The move, proposed in February (See OR PERS Proposes Using Reserves to Help Cut Employer Pension Costs ), is expected to lower employer contributions to the fund by around $150 million next year, the Associated Press reports. It is expected to save about $1 billion in costs for 2007 – 2009.
In addition, a possible change in actuarial methods could reduce employer payment rates even more in the short term. Actuaries say new methods can more accurately predict how much the retirement system has on hand and how much in pensions it will owe down the line, according to the AP.
The actuarial change would cut rates public employers pay to PERS to about 16% for school boards from the current 17% and 13% for state and local governments from 15% currently.
Most board members said they do not want all the benefits from the new actuarial methods to go to lowering employers’ costs, but that some should go toward paying down the $4 billion plus in unfunded liabilities of PERS.
The Oregon legislature is currently considering changes that would trim pensions for certain public employees and cut costs in an effort to decrease the PERS shortfall.