© 2024 | Jefferson Public Radio
Southern Oregon University
1250 Siskiyou Blvd.
Ashland, OR 97520
541.552.6301 | 800.782.6191
Listen | Discover | Engage a service of Southern Oregon University
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Oregon Supreme Court Considers Whether To Allow PERS Pension Cuts

The Oregon Public Employees Retirement System (PERS) building in Tigard, Ore., on Sunday, Jan. 6, 2019.
The Oregon Public Employees Retirement System (PERS) building in Tigard, Ore., on Sunday, Jan. 6, 2019.

Oregon state Supreme Court justices showed little overt support for overturning legislation that trimmed public employee pensions in the state.

Lawyers representing Oregon public employees went to the state Supreme Court Tuesday to argue the Legislature went too far in reducing their pension benefits. What they did not find was a justice who seemed clearly sympathetic to their arguments.

Instead, Justice Thomas Balmer, the longest-serving member of the court, said the justices made it clear in a previous ruling that “detrimental” changes can be made to pension benefits as long as they only affect the compensation that employees receive for future work.

Aruna Masih, the Portland lawyer representing workers in the Oregon Public Employees Retirement System, argued that the Legislature promised workers they would give workers a certain benefit level when they revamped the system in 2003, and “that is a promise that needs to be honored.”

Chief Justice Martha Walters countered that the Legislature gave a starting date for those changes but that “doesn’t tell you when you are going to end doing that.”

As a result of the pandemic, only three of the justices were in the court’s Salem chambers during the oral arguments while the other four justices participated by video — and those four asked few questions.

The oral arguments only offered a glimpse into how the justices might be thinking. And the tenor of their questions may not reflect how they come down in their written decision.

Oregon’s high court has frequently dealt with pension issues as PERS has periodically faced big financial shortfalls over the last two decades. At the end of last year, the system had a long-term debt of about $24 billion, and that shortfall is likely to rise because of the economic downturn.

To grapple with the debt, state and local governments and school districts have been forced to pay higher PERS rates for their workers over the past several years. Those PERS rates now average 25% of payroll.

In 2019, lawmakers passed a bill aimed at capping the rise in employer rates. The biggest change the Legislature made was to stretch out the repayment period for the pension debt. But under political pressure from major elements of the business community — which wanted PERS reforms in exchange for not fighting new taxes on business for schools — legislators also agreed to trim pension benefits.

Public-employee unions fought hard against the bill, which passed the Democratic-led Legislature by narrow margins. And several unions refused to financially back Democratic lawmakers who voted for the measure before the May primary.

Masih argued that the Legislature unfairly took benefits from workers who aren’t responsible for the pension shortfalls, which are largely due to benefits being paid to already retired workers. Benjamin Gutman, the solicitor general for the state Department of Justice, countered that workers may expect to receive a certain benefit, but that doesn’t mean they have “earned or accrued that yet.”

The court has no deadline for deciding the case.

Copyright 2020 Oregon Public Broadcasting.

Jeff Mapes is a senior political reporter at Oregon Public Broadcasting. Previously, Jeff covered state and national politics for The Oregonian for nearly 32 years. He has covered numerous presidential, congressional, gubernatorial and ballot measure campaigns, as well as many sessions of the Legislature, stretching back to 1985. Jeff graduated from San Jose State University with a B.A. in journalism.