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0 of 3 Premium Clicks used this month SUBSCRIBE Print + Online Subscriber Activation | Register x Forgot Password | Need an Account? e-edition | subscribe | newsletter | deals Classifieds Jobs Autos Real Estate FEATURED » NEWS NOW Ashland upskirt photography suspect arrested ... Medford man accused of threatening girlfriend with high-speed crash ... Town hall meeting on marijuana planned ... Ashland upskirt photography suspect arrested ... Medford man accused of threatening girlfriend with high-speed crash ... Town hall meeting on marijuana planned ... PERS State treasurer: Legislature's inaction will raise pension costs Comment By Jonathan J. Cooper The Associated Press MailTribune.com By Jonathan J. Cooper The Associated Press Posted May. 29, 2015 at 5:31 PM Updated May 29, 2015 at 6:12 PM By Jonathan J. Cooper The Associated Press Posted May. 29, 2015 at 5:31 PM Updated May 29, 2015 at 6:12 PM » Social News TIGARD — School districts and local governments will have to pay more for employee pensions because legislative leaders are blocking a bill to restructure the management of Oregon's investments, state Treasurer Ted Wheeler said Friday. Wheeler has tried unsuccessfully for three years to convince lawmakers that his agency needs more independence from the Legislature to hire staff and make decisions about investments. He says the current governance structure is too risky, and without more flexibility, investment managers will be forced to back away from Oregon's heavy exposure to private equity investments. Such a move would lower long-term investment returns in Oregon's $70 billion pension fund — money that would have to be made up with higher contributions from taxpayers. Wheeler, an elected Democrat, gave his warning in a joint meeting of the Public Employees Retirement System (PERS) Board and the Oregon Investment Council, which makes decisions on investment policy. "The reality is ... more resources have to be squeezed out of our public education system and our municipal and county budgets," Wheeler said. "Here we have an opportunity to do something different, and the Legislature has chosen to squander it." State and local governments are already looking at a steep hike in their retirement costs after a state Supreme Court decision in April that overturned the bulk of Public Employees Retirement System cuts that the Legislature approved in 2013. In a separate presentation Friday, PERS financial consultants said that the court decision will raise pension liabilities by $5 billion. The court's decision allowed about $1.3 billion worth of cuts to be preserved, the consultants said. As a result of the court decision, the PERS experts expect that government employers will see their collective pension contributions rise $690 million in the 2017-2019 budget cycle. On average, the cost will jump from an average of 18.2 percent of payroll to 21.2 percent, with more increases to come down the road. The increases will be especially harsh for school districts. Compared with state and local governments, school districts have higher accrued retirement costs relative to the number of active employees. Wheeler has pitched his "Investment Modernization Act" as a necessary step to avoid digging an even deeper hole. He says his agency spends too much on Wall Street investment managers because he lacks authority to hire staffers to do it. Money spent on managers can't be invested for growth, dampening returns. He also says consultants have advised that Oregon can't properly manage the risk associated with complex investments if its budget and hiring are subject to the whims of legislators. Senate President Peter Courtney, a Salem Democrat who opposes Wheeler's initiative, said he's "not trying to stand in anybody's way," but he's reluctant to cede legislative oversight, particularly after he did so for Cover Oregon before it failed to launch a health insurance website. Executive branch officials always complain they don't have enough autonomy, Courtney said. He has worked to get Wheeler more spending authority, he said, and the next treasury budget will allow for 24 more employees. The treasury's budget comes from investment earnings, not the general fund, but the Legislature imposes a spending and hiring limit. "Like it or not, the legislative branch of government does exist in the Oregon Constitution," Courtney said in an interview. "I cannot just cut us loose from some kind of very serious oversight role in this." A fifth of Oregon's pension fund is in private equity investments, which presents the opportunity for both high risks and high rewards. John Skjervem, the state's chief investment officer, said the Oregon Investment Council will meet next week to consider pulling about 2.5 percent of the pension fund out of private equity in favor of less risky — but also less lucrative — investments because of the Legislature's inaction. "If we don't get the flexibility to staff the organization as it needs to be staffed, we will need to put limits on what we do," Skjervem said. By Jonathan J. Cooper The Associated Press MailTribune.com By Jonathan J. Cooper The Associated Press Posted May. 29, 2015 at 5:31 PM Updated May 29, 2015 at 6:12 PM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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