HomeMy WebLinkAboutAdmin Order 43-04-01ADMINISTRATIVE ORDER NO. 43-04-01
of the
City Manager
City of Eugene, Oregon
ESTABLISHING PROCEDURES FOR MAYOR AND CITY COUNCILOR
CONTRIBUTIONS TO THE OREGON PUBLIC EMPLOYEES
RETIREMENT SYSTEM ("PERS") AND THE OREGON PUBLIC
SERVICE RETIREMENT PLAN ("OPSRP"); AND REPEALING
ADMINISTRATIVE ORDER NO. 43-01-01.
The City Manager of the City of Eugene f'mds that:
A. Chapter VI, Section 18 of the Eugene Charter of 2002 (the successor to the same
section of the Charter. of 1976 as amended) provides that commencing July 1, 2001 the Mayor is
to receive a stipend of $1,500 per month and the City Councilors a stipend of $1,000 per month,
with the amounts to be adjusted at the beginning of each fiscal year thereafter, based on the
Consumer Price Index for the Portland, Oregon area, or its successor. That section also provides
that the Mayor and City Councilors ("elected officials") shall receive no fringe benefits except
those required by state law.
B. By receiving the stipend, the elected officials in office on July 1, 2001 were
eligible under ORS 238.015 to participate in PERS. Effective August 29, 2003, membership in
PERS was no longer available to the City's elected officials who had not elected to participate in
PERS prior to that date. However, under ORS 238A. 100, the elected officials became eligible to
participate in OPSRP on that date; they may also elect not to become a member. Members of
PERS or OPSRP, including elected officials, are required to pay a mandatory 6% employee
contribution by way of a salary reduction. The contribution is treated as an employer
contribution under Section 414(h)(2) of the Internal Revenue Code.
C. ORS 238.205 and 238A.335 allow, but do not require, PERS and OPSRP
participating employers to assume their employees' contributions. The City has no policy or
written agreement to assume the PERS or OPSRP contributions of the elected officials.
D. The elected officials do not have the option of receiving the salary payment and
paying the PERS or OPSRP employee contribution directly.
E. If they choose to participate, the elected officials' reported salary on their W-2
forms for tax purposes will be reduced by the amount of the officials' contribution.
F. Because of the changes in the statutes regulating membership in PERS and
OPSRP, Administrative Order No. 43-01-01 should be repealed and procedures established as
provided herein.
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NOW, THEREFORE,
The City Manager of the City of Eugene orders and directs that:
1. Administrative Order No. 43-01-01 is hereby repealed as of the effective date of
this order. This repeal however, does not affect the validity of any elections authorized or taken
thereunder by an elected official, which are hereby ratified and affirmed.
2. Effective January 1, 2005, an elected official may elect not to become a member
of the OPSRP pension program by giving the Public Employees Retirement Board written notice
of that election not later than 30 days after taking office. Such an election will also operate as an
election not to become a member of the individual account program, and is irrevocable during
the term of office for which the election is made. Once membership in PERS or OPRSP is
established, it cannot be discontinued during the elected officials' term of office except upon
separation from service.
3. Elected officials choosing to participate in PERS or OPSRP are required to pay
the 6% employee contribution required by PERS and OPSRP. All employee contributions made
to PERS or OPSRP shall be made through mandatory salary reduction. These mandatory
reductions shall be remitted to PERS, as the Administrator for both PERS and OPSRP, by the
City of Eugene and shall be treated as employer contributions under Section 414(h)(2) of the
Internal Revenue Code. The elected official's reported salary for federal and state income tax
purposes shall be reduced by the amount of the contribution made to PERS or OPSRP by the
City of Eugene pursuant to this reduction.
Dated and effective this ~l{~day of ~, 2004.
Dennis M. Tayl~[
City Manager
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