Relating to the application of overtime under the Oregon Public Service Retirement Plan.
Summary
HB 3363 changes how overtime is treated when calculating retirement benefits under the Oregon Public Service Retirement Plan (OPSRP). The bill amends ORS 238A.130 to replace the current overtime averaging approach with a new “overtime cap” framework for determining what overtime hours may be counted in a member’s final average salary. It also keeps existing exclusions for certain late-career salary increases, including employer-paid insurance-related increases that are not broadly offered to the same employee class.
Under the bill, participating public employers must calculate, by July 1 each year, the actual average overtime hours worked by each employee class in the prior calendar year. If that average exceeds 105 percent of the existing cap, the new average becomes the cap for the current year; otherwise, the prior cap remains in place. The Oregon Department of Administrative Services must calculate caps separately for each state agency and may establish more than one cap for a class of state employees based on geographic placement. Employers must also keep records of the caps and provide them to the Public Employees Retirement Board upon request. The first calculations are due by January 31, 2026, and apply to calendar year 2026.
Impact
The bill would directly amend Oregon’s public pension law governing OPSRP final average salary calculations, specifically ORS 238A.130, and add new provisions to ORS chapter 238A. Its practical effect is to change how overtime is limited for pension purposes, potentially affecting retirement benefit calculations for state and local government employees whose compensation includes substantial overtime. It also imposes new administrative duties on participating public employers and the Department of Administrative Services to calculate, track, and maintain overtime caps by employee class and, for state agencies, by geographic placement.
Sentiment
The available vote history suggests the measure moved forward without recorded opposition in committee, passing 7-0 with a recommendation to be referred onward rather than with a direct recommendation for passage. No committee transcript is available, so there is no recorded debate to indicate strong public or legislative controversy in the materials provided. Overall, the bill appears to have been treated as a technical pension-administration measure rather than a highly partisan proposal.
Contention
The main potential point of contention is the bill’s effect on retirement benefit calculations for employees who work significant overtime, since capping overtime for pension purposes can reduce future benefits for some workers while limiting pension cost growth for employers and the retirement system. Another likely issue is administrative complexity: employers must calculate caps annually, maintain records, and in the case of state agencies, potentially manage multiple caps based on geography. The bill text also preserves a distinction between state and local government employees, which could raise questions about consistency across public employers.