(1) The regular account for an active or inactive member of the Public Employees Retirement System shall be examined each year. If the regular account is credited with earnings for the previous year in an amount less than the earnings that would have been credited pursuant to the assumed interest rate for that year determined by the Public Employees Retirement Board, the amount of the difference shall be credited to the regular account and charged to a reserve account in the Public Employees Retirement Fund established for the purpose. A reserve account so established may not be maintained on a deficit basis for a period of more than five years. Earnings in excess of the assumed interest rate for years following the year for which a charge is made to the reserve account shall first be applied to reduce or eliminate the amount of a deficit.

(2) The regular account for an active or inactive member who established membership in the system before January 1, 1996, as described in ORS § 238.430, may not be credited with earnings in excess of the assumed interest rate until:

(a) The reserve account established under subsection (1) of this section no longer has a deficit;

(b) The reserve account established under subsection (1) of this section is fully funded with amounts determined by the board, after consultation with the actuary employed by the board, to be necessary to ensure a zero balance in the account when all members who established membership in the system before January 1, 1996, as described in ORS § 238.430, have retired; and

(c) The reserve account established under subsection (1) of this section has been fully funded as described in paragraph (b) of this subsection in each of the three immediately preceding calendar years. [Formerly 237.277; 2001 c.945 § 4; 2003 c.3 § 1; 2003 c.67 § 5; 2003 c.625 § 10; 2011 c.722 § 13]

[2003 c.67 § 8; 2003 c.625 § 12; repealed by 2011 c.722 § 15]