State retirement system under water

Governor Kate Brown’s Public Employee Retirement Systems task force has still not come up with a viable solution for closing a $22 billion state deficit. She is leaning toward an employer-incentive program. Employees from Lane Community College, as well as other public employees, have entered into a legal agreement with the state. Jennifer Salzman, an instructor here at Lane Community College, feels “It is important that the state uphold their part of this agreement.”

PERS is the primary pension program for public employees in the state of Oregon. Members include state and local employees, which includes college and university instructors. PERS works much like a mutual fund where funds are spread across many investments, both high and low risk.

Lane’s faculty are members of this fund and are very concerned about the impact this will have on their pension once they reach retirement. They are afraid the money will not be there as promised when it comes time for them to receive it. This has caused one instructor, Lee Imonen, the Union Representative for Lane Community College’s faculty, to lose faith in the security of the very system that gave him reason to become a teacher.

“When we were hired, some of the assurances of the position was a good health plan, and a reasonable retirement. Like many others in today’s workforce, I feel less certain about the future and my ability to rely on retirement benefits when the time comes,” Lee said.

PERS was originally set up so that, at retirement, the state would match employee non-capped contributions at 100 percent. This meant that pension payments many times equaled or exceed 100 percent of salary. The fund went into debt in the 1980s. By 2003 the deficit became too great and reform began.

Now, it is the current employees who will bear the brunt of this deficit upon their retirement. One city employee, who spoke on the condition of anonymity, when asked how she felt this would affect her retirement, commented, “My plan is to get vested then leave and take my money with me.”

The governor’s task force was charged with finding options that would bring down the deficit by $5 billion within five years. In the report, submitted on Nov. 1, 2017, the task force submitted over a dozen proposals, each with their own pros and cons.

Governor Brown showed great concern over proposals to privatize public universities and sell off the State Accident Insurance Fund Corporation.

She instructed the task force to continue searching for more viable options. The focus to be on an employer-incentivized state match program of .25 on the dollar to be funneled into the PERS fund. She suggested possibly pooling outside excess funds to use for this and intends to avoid a rise in liquor taxes or initiating new taxes on Oregonians.

As of the writing of this article, there have been no decisions made as to a resolution. The focus will continue to be on the state match program when the governor and PERS task force convene at the next legislative session on Feb. 5.