to which I would

be entitled at my intended retirement date of March 1, 2041. In addition, prior to'the passage

of SB 822 and SB 861, every August after my retirement date, I would have been entitled to

receive a Cost of Living Adjustment (COLA) calculated under the version of ORS 238A_210

in effect when X accepted my PERS covered employment.

4. Under the recently passed legislation, Y will not receive the Cost of Living

Adjustment (COLA) benefits which were promised to me at the time X accepted PERS

covered-employment. Under SB 822; if Y were to retire in 2013, I will only zeceive a 1.5%

COLA and in tl~e years ti~ereafter: under SB 822 and/or SB 861 my COLA would be reduced

even further.

Page 1 = AFFIDAVIT OF JIZV VOEKS_

~ .J

PER-7

Petitioner Exhibit I3, p. l of 10

PER-8

5. Attached as EXAIBTT 2 to this Affidavit is an analysis of my PERS benefits

under the statutes prior to ame~adment and my anticipated entitlement after the SB 822 and

SB 861 changes prepared by actuary David Mac~.ennan. As can be seen from this analysis,

SB 322 and SB 861 passed by the 2013 Ozegon Legislature will have a substantial

det~•imental impact on my retirement benefits.

Dated this 3 ~=~ day of

SUBSCRIBBD AND SWORN TO before me this 3~' day of ~Dec~,do~ ,~

Page 2 - APFTDAVIT OF JIi 1 VOEKS

~ ̀ may.. d~a~w.~. /.~'da.,na~

Notary Public for OregonMy Commission Expires: ~{-.tb-~'~

+~ ~ OFFICIAL SEALKAREN LYNN RDAMS

c' `NOTARY PUBLIC•OREGONCOMMISSION NO.476814

MY COMMISSION EXPIRES APRIL 16, 2 :' i :~


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. T~ofaiSerWesCtadit-The fetalnumberWmonthaofeetvleecredltthetyoueamed

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From this peke you are able ~ vlev+youreaiary hlgtpry.

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• EmpbyarName - U

sb the employer8lhetfiave rsponetl employment to PERS.

• (iroasS~lery-Fhegrossseleryrepottedbyyouremployer,

Nr

F@nal Ave:a a Sala

~:; z.

7Ne anAne DarwfR ~

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n IMom~aUon la the PEERS tletabae~ yrovid~d by em}~oy~n, aad o

n tla~ you Iryiut ~

the date tt+e aatlmete Is generated. The eewreey of y

ow estlmate

w]II depend on dowobaaly the kMmmatlan you provide, aiq tlw iMormaflan~uaWoigly provided i»e amployue, matcAe~ U

w Iniametion w

ad io calculate your Deneflt at the time you retire.

Chaf~ges to eanplbut{oma, eaml~s, rettram~nt o»~,~Intl avata9a salnq+, ~alwLtlon faotors,l8ws, a

otMr hAmmaUon aced M

tlsvelop thk aatlmate will also altset Ure accuracy of theestimate. P

ERS b not DofaM b

y aqr eatlmafe pro~dd~d by this online benet~t estlmator {O

RS 238.458(8)}.

'Ails oMna sstknate tloes not ~Mllk you to nny bufsl~.Your DansflU a

n dsterm(nad In aeoordenea WiN~ O

RS C1~9pt~ra 238 and 2

~8A when 6eneffts aro Oret paid. K A

ERS at airy tlme

oeoomea aware otanarror In y

ow benalRs, ~ehsrthsfrro~ was m

ade by you,yc~ emyJoyeyaJ, a

Ly SERB. PFn8b requlreato eoneet the error. P

ERs may ciao be requlrod to m

ake

con~etions as a resWt of covet deelsloam or otl1~ ~

tpppu ~f dew. Corr~c8otq m

ay reautt lnan I

ncrwaor dee~aN to your boneflu. C

ha~ea rosuhMp from dfeeovery oT arry error m

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retroaelMe to your rogremsiif date. PERS 8 ragnired.toaolMet e

mouMa ovarpeltl to you a

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amaurRs uaderyKld to you.

Tote1 Servke Croah-An emourtoigme creEited to an emaoyee imtlme worked based an membaPsellgibillry an0 N

e Ilme period worketl tluring the eelenda~ year. -celeuWced 4y 1he sys[em up to

the retirement date entered.

Mommy Fh~al Avarago Salary-'Ihe mantNyaver~ge of the aelaty paid ]n the last98 months or Tess ofectiveemploymertt poslGons or the three ~ncecuUve hlgl~eat calendar years seiery, whichever

Is highest

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d an data you U

~ on the Clete ~

e aspmete fs generated. The aceureey o! your eatlmeta

wUl depend ~n fqw Woes4r ~

hKeroiaGai yoU provide, and tlu 4Normstianytevlotnl~r provkNd Dy omployari, matct~aa the Irtormatlon w

ad fo eakulat8 your Deneflt at tt+e rims you retVe.

Cfia~pee moomtlb4tbns, earniape, rotl[embntaf~tRt,flNlave~aye ~~kry, oala~tbnfeotoia, laws, motApr Informatbn used to deveaop Chia astlma[e wlpalso ettaa7 the aocwacy of the

ettlm8te. PERS !e not Dound by any g

Umate provkkdby thb onla~e OsaeAt es~oator (O

RS 298.66{8)}.

'Tl~ aaNna estimate dose rwt a~7tk you to say b~n~8tf. Your benella era d~tgmUrod In eCaordanca wrih t7Gt8 Cluptsra 238 aatl 238A whey banelRs a.re Brat paid. lT P

ARS at airy tlme

hscome~ were a

an smor8~ your bnr~eflh~wl~►ths arm wee roads by you, your smployer(~~, as by P

igs, Pegs Is r

agWnd to corroot uis error. PErts m

ay also D

e requlran w

make

eanaetbne as a rasuhOte0iu7 Welelom or M

Mrohanp0e 1n Iew.40rree~One m

ay result ~n anb~ereese a

d~onase toyonr baneflro. CNanpss reautNnp from dleeavery of any error m

aybe

ntroaNive to yoty r~grarrt~t W fe p~tS Is r

~lrsd 1p eopee4 eu►ounb ovarpdd toyQu ae tl~e reaWta/ an

error. ~f PERS uaderpai6you a

s a result of e

n error, P

ERs Fe requhed to pro~lde

amowde underpaW to You.

O.-~w0fl.

i!Wd0.,.'~a~a

PER-14Alka MacLennan, MBA

THE CREVELING MACL~NNAN COMPANY Bradford Graveling, EADavid MacLennan,.ASA, EA (Advisor)

November 24, 2013

Greg HartmanBennett, Hartman, Morris &Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204

Re: Jin Voeks —Estimated PERS benefit loss attributable to Senate Bills 822 & 861

Dear Greg:

At your request, I have determined the estimated loss of OPSRP pension benefits Jin Voeks willexperience due to the enactment of Senate Bills 822 and 861.

Jin Voeks's benefit at retirement was estimated assuming a 3.75% salary increase assumption, thesame assumption used to compute PERS systemcosts in the December 31, 2011 actuarial report (themost recent report available). It was also assumed that he will survive to, and retire, when he has 25years of service at the age of 53, and that he will elect that his benefits be paid under Option 2, a jointand 100% survivor annuity.

The method used to compute the estimated loss is based upon .iin Voeks's life expectancy combinedwith his survivor beneficiary's life expectancy. The respective totals of the expected future benefitpayments under SB 822, SB 861, and old law were determined assuming the dates of deathcorrespond with their life expectancies. The difference between the old-law total and the Senate Billtotal is the estimated average benefit loss attributable to that Senate Bill for PERS Members withsimilar ages and benefit levels. Note that actuarial present values are not used —only expectedbenefit payment totals are employed.

The mortality assumptions used in computing life expectancy are identical to those used to computePERS system costs in the December 31, 2011 actuarial report (the most recent report available).

The old-law COLA was assumed to be 2% in future years. This is identical to the assumption used tocompute PERS system costs in the December 31, 20I 1 actuarial report.

Jin Voeks`s estimated projected benefit at retirement (age 53) is $4,334/month. A summary of theyear by year loss is provided in the attached report. The results of my calculations are summarized inthe table below: '

Dollar PercentageJin Voeks's Estimated Benefit Loss ~ Loss LossAttributable to SB 822: $366,416 11.8%Attributable to SB 861: $497,419 16.0%

Tel &Fax: (503) 246-1654 1752 SE 25th Ave Portland OR 97214-4905 www.pen-val.com

Exhibit 2, Page I of 3


PER-15

Greg HartmanI~Iovember 24, 2013

' Page 2 of 2

Calculation Data

Jin Voeks:

Birth Date: May 20, 1983.

PERS Membership Date: January 1, 2011.

Credited Service: 2 years as o£December 31, 2012.

2012 Salary: $51,568.40.

PERS Classification: Police and Fire.

Oregon Residency: In-state.

Source of Information: Office of Greg Hartman, PERS Online Member Services screen shots,

2011 PERS Member Annual Statement.

Actuarial Assumptions and Methods

Valuation Date: August 1, 2U1~3.

Mortality: Pre-retirement mortality: None.Post-retirement mortality:RP-2000 (generational mortality projection using scale AA).

Jin Voeks: 33%blue collar (male) with no setback.Beneficiary: white collar (female), no set-back.

Interest: Not Applicable.

Retirement Age: 53.

Old-law COLA:1 (Cost-of-Living Adjustment)i 2% per year.

Retirement Payment Option: Option 2.

Beneficiary Age: Same as Member.

Statement of Ouali#ications: I am a co~isulti~g actuary who has been employed in pension-related

actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an EnrolledActuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.

Please contact me if you have any questions.

Sincerely,

t~r~~/~d ~ L~~lv~ ~jDavid MacLennan, ASA, MSPA, FCA, EA

' Consulting Actuarydavid(c~pe►~-val. com

THE CREVELING MACLENNAN COMPANY


Petitioner Exhibit 13, p. 9 of l0

Member: Jin Voeks

Jin Voeks's Life Expectancy: 33.94 yearsSurvivor's expected payment period: 6.14 years

Total expected payment period: 40.08 years

SB 822 SB 861 SB 861 Yearly SupplementalYear ending Loss Loss Loss Percenta4e Payment

7/31/2036 $0 $0 0.0% $07/31/2037 $220 $390 0.7% $07/31/2038 $453 $793 1.5% $07/31/2039 $698 $1,208 2.2% $07/31/2040 $957 $1,637 2.9% $07/31/2041 $1,230 $2,080 3.6% $07/31/2042 $1,516 $2,537 4.3% $07/31/2043 1,817 $3,008 5.0% $07/31/2044 $2,133 $3,493 5.7% ~ $07/31/2045 $2,463 $3,994 6.4% $07/31/2Q46 $2,810 $4,510' 7.1% $07/31/2047 $3,176 $5,042 7.8% $07/31/2048 ~ $3,566 $5,590 8.5% $07/31/2049 $3,979 $6,158 9.2% $07/31/2050 $4,416 $8,752 9.8% $07/31/2051 $4,878 $x,372 70.5% $07/31/2Q52 $5,365 $8,018 11.2% $07/31/2053 $5,878 $8,691 71.9% $07/31/2054 $6,417 $9,391 12.6% $07/31/2055 ' $6,983 $10,119 13.4% ~ $07/31/2056 $7,577 $70,876 14.1% $07/31/2057 $8,198 $11,662 14.8% $07/31/2058 $8,848 $12,478 15.5% $07/31/2059 $9,527 $13,324 16.2% $07/31/2060 $10,236 $14,201 17.0%. $07/31/2061 $10,976 $15,110 77.7% $07!31/2062 $11,746 $16,051 18.4% $07/31/2063 $12,549 $17,025 19.2°/a $07/37/2064 $13,383 $18,033 19.9% $07!37/2065 $14,251 $99,075 20.7% $07/31 /2066 $15,153 $20,153 21.4% $07/31!2067 $16,090 $21,266 22.1% $07/31/2068 $17,062 $22,415 22.9% . $07/31/2069 $18,069 $23,602 23.6% $07/3i/2070 $19,114 $24,827 24.3% $07/31/2071 $20,196 $26,091 25.1% $07/31/2072 $21,317 $27,394 25.8% $07/31/2073 $22,477 $28,738 26.6% $07/31/2074 $23,677 $30,123 27.3% $07/31/2075 • $24,918 $31,550 28.0°/a $Q7/31/2076 $2,096 $2,642 28.8% $0

TOTAL $366,416 $497•,419 $0

THE CREVELING MACLENNAN COMPANY

PER-16



Wd

NAtltAEL0.ARKEN-6TINIATEO BBiERT PR0IKlIONS

Name:

~''~~ael R. Arken

P6t5ID:

336545 Based on LE as ProjacEed b

y PERS

Effete Retlrement Date (ERD):

3/1 /2002

Option :2

BestCalcMethod:.Money- Match

Monthly R~irement Alicwance'":2,159.12

Rnaf Average Salary:3,T/0.46

Rrst Glass Montltly Pym~

2,3fi6.80 (gA5 Ad)~

Replacement Ratto ~ FRD:

63/0

Member Age ~1 E

RD:

56 yrs

1 mtlu

Benefidary Age @ ERD:

47 yrs

s mths

ServfceTlme:21 yrs

SOmThs

Service before 10/iJ1991:11 yrs

5 mths

HB 3349 Pera~ntage:

5.1715°Yo

SB 6i6 Percentage:

Z.0%

No ei~s

SB 822

Se e61

To~l6rpe~ed Payments1,303,931.50

1,250,25451'I,163,30L21

Toml Rojech~ ReductionIVA

51,037.58133,690.49

Peroenbge ReducibnNA

3.91%16.25%

PresentVafueoFTolalExPetbad PaYrt~ts

Spg~On.yz494,681.93

470,991.63

H+eseM VaWe afTotalPrayed Reduction

~~ ~gai

36,194.38

~~ ~~

0° ~

NA

269967.11%

Assent Value

Member LJfe E

~eGancy @ ERo:

b yrs

?76 mths LE:

T8.5

W LA Carryover as of 7J1J2013:

3.77/0

* Mr. Arkrn eIOCbCd to iem3a~ to variable at retlrertler~ 6en2fit artw~mt is as of ?/1/14

Based on LE as Pm3flded by miners

wo Bllls

58822

SB 861

1,349,14L621,241,744.34

1,199,797.15

NA

~54,574.94

141,976.18

NA

4.05%10.52%

514,533.88499,689.27

475,396SD

NA

14,114.6737,193.79

NA

2.74%72396

LE: 79.25

STATE RESPONDENTS

DCHIBIT S13

Page 1 of 4

rWd

MICHAEL R. A

RKEN -ESTIMATED BENEFIT PROJECTIONS

Nn R:IIe

CQLA

YearMonthly

Allowance~~

Percentage)

AdditlonaiMorrthlyCOW for

Current Year

CumulativeMonthly

COLA Since

ttetirement

MonthlyAllowance

w/CO1A, beforeTR

MonthlyWlowanoe

w/COEA & TR

Yearly Allowancew/COLA & TR

2013

2,141.232.00°/a

52.89556.f2

2,647.352,836.84

34,042.11

2014

2,169.122.00%

54.50610.62

2,779.742,923.50

35,081.982015

2,169,122.00°/a

55.59666.22

2,835.342,98!.97

35,783.622016

2,169.122.00%

56.71722.93

2,892.053,041.61

36,499.292017

2,169.122.00%

57.8478Q.77

2,949.893,102.44

37,229.282018

2,169.122.00%

59.00839.76

3,008.883,164.49

37,973.862019

2,ifi9.122.00%

60.18899.94

3,069.063J227.78

38,733.342020

2,169.122.00%

61.38961.32

3,130.943,292.33

39,508.012021

2,169.122.00%

62.611,U23.93

3,193.053,358.18

40,298.172022

2,I69.122.Od% ~

63.861,087.79

3,25fi.91~

3,425.3441,104.13

2023

2,169.122.00%

65.141152.93

3,322.053!493.85

41,926.222024

2,169.122.00%

66.441,219.37

3,388.493,563.73

42,764.742025

2,169.122.a0%

67.771,287.14

3,455.263,635.00

43,620.032026

2,169.122.00%

69.131,356.27

3,525.393,707.70

44,492.432027

2,169.122.00%

70.511,426,78

3,595.903,781.86

45,382.282028

2;169.122.00%

71.92!,49$.69

3,667.813!857.49

46,289.932029

2,164.122.D0%

73.361,5!2.05

3,741.173,934.64

47,2!5.73203Q

2,164.122.00%

74.821,646.87

3,8f5.994013.34

48,160.042031

2,169.122.OQ%

76.321,723.19

3,892.314,093.50

49,123.242032

2,169.122.00%

77.851,801.04

3,970.164,175.48

50,105.712033

2,169.122.00%

79.401,880.44

4,049.564,256.99

51,107.822034

2169.122,00%

80.991,961.43

4130.55

4,344.1652,129.98

2035

2,169.122.00%

82.612,044.04

4,213.164,431.U5

53,172.582036

2,164.122.00%

84.262,128.31

4,297,434,5f9.67

54,236.032037

2,169.122.00°/a

85.952,214.26

4,383.384,610.06

55,320.752038

2,169.12-

2.00%

87.672,301.92

4,471.Q44,702.26

56,427.372039

2,169.122.00%

89.422,391.34

4,560.464,796.31

57,555.712040

2,169:122.00%

91.212,982,55

4,651.674,892.24

58,706.822041

2,169.122.OD%

93.032,575.59

4,744.714,990.08

59,860.962042

2169.122.00%

~ 94.89

2 670.48

4839.60

5,089.8815,269.64

1,349,141.62

COLA estimates are for projection purposes oily. O

RS chapters 238 and 2

38A (former) provided n

o guarantee of a specific C

OLA amount.

STATE RESPONDENTS

EXHIBIT S13

Page 2 of 4

rWd

MICHAEL R. A

RKEN -ESTIMATED BEPJfFIT PROJECTIONS

CA fl'1'7

COlA

YearMonthlyAUowarrce

Effective COIA

Percentage

AdditionalMor~thlyCOLA fbr

GUrrent Year

CumulativeMonthly COIA.

Since.Retirement

MonthlyAllowancew/COLA,

before TR

MonthlyAliowanoew/COLA &

TR

Yearly AllowanceW COLA & TR

Year[yPercentageReductionCOLH Onl

YearlyReductlo~Amount

COLA Onl.

Cumulative PV

of ReductionCOLA.Oni

24i3

2,141.231.50°l0

39.675.42.90

2,684.232,82294

33,875.240.47%

158.67158,67

Z01~}2~1fi9,12

1.81% .

48.6U59.1.49

~ 2 760.61

2,903.3834,840.53

0:65°Io229.58

371.74

20YS

2,169:121.80%

49.74641.23

2,810.35.2,955.69

35,4fi8.310.84°k

299:81,629.97

2016

2,.169.121.80%

50.49691.72

2 $60.64

3,008.7935,105.50

1.0$°l0374.43

929.28

2017

2,169.121.78%

51.25742.97

2x912:09

3,062.fi93fi~752:26

1.z2%

453.571,265.77

20I8.2,Ifi9.12

1.79%'

52.017'94.98

2,964.103,117:39

37,408.71t.42°!0

537.361,635,75

2019

2,159.121.78%

X2.79847.78

3,016.903,172.92

38;07.011.62%

625.962,035.73

2020

2,169:121.78%

53.59901.37

3,070.493,229.28

3'8;751.3]:1.82%

719.492,452:4I

202].2,1~i9:13

1.77%

54.39955.76

3124.883

x286.4$39,437.75

2.03%

8~.8.if2,912.69

2022

2,169:121.77%

5b.Z1].,.010:96

~R1~0..08

3,344.5440134119

2.24%

921.963,383.62

203

'2,169.12L76%

56.031,U67.d0

3,235.123,403.47

4Q,841:682.46%

1,031,213,872.47

2024

2,169.121.7fi%

56.881,123.87

3,292:993,463.29

41,559.472.68%

'1,146.004,376.66

2025

2,169,121.75%

57.73x,181.•60

3350.723,524.QU

42;288.04

2.90%

1,266.504

x893.782026

2,16.9.121.75%

~ 58.51

1~~240.113,409:23

3; 585.54~}3,U2643

3.13%

1,393:.925,422.00

2027

2f1fi9:121.73'/a

59.091~Z99.2(~

3;968.32.3x647.68

43,772.213.37%

I~530.905~960.4a

2028

2,169.121.72%

'59.68.1,358.88

3,528.00'x,710.45

44,525.453.62°Io

1,677.72,~

6,5.07.992U29

2,1'69.121.71%

60.281419.16

3,588.283,773.85

45,786:223.89%

1,834.37,U63.74

2030

2~169:1Zx.70%

6fl.88f~480:05

3y649.1Z3,837.88

46,054.594.16a/o

2,001.927,626.53

'20312169.12

1.69%

61.491,541.54

3,710.663,902.55

~~830.654.44%

2',179.868,195.28

2032

2yib9:121.b7%

62.112,603.64

x,772.763,967.87

47,614:484.73%

2;~68,73~8,768.85

2033

2,169.121:66°~a

fi2.731,666.37

3,835.494,033.84

48,4Q6.135.03%

2,56$.849,346.14

2034

2,169.121.b5%

63.351,729:73

3,89.8.854,100.48

49;2Q5.715.33%

2;780.489,~Z6.~4

2035

2,169._12i.b4°7o

63.991,793:72

3,962.844,167.77

5Q,013.285.65°10

3 003:95

10,507.492036

2,Ib9.121.63%

64.631,858.34

4,027.4b4,235.74

50,825.935.97%

3,239.5711~089.yF5

2037

2,169.12L.62%

65.271,423.62

4f092.74

4,304.3951,652:73

6.30%

3f487.~511,67Q.90

2038

2,159.121,61%

65.93,1,989.55

4;158.G74373.73

52,484.786.64%

3,748.5312~250.9i

2039

2,169.12.1.60%

65.592,056.13

4,22.5.254,943.76

53,325.146.99%~

4,022.55.12,828.54

2040

2.,169.121.59%

67'.252;123.39

4 292.51

4,514.4954,173.90

7.34%

4,310.03.

13,402.44.2041

2,169.121.58%

67.932,191,31

4,360.434,585.93

55; 031..16

x.70%

4,611.3313,973.29

2042

2x.69:121.57%

68.6Q2,259.91

4,429.034,6S8.D8

13,9 4.258.07%

1,231.70'14,].14.67

1,291,744.34 54,574.94

1~4,114~.67

STATE RESPONDENTS

EXHIBIT S93

Page 3 of 4

NWd

MICHAEL R. A

RKEN - ESTfMATED 6ENEFIT P

RQI ECTIONS

COtA

YearMonthly

Alfawance

EffeGNeCOLA

Percents e

AddltlonalMonthly C

OLA

for CurtentYear

dimuladveMonthly O

OLA

SinceRetlremem

MonthlyAllowancew/COUI,

before TR

Yearly AllowancewJCOLA, before

TR

MonthlyAllovrancew CO[A & TR

Suppfemen~ryPa

rrt

Yearly Mowanoe

w/OOLA, TR and

Su

t

YeaHy

Peroen~ge

ReductionOOLA ~I

YearlyReduttlon

Amourrt COLA

On

GLmulativePV of

ReductionCOLA Onl

2013

2,141.23I.50%

39.b7542.90

2,684.1332,209.52

2,822.9433,875.24

0.47%

158.57158.67

2014

2,169.121.25%

33.55576.45

2,745.5732,946.82

2,887.5680.52

34,731.190.94%

329.56464.54

2015

2,169.121.25°Yo

34.32b10.77

2,779.8933,358.66

2923.65

82.3735,166.17

2.63°k583.04

966.73

2016

2,169.121.2590

34J5

645.SZ2,814.64

33,775.647y960.20

83.4035,605J4

2.32%

845.511,542.61

2017

2,169.121.25%

35.18680.70

'2,649.8234,297.84

2,997.2084.49

36;050.823.00°/b

1,116.362,470,81

2018

2,169.121.25%

35.62716.32

2x 885.44

34,621.313,034.66

85.4936,501.45

3.fi8%1,395.81

3,43L85

2019

2,169.12.1.25%

36.07752.39

2,921.5135,058.13

3,072.6086.5b

36f 9s/.72

4.35%

1,b84.064,547.95

2020

2,169.121.2595

36.52786.91

2,958.0335,496.35

3,111.0037,332.0.5

5,24%

2,068.975,734.91

2021

2,169.121.2590

36.98625.88

2,995.0035,940.06

3,149.8937,798.70

5.90%

2,376.577,042.93

2022

2,169.121.259'0

37.44~

863.323,tI32.44

36,38931

3,189.2638271.18

6.55%

2,693.658,418.62

20?3

2,169.12125%

37.91901.23

3~Q70.3536,844.17

3,229.13_38,749.57

7.20%

3,020.449,850.67

2024

2,169.121.25a/o

38.38939.61

3,IOB.T337,3U4.73

3,264.4939,233.94

7.85%

3,357.1811,327.69

2025

2,169.121.25%

36.86978.47

3,147.5937,771.03

3,310.3634,724.36

8.999b3,7{14.11

22,840.12

202fi2,169.12

1.254'03934

1,017.813,186.93

.. 38,243.17

3'351.74

40,22D.929.13%

4,061.4814,379.20

2027

2,169.121.25g'o

39.841,057.65

3,226.7738,721.21

3 393.64

40,723.664.76%

4,429.5315,937.01

2028

2,16912

1.734/04033

1097.98

3~267.1U39f 2D5.?3

3,436.U641,232.73

10.39%

4,8Q8.5317,506.48

2024

2,169.121.259'0

40.841,138.82

3~3D7.9439,695.29

3f479.0i41,748.13

11.01°105,196.74

19,081.272030

2,L69.121.25%

41.351,180.17

3,349.2940,191.48

3,5~2~5042,269.99

11.63%

5,600.4320,655.72

2431

2,169.121.25%

41.871,222.04

3,391.1640,693.88

3,566.5342,748.36

12.24%

6,013.8722,224.74

2032

2,169.121.259b

42.39f,264.43

3.433.5541,202.55

3,611.1143,333.34

12.85%

6,439.3623,784.03

2033

2,169.121.259/0

42.921,30735

3.476.4741,717.58

3,656.2543,875.Q1

13.469/06,877.16

25.329.512034

2,169.121.255'a

43.461,350.80

3,519.9242,]39.65

3,701.9544,423.44

14.06°167,327.59

26,857.78

2035

2,169.121,25%

44.001,394.80

3,563.9242,767.04

3,748,2344,978.74

14.65%

7,790.9328,3fi5.81

2036

2,169.12125%

44.551,439.35

3,608.4743,301.63

3,795.0845,540.97

15.24%

8,267.5024.850.98

2037

2,169.121.25%

45.111,484.45

3,653.5743,842.90

3,842.5246,E20.23

15.83%

8,757.6231,311.04

2038

2169.12

1.25°Yo45.67

1,530.123,699.24

44,390.943,890.55

46,686.6116.41%

9,261.5932,744.06

2039

2,169.121.25%

46.241,S/6.37

3,745.4944,945.82

3,939.1847,270.19

16.99%

9,779.7534,148.42

2040

2,169.12115%

46.821,623.18

3,74230

45,507.643,988.42

47,661.0717.57"/0

10,3f2.4435,522.77

2041

2,169.121.25So

47.401,670.59

3,839.7146,076.49

4,038,2848,459.34

18.149b10,860.00

36,865.982042

21b9.12

1.25%

48,001718.58

3 887.70

11663.11

4088.76

12 266.27

18.70%

2 855.69

37193.79

1,199,797.15 141,576.18

37,143J9

STATE RESPONDENTS

EXHIBIT S13

Page 4 of 4

rNWd

Name:

]In P. Voel~

PERS ID:

896610

pro]ected Effective Retirement Date (ERD):

7M/2038

Pro)ected Option:Full Survivorship

Best Calc hiefhod:OPSRP Formula

Pro]ected Monthly Retlrement Allowance*:4,183.85

Protected Flnal Average Salary:9,782,11

Protected First Gross Monthly Pymt:4,246.07

Protected Replacement Ratlo @ ERD:

43%

Member Age (g~ Projected E

RD:

53 yrs

1 mths

BeneflGary Age ~ Projected E

RD:

53 yrs

i mthe

Projecbed Service Time"`:25 yrs

e mtl~s

Tax Remedy Percentage':

0.00°k

MembeP LJfe Expectancy @Projected E

RD:

38S yrs

462 mtl~s

JIN VOEKS -ESTIMATED BENEFIT PROJECTIONS

Based on !E as Projected b

y PERS

No 811fs

SB 822

58 861

Total Expelledx,934,864.43

2,608,041.842,478,500.56

PaYmentr

Topl ProjectedNA

326,82259456,363.87

RRductlon

Percentage ReductionNA

11.14"/015.55%

Present Value aFToml151,864.67

14?,207.34137,520.26

ExpecM~ Paymerds

PresEntYalueofTotalNq

9,657.33'I4,3g4.39

aroJec6~i Reductbn

Percentage ReductionNA

6.36%

9.45°hat P►Psent Value

LE

38.5

■ A~umes Mr. Vceks wpl wak as a Pollw and Flre member to Ef~edlve Date of Retirement wtthout arty breaks In service

*« As an OPSIiP mem6ei, Mc VaeJcs Is not eligible f

a any m

x remedy

Based on LE as ProjecCed b

y PetRioners

No 8111s

SB 872

58 861

2,998,593.272,658,086.40

2,524,~i0.48

NA

340,506.86473,962.79

NA

11.36°h15.81%

149,538.08ig0,1T3.76

]35,371.99

NA

9,799.9214,527.77

NA

655°/a9,72°k

LE

40.08STATE RESPONDENTS

EXHIBIT S21

...Page..9 of .4.

NNWd


COLA

YearMonthly

~ Allowance

COLA

Percen e'

Additio~aiMonthlyCOLA for

CurrentYear

CumulativeMonthly C

OIA

SinceRetirement

MonthlyAllowancew COLA

YearlyAllowancew/COLA

2036

4,3.93.652.00%

83.6783.87

4~277.5Z51,330.28

2037

4,193.652.0~%

85.55169.42

4,363.0752,356.88

2038

4,193.652.00%

87.26256.66

4,450.3353,404.02

20394,f93.65

2.00%89.01

345.694,539.34

54,472.10204U

4,193.652.00°

94.79436.48

4,630.1355,561.54

20414,193.65

2.00%92.60

529.084,722.73

56,672.772Q42

9,193.652.00°/a

9495

623.544l8i7.19

57+ 606.23

20434,193.65

2.00%9634

719.884,913.53

58,962.352044

4,193.652.00%

98.27818.15

5,011.8060,141.60

20454,193.65

2.00%100.24

918.395,112.04

61,344.432046

4,193.652.00%

102.241,620.63

5,214.2662,571.32

20474,193.65

2.00%104.29

1,124.915,318.56

63,822.752048

4,193.652.Ofl%

106.371,231.28

5,424.9365,099.20

2049

4,193.652,00%

108.501,339.76

5533.43

66,401.192050

4,193.652.00%

110.671,450.45

5,644.1067,729.21

2031

4,193.652.00%

112.882,563.33

5,756.9869,083.74

2052

4,193.652.00%

115.141,678.47

5,872.1270,4fi5.47

2053

4,193.652.00%

117.441,795.91

5,969.5671,874.78

2054

4,193.652.0095

119.791,915.71

6,109.3673,312.27

2055

4,193.652.00%

122.292,037.89

6,231.5474,778.52

2056

4,193..652.00%

124.632,162.52

6,356.1776,274.09

2057

4,193.652.00%

127.122,289.65

6,483.3077,799.57

2058

4,193.652.00%

129.672,419.31

6,612.9679,355.56

2054

4,i93~652.00%

132.262,551.57

6,745.2280,942.67

2064

4,193.652.0fl%

134.902,686.48

6,880.1382,561.53

2Q61

4,193,652.00%

137.602,824.08

7,017.7384,212.7b

2062

4,193.652.00%

140.352,9fi4.43

7,158.0885,897.01

2063

4,193.652.00%

143.163,107.60

7,301.2567,614.95

2064

4,193.652,00%

146.023x253.62

7,447.2789,367.25

2065

4,193.652.OU%

148.953,402.57

7,596.2291,154.69

2066

4,193.652.0096

151.423,554.49

7,748.1492,977.69

2067

4193.65

2.00%

154.963,709.45

7x903.10

94,837.242068

4,193.652~OQ%

158.Q63,867.52

B,U61~1796,733.99

20694,193.65

2.Oa%161.22

4,028.748,222.39

98,668.672070

4,193.652.00%

164.454,193.19

8,386.84100,642.04

20714,193.65

2,00%167.74

4,360.928,554.57

102,654.882072

4,193.652.OU%

171.9

4,532.028,725.67

104,707.982073

4,193.652.09%

174514,706,53

8,900.18106,802.14

20744,193.65

2.00%178.00

4,884.539,078.18

108,938.182075

4193.652.00%

161.565 066.10

9 259.75

9 259.75

2,996,593.27

STATE RESPONDENTS

COLA estimates are for protection purposes only. O

RS chapters 2

38 and 236A (former) provided n

o guarantee of a

specific COLA amount

EXHIBIT S21

.. .. ..

_ ......... _ ..... ....... Page 2 of 4

~.

MNWd


CA R79

COIA

YearMonthly

Allowance

EffectiveCOLA

Percents

AdditionalMonthlyCOLA for

Current Year

CumulativeMonthly

CALA Slnce

Retlrement

MonthlyAllowancew/C01A

YearlyAllowanceW COLA

YearlyPercentageReductionCOlA Onl

YearlyReductionAmount

OOLA ~n

CumulativePV of

ReductionCOLA Onl

20364,193.65

1.609066.94

66.944,260.59

51,127.040.40%

203.2436.51

20374,193.65

1.59%67.61

134.544,328.19

51,938.31O.BO°/a

418.57iD6.29

20364193.65

1.58%6628

202.624 396.47

52 757.69

1.21%646.33

206.302039

4,193.651.579/0

68.9b271.79

4,465.4453,585.27

1.6396886.83

333.652040

4,193.651.569~a

69.65341.44

4,535.0954,R}21.12

2.05%1,140.42

485.632041

4,193.651.55%

70.35411.79

4,605.4455,265.33

2.48%

1,407.44659.71

20424,193.65

1,549/071.05

482.854,67b.50

56,117.992.92%

1,688.24853.50

20439,193.65

1.53a/o71.7fi

554.614~7~i8.26

56,979.173.36%

1,983.191064.77

20444,193.65

1.53%72.48

627.104,820.75

57,848.963.81%

2,292.641,291.45

20454,193.65

1.52°673,21

740.304,893.95

58,727.454.27%

2,616.981,531.58

20464,193.65

1.51°/473.94

774.244,967.89

59,614.724.73%

2,956.601,783.36

20474,193.65

1.50%74.68

849.925,042.57

60,510.875.19%

3,311.882,045.11

204$4,193.65

1.49%75.11

924.035117.68

61,412.155.66%

3,587.062,315.55

20494,193.65

1.47°k75.29

999.325,192.97

62,315.686.15%

4,085.512,593.67

20504,193.65

1.45%75.48

1,074.815,268.46

63,221.476.66%

4,507.742,878.45

20514,193.65

1.44%75.67

1,150.485,394.13

64,129.527.17°/4

4,954.273+166.94

20524,193.65

1.42%75.86

1,226.345,41999

65,039.847.74°16

5,425.633,464.18

20534,193.65

1.40%76.45

f,302.395,496.04

65,952.448.24%

5,92L343,763.27

20544,193.65

1.39%76,24

1,378.635,5J2~28

66,867.328.79%

6.444.954,065.34

20554,193.65

1.37%76,43

1,455.065,648.71

67,784.499.35°/a

6,994.034,369.57

20564,193.65

1,36%76.62

1,531.685,725.33

66703.959.92%

7,570.144,675.18

20574,193.65

1.34%76.81

1608,495,802.14

69,625.7110.51%

8,173.Bfi4,981.42

20584,193.65

1.339'077.01

1,685.505,679.15

70,549.7611.10°k

8,805.795,257,61

20594,193.65

1.31%77.20

1,762.705,956.35

71,47fi.1511.70%

9,466.525,593.10

20604,193.65

1.30%77.39

1,840.096,033.74

72,404.8412.30%

10,156.695897.29

20614,193.65

1.29%77.58

1,917.576,111.32

73,335.8512.92%

10,876.906,199.61

20624,193.65

1.27%77.78

1,995.456,189.10

74~Zfi4.1913.54%

11,627.826,499.56

20634,193.65

1.26%77.97

2,073.426,267.07

75,204.8714.16%

12,410.096,796.67

20644,193.b5

1.25°/a78.17

2,151.596,345,24

76,142.8814.80%

13.224.377,090.50

20654,193.65

1.23%78.36

2,229.456,423.60

77,083.2415.44%

24,071.367,380.66

20664,193.65

1.22%78.56

2,308.516,502.16

78,025.9416.08%

14,951.757,666.80

2067,4,193.65

1.21%78.76

2,387.276,580.92

76,971.0116.73%

15,866.247,946.60

266

4,193.651.20%

78.952,466.12

6,659.8779,918.49

17.38%16,815.55

8,225.782069

4,193.651.19%

79.152,545.37

6,739.0280,868.23

18.fl4%17,800.44

6,498.082070

4,193.651.18%

7935

2,624.726,81837

81,820.4018.70%

18,821.648,765.31

2Q714,193.65

1.17%79.55

2,704.266897,91

82 774.95

19.37%19 879.93

9,027.252072

4,193.651.16%

79.742784.01

6,977.6683~73i.89

20.03%20,976.09

9,283.762073

4,193.651.15%

79.942,@63.95

7,057.6084,691.22

20.70%22,110.92

9,534.702074

4~i93.651.f4%

80.142,944.10

7,137.75-85,652.95

21,37%23,285.23

9,779.962075

4193.651.13%

80.343 024.44

7 218.09

7,218.0922.05%

2 041.66

9,799.92~,a~o~vao.yu

S4U~JUb.tf6 9,/99.92

STATE RESPONDENTS

EXHIBIT S21

Page 3 of 4

NWd


~Q ~~,

GALA

YearMonthly

Allowance

EffectiveCALA

PerCercta e

AdditEonalMo~hly

COLA far

Current Year

CumulativeMonthly

COLA Since

Retirement

MonthlyAllowancew COLA

YearlyAllowancew COLA

YearlyPercentageReductionGALA On

YearlyReductionAmount

COLA Onl

CumulativePV of

ReductionCALA Onf

20364,193.65

1.25%

52.4252.42

4,246.0750,952.85

0.74%

377.4367.80

20374,193.65

1.25%

5308

105.504,299.15

51,589.761.47%

7b7.12195.7Q

20384,193.65

1.25%

53.74(59.24

4,352.8952,234.63

2.19°/a1,169.39

376:632039

4,193.651.25%

54.41213.65

4,407.3052,887.56

2.91%

1,584.54604.17

20404,193.65

1.25% .

55.09268.74

4,462.3953,548.66

3.62%

2,012.88872.43

20414

x193.651.25%

55.76324.52

4518.17

54218.024.33%

2,454.761176.04

2D424143.65

1.25%

56.48381.00

4,574.6554,845.7~F

5.03%

2,914.491510.13

20434,193.55

1.25%

57.18438.18

4,631.8355,581.94

5.73%

3,380.411,870.26

20444,193.65

f.25%

57.90496.08

4,689.7356,276.71

6.43%

3 864.89

2,252.382045

4,193.651.25%

58.62554.70

4,748.3556,980.17

7.11%

4,364.262,652.84

20464

x 193.651.25°/6

59.35b14.05

4,807.7057,692.42

7.80%

4,878.903,068.32

2047

4,193.651.254'0

60.10674.15

4,867.8058,413.58

8.48°k5,409.17

3,495.832048

4,193.651.25%

60.85735.00

4,928.6559,143.75

9.15%

5,955.453,932.65

20494,193.65

1,25%

61.61796.60

4,990.2559,883.04

9.82%

6,518.144,376.37

20504,193.65

1.25%

62.38858.98

5,052.6360,631.58

10.48967,097.63

4,824.772051

4,193.651.24%

62.58921.56

5,115.2161,382.53

11.15%

7,701.265,276.32

20524,193,65

1.23%

62.67984.23

5177.88

62,134.6011.82%

8,330.875,729.b6

20534,193.65

121%

62.771,047.00

5,240.6562,887.81

12.50%

8,986.976,16352

20544,193.65

1.20%

62.861,109.86

5,303.5163,,642.14

13.19%

9,670.1461 636.75

20554,193,65

1.19%

62.961,172.82

5,366.4764,397.60

13.88%

10,380.927,088.31

20564,193.65

117%

63.051235,67

5,479.5265~154.Z0

14.58%

11,119,847537.21

20574,193.65

1.169/063.14

1,299.015,492.66

65,911.9315.28%

11,887.647,982.60

20584,193.65

1.15%

63.241,362.25

5,555.9066,670.80

15.98°/a12,fi84.77

8,423.672059

4,193.651.14%

63.331,425.58

5,619.767,430.80

16.699/013,511.87

8,859.702060

4,193.651.13%

63.431,489.01

5,682.6658,191.95

17.40%

14,369.589290.06

20614,193.65

1.12%

63.521,552.5a

5,746.!966,954.24

18.12%

15,258.529,714.18

20624,193.65

i.li%

63.621,616.16

5,809.81fi4,717.67

18.84%

16,179.3510,131.54

20634,193.65

1.10%

63.711,679.87

5873.52

70,482.2419.55%

17,132.7110,541.71

20644,193.fi5

1.09%

63.811743,68

5937.3371,247.97

20.28%

18,119.2410,944,29

20654,193.65

1.Q8°h63.91

1,8Q7.596,OOf.24

72,614.8421.00%

19,139.7611,338,97

20664,143.65

1.47%

64.OD1,871.59

6,065.2472,782.86

21.72%

20,194.8311,725.45

20674,193.55

1.06%

64.IQ1,935.69

6,129.3473,552.04

22.44°h21,285.21

12,103.492068

4,193.b51.05%

64.191,999,88

6,193.5374,322.36

23.17%

22,411.6212,472.91

20694,143.65

1,04%

64.292,064.17

6,257.8275,093.85

23.89%

23,574.82!2,833.56

20704,193.65

1.03%

fi4.392,128,56

6,322.2175,866.49

24.62%

24,775.5513,18531

20714,193.65

1.02%

64.482,193.04

6,386.6976,640.29

25.34%

26,014.5913,528.09

20724,193.65

1.01%

64.582,257.62

6,451.2777415.25

26.07%

27,292.73I3~861.85

20734,143.65

1.00%

b9.682,322.30

6,515.9578,191.37

26.79%a28,610.77

14,186.562074

4,193.650.99%

64.772,387.07

6,58072

7.8,968.6627.51%

29,969.5224,5D2~22

20754 193.65

0.99%

64.872 451.94

6645.59

6645.5928.23%

2 614.15

(4,527.77Z,SZ4,fi30,98

473,962.79 14,527.77

STATE RESPONDENTS

EXHIBIT S21

Page 4 of 4

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Matthew Larrabee - X (by Auerbach)

PER-25ios

MR. KUTLER: That's all I have. Thank you.

THE COURT: Mr. Auerbach is on his feet, it

looks like he has something he'd like to ask this witness.

MR. AUERBACH: May I ask a few questions?

THE COURT: Go ahead.

MR. AUERBACH: Thank you.

CROSS-EXAMINATION

(City of Portland)

BY MR. AUERBACH:

Q I'm Harry Auerbach, I represent the City of

Portland.

A Okay.

Q We have two plaintiffs, Mr. Arken and Mr. Voeks.

I just want to ask you: When you and Mr.

Hartman were having your conversation, he was asking you

questions about losses and benefit cuts.. In fact, the

COLA changes don't reduce anybody's benefits, do they?

A You know, I think it's a matter of perspective,

you know, they're lesser increases which --

Q That's correct.

A -- depending on your perspective, you can view

as a lesser increase or a cut.

Q But people will make more money next year,

///

Qr~darann. Qan+ekance (503) 618-9958

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Matthew Larrabee - X (by Auerbach)

PER-26io9

people -- retirees will get more money next year than they

got this year even under the changes by these --

A That's correct, in our modeling, there were no

circumstances where the effects of 822 or 861 caused

benefits already being paid to decrease.

Q Other than the folks who live out of state who

don't get the tax --

A Other than the folks who live out of state.

Q -- benefit anymore?

A Yeah. Thank you.

Q And were you involved in the enactment -- in the

process that resulted in the enactment of either of these

two statutes, 822 or 861?

A ~ I was involved in terms of providing the

analysis that are included in the exhibits, sir.

Q And what have .you reviewed in preparation of

your report for this case or in preparation for your

testimony here today?

A Reviewed our relevant work products, public

presentations that we've made to the PERS board, and then

as noted, did some review of some of the other exhibits

that were submitted by both the plaintiffs and the

defendant, the respondents here.

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~ndeaean. ~~naa.Ca~uc (503) 618-988

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Matthew Larrabee - X (by Rudnick)

PER-27ios

Q And in any of the documents that you reviewed,

either in the process of your work when these bills were

before the legislature or getting ready ~o be before the

legislature or in preparing for your participation in this

litigation, do you recall seeing anything that would --

any piece of paper by which the legislature promised

anybody or in particular, my two plaintiffs Mr. Arken and

Mr. Voeks that they would not change the method by which

COLAs were calculated?

A T have not seen anything to that effect.

MR. AUERBACH: Thank you, that's all the

questions I have.

THE COURT: Ms. Rudnick.

MS. RUDNICK: .Thank you, Your Honor. I have

just a couple of questions.

CROSS-EXAMINATION

(Linn County, Estacada School District et al)

BY MS. RUDNICK:

Q Mr. Larrabee, Mr. Hartman made the point that

the increase in employer rates that resulted from the

changes in methodology and the reduction in the assumed

earnings rate in 2013, basically offset the reduction in

employer rates resulting from this legislation; do you

remember that?

Qnd4nao~, Qaain.~z (503) 618-9958

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Steven Rodeman - X (by Auerbach)

CROSS-EXAMINATION

(City of Portland)

PER-~~

BY MR. AUERBACH:

Q Mr. Rodeman, I'm harry Auerbach. I represent

the City of Portland, and we are proceeding by Mr. Voeks

and Mr. Arken, who is.an employee and a retiree.,

In all the work that you've done on this issue,

both in the legislature and in your job for PERS and

preparing for this litigation, have you come across any

piece of paper by which the legislature or PERS has

promised the employees, retirees in general, or my two

plaintiffs in particular, that they would not change the

method of calculating and paying COLAS?

A. No.

MR. AUERBACH: Thank you. That's all I have.

THE COURT: All right. That covers everyone who

had questions for Mr. Rodeman. You may step down.

Further witnesses for the State respondents?

MR. KUTLER: No further witnesses, Your Honor.

THE COURT: Ms. Rudnick, do you have witnesses?

MS. RUDNICK: I do, Your Honor. I have two.

THE COURT: Okay.

MS. RUDNICK: The first is John Tapogna.

THE COURT: Okay.

II%

~rnu,~; QondoRanee (503) 618-9938

INDEX OF APPENDICES

Oregon Laws 2013, Chapter 53 (SB 822) .............................:..................... APP-1

Oregon Laws 2013 (Special Session), Chapter 2 (SB 861) ........................A.PP-9

Bureau of Labor Statistics, CPI Detailed Report, Data for Feb. 2014 .....APP-13

APP-1

OREGON LAWS 2013 Chap. 53

CHAPTER 53

.AN ACT ss sz~

Relating to public employee retirement; creating-new provisions; amending ORS 237.635, 237.637,238.360, 238.372, 238.374, 238.376, 238.378, 238.575,238A.210 and 314.840; limiting expenditures; anddeclaring an emergency.

Be It Enacted by the People of the State of Or-egon:

COST-OF-LIVING ADJUSTMENT

SECTION 1. ORS 238.360 is amended to read:238.360. (1) As soon as practicable after January

1 each year, the Public Employees Retirement Boardshall determine the percentage increase or decreasein the cost-of-living for the previous calendar year,based on the Consumer Price Index (Portlandarea-all items) as published by the Bureau of LaborStatistics of the U.S. Department of Labor for thePortland, Oregon, area. Prior to July 1 each year theallowance which the member or the member's bene-ficiary is receiving or is entitled to receive on Au-gust 1 for the month of July shall be multiplied bythe percentage figure deternuned, and the allowancefor the nest 12 months beginning July 1 adjusted tothe resultant amount.

(2) Such increase or decrease shall not exceed[two] 1.5 percent of any monthly retirement allow-ance in any year and no allowance shall be ad'ustedto an amount less than the amount to which t~e re-cipient would be entitled if no cost-of-living adjust-ment were authorized.

(3) The amount of any cost-of-living increase ordecrease in any year in excess of the maximum an-nual retirement allowance ad,~ ustment of [two] 1.5percent shall be accumulated from year to year andincluded in the computation of increases or de-creases in succeeding yeazs.

(4) Any increase in the allowance shall be paidfrom contributions of the public employer underORS 23$.225. Any decrease in the allowance shall bereturned to the employer in the form of a creditagainst contributions of the employer under ORS238.225.

SECTION 2. The amendments to ORS 238.360by section 1 of this 2013 Act apply to all adjust-ments to allowances made under ORS 238.360 onand after July 1, 2018, and before July Y, 2014.

SECTION 3. ORS 238.360, as amended by sec-tion 1 of this 2013 Act, is amended to read:

238.360. (1) ~9s soon as practicable after January1 each year, the Public Employees Retirement Boardshall determine the percentage increase or decrease inthe cost-af-living for the previous calendar year, basedon the Consumer Price Index . (Portland area-allitems) as published by the Bureau of Labor Statisticsof the U.S. Department of Labor for the Portland,

Oregon, area. Prior to July 1 e¢ch year the allow¢ncewhich the member or the member's beneficiary is re-ceiuing or is entitled to receive on 'August 1 for themonth of July shall be multiplied by the ercentagefigure determined, dnd tlae allowance for t~e next 12months beginning Jr~ly 1 adjusted to the resultant¢mount.] On July Y of esc1~ year, the Public Em-ployees Retirement Board shall increase theyearly allowance that a member or member'sbeneSciary receives or is entitled to receive, asprovided in subsections (2) and (3) of this sec-tion. The increase is 5rst payable with the al-lowance that the member or the member'sbeneficiary receives or is entitled to receive onAugust 1.

[(2) Such increase or decrease shall not exceed 1.5percent of any monthly retirement allowance in anyyear and no allowance shall be adjusted to ¢n amountless than the amount to which tjie recipient would beentitled if no cost-of-living adjustment were author-ized.]

[(3) The ¢mount of any cost-of-living increase ordecrease in any year in excess of thz maximum an-nual retirement allowance adjustment of 1.5 percentshall be accumulated from year to year and includedin the computation of increases or decreases in suc-ceeding years.]

(2)(a)' If the member's or member'sbeneficiary's early allowance for the previousyear totaled20,000 or less, the allowance shallbe increased by two percent.

(b) If the member's or member'sbeneficiary's yearly allowance for the previousyear totaled more than $20,000 but not morethan $40,000,- the allowance shall be increased by$400 plus l.b percent of the amount of the yearlyallowance exceeding $20,000.

(c) If the member's or member'sbeneficiary's yearly allowance for the previousyear totaled morethan $40,000 but not morethan $60,000, the allowance stall be increased by$700 plus one percent of the amount of theyearly allowance exceeding $40,000.

(d) If the member's or member'sbeneficiary's yearly allowance for the previousyear totaled more than $60,000, ~ the allowanceshall be increased by $900 plus .25 percent of theamount of the yearly allowance exceeding$60,000.

(3) If a member or member's beneficiary hasbeen receiving an allowance for less than 12months on July 1 of any year, the board shallcalculate the iacrease under subsection (2) ofthis section on the basis of the yearly allowancethe member or member's beneficiary would havereceived if the member or member's beneficiaryhad received the monthly allowance for 12months.

(4) Any increase in the allowance shall be paidfrom contributions of the public employer underORS 238225. [Any decrease in the allowance shall bereturned to tjie employer in the form of a credit

Chap. 53 OREGON LAWS 2013

¢gainst contributions of the employer under ORS238.225.]

SECTION 4. The amendments to ORS 238.360by section 3 of this 2013 Act apply to all in-creases to allowances made under ORS 238.380on and after July 1, 2014.

SECTION b. ORS 238A.210 is amended to read:238A.210. (1) As soon as practicable after Janu-

ary 1 each year, the Public Employees RetirementBoard shall determine the percentage increase ordecrease in the cost of living for the previous calen-dar year, based on the Portland-Salem, OR-WA,Consumer Price Index for All Urban Consumers forAll Items, as published by the Bureau of Labor Sta-tistics of the United States Department of Labor.Before July 1 each year, the board shall adjust everypension payable under ORS 238A.180, 238A.185 and238A.190, every disability benefit under ORS238A.235 and every death benefit payable under ORS238A.230 by multiplying the monthly payment by thepercentage figure determined by the board. If aperson has been receivixg a pension or benefit forless than 12 months on July 1 of a calendar year, theboard shall male a pro rata reduction of the adjust-ment based on the number of months that the pen-sion or benefit was received before July 1 of theyear. The adjustment shall be made for the paymentspayable on August 1 and thereafter:

(2) An increase or decrease in the benefit pay-ments under this section may not exceed [two] 1.5percent in any year. A pension or death benefit maynot be adjusted to an amount that is less than theamount that would have been payable if no cost-of-living adjustment had been made since the pensionor death benefit first became payable.

SECTION 6. The amendments to ORS238A210 by section 5 of this 2018 Act apply toall adjustments to pensions or benefits madeunder ORS 238A.210 on and after July 1, 2018,and before July 1, 2014.

SECTION 7. ORS 23SA.210, as amended by sec-tion 5 of this 2013 Act, is amended to read:

238A.210. [(1) As soon as prdctic¢ble after Jdnu-ary 1 each year, the Public Employees RetirementBoard shall determine the percentage increase or de-credse in the cost of liaing for the previous calendaryear, based on the Portland-Salem, OR-WA, Con-sumer Price Index for All Urban Consumers for AllItems, as ~vublished by the Bureau of Labor Stadisticsof the United States Dep¢rtment of Labor. Before JulyI each year, tTze board shall acdjust every pensionpayable under ORS 238A 180, 238A.185 and238A.190, eaery disability benefit under ORS238A.235 and eaery death benefit payable under ORS238A.230 by multiplying the monthly payment by thepercentage figure determined by the board. I f a per-son has been receiaing a pension or benefat for lessthan 12 months on July 1 of a calendar year, t)zeboard shall make a pro mt¢ reduction of t)ie adjust-

APP-2

ment based on the number of months that the pensionor benefit was received before July 1 of the year. Theadjustment shall be made for the payments p¢ydbleon August Y and thereafter.]

[(2) An incre¢se or decre¢se in the benefit pay-rnents unaler this section may not exceed 1.5 percentin any year. A pension or death benefct may not beadjusted to an amount that is less than the amountth¢t would have been payable if no cost-of-living ad-justment had been made since the pension or deathbenefit firsE became payable.]

(1) On July 1 of each year the board shallincrease every pension payable under ORS238A.180, 238A.185 and 238A.190, every disabilitybenefit under ORS 238A.235 and every deathbenefit payable under ORS 288A280 as providedin subsections (2) and (S) of this section. Theincrease shall be made for the payments payableon Augu et 1 and thereafter.

(2)(a) If a person's yearly ension or benefitfor the previous year totaled20,000 or leas, thepension or beneSt shall be increased by twopercent.

(b) If a person's yearly pension or benefit forthe previous ,year totaled more than $20,000 butnot more than $40,000, the pension or benefitshall be increased by $400 plus 1.b percent of theamount of the yearly pension or benefit egceed-ing $20,000.

(c) If a person's yearly pension or benefit forthe previous year totaled more .than $40,000 butnot more than $60000 the pension or benefitshall be increased ~y 700 plus one percent ofthe amount of the yearly pension or benefit ez-

~~°'000.(d) a person's yearly pension or benefit for

the previous year totaled more than $60,000, thepension or benefit shall be increased by $900 plus.25 percent of the amount of the yearly pensionor bene5t esceeding $60,000.

(3) If a person has been receiving a pensionor benefit for less than 12 months on July 1 ofany year, the board shall calculate the increaseunder subsection (2) of this section on the basisof the yearly allowance the person would havereceived if the person bad received the pensionor benefit for 12 months.

SECTION 8. The amendments to ORS238A210 by section 7 of this 2018 Act apply toall increases to pensions or benefits made underORS 2SSA.210 on and after July 1, 2014.

SECTION 9. (1) The amendments to ORS238.360 and 288A.210 by sections 3 and 7 of this2013 Act become operative on July 1, 2014.

(2) The Public Employees Retirement Boardmay take any action before the operative datespecified in subsection (1) of this section to en-able the board, on and after the operative datespeciSed in subsection (1) of this section, to eg-ercise all the duties, functions and powers con-ferred on the board by the amendments to ORS

APP-3


238.360 and 238A.210 by sections 3 and 7 of this2018 Act.

SECTION Y0. ORS 238.575 is amended to read:238.575. (1) Every monthly retirement allowance

or pension payable to a 'udge member or survivingspouse of a udge mem~er under ORS 238.500 to238.585 shall ~e adjusted annually [to reflect the per-ceretageincrease or decrease in the cost of living] asprovided in ORS 238.360.

(2) ORS 238.368 applies to judge members, andfor that purpose the monthly retirement allowancereferred to in ORS 238.368 shall be the monthly re-tirement allowance payable to a judge member orthe monthly pension payable to the surviving spouseof a judge member under ORS 238.565 (3)(a).

TAXATION OF OUT-OF-STATE RETIREES

SECTION Y1. ORS 238.372 is amended to read:238.372. (1) Except as provided in ORS 238.372 to

238.384, the Public Employees Retirement Board maynot pay the increased Lbenefct] benefits provided bychapter 796, Oregon Laws 1991, or chapter 569,Oregon Laws 1995, if the board receives notice underORS 238.372 to 238.384 that the payments made tothe person under this chapter are not subject to Or-egon personal income tax under ORS 316.127 (9).

[(2) The pro~isions of ORS 238.372 to 238.384 donot apply to: J

[(a) A retired member of the system who is re-ceiuing payments under this c)zapter dnd whose effec-tiue d¢te of retirement is before January 1, 2012;]

[(b) A person who is receiving payments underthis chapter by reason of the retirement of a memberwhose effectiae date of retirement is before January1, 2012; andj

[(c) Any other person who receives payments un-der this chapter that began before J¢nuary 1, 2012.]

[(3)] (2) The board shall give written notificationof the provisions of ORS 238.372 to 238.384 to allpersons applying for or receiving payments underthis chapter.

[(4)] (3) A person receiving payments under thischapter that are not increased under chapter 796,Oregon Laws 1881, or chapter 569, Oregon Laws1995, by reason of ORS 238.372 to 238.384 has noright or claim to the increased benefit provided bychapter 796, Oregon Laws 1991, or chapter 569,Oregon Laws 1995, except as provided in ORS238.372 to 238.384.

SECTION 12. ORS. 238.374 is amended to read:238.374. (1) A person applying for payments un-

der this chapter shall give a written statement tothe Public Employees Retirement Board that indi-cates whether the payments will be subject to Ore-gon personal income tax under ORS 316.127 (9). Ifthe person fails to provide the statement required bythis subsection, or the statement indicates that thepayments will not be subject to Oregon personal in-come tax under ORS 316.127 (9), the board may not

pay the person the increased [benefit] benefits pro-vided, by chapter 796, Oregon Laws 1991, or chap-ter b69, Oregon Laws 1995.

(2) If a person is receiving payments under thischapter that have not been increased under chapter796, Oregon Laws 1991, or chapter 569, OregonLaws 1995, by reason of the provisions of subsection(1) of this section, and thereafter the payments be-come subject to Oregon personal income tax underORS 316.127 (9), the person shall promptly notifythe Public Employees Retirement Board by writtenstatement that the payments are subject to Oregonpersonal income tax under ORS'316.127 (9).

(3) If a person is receiving payments under thischapter that have not been increased under chapter796, Oregon Laws 1991, or chapter 569, OregonLaws 1995, by reason of the provisions of subsection(1) of this section, and the board receives notice un-der subsection (2) of this section that payments tothe person under this chapter are subject to Oregonpersonal income tax under ORS 316.127 (9), or de-termines under ORS 238.378 that payments to theperson under this chapter are subject to Oregonpersonal income tax under ORS 816.127 (9), theboard shall initiate payment of the increased(benefit] benefits provided by chapter 796, OregonLaws 1881, or chapter 669, Oregon Laws 1995. Theincrease in benefits becomes effective on the firstday of the calendar year following receipt of noticeby the board.

SECTION 1S. ORS 238.376 is amended to read:238.376. (1) If a person is receiving payments

under this chapter, and after the payments com-mence the payments cease to be subject to Oregonpersonal income tag under ORS 316.127 (9), the per-son shall promptly notify the Public Employees Re-tirement Board by written statement that thepayments are no longer subject to Oregon personalincome tax under ORS 316.127 (9). The board shallreduce any benefits payable to the person by theamount by which the benefits were increased undezchapter 796, Oregon Laws 1991, or chapter 569,Oregon Laws 1995: The reduction in benefits be-comes effective on the first day of the calendar yearfollowing receipt of notice by the board.

(2) If a person is receiving payments under thischapter that have been reduced [under the provisionsof subsection (1) of this section] because the pay-ments are not subject to Oregon personal in-come tas under ORS 316.17 (9), and thereafterthe payments become subject to Oregon personal in-come taa under ORS 516.127 (9), the person shallpromptly notify the board by written statement thatthe payments are once again subject to Oregon per-sonal income tax under ORS 516.129 (9).

(3) If a person is receiving payments under thischapter that have been reduced [under the provisionsof subsection (1) of this section] because the pay-ments are not subject to Oregon personal in-come tas under ORS 816.127 (9), and the boardreceives notice under subsection (2) of this sectionthat payments to the person under this chapter are


once again subject to Oregon personal income taxunder ORS 816.127 (9), or determines under ORS238.378 that payments to the person under tauschapter are once again subject to Oregon personalincome tax under ORS 816.127 (8), the board shallresume payment of the increased [benefit] benefitsprovided by chapter 796, Oregon Laws 1991, orchapter 669, Oregon Laws 1995. The increase inbenefits becomes effective on the first day of thecalendar year following receipt of notice by theboard.

SECTION 14. ORS 238.378 is azmended to read:238.378. (1) Not less than once each calendar

year, the Public Employees Retirement Board shallprovide to the Department of Revenue informationidentifying persons to whom payments have beenmade under this chapter. The Department of Re-venue shall provide to the board such informationon Oregon personal income. tax returns as the boarddeems necessary to determine whether the paymentsmade to tie person under this cha~pter are subjectto Oregon personal income tag under ORS 316.127(9).

(2) Tf the board determines that the paymentsmade to a person under this chapter are not subjectto Oregon personal income tax under ORS 316.127(9) based on information provided by the Departmentof Revenue under this section, and the person is re-ceiving the increased benefit provided by chapter796, Oregon Laws 1991, or chapter 569, OregonLaws 1995, the board shall reduce the benefits pay-able to the person as provided in ORS 238.376 (1).

(3) If the board determines that the paymentsmade to a person under this chapter are subject toOregon personal income tax under ORS 816.127 (9)based on information provided by the Department ofRevenue undex this section, and the person is notreceiving the increased benefit provided by chapter796, Oregon Laws 1991, or chapter 569, OregonLaws J.995, the board shall increase the benefitspayable to the person as provided in ORS 238.374 (3)or 238.376 (3).

SECTION 16. ORS 237.635 is amended to read:237.635. (1) And public employer that provides

retirement benefits to its police officers and fire-fighters other than by participation in the PublicEmployees Retirement System pursuant to the pro-visions of ORS 237.620 shall provide increases to thepolice officers and firefighters of the public em-ployer, both active and retired, that are equal to theincreases in retirement benefits that are provided forin this 1991 Act for active and retired police officersor firefighters who are members of the Public Em-ployees Retirement System, or shall provide to thosepolice officers and firefighters increases in retire-ment benefits that are the actuarial equivalent ofthe increases in retirement benefits that are pro-vided for in this 1991 Act for police officers or fire-fighters who are members of the Public EmployeesRetirement System. No other retirement benefit orother benefit provided by those public employers

APP-4

shall be decreased by the employer by reason o£ theincreases mandated by this section. '

(2) The increased benefits provided for in thissection apply only to police officers or firefighterswho establish membership before July 14, 1995, in aretirement plan or system offered by a public em-ployer in lieu of membership in the Public Employ-ees Retirement System pursuant to the provisions ofORS 237.620.

(3) A public employer that is subject to therequirements of this section shall cease payingincreased retirement benefits under this sectionif the payments made to .the person are notsubject to Oregon personal income tag underORS 816.127 (9). A public employer that is sub-ject to the requirements of this section shalladopt procedures similar to those described inORS 238372 to 236.384 for the purpose of imple-menting this subsection. The Department ofRevenue shall provide to 'a public employer thatis subject to the requirements of this section theinformation regarding Oregon personal imcometaac returns that the public emplover deemsnecessary to determine whether the retirementbenefits paid to the person by the public em-ployer are subject to Oregon personal incometag under ORS 816.127 (8).

SECTION 16. ORS 237.637 is amended to read:237.637. (1) Any public employer that provides

retirement benefits to its police officers and fire-fighters other than by participation in the PublicEmployees Retirement System pursuant to the pro-visions of ORS 237.620 shall provide increases to thepolice officers and firefighters of the public em-ployer, both active and retired, that are equal to theincreases in retirement benefits that are provided forin chapter 569, Oregon Laws 1995, for active andretired police officers or firefighters who are mem-bers of the Public Employees Retirement System, orthe public employer shall provide to those police of-ficers and firefighters increases in retirement bene-fits that are the actuarial equivalent of the increasesin retirement benefits that are provided for in chap-ter 569, Oregon Laws 1995, for police officers orfirefighters who are members of the Public Employ-ees Retirement System. Increases provided underthis section Shall be reduced by the amount of anybenefit increase provided by ORS 237.635 in thesame manner that increases in retirement benefitsthat are provided for in chapter 569, Oregon Laws1995, for active and retired police officers or fire-fighters who are members of the Public EmployeesRetirement System are reduced to reflect amountspaid to those members under the provisions of chap-ter 796, Oregon Laws 1991. No other retirementbenefit or other benefit provided by those publicemployers shall be decreased by the employer byreason of the increases mandated by this section.

(2) A public employer that is subject to the re-quirements of this section shall cease paying in-creased retirement benefits under this section .if thepayments made to the person are not subject to Or-

APP-5


egon personal income tax under ORS 316.127 (9). Apublic employex that is subject to the requirementsof this section shall adopt procedures similar tothose described in ORS 238.372 to 238.384 for thepurpose of implementing this subsection. The De-partment of Revenue shall provide to a public em-ployer that is subject to the requirements of thissection [such] the information regarding Oregonpersonal income tax returns [as] that the publicemployer deems necessary to determine whether theretirement benefits paid to the person by the publicemployer are subject to Oregon personal income taxunder ORS 316.127 (9).

[(3) The provisions of subsection (2) of this sectiondo not apply to:]

[(a) A retired police officer or firefighter who isreceiving pdyrraents under the public emp er's planand whose efj'ective date of retirement is be}~ore Janu-ary 1, 2012;]

[(b) A person who is receiving payments under tlaepublic employer's plan by reason of the retirement ofa police officer or firefighter whose effective date ofretirement is before January 1, 2012; and]

[(c) An other person who receives pay ments un-der thz pu~lic employer's plan that began before Jan-udry 1, 2012.]

SECTION 17. ORS 314.840, as amended by sec-tion 11, chapter 107, Oregon Lawa 2012, is amendedto read:

314.840. (1) The Department of Revenue may:(a) Furnish any taxpayer, representative author-

ized to represent the taxpayer under ORS 305.230 orperson designated by the taxpayer under ORS305.193, upon request of the taxpayer, representativeor designee, with a copy of the taxpayer's income taxreturn filed with the department for any year, orwith a copy of any report filed by the taxpayer inconnection with the return, or with any other infor-mation the department considers necessary.

(b) Publish lists of taxpayers who aze entitled tounclaimed tax refunds.

(c) Publish statistics so classified as to preventthe identification of income or any particulars con-tained in any report or return.

(d) Disclose a taxpayer's name, address, tele-phone number, refund amount, amount due, SocialSecurity number, employer identification number orother taxpayer icienti~fication number to the extentnecessary in connection with collection activities orthe processing and mailing of correspondence or offorms for any report, return or claim required in theadministration of ORS 310.630 to 310.706, any localtax under ORS 305.620, or any law imposing a tagupon or measured by net, income.

(2) The department also may disclose and giveaccess to information described in ORS 314.835 to:

(a) The Governor of the State of Oregon or theauthorized representative of the Govexnor:

(A) With respect to an individual who is desig-nated as being under consideration for appointmentor reappointment to an office or for employment 9n

the office of the Governor. The information disclosedshall be confined to whether the individual:

(i) Has filed returns with respect to the taxesimposed by ORS chapter 316 for those of not morethan the three immediately preceding years forwhich the individual was required to file an Oregonindividual income tax return.

(ii) Has failed to pay any tax within 30 days fromthe date of mailing of a deficiency notice or other-wise respond to a deficiency notice within 30 daysof its mailing.

(iii) Has been assessed any penalty under theOregon personal income tax laws and the nature ofthe penalty.

(iv) Has been or is under investigation for possi-ble criminal offenses under the Oregon personal in-come tax laws. Information disclosed pursuant tothis parsgraph shall be used only for the purpose ofmaking the appointment, reap pointment or decisionto employ or not to employ the individual in the of-fice of the Governor.

(B) For use by an officer or employee of the Or-egon Department of Administrative Services dulyauthorized or employed to prepare revenue esta-mates, or a person contracting with the Oregon De-partment ~of Administrative Services to preparerevenue estimates, in the preparation of revenue es-timates required for the Governor's budget underORS 291.201 to 291.226, or required for submissionto the Eme~rg ency Board or the Joint Interim Com-mittee ~ on Ways and Means, or if the LegislativeAssembly is in session, to the Joint Committee onWays and Means, and to the Legislative RevenueOfficer or Legislative Fiscal Officer under' ORS291.342, 291.348 and 291.445. The Department of Re-venue shall disclose and give access to the informa-tion described in ORS 314.835 for the purposes ofthis subparagraph only if

(i) The request for information is made in writ-ing, specifies the purposes for which the request ismade and is signed by an authorized representativeof the Oregon Department of Administrative Ser-vices. The form for request for information shall beprescribed by the Oregon Department of Adminis-trative Services and approved by the Director of theDepartment of Revenue.

(ii) The officer, employee or person receiving tkzeinformation does not remove from the premises ofthe Department of Revenue any materials that wouldreveal the identity of a personal or corporate tax-payer.

(b) The Commissioner of Internal Revenue orauthorized representative, for tax administration andcom fiance purposes only.

~c) For tax administration and compliance pur-poses, the proper officer or authorized representativeof any of the following entities that has oz is gov-erned by a provision of law that meets the require-ments of any applicable provision of the InternalRevenue Code as to confidentiality:

(A) A state;(B) A city, county or other political subdivision

of a state;


(C) The District of Columbia; or(D) An association established exclusively to

provide services to federal, state or local taxing au-thorities.

(d) The Multistate Tag Commission or its au-thorized representatives, for tas administration andcompliance purposes only. The Multistate Tax Com-mission may make the information available to theCommissioner of Internal Revenue or the proper of-ficer or authorized representative of any govern-mental entity described in and meeting thequalifications of paragraph (c) of this subsection.

(e) The Attorney General, assistants and em-ployees in the Department of Justice, or other legalrepresentative of the State of Oregon, to the extentthe department deems disclosure or access necessaryfor the performance of the duties of advising or re-presenting the department pursuant to ORS 180.010to 180240 and the tax laws of this state.

(fl Employees of the State of Oregon, other thanof the Department of Revenue or Department ofJustice, to the extent the department deems disclo-sure or access necessary for such employees to per-form their duties under contracts or agreementsbetween the department and any other department,agency or subdivision of the State of Oregon, in thedepartment's administration of the tax laws.

(g) Other persons, partnerships, corporations andother legal entities, and their employees, to the ex-tent the department deems disclosure or access nec-essary for the performance of such others' dutiesunder contracts or agreements between the depart-ment and such legal entities, in the department'sadministration of the tax laws.

(h) The Legislative Revenue Of~i.cer or author-ized representatives upon compliance with ORS173.850. Such officer or representative shall not re-move from the premises of the department any ma-terials that would reveal the identity of any taxpayeror any other person.

(i) The Department of Consumer and BusinessServices, to the extent the department requires suchinformation to determine whether it is appropriateto adjust those workers' compensation benefits theamount of which is based pursuant to ORS chapter656 on the amount of wages or earned income re-ceived by an individual.

(j) Any agency of the State of Oregon, or anyperson, or any officer or employee of such agency orperson to whom disclosure or access is given bystate law and not otherwise referred to in this sec-tion, including but not limited to the Secretary ofState as Auditor of Public Accounts under section2, Article VI of the Oregon Constitution; the De-partment of Human Services pursuant to ORS314.860 and 412.094; the Division of Child Supportof the Department of Justice and district attorneyregazding cases for which they are providing supportenforcement services under ORS 25.080; the StateBoard of Tag Practitioners, pursuant to ORS 673.710;and the Oregon Board of Accountancy, pursuant toORS 673.415.

APP-6

(k) The Director of the Department of Consumerand Business Services to determine that a personcomplies with ORS chapter 656 and the Director ofthe Employment Department to determine that aperson complies with ORS chapter 657, the followingemployer information:

(A) Identification numbers.(B) Names and addresses.(C) Inception date as employer.(D) Nature of business.(E) Entity changes.(F) Date of last payroll.(L) The Director of Human Services to determine

that a person has the ability to pay for care thatincludes services provided by 'the Eastern OregonTz~aining Center or the Department of Human Ser-vices to collect any unpaid cost of care as providedby ORS chapter 179.

(m) The Director of the Oregon Health Authorityto determine that a person has the ability to pay forcare that includes services provided by the BlueMountain Recovery Center or the Oregon StateHospital or the Oregon Health Authority to collectany unpaid cost of care as provided by ORS chapter179.

(n) Employees of the Employment Department tothe extent the Department of Revenue deems disclo-sure or access to information on a combined tax re-port filed under ORS 316.168 is necessary toperformance of their duties in administering the taxunposed by ORS chapter 657.

(o) The State Fire Marshal to assist the StateFire Mazshal in carrying out duties, functions andpowers under ORS 453.307 to 453.41, the employeror agent name, address, telephone number andstandard industrial classification, if available.

(p) Employees of the Department of State Landsfor the purposes of identif~ing,locating and publish-ing lists of taxpayers entitled to unclaimed refundsas required b_y the provisions of chapter 694, OregonLaws 1993. The information shall be limited to thetaxpayer's name, address and the refund amount.

(q) In addition to the disclosure allowed underORS 305.225, state or local law enforcement agenciesto assist in the investigation or prosecution of thefollowing criminal activities:

(A) Mail theft of a check, in which case the in-formation that may be disclosed shall be limited tothe stolen document, the name, address and taaipayeridentification number of the payee, the amount ofthe. check and the date printed on the check.

(B) The counterfeiting, forging or altering of acheck submitted by a taxpayer to the Department ofRevenue or issued by the Department of Revenue toa taxpayer, in which case the information that maybe disclosed shall be limited to the counterfeit,forged or altered document, the name, address andtaxpayer identification number of the payee, theamount of the check, the date printed on the checkand the altered name and address.

(r) The United States Postal Inspection Serviceor a federal law enforcement agency, including butnot limited to the United States Department of Jus-

APP-7


tice, to assist in the investigation of the followingcriminal activities:

(A) Mail theft of a check, in which case the in-formation that may be disclosed shall be limited tothe stolen document, the name, address and tazpayeridentification number of the payee, the amount ofthe check and the date printed on the check.

(B) The counterfeiting, forging or altering of acheck submitted by a taxpayer to the Department ofRevenue or issued by the Department of Revenue toa taxpayer, in which case the information that maybe disclosed shall be limited to the counterfeit,forged or altered document, the name, address andtaxpayer identification number of the payee, theamount of the check, the date printed on the checkand the altered name and address.

(s) The United States Financial ManagementService, for purposes of facilitating the offsets de-scribed in ORS 305.612.

(t) A municipal corporation of this state for pur-poses of assisting the municipal corporation in theadministration of a tax of the municipal corporationthat is imposed on or measured by income, wages ornet earnings from self-employxnent. Any disclosureunder this paragraph may be made only pursuant toa written agreement between the Department of Re-venue and the municipal corporation that ensuresthe confidentiality of the information disclosed.

(u) A consumer reporting agency, to the extentnecessary to carry out the purposes of ORS 314.843.

(v) The Public Employees Retirement Board, tothe extent necessary to carry out the purposes ofORS 238.372 to 238.384, and to any public employer,to the extent necessary to carry out the purposes ofOftS 237.635 (8) and 237.637 (2).

(3)(a) Each of~'icer or employee of the departmentand each person described or referred to in subsec-tion (2)(a), (e) to (k) or (n) to (q) of this section towhom disclosure or access to the tax information isgiven under 'subsection (2) of this section or anyother provision of state law, prior to beginning em-ployment or the performance of duties involvingsuch disclosure or access, shall be advised in writingof the provisions of ORS 314.835 and 314.991, relat-ing to penalties for the violation of ORS 314.835, andshall as a condition of employment or performanceof duties ezecute a certificate for the department, ina form prescribed by the department, stating in sub-stance that the person has read these provisions oflaw, that the person has had them explained andthat the person is aware of the penalties for the vi-olation of ORS 314.835.

(b) The disclosure authorized in subsection (2)(r)of this section shall be made only after a writtenagreement has been entered into between the De-paxtment of Revenue and the person described insubsection (2)(r) of this section to whom disclosureor access to the tax information is given, providingthat:

(A) Any information described in ORS 314.835that is received by the person pursuant to subsection(2)(r) of this section is confidential information that

7

may not be disclosed, except to the extent necessaryto investigate or prosecute the criminal activitiesdescribed in subsection (2)(r) of this section;

(B) The information shall be protected as confi-dential under applicable federal and state laws; and

(C) The United States Postal Inspection Serviceor the federal law enforcement agency shall givenotice to the Department of Revenue of any requestreceived under the federal Freedom of InformationAct, 5 U.S.C. 552, or other federal law relating tothe disclosure of information.

(4) The Department of Revenue may recover thecosts of furnishing the information described in sub-section (2)(k) to (m) and (o) to . (q) of this sectionfrom.the respective agencies.

EMPLOYER CONTRIBUTION RATES

SECTIdN 18. (1) As soon as possible afterthe effective date of this 201H Act, the PublicEmployees Retirement Soard shall recalculatethe contribution rates of all employers, pursu-ant to ORS 238.22b, to reflect the provisions ofthis 2013 Act.

(2) The board shall issue corrected comtribu-tion rate orders to employers ai~ected by recal=culated rates under this section within 90 daysafter the effective date of this 2013 Act. Thecorrected rates are effective July 1, 2013.

JUDICIAL REVIEW

SECTIO1~L19. (1) Jurisdiction is conferred onthe Supreme Court to determine in the mannerprovided by this section whether this 2013 Actbreaches any contract between members of thePublic Employees Retirement System and theiremployers, violates any constitutional provision,inetuding but not limited to impairment of con-tract rights of members of the Public EmployeesRetirement System under Article I, section. 21,of the Oregon Constitution, or Article I, section10, clause 1, of the United States Constitution,or is invalid for any other reason.

(2) A person who is adversely affected by this2013 Act or who will be adversely affected bythis 2015 Act may institute a proceeding 'for re-view by filing with the Supreme.Court a petitionthat meets the following requirements:

(a) The petition must be filed within 60 daysafter the effective date of this 2018 Act

(b) The petition must include the following.(A) A statement of the basis of the chal-

lenge; and(B) A statement and supporting affidavit

showing how the petitionear is adversely affected.(3) The petitioner shall serve a copy of the

petition by registered or certified mail upon thePublic Employees Retirement Soard, the Attor-ney General and the Governor.

Chgp. 53 OREGON LAWS 2013

(4) Proceedings for review under this sectionshall be given .priority over all other mattersbefore the Supreme Court.

(b) The Supreme Court shall allow publicemployers participating in the Public EmployeesRetirement System to intervene in any proceed-ing under this section.

(6) In the event the Supreme Court determines that there are factual issues in the peti-tion, the Supreme Court may appoint a specialmaster to hear evidence and to prepare recom-mended findings of fact.

EXPENDITURE LIMITATION

SECTION 20. Notwithstanding any other lawlimiting expenditures, the amount of $1,008,161is established for the biennium beginning July1, 2013, as the ma~mum limit for payment ofexpenses from fees, moneys or other revenues,including Miscellaneous Receipts, but egeludinglottery funds and federal funds, collected or re-ceived.by the Public Employees Retirement Sys-

APP-8

tem for administrative and operating expensesincurred in implementing the provisions of this2013 Act.

CAPTIONS

SECTION 21. The unit captions used in this2013 Act are provided only for the convenienceof the reader and do not become part of thestatutory law of this state or express any legis-lative intent in the enactment of this 2013 Act.

EMERGENCY CLAUSE

SECTION 22. This 2013 Act being necessaryfor the immediate preservation of the publicpeace, health and safety, an emsrgency is de-clared to east, and this 2013 Act takes effect onits passa~e.

Approve by the Governor May 6, 2013F51ed in the office of Secretary of State May 6, 2013Effective date May 6, 2013

APP-9

OREGON LAWS 2013 SPECIAL SESSION Chap. 2

CHAP'T'ER 2

AN ACT SB ssi[2013 Special Session]

Relating to cost-of-living adjustments under thePublic Employees Retirement System; creatingnew provisions; amending ORS 238.360, 238.465and 238A210; and declaring an emergency.

Be It Enacted by the People of the State of Or-egon:

COST-OF-LIVING ADJUSTMENTS

SECTION 1. ORS 238.360, as amended bysections 1 an 3, chapter 53, Oregon Laws 2013, isamended to read:

238.360. (1) On July 1 of each year, the PublicEmployees Retirement Board shall increase theyearly allowance that a member or member's benefi-ciary receives or is entitled to receive, as providedin Lsubsections (2) and (3)] subsection (2) of thissection. The increase is first payable with the al-lowance that the member or the member's benefici-ary receives or is entitled to receive.on August 1.

(2)(a) ff the member's or member's beneficiar~syearly allowance [for the previous year totaled$20,000] is $60,000 or less, .the allowance shall beincreased by Ltwo] 1.25 percent.

[(b) If the members or member's beneficiary'syearly allowance for the previous, ye¢r tot¢led morethan $20,000 but not more than $40,000, the allowanceshall be increased by $400 plus 1.5 percent of theamount of the yearly allowance exceeding $20,000.)

[(c) 1`f .the member's or member's beneficaary'syearly allowance for the precious year totaled morethan $40,000 but not more than $60,000, the allowanceshall be incre¢sed by $700 plus one percent of theamount of the yearly allowance exceeding $40,000.]

((d)] (b) If the member's or member'sbeneficiary~s yearly allowance or the previous yeartotaled] is more than $60,000, t e allowance shall beincreased by [$900 plus .257 $750 pltus O.lb percentof the amount of the yearly allowance exceeding$60,000.

[(3) If a member or member's beneficiary h¢s beenreceiving an allowance for Zess than 12 months onJuly 1 of any year, the board shall calculate the in-crease under subsection (2) of this section on the basisof the yearly allowance the member or member's ben-eficiary would have received if the member ormember's beneficiary had received the. monthly dllow-ance for 12 months.]

[(4)] (8) Any increase in the allowance shall be.paid from contributions of the public employer underORS 238.225.

(4) As used in this section, "yearlyallowance" means the monthly allowance that amember or member's beneSeiary is entitled toon July 1 of the year in which the board is cal-culaEing the increase under subsection (1) of thissection, multiplied by 12.

SECTION 2. The amendments to ORS 238.360by section 1 of this 2013 special session Act ap-ply to all increases to allowances made underORS 238.360 on and after July 1, 2014.

ECS TION 3. ORS 238A.210, as amended bysections 5 and 7, chapter 53, Oregon Laws 2013, isamended to read:

238A.210. (1) On July 1 of each year, the boardshall increase every pension payable under ORS238A180, 238A.185 and 238A.190, every disabilitybenefit under ORS 238A.235 and every death benefitpayable under ORS 238A.230 as provided in [subsec-taons (2) and (3)] subsection (2) of this section. Theincrease shall be made for the payments payable onAugust 1 and thereafter.

(2)(a) If a person's yearly pension or benefit ~}orthe previous year totaled $20,000] is $80,000 or less,the pension or benefit shall be increased by [two]126 ercent.

[~) If a person's yearly pension or benefit for theprevious year totaled more tlzdn $20,000 but not morethan $40,000, the pension or benefit shall be incre¢sedby $400 plus 1.6 percent of the amount of the yearlypension or benefit exceeding $20,000.]

[(c) If a person's yearly pension or benefit for theprevious year totaled more tlzan $40,000 bud not morethan $60,000, the pension or benefit shall be increasedby $700 plus one percent of the amount of the yearlypension or benefit exceeding $40,000.]

[(d)] (b) If a person's yearly pension or benefitfor the previous year totaled] is more than $60;000,the pension or benefit shall be increased by [$900plus .25] $750 plus 0.15 percent of the amount of theyearly pension or benefit exceeding $60,000.

[(3) If d person has been receiving a pension orbenefit for less than 12 months on July 1 of any year,the board shall calculate the increase under subset-tion (2) of this section on the b¢sis of the yearly al-lowdnce the person would have received if the personhad received the pension or benefit for 12 months.]

(S) As used in this section, "yearly pensionor benefit" means the monthly pension or bene-fit that a person is entitled to on July 1 of theyear in which the board is calculating the in-crease under- subsection (1) of this section,multiplied by 12.

SECTION 4.. The, amendments to ORS238A210 by section S of this 2013 special sessionAct apply to all increases to pensions or benefitsmade under ORS 238A.210 on and after July 1,2014.

SECTION 5. (1) The amendments to ORS238.360 and 238A.210 by sections 1 anal S of this2013 special session Act become operative onJuly 1, 2014.

(2) The Public Employees Retirement Boardmay take any action before the operative datespecified in subsection (1) of this section to en-able the board, on and after the operative date

Chap. 2 OREGON LAWS 2013 SPECIAL SESSION

specified in subsection (1) of this section, to es-ercise all the duties, functions and powers con-ferred on the board by the amendments to ORS238.360 and 238A.210 by sections 1 and 3 of this2013 special session Act.

SECTION 6. ORS 238.465 is amended to read:238.465. (1) Notwithstanding ORS 238.445 or any

other provision of law, payments under this chapteror ORS chaptex 238A of any pension, annuity, re-tirement allowance, disability benefit, death benefit,refund benefit or other benefit that would otherwisebe made to a person entitled thereto under thischapter or ORS chapter 238A shall be paid, in wholeor in part, 'by the Public Employees RetirementBoard to an alternate payee if and to the extent ex-pressly provided for in the terms of any judgment ofannulment or dissolution of marriage or of sepa-ration, or the terms of any court order or court-approved property settlement agreement incident toany judgment of annulment or dissolution of mar-riage or of separation. [Notwithstanding any otherprovisions of this section] Except as provided insubsection (5) of this section, the total value ofbenefits payable to a member and to an alternatepayee under this section may not be greater than thevalue of the benefits the member would otherwisebe eligible to receive. Any payment under this sub-section to an alternate. payee bars recovery by anyother person.

(2) A judgment, order or settlement providing forpayment to an alternate payee under subsection (1)of this section may also provide:

(a) That paym ents to the alternate payee maycommence, at the election of the alternate payee, atany time after the earlier of

(A) The earliest date the member would be eligi-ble to receive retirement benefits if the memberseparates from service; or

(B) The date the member actually separates fromservice due to death, disability, retirement or termi-nation of employment.

(b) That the alternate payee may elect to receivepayment- in any form of pension, annuity, retirementallowance, disability benefit, death benefit, refundbenefit or other benefit, except a benefit in the formof a joint and survivor annuity, that would be avail-able to the member under this chapter or ORSchapter 238A; or that would be available to themember if the member retired or separated fromservice at the time of election by the alternatepayee, without regard to the form of benefit electedby the member.

(c) That the alternate payee's life is the measur-ing life for the purpose of measuring payments tothe alternate. payee under the form of benefit se-lected by the alternate payee and for the purpose ofdetermining necessary empToyer reserves.

(d) Except as provided in ORS 238.305 (10) and238.325 (7), that any person designated by' the mem-ber as a beneficiary under ORS 238.300, 238.305,238.325, 238A.190 or 238A4Q0 be changed, eventhough the member has retired and has begun re-

APP-10

ceiving a retirement allowance or pension. If achange of beneficiary is ordered under this para-graph, the board shall adjust the anticipated benefitsthat would be payable to the member and the bene-ficiary to ensure that the cost to the system of pro-viding benefits to the member and the newbeneficiary does not exceed the cost that the systemwould have 'incurred to provide benefits to themember and the original beneficiary. The judgment,order or settlement may not provide for any changeto the option selected by the retired member underORS 238.300, 238.305, 238.320, 238.325, 238A190 or238A.400 as to the form 'of the retirement benefit.

(3) The board shall adopt rules that provide for:(a) The creation of a separate account in the

name of the alternate payee reflecting thejudgment's, order's or agreement's distribution of themember's benefits under this chapter or OR8 chap-ter 238A;

(b) The establishing of criteria to determinewhether domestic relations judgments, orders andagreements comply with this section; and

(c) The definitions and procedures for the ad-ministration of this section.

(4) An alternate payee may designate a benefici-ary for the purposes of death benefits payable underORS 238.390 and 238.395. Subject to ORS 238A.410(2), an alternate payee may delignate a beneficiaryfor the purposes of death benefits payable underORS 238A410. If the alternate payee fails to desig-nate abeneficiary for the purposes of death benefitspayable under ORS 238.390 and 238.395, the benefitsshall be paid as provided by ORS 238.390 (2). If thealternate payee fails to designate a beneficiary forthe purposes of death benefits payable under ORS238A410, the benefits shall be paid as provided byORS 238A.410 (3). If a judgment, order or agreementawards an interest to an alternate payee, and if thealternate payee predeceases the member before thealternate payee has commenced receiving benefits,the alternate payee shall be considered a member ofthe system who died before retiring for the purposesof the death benefits provided in ORS 238.390,238.395, 238A230 and 238A.410, but for purposes ofthe death benefits provided in ORS 238.395, the al-temate payee shall be considered a member of thesystem who died before retiring only if the memberwould have been eligible for death benefits underORS 238.395 had the member died at the same timeas the alternate payee. Payment of the death bene-fits to the beneficiaries, estate or other persons en-titled to receive the benefits under ORS 238.390,238.395, 238A.230 and 238A.410, shall constitute pay-ment in full of the alternate payee's interest underthe judgment, order or agreement.

(5) Any increase in the retirement allowanceprovided to the member shall increase the amountspaid to the [spouse or former spouse of the member]alternate payee in the same proportion, exceptthat:

(a) An alternate payee is not entitled to receivecost-of-living adjustments under ORS 238.360 or anyother retirementallowance increase until benefits

APP-11

OREGON LAWS 2013 SPECIAL SESSION Chap. 2

are first paid from the system on behalf of themember[.]; and

(b) Coat-of-living adjustments under ORS238.360 or 238A.210 to the retirement allowancepaid to an alternate payee shall be calculated onthe basis of the amount of the alternate payee'syearly allowance or yearly pension or benefit,as those terms are defined in ORS 238.360 and238A.210.

(6) An alternate payee under this section is noteligible to receive the benefits provided under ORS238.410, 238.415, 238.420 and 238.440 by reason of theprovisions of this section.

(7) An alternate payee who elects to begin re-ceiving payments under subsection (1) of this sectionbefore the member's effective date of retirement isnot eligible to receive any additional payment byreason of credit in the system acquired by the mem-ber after the alternate 'payee begins to receive pay-ments.

(8) Subsection (1) of this section applies only topayments made by the board after the date of receiptby the board of written notice of the judgment, orderor agreement and such additional information anddocumentation as the board may prescribe.

(9) Whenever the board is required to make pay-ment to an alternate payee under the provisions ofthis section, the board shall charge and collect outof the benefits payable to the member and the alter-nate payee actual and reasonable administrative ex-penses and related costs incurred by the board inobtaining data and making calculations that arenecessary by reason of the provisions of this section.The board may not charge more than $300 for totaladministrative expenses and related costs incurredin obtaining data or making calculations that arenecessary by reason of the provisions' of this section.The board shall allocate expenses and costs chargedunder the' provisions of this subsection between themember and the alternate payee based on the frac-tion of the benefit received by the member or alter-nate payee.

(10) Unless otherwise provided by the judgment,order or agreement, a member has no interest in thebenefit payable to an alternate payee under thissection. Upon the death of an alternate payee, theboard shall make such payment to the beneficiarydesignated by the alternate payee as may be requiredunder the form of benefit elected by the alternatepayee. If a .death benefit is payable under ORS238.390 or 238.395 by reason of the death of an al-ternate payee, payment of the death benefit shall bemade to the beneficiary designated by the alternatepayee under ORS 238.390 (1), or as otherwise pro-vided by ORS 238.390 and 238.395.

(11) As used in this section, "court" means anycourt of appropriate jurisdiction of this or any otherstate or of the District of Columbia.

3

SUPPLEMENTARY PAYMENTS

SECTION 7. Section 8 of this 2013 specialsession Act is added to and made a part of ORSchapter 238.

SECTION 8. (1) As used in this section:(a) "Yearly allowance" has the meaning

given that term in ORS 238.360.(b) "Yearly pension or benefit" has the

meaning graven that term in ORS 2SSA210.(2) Each year, the Public Employees Retire-

ment Board shall make a supplementary ~ay-ment to each member or member's beneficiary.The supplementary payment shall be equal to0.2b percent of the member's or member'sbeneficiary's yearly allowance or yearly pensionor benefit, but in no event may the supplemen-

~(paym ent exceed $1b0.3) In addition to the supplementary pay-

ment under subsection (2) of ties section, theboard shall make an additional supplementarypayment each year to each member ormember's beneficiary with a yearly allowanceor yearly pension or benefit of $20,000 or less. Asupplementary payment made under this sub-section shall be equal to 0.26 percent of themember's or member's beneficiary's yearly al-lowance or yearly pension or.benefit.

(4) The board shall make the first supple-mentary payments under subsections (2) and (3)of this section in 2014.

(5) A supplementary payment made underthis section may not be included in a member'sor member's beneficiary's yearly allowance oryearly pension or benefit for purposes of calcu-lating cost-of-living adjustments under ORS236.360, 238.575 or 238A.210.

(6) The board shall pay supplementary pay-ments under this section out of the reserve ac-count established under ORS 238.870 (1).

REPORT TO LEGISLATURE

SECTION 9. On or before September 30, 2018,the Public Employees Retirement Board shallreport to the Governor, the President of theSenate and the Speaker of the House of R.epre-sentatives on:

(1) Recommendations relating to the cost-of-living adjustment under the Public EmployeesRetirement System;

(2) Recomumendations relating to the contin-uation of supplementary payments to membersand members' beneficiaries under section S ofthis 2015 special session Act; and

(3) Recommendations on approaches to esl-culating cost-o£ living adjustments under thesystem that take into consideration a retiredmember's years of creditable service.

Chap. 2 OREGON LAWS 2013 SPECIAL SESSION

SUNSET

SECTION Yo. Sections 8 and 9 of this 2o1Sspecial session Act are repealed on December Hl,2019.

JUDICIAL REVIEW

SECTION 11. (1) Jurisdiction is conferred onthe Supreme Court to determine in the mannerprovided by this section whether this 2013 spe-cial session Act breaches any. contract betweenmembers of the Public Employees RetirementSystem and their employers, violates any con-stitutional provision, including but not limitedto impairment of contract rights of members ofthe Public Employees Retirement System underArticle. I, section 21, of the Oregon Constitution,or Article I, section 10, clause 1, of the UnitedStates Constitution, or is invalid for any otherreason.

(2) A person who is adversely affected by this2018 special session Act or who will be adverselyaffected by this 2013 special session Act may in-stitute aproceeding for review by filling with theSupreme Court a petition, that meets the fol-lowing requirements:

(a) The petition must be filed within 60 daysafter the effective date of this 2013 special ses-sion Act.

(b) The petition must include the fallowing:(A) A statement of the basis of the chal-

lenge; and(B) A statement and supporting affidavit

showing how the petitioner is adversely affected.

APP-12

(3) The petitioner shall serve a copy of thepetition by registered or certified mail upon thePublic Employees Retirement Board, the Attor-ney General and the Governor.

(4) Proceedings for review under this sectionshall be given priority over all other mattersbefore the Supreme Court.

(5) The ,Supreme Court shall allow publicemployers participating in the Public EmployeesRetirement System to intervene in any proceed-ing under this section.

(6) In the event the Supreme Court deter-mines that tLere are factual issues in the peti•tion, the Supreme Court ma appoint a specialmaster to hear evidence an~to prepare recom•mended findings of fact.

CAPTIONS

SECTION 12. The unit captions used in this2013 special session Act are provided only forthe convenience of the reader and do not be-come part of the statutory law of this state orexpress any legislative intent in the enactmentof this 2018 special session Act.

EMERGENCY CLAUSE

SECTION 13. This 2013 special session Actbeing necessary for the immediate preservationof the public peace, health and safety, an. emer-gency is declared to east, amd this 2013 specialsession Act takes effect on its passage.

_Approved by the Governor October S, 2013Filed in the office of Secretary of State October 8, 2013Effective date October 8, 2013

Table 2d. Historical Consumer Price Index for All Urban Consumers (CPI-U~: U. S. city average, all items AP P~7 3(19824='100, unless athenvise noted)

Year Jan. Feb. Mar. Apr. May June Juiy Aug. Sep. Oct. Nov, Oec.

1913 9.8 8.8 8.8 9.8 9.7 B.8 8.8 9.9 10.0 10.0 10.1 10.0

1914 10.0 9.9 9.9 9.8 9.9 9.9 10.0 10.2 1D.2 10.1 10.2 1~.1

1915 70.1 10.0 9.9 10.0 10.1 70.1 10.1 10.1 10.1 10.2 10.3 10.3

1918 10.4 10.4 10.5 i0.6 10.7 10.8 10.8 10.9 11.1 11.3 11.5 17.6

7917 11.T 12.0 12.0 12.6 12.8 13.0 12.8 13.0 13.3 13.5 13.5 13.7

1818 14.0 74.7 14.0 14.2 14.5 14.7 15.1 15.4 15.7 16.0 t6.3 16.5

1979 16.5 16.2 16.4 18.7 16.9 1fi.9 17.4 17.7 17.8 18.1 18.5 18.9

1920 19.3 19.5 79.7 20.3 20.6 20.8 20.8 20.3 20.0 19.9 79.8 19-4

1921 79.0 18.4 18.3 18.1 17.7 17.6 17.7 77.7 i7.5 17.5 77.4 17.3

1922 16.9 16.8 16.7 16.7 16.7 16.7 7B.8 76.6 16.6 16.7 16.8 16.9

7923 16.8 16.8 16.8 16.9 16.9 17.0 17.2 77.1 17.2 17.3 17.3 17.3

1924 17.3 77.2 17.1 17.0 1T.0 17.0 17.1 17_D 17.1 17.2 17.2 17.3

1925 17.3 1T.2 17.3 17.2 17.3 17.5 17.7 17.7 17.7 17.7 18.0 17.9

1926 17.9 1 T.9 17.8 17.9 17.8 7 7.7 17.5 17.4 17.5 17.6 17.7 17.7

1927 17.5 17.4 17.3 17.3 17.4 17.6 17.3 17.2 77.3 17.4 17.3 17.3

1928 17.3 1T.1 77.1 17.1 17.2 77.1 17.1 17.1 17.3 17.2 17.2 17.1

1929 17.1 17.1 17.0 16.9 17.0 17.7 17.3 17.3 17.3 .17.3 17.3 772

1930 17.1 17.0 16.9 17.Q 16.9 16.8 16.6 16.5 16.6 16.5 16.4 76.1

1931 15.9 15.7 15.6 15.5 15.3 15.1 15.1 15.1 15.0 14.9 14.7' 14.6

1932 14.3 74.1 14.0 13.9 13.7 13.6 13.6 13.5 73.4 13.3 13.2 13.1

1933 12.9 12.7 12.6 12.6 12.6 72.7 13.1 13.2 13.2 13.2 13.2 13.2

1934 13.2 13.3 13.3 13.3 13.3 13.4 13.4 13.A 13.6 13.5 13.5 13.4

1935 13.6 13.7 13.7 13.8 13.8 73.7 13.7 73.7 73.7 13.7 13.8 13.8

1836 13.8 13.5 13.7 73.7 13.7 73.8 13.9 14.0 14.0 14.4 14.0 14,0

1937 14.1 14.1 74.2 74.3 14.4 14.4 14.5 14.5 14.6 14.6 14.5 14.4

1938 14.2 14.7 14.1 14.2 14.1 14.1 14.1 14.t 74.7 14.0 1A.0 14.0

1839 74.0 13.9 13.9 13.8 13.8 13.B 13.8 13.8 14.1 14.0 14.D 14.0

1940 13.9 14.0 14.0 14.0 14.0 i4.1 14.0 74,0 14.0 14.0 14.0 14.1

1941 14.1 14.7 14.2 14.3 74.4 14.7 14.7 14.9 15.1 15.3 15.4 15.5

1942 15.7 15.8 16.0 76.1 16.3 16.3 1fi.4 16.5 76.5 16.7 16.8 16.9

1943 16.9 16.8 17,2 17.4 17.5 17.5 17.4 17.3 17.4 17.4 17.4 17.4

1944 17.4 1T.4 17.4 17.5 17.5 17.6 17.7 77.7 17.7 77.7 77.7 77.8

1845 77.8 17.8 17.8 77.8 77.9 18.1 1,8.1 78.1 78.1 18.1 18.1 18.2

1946 182 18.1 78.3 18.4 18.5 1g.7 19.8 20.2 20.4 20.8 27.3 21.5

1947 21.5 21.5 21.9 21.8 21.8 22.0 22.2 22.5 23.0 23.0 23.1 23.4

1948 23.7 23.5 23.4 23.6 23.9 24.1 24.4 24.5 24.5 24.4 24.2 24.1

1949 24.0 23.8 25.8 23.9 23.8 23.9 23.7 23.8 23.8 23.7 23.8 29.6

1950 23.5 23.5 23.6 23.6 23.7 23.8 24.1 24.3 24.4 24.8 24.7 25.0

1951 25.4 25.7 25.8 25.8 25.9 25.9 25.8 25.9 26.1 26.2 26.4 28.5

1952 28.5 26.3 2fi.3 26.4 26.4 2fi.5 26.7 26.7 26.7 26.7 2B.7 26.7

1953 28.6 26.5 26.6 26.6 26.7 26.8 26.8 26.9 26.9. 27.0 26.8 26.9

1959 26.9 2&.9 26.9 2fi.8 26.9 ~ 28.9 26.9 26.9 2fi.8 26.8 26.8 26.7

1955 26.7 26.7 26.7 26.7 26.7 26.7 26.8 26.8 26.9 26.9 26.9 26.8

1956 2fi.8 28.H 2fi.8 2fi.9 27.0 27.2 27.4 27.3 27.4 27.5 27.5 27.6

1957 27.fi 27.7 27.6 27.9 28.0 28.7 28.3 28.3 26.3 28.3 26.4 28.4

1958 28.6 26.6 28.8 28.9 28.9 28.8 28.0 28.9 28.9 28.9 2B.0 28.8

1859 29.0 28.9 28.9 29.0 29.0 29.1 28.2 29.2 29.3 29.4 28.4 28.4

1980 29.3 28.4 29.4 29.5 29.5 29.6 28.6 29.6 29.8 29.6 29.8 29.8

1987 29.6 29.8 29.8 29.8 29.8 29.8 30.0 29.9 30.E 30.0 30.0~ 30.0

19fi2 3D.0 30.1 30.1 30.2 30.2 30.2 30.3 39.3 30.4 30.4 30.4 30.4

1983 30.4 30.4 30.5 30.5 30.5 30.6 30.7 30.7 30.7 3D.6 3U.8 30.9

1984 30.9 30.9 30.9 30.9 30.9 31.0 31.1 31.0 31.1 31.1 31.2- 31.2

1965 31.2 31.2 31.3 31.4 31.4 31.6 31.6 31.6 31.6 31.7 31.7 31.8

1956 31.8 32.0 32.1 32.3 32.3 32.4 32.5 32.7 32.7 32.9 32.8 32.9

1967 32.9 32.8 33.0 33.1 33.2 33.3 33.4 33.5 33.6 33.7 33.8 33.9

1968 34.1 34.2 34.3 34.4 34.5 34.7 34.8 35.0 35.1 35.3 35.4 35.5

1969 35.6 35.8 36.1 36.3 36.4 36.6 36.8 37.0 37.1 37.3 37.5 37.7

See faolnotes at erd of liable.

86 CPI Detailed Report-February 2014

Table 24. Historical Consumer Price Index for All Urban APP~7 4Consumers (CPI•U~: U. S. eity average, ailitems-Continued

(1982-84=100, unless otherwise noted)

Year

Semianrnlalaverages Annual

B~&

Percen[change~1Om ~eviois

1st 2nd Dec.Annual

halt hall avg.

1973 9.91914 10.0 1.0 1.0

1915 10.1 2.0 7.07916 10.9 12.6 7.91917 12.8 18.1 17.41918 15.1 20.4 18.01914 17.3 14.5 146

1920 20.0 2.6 15.61921 1T.9 -1D.8 -10.519?2 16.8 -2.3 -6.11923 17.1 2.4 1.8197A 17.1 .D .0

1925 17.5 3.5 2.3192fi 17.7 •1.1 1.17927 _ 17.4 -2.3 -1.71928 17.1 -12 -1.71929 _ _ 17.1 .& .0

79~ 76.7 -6.4 -2.31931 15.2 -9.3 -B.0f932 t3.7 -10.3 -9.91833 13.0 .8 -5.11934 13.4 1.5 3.1

1835 _ _ 13.7 3.d 221938 _ _ 13.9 1.4 1 S1937 _ 14.4 2.9 3.61938 _ 14.1 -2.8 -2.11939 13.9 .0 -1.4

1940 14.0 .7 .71941 14.7 9.9 5.01942 16.3 9.0 10.91843 _ _ 17.3 3,0 6.11944 _ _ 17.6 2.3 1.7

IB45 _ 18.0 22 2.31846 18.5 18.1 8.31947 22.3 8.8 14.41948 24.1 3.0 8.11949 23.8 -2.1 -12

1950 _ 24.1 5.9 1.31951 _ _ 26.0 8.0 791952 26.5 .8 1.91853 _ _ 26.7 .7 .81954 26.8 -.7 .7

IB55 2fi.8 .4 -.41956 27.2 3.0 1'.51857 26.1 2.9 3.31858 28.8 7.8 2.81959 29.1 17 .7

l9fi0 29.6 1.4 1.7196'1 _ 29.9 .7 1.01962 30.2 1.3 1.01963 _ 30.6 1.6 1.31964 3t~ 1.0 1.3

IB65 31.5 1.8~ 1.6i 8fifi 32.4 3.5 2.9967 33.4 3A 3J968 34.8 4.7 4.29B9 36.7 62 5.5

See footnotes at end of table.


Table 24. Historical Consumer Price index for All Urban Consumers (CPI-U): U. S. city average, all items-Contin~ P~7 5

(198254=100, unless otherwise noted)

Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct Nov, Dec.

1970 37.8 38.0 38.2 38.5 ' 38.6 38.8 38.0 39.0 392 39.4 38.6 39.81971 39.8 39.9 4D.D 40.1 40.3 40.6 40.7 40.8 44.8 9U.9 40.9 41.71972 41.1 41.3 41.4 41.5 41.6 41.7 47.8 42.0 42.1 42.3 42.4 42.51973 42.fi 42.9 43.3 43.6 43.9 44.2 44.3 45.1 452 45.6 45.8 4&21974 46.6 47.2 47.8 48.0 48.6 49.0 49.4 50.a 50.6 51.1 51.5 61.9

7975 52.7 52.5 52.7 52.9 53.2 53.8 54.2 54.3 54.6 54.9 55.3 55.51978 55.6 55.8 55.9 58.1 56.5 56.8 57.1 57.4 57.6 57.9 58.0 fi8.27977 56.5 ~ 58.7 59.5 60.0 60.3 60.7 61.0 61.2 61.4 61.6 61.9 82.71978 62.5 62.9 63.4 fi3.9 84.5 65.2 65.7 6fi.0 56.5 67.1 67.4 67.71979 68.3 69.1 69.8 70.6 71.5 72.3 73.1 73.8 74.6 75.2 75.8 76.7

19~ 77.8 T8.9 80.1 81.0 61.8 82.7 82.7 83.3 84.0 84.8 85.5 86.31981 87.0 87.8 88.5 89.1 89.8 90.6 91.6 92.3 93.2 B3.4 83.7 94.0t B82 94.3 94.6 04.5 84.9 85.8 97.0 87.5 97.7 97.9 98.2 98.0 97.61983 97.8 87.9 87.8 98.6 98.2 98.5 89.9 100.2 100.7 101.0 107.2 101.31984 i01.9 192.4 102.8 103.1 703.4 103.7 104.1 104.5 105.0 105.3 105.3 105.3

1985 105.5 108.0. 108.4 10fi.9 107.3 107.fi 17.8 108.0 108.3 108.7 709.0 109.31988 109.fi 189.3 108.8 108.6 1D8.9 109.5 109.5 109.7 110.2 110.3 110.4 110.51967 111.2 117.8 112.7 112.7 113.7 713.5 113.8 114.4 115.0 115.3 175.4 115.41988 115.7 116.0 116.5 117.1 117.5 118.0 118.5 119.0 119.8 120.2 12D.3 120.51989 121.1 121.6 122.3 123.1 123.8 124.1 124.4 124.fi 125.0 125.fi 125.9 126.1

1990 127.4 128.0 128.7 728.9 129.2 129.9 130.4 131.6 132.7 733.5 133.8 133.81994 134.6 134.8 t35.D 135.2 135.8 136.0 136.2 136.6 137.2 137.4 737.8 137.9IB92 138.1 138.6 138.3 738.5 738.7 140.2 140.5 740.8 141.3 741.8 142.0 141.91993 142.6 143.1 143.8 144.0 144.2 144.4 144.4 144.6 145.1 145.7 745.8 145.8994 146.2 146.7 147.2 147.4 147.5 148.0 148.4 149.0 148.4 749.5 149.7 149.7

995 150.3 150.9 151.4 151.9 152.2 152.5 152.5 152.9 953.2 153.7 753.6 163.5998 154.4 154.9 155.7 156.3 156.6 156.7 157.0 167.3 157.8 158.3 158.8 768.8997 159.1 159.6 160.0 T60.2 160.1 160.3 160.5 160.$ 161.2 161.6 761.5 161.3996 161.6 161.9 762.2 162.5 162.8 183.0 183.2 783.4 163.8 184.0 184.0 163.9999 164.3 164.5 165.0 166.2 166.2 166.2 166.7 167.1 167.9 788.2 168.3 168.3

1000 168.8 169.8 771.2 171.3 171.5 172.4 172.8 172.8 173.7 774.0 174.1 174.0',001 175.1 775.8 176.2 176.8 177.7 178.0 177.5 177.5 178.3 177.7 177.4 17fiJ'002 177.1 177.8 178.8 179.8 178.8 779.9 780.1 180.7 18T.0 181.3 181.3 180,9003 181.7 183.7 184.2 183.6 183.5 183.7 183.9 184.6 185.2 i85.0 184.5 784.3004 185.2 186.2 187.4 788.0 188.1 189.7 189.4 189.5 188.8 190.9 191.0 190.3

905 190.7 191.8 183.3 194.6 194.4 194.5 185.4 186.4 198.8 198.2 197.6 786.8006 198.3 198.7 189.8 201.5 202.5 202.9 203.5 203.9 202.9 201.8 201.5 201.8007 202.416 203.499 206.3fi2 206.686 2U7.949 208.353 208.298 207.917 208.490 208.938 210.177 270.U36006 21t.4~ 211.693 213.528 214.823 216.832 278.815 219.989 279.086 218.783 278.573 212.425 210.228009 211.~g3 212.193 212.7UB Zi3.240 213.858 275,893 215.351 215.634 275.969 216.177 216.33U 21b.949

010 218.887 216.741 217.631 218.009 278.178 217.965 218.017 218.312 218.439 218.711 218.803 279.179071 220.223 221.308 223.467 224.908 225.964 225.722 ~5.9T2 226.545 226.889 226.A21 226.2 225.672072 228.685 227.663 229.392 230.085 228.815 229.478 X9.104 230.378 231.407 231.317 230.221 229.801013 230.280 232.186 232.773 232.531 232.945 233.504 733.596 233.877 234.149 233.546 233.069 233.049074 733.91& 234.781 _

See footnotes at end of fable.


Table 24. Historical Consumer Price Index for All Urban APP-16Consumers CPI-U): U. S. cky averege, all

items-Continued

(7982 4=1a0, unless otherwise noted)

Year

Semiannualaverages Annual

a~e~

Percent charge<fOm previous

1st 2nd Dec.A^"ual

half half a~+g.

7970 38.8 5.6 5.77971 _ A0.5 3.3 4.41972 41.8 3.4 321973 44.4 8.7 &21974 49.3 723 11.0

4975 53.8 6.9 B.71976 56.9 4.9 5.61977 60.6 6.7 6,51978 65.2 9.0 7.61979 72.B 13.3 71.3

1980 82.4 12.5 73.51981 90.9 8.9 10.31982 96.5 3.8 621983

~99.6 3.8 32

1984 102.9 104.9 103.9 3.9 4.3

1985 106.8 708.5 107.6 3.8 3.61986 109.1 170.1 1D9.6 7.7 1.91987 112.4 714.9 113.6 4.4 3.61988 116.8 718.7 118.3 4.4 4.71999 122.7 .125.3 124.0 4.6 4.8

1980 128.7 132.6 130.7 8.1 6.41981 1352 137.2 136.2 3.1 421992 139.2 141.4 140.3 2.B 3.01993 143.7 145.3 144.6 , 2.7 3A1994 147.2 149.3 148.2 2.7 2.8

1995 151.5 153.2 152.4 2.5 2.81998 155.8 157.9 158.9 3.3 3.01997 159.9 161.2 160.5 1.7 2.31998 162.3 163.7 763.0 1.6 1.61999 '165.4 167.8 166.6 2.7 22

200 170.8 773.6 172.2 3.4 3A2001 176.6 777.5 177.1 1.6 2.82002 778.9 18D.9 178.8 2.4 1.82003 183.3 184.6 184.0 1.9 2.32004 187.6 190.2 188.9 3.3 2.7

2U05 '193.2 197.4 195.3 3.4 3.42Q06 200.8 202.8 201.8 2.5 322007 205.709 206.978 207.342 4.1 292008 214.429 216.1 T7 215.303 .1 3.62U09 213.139 215.935 274.537 2.7 -.4

2010 217.535 218.57fi 216.056 1.5 7.62D11 ?23.598 226.28D 224.939 3.0 3?2012 228.850 230.338 228.594 1J 2.72013 232.386 233.648 232.857 1.5 7.52014

- Data not available.NOTE Index applies to a month as a whole, not to arty speck date.


CERTIFICATE OF FILING AND SERVICE

I hereby certify that I electronically filed the foregoing RESPONDENT

CITY OF PORTLAND' S ANS WERING BRIEF AND SUPPLEMENTAL

EXCERPT OF RECORD with the State Court Administrator, Appellate Court

Records Section, 1163 State Street, Salem, OR 97301, on August 25, 2014.

I further certify that the foregoing RESPONDENT CITY OF

PORTLAND'S ANSWERING BRIEF AND SUPPLEMENTAL EXCERPT

OF RECORD will be served electronically and/or by First Class Mail on

August 25, 2014, on the following individuals:

ANNA M. JOYCESolicitor GeneralKEITH L. KUTLERAssistant Attorney GeneralMICHAEL A. GASPER, OSB #062000Assistant Attorney GeneralDepartment of Justice1162 Court Street NESalem, OR 97301

MATTHEW MERRITTAssistant Attorney GeneralDepartment of Justice1515 SW 5th Avenue, Suite 410Portland, OR 97201

Attorneys fog Respondents EllenRosenblum, Public EmployeesRetirement System, John A.Kitzhabe~, State of Oregon, PublicEmployees Retirement Board

GREGORY HARTMANARUNA A. MASIHBennett, Hartman, Morris &Kaplan210 SW Morrison Street, Suite 500Portland, OR 97204

Attorneys for Petitioners Aiken,Clouse, Custer, Ditte~, Domenigoni,Hawkins, Johnson, Moro, O'Kief,Silience, Smith, Vickery and Vock

MICHAEL D. REYNOLDSAttorney at Law8012 Sunnyside Avenue N.Seattle, WA 98103Pao Se Petitioner

GEORGE A RIEMERArizona CJC1501 W. Washington Street, Suite 229Phoenix, AZ 85007Pro Se Petitioner

2

J. MICHAEL PORTERMiller Nash LLP111 SW 5~' Avenue, Suite 3400Portland, OR 97204Attorney fog Respondent BeavertonSchool District

WAYNE STANLEY JONES18 North Foxhill RoadNorth Salt Lake, UT 84054Pro Se Petitioner

DANIEL B. ATCHISONCity Attorney's Office555 Liberty Street SE, Suite 205Salem, OR 97301

Attorney fog Respondent City ofSalem

EUGENE KARANDY IIOffice of the Linn County Attorney104 4th SW, Room 123Albany, OR 97321

ROB BOVETTAssociation of Oregon Counties1201 Court Street NE, Suite 300Salem, OR 97301

Attorneys fog Respondent LinnCounty

W. MICHAEL GILLETTESARA KOBAKLEORA COLEMAN-FIRE, OSB#113581WILLIAM B. CROW, OSB #610180Schwabe Williamson &Wyatt PC1211 SW 5~` Avenue, Suite 1900Portland, OR 97204

Attorneys for Inte~veno~ League ofOregon Cities

EDWARD H. TROMPKEJordan Ramis PC2 Centerpointe Drive, 6th FloorLake Oswego, OR 97035

AttoNney fog Respondent TualatinValley Fire &Rescue

CRAIG CRISPINCrispin Employment Lawyers1834 SW 58th Avenue, Suite 200Portland, OR 97221

Attorney foY Amicus Curiae, AARP

LISA M. FREILEYOregon School Board Association1201 Court Street NEPO Box 1068Salem, OR 97308

WILLIAM F. GARYSHARON RUDr]ICKHarrang Long Gary Rudnick PC360 E. 10th Avenue, Suite 300Eugene, OR 97401

Attorneys for Respondents BeavertonSchool District, Estacada SchoolDistrict, Oregon City SchoolDistrict, Ontario School District,West Linn School District and BendSchool District, and for IntervenorOregon School Boards Associationand Association of Oregon Counties

SARAH K. DRESCHERTedesco Law Group3021 NE BroadwayPortland, OR 97232Attorney for Amicus CuriaeInternational Association of FireFighters

~j

Hon. Stephen K. BushongSpecial MasterMultnomah County Circuit Court1021 S W 4th AvenuePortland, OR 97204

s/Harpy AueNbach

HARRY AUERBACH, OSB #821830Chief Deputy City AttorneyKENNETH A. McGAIR, OSB #990148Deputy City AttorneyAttorneys for RespondentCity of Portland

city of portland answer brief

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