Oregon school districts have caught a break from the rise in public pension payments that's been battering their budgets since the 2008 recession, thanks to a rising stock market and the state Legislature.
A new schedule of payments shows school districts will pay about 25 percent less, on average, in 2015 to bail out the Public Employees Retirement System, the Salem Statesman Journal reported Monday.
Two years ago, the pension system was looking at a $16 billion shortfall. Every public employer learned they would be paying about 30 percent more for pension benefits in 2013 in an effort to make up the shortfall.
Now, the shortfall has shrunk by half, and the markets have risen in a way that's helping all public employers.
However, for many other public employers in Oregon, pension contributions are going up, just not so sharply.
On average, other local and state bodies will see an increase of about 11 percent in contributions.
For all public employers, the actual payments vary widely depending on workforce characteristics and a variety of other factors.
School districts own more of that shortfall, in part because their employees' retirements tend to be worth more, on average. Teachers tend to spend their entire careers in public service.
School districts also have issued bonds to pay off part of the shortfall, and the money is invested, meaning the schools benefit greatly if markets go up — and are punished more severely when they go down.
In its 2013 session, the Legislature passed bills to decrease cost-of-living adjustments for PERS retirees and to reduce contribution rates. Public employees have challenged those cuts, and the Oregon Supreme Court is scheduled to hear arguments in their case next month.
If the court upholds the cuts, actuaries predict employer contribution rates will continue to decline over the coming years as the impact of smaller COLAs builds on itself and as younger workers with cheaper pensions replace retiring employees.
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Information from: Statesman Journal,
Copyright 2014 Oregon Public Broadcasting
