Oregon Governor Kate Brown and the Oregon Legislature are desperately looking for ways to beef up the state’s PERS system. It appears to be running out of money. As a fix, Brown is suggesting taking the State Accident Insurance Fund’s (SAIF) $1.4 billion surplus.
Of course, that money belongs to the businesses that buy work comp from SAIF but apparently Brown and some in the Legislature aren’t aware of how SAIF is constructed, nor have they looked deeply into the last time a Legislature grabbed those funds.
It cost the state over $225 million.
Oregon’s business community is looking at two ballot measures that may go a long way toward solving the PERS problem by fixing the future. The first gives new hires the option of a 401(k)-type retirement plan that is financed by a 6% salary contribution of the employee and an equal amount by the employer.
These new hires could pick this or the pension system as it exists now. They cannot — however — do both as today’s employees can. If enough signatures are gathered to put it on the ballot, and if it passes, then starting in July of 2021, employees would give 6% of each paycheck toward their choice.
Ballot idea two requires the Oregon Legislature to study a new 401(k) style retirement plan — like that just discussed — and then submit recommendations to implement the plan by 2022. At the same time, the idea will require current employees and new employees to pay a third of the cost of their pension benefits going forward.
The costs range between 2.8% and 6% depending on job classification.
The two petitioners are former governor Ted Kulongoski and former Republican legislator Chris Telfer. “This is not a short-term issue,” Kulongoski said. “For the next 20 years, this will eat at state government finances unless this issue is dealt with. If nothing else, I’m hoping the legislature starts looking at this much more seriously than they have.”
Kulongoski and Telfer got interested in pushing these ideas from interaction with the Oregon Business Council and the business council’s group, PERS Solutions for Public Services. For years both have — and with no success — pushed the Oregon Legislature to solve the PERS issue.
Tim Nesbitt is a labor leader. He has been the Oregon Business Council’s PERS consultant for years. Nesbitt thinks it’s going to take more than just a business community push to get PERS reforms passed.
“If the legislature doesn’t act this year, it would be on the ballot for the 2020 general election,” Nesbitt said. “By then, schools and other employers will be staring at another big PERS cost increase. This only gets worse. It intensifies to crisis proportions, whether we’re there already or will be” in the next few years.”
Nesbitt said the two groups, and Kulongoski and Telfer are taking both ideas to various places to get some sort of consensus. He doubts both will end up on the ballot. More than likely it will be something that combines both ideas.
Each will take 112,020 signatures to get on the ballot to be seen by Oregon voters in 2020.
Nesbitt says neither measure will do much to help with the $27 billion unfunded liability of the Oregon Public Employees Retirement Fund. They would — if passed — ease the future impact to schools and public agencies.
Lou Ogden is the former mayor of Tualatin, Oregon. Former state representative Julie Parrish has joined Ogden and others to form Unified Business Oregon. Ogden says they like the two ballot measures. “Our organization applauds Governor Kulongoski and Senator Telfer for stepping up to lead on PERS reforms,” Ogden said. “They too have set aside party differences to come together to do what's right for all Oregonians, and we'll be there to help.”
Parrish is also working as a co-sponsor for another ballot measure that prohibits the state — or any government — from borrowing money to pay PERS obligations.
Source link: OregonLive.com