SALEM, Ore. (AP) — Cuts in retiree benefits and investment returns that beat expectations have eased the pressure on rates that governments pay to finance public pensions in Oregon.
An actuarial report shows the unfunded liability of the Public Employees Retirement System has been cut nearly in half, to $8.5 billion as of the end of 2013, The Oregonian reported (http://bit.ly/1lWEy7o).
The report eases the burden on local government and school boards, which pay into the system and have faced higher costs to cover the system's shortfall. It also could mean the Legislature won't deal with the issue again when it meets next year.
The calculations could be upset if public employees win a state Supreme Court challenge to legislative actions that included a reduction in annual cost-of-living increases.
As a result of the improving finances, the average contribution rate for public bodies is expected to drop slightly, to 10.6 percent of payroll effective next year. That systemwide average includes extra payments that some employers have made into so-called side accounts.
Excluding side accounts, the average base contribution rate is expected to rise 1 percentage point.
The rates vary substantially among public employers such as city and county governments and school boards. Precise rates are calculated in September.
Acknowledging that the costs are still heavy for most governments and there's still uncertainty about the litigation, PERS board chairman John Thomas of Eugene said it was pleased.
"We just hope we can stay the course," he said.
A decision from the court is expected next year, and the PERS board and legislators hope it comes before the Legislature adjourns its session next summer.
Information from: The Oregonian, http://www.oregonlive.com