Chalkboard Project and Oregon Business Council Re-Release PERS Report
Finding a sustainable solution for unfunded obligations is necessary
|
PORTLAND-November 24, 2009- In 2007, the Chalkboard Project and the Oregon Business Council (OBC) commissioned a report from ECONorthwest on the state of the Public Employees Retirement System (PERS). After the 2003 legislative changes to PERS, the public was torn as to whether or not the system needed to be reformed further. The report gave an in-depth look at the system and suggested a number of additional changes to prevent excessive financial burdens in the future.
Today, the Chalkboard Project and OBC are re-releasing the PERS report along with an issue update by ECONorthwest. Given the attention to PERS in recent news, it is important for the public and policymakers to understand the problem and potential solutions.
As the update states, "The 2003 legislative changes, while far reaching, fell well short of insulating the system from the kind of market losses incurred in 2008." Without greater reforms to the system, the report argues, public employers face increasing costs that will place a tremendous burden on public services in Oregon.
"The volatility of PERS is not good for school districts. Especially in poor economic times, these unfunded obligations threaten the stability of public education. Without further reforms, it is difficult to imagine an education system with stable and adequate funding," said Sue Hildick, Chalkboard Project President.
As of December 31, 2008 the unfunded obligations of public employers had grown to nearly $17 billion, compared to $4.6 billion in December 2005.
The update draws attention to the three major issues with PERS that were not solved by the 2003 legislation:
- The cost of operating defined-benefit systems, like Oregon's, increases when underlying investments fall.
- Unique rules of the Tier I program make Oregon's pension system unusually costly and volatile.
- In an apparently ill-fated attempt to lower PERS costs, many public employers borrowed large sums of money and invested the proceeds in the market. They bet the returns on investments would exceed the cost of borrowing the money. For now, many borrowers have lost that bet.
"Oregon has taken important steps to address its PERS liability. Even so, we cannot ignore the fact that more has to be done to prevent tough economic times from reversing any progress," said Duncan Wyse, Oregon Business Council President.
Read the 2009 update on PERS:: http://www.chalkboardproject.org/images/national%20research/PERS%202009-2.pdf
Read the complete 2007 PERS report: http://www.chalkboardproject.org/images/national%20research/PERS-1.pdf
###
|
About Chalkboard Project
Launched in 2004, the Chalkboard Project is a non-profit, non-partisan organization working to unite Oregonians to make our K-12 public schools among the nation's best. We aim to help create a more informed and engaged public that understands and addresses the tough choices and trade-offs required to build strong schools. www.ChalkboardProject.org @ChalkTalkers
About the Oregon Business Council
OBC mobilizes business leaders to contribute to Oregon's quality of life and economic prosperity. OBC studies problems that pose a barrier to these aims, and it works with other business groups and public officials to craft solutions and act on opportunities. OBC embraces the vision of Oregon Shines II: quality jobs for all Oregonians; safe, caring and engaged communities; and healthy sustainable surroundings.
For more information visit www.orbusinesscouncil.org.
|
|
