As if to remind Oregonians why the upcoming election matters so much, the board that oversees the state’s public pension system will meet Friday to adopt employer-contribution rates for the next two years. Prepare to hear cries of “ouch” from government offices and school districts across the state.
The Public Employees Retirement System finances pension obligations with investment earnings supplemented by contributions from the schools, cities, counties and state agencies that employ PERS beneficiaries. Because the PERS investment fund, even when booming, doesn’t generate nearly enough money to support the system fully, the PERS board periodically adjusts the percentage of payroll individual agencies and districts must contribute to make up the difference.
On Friday, the board will consider adopting new rates for the biennium that will begin July 1. Here’s what the change will look like for some local employers:
The city of Bend will see its contribution rate for longtime public employees with comparatively rich Tier 1 and Tier 2 benefits jump from 20.7 percent of payroll to 24.9 percent of payroll, a 20 percent increase. Contributions for newer employees on the less-generous OPSRP plan will jump from 12.1 percent of payroll to 16.2 percent of payroll, an increase of almost 34 percent.
Bend’s public school district will see Tier 1 and Tier 2 contribution rate jump from 18 percent of payroll to 22.8 percent of payroll, an increase of over 26 percent. And the rate for OPSRP employees will rise from 12.7 percent of payroll to 17.3 percent of payroll, an increase of 36 percent.
With these increases, Bend’s school district will have to hand PERS millions of dollars every year that would otherwise be used for something else. Like, say, hiring teachers. Unfortunately, the pain will continue. The pension system’s actuaries expect a similar increase systemwide for the 2021-2023 biennium.
Is it any wonder Bend-La Pine Superintendent Shay Mikalson lamented in a preface to this year’s district budget the Legislature’s “pending and compounding PERS crisis?”
If fixing, or even mitigating, Oregon’s ongoing PERS crisis were simple or politically easy, it would have been done years ago. Because it is neither, concerned taxpayers should look to support candidates who are serious about addressing the problem. Electing them is no guarantee of success, as just about any reform to the system will face legal challenges. But electing PERS do-nothings will guarantee the continuation of the status quo.