Opinion ID: 835784
Heading Depth: 3
Heading Rank: 6

Heading: Actuarial Equivalency Factors

Text: Under an administrative rule that PERB adopted in 1993, and later amended in 1996, PERB declared that it would not reduce, by application of new actuarial equivalency factors (AEFs), [24] the service retirement allowances of PERS members who joined the system before 1999. That declaration notwithstanding, the 2003 PERS legislation directs the implementation of updated AEFs beginning July 1, 2003, and thereby modifies the AEF calculation for certain members who entered the system before 1999. Members who retired on or before June 30, 2003  one day before the effective date of the new legislation  receive service retirement allowances calculated using the AEFs in place before the legislative reforms. All other members who joined the system before 1999 and who retired or will retire on or after July 1, 2003, will receive service retirement allowances that are subject to the new legislation. Those allowances are determined using one of two calculations, whichever produces the greater benefit. The first requires that the AEFs in effect at a member's effective retirement date be applied to the member's account balance. The second creates an account balance as of June 30, 2003, that consists only of the member's contributions and earnings credited as of that date. Based on that account balance, PERB determines the member's service retirement allowance using the AEFs in effect on June 30, 2003.