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L/RAIN Temp: 58 °F Wind: N at 4 mph Sunday, April 20, 2003 SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics AP News Weather Classified Archives Site Map EXTRA HomeLife Magazine W3 Magazine Jobs @ Mail Tribune Tempo A & E Oregon CarZone Wellness Connection Real Estate Newspaper in Education Prime Times Outdoor Journal Personals Movie Times TV Times E The People CLASSIFIEDS Find a Car Find a Home Find a Job Find Everything E SOUTHERN OREGON Automotive Communities Entertainment Publications Recreation Calendar ABOUT US FAQ What's New Advertise Home Delivery Classified Ad Contact Us Media Kit Email Story to a Friend April 3, 2003 PERS liability grows in new projection Legislators work on reforms but that process takes time By DAMIAN MANN Mail Tribune Legislative efforts to rein in the state Public Employees Retirement System received a sharp blow this week as new projections show a worsening long-range debt. The PERS liability has grown to $16.42 billion from previous estimates of $15 billion and could peak at $17.79 billion in late 2007, leaving schools and other municipalities to pick up the tab. Legislators have created two bills — one of which has been signed by the governor — that have not been calculated into the revised debt figures released by PERS this week. Under the current scenario, schools can be expected to pay up to 25 percent of their payroll for retirement benefits this July, but by 2007, that amount could rise to almost 33 percent. "Schools are going to be laying off more people because of PERS," said Republican Rep. Dennis Richardson of Central Point. "This system is fatally flawed and could bankrupt the state if we don’t take action." Gov. Ted Kulongoski signed one bill in February that caps PERS benefits at 8 percent, knocking off $1 billion of the debt. Another bill that hasn’t yet been signed into law would replace 1978 PERS mortality tables with current ones to reflect the average lifespan of Americans, which is now four years longer, saving another $1.5 billion. Richardson said the exact effects of these bills have not been calculated into the new figures released by PERS. "This is extremely frustrating for schools," he acknowledged. "Until we have firm figures, I would advise schools to anticipate the full PERS payment." Ben Bergreen, superintendent of the Phoenix-Talent School District, said increased PERS costs will be approximately $500,000 next school year — part of his district’s $2 million shortfall estimate. "It contributes to the problem of trying to balance the budget," he said. However, Bergreen remains hopeful that legislative bills will make a significant dent in PERS costs. John Marshall, executive director of the Oregon School Boards Association, said that despite the latest projections, any legislation that affects the PERS liability would be helpful. He said these projections, which are done every two years, are based on the current state of the economy. "Every time the stock market goes down the unfunded liability goes up," he said. If the economy improves, the debt would go down, he said. Marshall doesn’t expect the new projections will increase rates to schools this July above the 18.58 percent of payroll anticipated. Many districts also pay an additional 6 percent, making their total contribution to PERS 24.58 percent. He anticipates the Legislature can enact more reforms that will further knock down the debt. Democratic Rep. Greg Macpherson of Lake Oswego proposed a plan to revamp the retirement system. But Richardson said the plan still would be subject to market fluctuations and leave schools and other institutions susceptible to increased costs in the future. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Printer Friendly Version Email Story to a Friend Subscribe Archive: Click to Search Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2003 Mail Tribune. All rights reserved. Privacy Policy | Terms & Conditions Website Feedback A D V E R T I S E R S