Oregon's Public Pension Costs to Go Up $885M Next Year

Schools, cities, state agencies and other public employers across Oregon will have to pony up an extra $885 million next biennium to fund the state's public pension system.

 
That's about 10 percent higher than previously forecast and a 44 percent increase from the $2 billion per biennium that public employers are currently paying to support the system. And the cost is almost certain to continue climbing, which is prompting a renewed outcry from Republican lawmakers for a reluctant legislature to take up PERS reform again.
 
The actuary for the Public Employees Retirement System shared an updated valuation of the pension fund's assets and liabilities at the system's regular board meeting Friday. The new numbers incorporate the system's investment returns through the end of 2015, as well as new economic assumptions about future returns and members mortality.
 
The PERS Board will send employers their new rates in September, though they won't take effect until July 1, 2017.
 
The news from Friday's meeting, though widely telegraphed in previous presentations to the board, was sobering. Despite healthy financial markets, PERS investment returns have lagged well behind the system's assumed rate of 7.5 percent. The Oregon Supreme Court threw out most of the legislature's money-saving pension reforms from 2013. The PERS Board has tweaked a few underlying economic assumptions to better reflect its real-world experience in the fund.