Ebner

BACKGROUND

I. PERS and Refund Annuities

PERS is a statutory retirement plan for state and local gov- ernment employees in Oregon. Many retired PERS members receive a monthly “service retirement allowance” composed of two parts: (1) a “refund annuity” and (2) a life pension.1 The amount of the refund annuity depends upon three vari- ables: (1) life expectancy rates for persons in the retiree’s age group; (2) assumed interest rates; and (3) the size of the retir- ee’s account balance at the time of retirement. The first two variables, life expectancy and assumed interest rates, are “ac- tuarial equivalency factors” (“AEFs”) used to convert the third variable, the retiree’s account balance at the time of retirement, into the monthly refund annuity. See Or. Rev. Stat. § 238A.005(2).

PERS governing statutes mandate that the refund annuity be “the actuarial equivalent of accumulated contributions, if any, by the member and interest thereon at the time of retire- ment.” Or. Rev. Stat. § 238.300. Thus, to convert a sum of money to a refund annuity, the PERS actuary multiplies that sum of accumulated contributions by the appropriate AEF from an annuity table adopted by Oregon’s Public…