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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 3363
Sponsored by Representative NERON, Senators MANNING JR, GORSEK, Representative SMITH G
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act changes how overtime is used in OPSRP. (Flesch Readability Score: 84.9).
Modifies how the overtime cap is calculated for use in calculating the final average salary of
members of the Oregon Public Service Retirement Plan.
A BILL FOR AN ACT
Relating to the application of overtime under the Oregon Public Service Retirement Plan; creating
new provisions; and amending ORS 238A.130.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 238A.130 is amended to read:
238A.130. (1) Except as provided in subsection (3) of this section, for purposes of the computa-
tion of pension program benefits under ORS 238A.125, “final average salary” means whichever of the
following is greater:
(a) The average salary per calendar year paid to an active member in the three consecutive
calendar years of membership that produce the highest average salary, including calendar years in
which the member was employed for less than a full calendar year. If the number of consecutive
calendar years of active membership before the effective date of retirement of the member is three
or less, the final average salary for the member is the average salary per calendar year paid to the
member in all of those years, without regard to whether the member was employed for full calendar
years.
(b) One-third of the total salary paid to an active member in the last 36 calendar months of
membership before the effective date of retirement of the member.
(2) For the purposes of calculating the final average salary of a member under subsection (1)
of this section, the Public Employees Retirement Board shall:
(a) Include any salary paid in or for the calendar month of separation from employment;
(b) Exclude any salary for any pay period before the first full pay period that is included in the
three consecutive calendar years of membership under subsection (1)(a) of this section; and
(c) Exclude any salary for any pay period before the first full pay period that is included in the
last 36 calendar months of membership under subsection (1)(b) of this section.
(3) For purposes of the computation of pension program benefits under ORS 238A.125 of a person
employed by a local government as defined in ORS 174.116, “final average salary” means whichever
of the following is greater:
(a) The average salary per calendar year earned by an active member in the three consecutive
calendar years of membership that produce the highest average salary, including calendar years in
which the member was employed for less than a full calendar year. If the number of consecutive
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 4250 HB3363
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calendar years of active membership before the effective date of retirement of the member is three
or less, the final average salary for the member is the average salary per calendar year earned by
the member in all of those years, without regard to whether the member was employed for full cal-
endar years.
(b) One-third of the total salary earned by an active member in the last 36 calendar months of
membership before the effective date of retirement of the member.
(4) For the purposes of calculating the final average salary of a member under this section, the
salary of the member does not include:
(a) Any amounts attributable to hours of overtime that exceed the [average number of hours of
overtime for the same class of employees as established by rule of the Public Employees Retirement
Board] overtime cap for the member’s class of employees calculated under section 3 of this
2025 Act. [The Oregon Department of Administrative Services shall establish by rule more than one
overtime average for a class of state employees based on the geographic placement of the employees.]
(b) Any increases in salary during the last 36 calendar months of membership before the effec-
tive date of retirement of the member that:
(A) Are made by an employer to pay for insurance coverage previously paid for by the employer;
and
(B) Are not offered to all employees in the same class of employees as established by rule of the
board [under paragraph (a) of this subsection].
SECTION 2. Section 3 of this 2025 Act is added to and made a part of ORS chapter 238A.
SECTION 3.(1) For purposes of ORS 238A.130 (4)(a), the overtime cap shall be calculated
as follows:
(a) Before July 1 of each year, a participating public employer shall calculate the actual
average number of overtime hours that employees in each class of employees employed by
the employer performed in the previous calendar year.
(b) If the average number of overtime hours for a class of employees for the previous
calendar year exceeds 105 percent of the existing overtime cap for that class of employees,
the average number of overtime hours calculated under paragraph (a) of this subsection shall
apply as the overtime cap to the calendar year in which the calculation is made.
(c) If the average number of overtime hours for a class of employees for the previous
calendar year does not exceed 105 percent of the existing overtime cap for that class of em-
ployees, the overtime cap for the previous calendar year shall apply to the calendar year in
which the calculation is made.
(d) The Oregon Department of Administrative Services shall calculate the overtime cap
under this subsection separately for each state agency, and calculate more than one over-
time cap for each class of state employees based on the geographic placement of the em-
ployees.
(2) A participating public employer shall maintain records of the overtime cap for each
class of employee for each calendar year and provide the records to the Public Employees
Retirement Board upon request.
SECTION 4.A participating public employer, as defined in ORS 238A.005, shall make the
first calculations of overtime caps under section 3 of this 2025 Act no later than January 31,
2026. The overtime caps calculated under this section apply to calendar year 2026.
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