1. Are all PERS members now part of the Oregon Public Service
Retirement Plan (OPSRP), the new successor plan?
Yes and no. OPSRP consists of two programs: the Pension Program
and the Individual Account Program (IAP). All active and inactive PERS members
became members of the IAP on January 1, 2004, but they did not automatically
become members of the Pension Program. Active PERS members will continue to
accrue service credit and benefits under PERS (ORS Chapter 238) unless they
incur a break in service. Employees hired on or after August 29, 2003, with no
prior PERS membership will become members of both the OPSRP Pension Program
and the IAP when eligible, but no sooner than
January 1, 2004.
2. What is a break in service?
When an active or inactive PERS member performs no hours of service in a qualifying position for a period of six consecutive months or longer, a break in service has occurred [HB 2020 2(3)(b)].
Note: For an explanation of "hours of service," "qualifying position," and "six consecutive months," see terms at the end of this Q&A.
3. What are the consequences of a break in service?
If you incur a break in service, you will retain all PERS service time and contributions (and any contributions to the IAP) that accrued before the break; however, after the break, all your future service time and contributions will accrue under the OPSRP Pension Program and the IAP [HB 2020 2(3)(a) and 2a(1)].
Note: If you were reemployed in a qualifying
position after a break in service before January 1, 2004, all service time
performed before January 1, 2004, was accrued under PERS, and all
service time performed on or after January 1, 2004, is accrued under the OPSRP
Pension Program and the IAP [HB 2020 2a].
4. Does vacation time or other paid leave count toward a break in
service?
No. Paid leave counts as hours of service and not toward a
break in service for vacations, holidays, illness, incapacity, jury duty,
military duty, or authorized leave during which you were paid and the leave is
during normally scheduled working hours [HB 2020 1(7)(a)].
5. How do I know if I have performed service in a qualifying position?
HB 2020 defines a "qualifying position" as one in which an eligible employee performs at least 600 hours of service in a calendar year for an employer participating in PERS [HB 2020 1(14)].
Note: Under OAR 459-075-0010(13) a separate
provision applies to members who begin a leave
of absence for career development or family leave. This provision is for break
in service purposes only and defines a qualifying position as one in which the
member:
• performs at least 600 hours of service in the calendar year before the
year in which leave begins, with a minimum of 50 hours per month in the six
months before the leave, and
• performs at least 600 hours of service in the calendar year following
the year in which leave ends, with a minimum of 50 hours per month in the
first six months following return to service.
6. Must I return to the same employer after or during my leave of
absence to avoid a break in service?
No. HB 2020 defines a break in service as performing no service
in a qualifying position. It does not require that performance of service be
with the same employer [HB 2020 2(3)(b)]. In addition, a qualifying position
is defined as one or more jobs with one or more public employers [HB 2020
1(14)]. Note: OAR 459-075-0010(16) provides that a school employee will be
considered to be providing service, for the purposes of determining whether a
break in service has occurred, during periods in
which his or her institution is not normally in session if the member
maintains an employee/employer relationship both before and after these
periods. The school employee does not have to return to the same institution,
but he or she must return as a school employee as defined in HB 2020 11(6).
(See Q 9.)
7. Do partial months of leave count toward a break in
service?
No, only full months count. OAR 459-075-0010 interprets "six consecutive
months" as six full calendar months. Example: Mary begins a period of unpaid
leave on January 2. The first month of her break in service period would be
February.
8. If I begin unpaid leave on January 1 and return to work July 1, do
I incur a break in service?
Yes, assuming you don't qualify for any of the exceptions in Q 13. January 1 through July 1 is six months long, and a break in service occurs if you perform no hours of service in a qualifying position for six or more consecutive full months. To avoid a break in service, you must return to a qualifying position before July 1.
9. I am a schoolteacher. Do the summer months when school is not in
session count toward a break in service?
Not if certain requirements are met. OAR 459-075-0010(16)
provides that summer months do not count as absence from service if (1) the
institution is not normally in session and (2) the employee is in an
employee/employer relationship both before and after that period. Thus, if you
remain under contract with your employer, you will be considered to be
performing
service during any month (or partial month) school is not normally in
session.
Example 1: Bob is a teacher under a contract with an employer, but is not paid when school is out for the summer. He works through May 15, when the school year ends, and is off for the summer. He takes unpaid leave during the fall term, which starts September 7. Assuming Bob maintained his employer/employee relationship through the summer, his break in service starts in October (the first full month) and he must return to work before the end of March (the sixth month).
Example 2: Harry is a teacher whose contract expires on May 15, the end of the school year. He takes the summer and fall term off, then returns to work as a schoolteacher in January. Because there was no employee/employer relationship during the summer, the summer months count toward a break in service. In Harry's case, he needed to return to work before December 1 to maintain his PERS membership.
10. I am on unpaid leave from work. How long must I return to work to
avoid a break in service?
It depends. The key is that you must perform service in a qualifying position to avoid incurring a break in service. See terms at the end of this Q&A for the definition of a qualifying position.
Example 1: John plans to work full time January 1 through February 28 (480 hours), go on regular unpaid leave, then return to work on December 1 and work full time the rest of the year (160 hours). Since 640 hours are performed in the calendar year, John can return to work for any length of time between March 1 and September 1 to avoid a break in service.
Example 2: Sally plans to work 480 hours from January 1 through February 28, go on regular unpaid leave for 9½ months, and then work 80 hours in December. Since Sally would have worked only 560 hours in the year, she would need to return to work for 40 hours between March 1 and September 1 to avoid a break in service. If she returned to employment for only one day during that period, she would not be performing service in a qualifying position on that day because her total hours of service for the year would be less than 600, and would still incur a break in service.
11. As long as I work at least 600 hours in a calendar year, can I be
on leave for any length of time without incurring a break in
service?
No. A break in service occurs when a member is absent from paid
service in a qualifying position for six consecutive full months (or 12 months
- see Q 13). To avoid a break in service, you must perform service in a
qualifying position before six (or 12) months have elapsed. See Q 5 and
10.
12. Does the unpaid leave I took before August 29, 2003, count toward a break in service?
Yes. If you began an unpaid leave of absence before the effective date of this new law and returned on or after August 29, 2003, the unpaid leave would count toward a break in service [HB 2020 §2a].
Example: Tim began unpaid leave on January 1,
2003, and returned on September 1, 2003. Tim incurs a break in service (unless
he qualifies for one of the exceptions under Q 13).
13. Are there any exceptions to the six-month break in service rule?
Yes. There are four exceptions. There is no break in service for:
1. Members who leave for purposes qualifying for family medical
leave until they have not performed service in a qualifying position for 12
consecutive months (see note in Q 5).
2. Members who leave for approved career development purposes until they have
not performed service in a qualifying position for 12 consecutive months (see
note in Q 5).
3. Members absent from other employment to serve as a legislator.
4. Members called to military duty and are later reemployed as provided under
USERRA in a qualifying position regardless of the length of time the member is
on official military leave as long as they are reemployed within the time
limits set by USERRA after completing military service. This is a federal
law.
14. I left on January 1 for approved family medical leave and will return on November 1. How can I perform 600 hours of service for my employer (and thus return to a qualifying position) with only two months left in the calendar year?
See Q 5 and corresponding note.
15. I am on unpaid leave for approved career development purposes
which I know will be longer than 12 months. How long must I return to work
during the leave of absence to avoid a break in service?
You must work in a qualifying position before 12 consecutive months have passed to avoid a break in service OAR 459-075-0010(13). See Q 5 and corresponding note.
16. Who determines whether my leave is for career development
purposes?
Each employer determines this. By statute, the leave must be in accordance with written authorization of the employer under a written policy the employer applies generally to the class of employees to which the member belongs [HB 2020, §2(3)(c)]. PERS requires official notice from the employer that a member is on this kind of leave.
17. I left employment for reasons that qualified me for family medical
leave, but I was only eligible for family medical leave for 12 weeks. May I
still be on leave for up to 12 months without incurring a break in
service?
Yes. HB 2020 states that family medical leave must be the reason a member leaves employment to be allowed up to 12 months' leave [2(3)(c)] without a break in service. OAR 459-070-0001(1)(b)(A) clarifies that it must be the original reason for ceasing performance of service; you need not qualify for family medical leave for the entire absence.
18. I left employment for reasons that would qualify me for family
medical leave, but my employer did not approve me. Am I still eligible to be
on leave for up to 12 months without incurring a break in
service?
No. You are allowed up to 12 months' leave without a break in service only if your employer has officially qualified you for family medical leave.
19. I have been on disability retirement in pay status for over a year
and was out on disability on August 28, 2003. If I return to work in a
qualifying position, will I have incurred a break in service?
The break in service provisions of HB 2020 apply only to members who were active or inactive on August 28, 2003. Since you were retired due to disability on August 28, 2003, future benefits will accrue under PERS, not OPSRP.
20. I have been a retired PERS member since January 2003. If I return
to public employment in a qualifying position in January 2004, will I be a
member of PERS or the OPSRP Pension Program?
If you work less than 1,040 hours in a calendar year under the
provisions of ORS 238.082, you will retain your status as a PERS retired
member and continue to receive retirement benefits. Your new employment will
not accrue any new benefits under either plan If you return to employment in
which you work 1,040 or more hours in a calendar year, your PERS benefits will
cease until you re-retire under the provisions of ORS 238.078, and future
service and benefits will accrue as an active member of PERS. The break in
service provisions of HB 2020 apply only to members who were active or
inactive on August 28,
2003, not those who were retired due to service or disability. However, please
note that all active PERS members became IAP members on January 1, 2004.
21. I retired from PERS on September 1, 2003, and would like to return
to full-time employment sometime in the future. Will my future service accrue
under PERS or OPSRP?
Future service will accrue under OPSRP. Because you were either an active or inactive member on August 28, 2003, the break in service provisions of HB 2020 2(3)(a) or 2a(1) apply. Therefore, if you are retired for six full months or more, you will not have performed any service for a public employer and will incur a break in service.
22. I was a member of PERS and have incurred a break in service. Do I
automatically become a member of the OPSRP Pension Program and the IAP when I
return to work, or do I need to complete another six-month waiting
period?
You will not need to complete another six-month waiting period. Your previous service under PERS counts toward the requirement in HB 2020 5(1) that an eligible employee complete six months of employment before establishing membership.
23. I was a vested PERS member and have incurred a break in service.
Do I automatically vest in my benefits under the OPSRP Pension Program and the
IAP when I return to work?
Under HB 2020 7(3) and 31(5), creditable service under PERS
counts toward vesting in the OPSRP Pension Program and the IAP. However, you
are not necessarily vested under OPSRP if you were vested under PERS. This is
because the two plans have different requirements for vesting. Under ORS
238.005(23) (as amended by HB 2003 16), you became vested because you made
contributions in each of five calendar years. Under HB 2020 §7 you will vest
in the OPSRP Pension Program on the date you complete at least 600 hours of
service in each of five calendar years or the date you reach normal retirement
age as defined in HB 2020 15, whichever is earlier. Under HB 2020 §31, you
became automatically vested in your IAP employee account on January 1, 2004.
If you later establish a rollover account, you will become vested on the date
the rollover account is established. If your employer establishes an employer
account under HB 2020 36, you will become vested in that account on the date
the member completes at least 600 hours of service in each of five calendar
years; the date on which the member
reaches normal retirement age as defined in HB 2020 15; the date you become
disabled; the date you die; or if the IAP is terminated, the date it is
terminated, whichever is earlier. Hours of creditable service earned under the
PERS program will count toward the vesting requirements of the OPSRP Pension
Program and IAP as long as you have not terminated your membership.
24. I left on sabbatical as a full-time teacher. To help me avoid a
break in service, a neighboring district will allow me work as a substitute.
Would service with that district help me avoid a break?
Yes. The definition of "employment" is all jobs worked for participating employers that total 600 hours or more in a calendar year.
25. I am a seasonal employee. If I work five months on and seven
months off, will I incur a break in service?
Yes, since you have performed no service in a qualifying
position for six months or more.
Definitions
Hours of service - Hours worked as well as paid leave for the
following reasons: vacation, holiday, illness, incapacity, jury duty, military
duty, or authorized leave during which the employee was paid.
Qualifying position - One in which an eligible employee
performs at least 600 hours of service in a calendar year for a
PERS-participating employer.
Six consecutive months - Six full calendar months, beginning
on the first day of the first full month and ending on the last day of the
sixth month.
Important note: This guide is intended to be a non-technical
resource for informational purposes only. Its contents are not legally binding
nor should it be considered as a substitute for the Oregon Revised Statutes or
Oregon Administrative Laws. The break in service issues are complicated and
the preceding questions and corresponding answers are meant to be only
examples for very specific situations. Whether a break in service has occurred
should be determined on a case-by-case basis.