By editorial board • 

PERS panel presents solid report, but it's of little value to major problem

The PERS Unfunded Actuarial Liability Task Force presented its final report to the governer this week. The group was tasked with exploring a range of money-generating options to pay down the state’s retirement system debt. 

The report includes plenty of useful tactics and business practices the state should consider no matter what the money be used for. But the idea that the task force’s work will be of any significance in the battle to fix PERS certainly is just a dog and pony show.

Governor Kate Brown set a target of $5 billion of new revenue to cut the pension deficit over the next five years. However, that’s struggling to tread water since the task force began its work. In July, the PERS board voted to decrease the expected return on investments from 7.5 percent to 7.2 percent, adding $2.4 billion to the unfunded liability.

When Brown announced the task force earlier this year, ideas of selling off major state assets — including universities, real estate or the state’s monopoly on liquor and workers compensation insurance — grabbed the most headlines. Those options seem all but dismissed by the governor, who set staff to follow up on two proposals: pooling the excess risk capital of state entities, and an incentive program for PERS employers to accelerate their payments to reduce the deficit.


The first is a creative option the panel content could generate $750 million to $1.5 billion. The proposal is to combine rainy day funds of entities like SAIF and public universities, then direct some of that money to the PERS debt: “If this risk capital was pooled at the state level, less would be required since the possibility that all entities would need risk capital at the same time is remote.”

The second seems like an effort to pass the hard work on. Brown favors enticing school districts and other PERS employers to pay off debt by selling assets, spending down reserves or other ways, to which the state would match 25 cents to the dollar for the local agencies’ liability. How the state would fund that program is a major question. 

This process was flawed from the beginning since, as the report states: “The Governor also directed us not to consider changes to benefit levels, rates of return, or specific investments.” 

Those options immediately raise ire of the public employees unions who greatly fund Democrat candidates in the state. In other words, the governor seems to be saying: “Let’s wait until after the next election to be serious about the PERS deficit.” 

Comments

Don Dix

'Kicking the can down the road' seems to be the state's final solution to many issues -- actually doing something can get one 'unelected', you know!

tagup

The SAIF money is not theirs to use....That fund is paid for by policy holders and is intended to reduce policy premiums to the insureds. The idea is in essence legalized theft from SAIF policy holders....

Don Dix

Question -- How does one claim a 'solid report' if 'it's of little value to major problem'? The 'appearance of doing something' is task force 101, and usually, as in this case, the only objective!

sbagwell

The panel did a good job of analyzing what it was charged with analyzing. Unfortunately, Gov. Kate Brown limited its mission to analyzing ways to raise money to keep bloated public employees pensions intact, which does nothing to attack the root problem.
I think just about anyone not invested in the care and feeding of public employees realizes the root problem here isn't lack of money to fund PERS pension, rather a pension program that is wildly and untenably over-generous. It's simply not sustainable.
I think Brown knows that perfectly well. The problem is, she's planning to fuel her re-election run with money from the state's public employee unions, starting with the OEA.
Steve

Don Dix

So, a task force set up to come up with ideas to pay down the PERS debt did nothing but spin their respective wheels. What a waste of time and print!

In 2002 Kate Brown said this -- “PERS OUGHT TO BE FIXED, BUT NOW IS NOT THE TIME.” At the time, the PERS liability was $4B. Now 15 years later and $22B in debt, it's still not the time. Really?

And Gov. Brown is more concerned with getting re-elected than fulfilling the job? That seems to be a distinctive trait in Oregon government these days -- get elected with hollow promises, rinse and repeat!

sbagwell

Yes.
And in most if not all other states as well, Red or Blue. Seems almost a common denominator in of modern American government.
Steve

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