Edwards said his proposal is expected to save $90 million over the next two years and more than $1 billion over the long term, according to the Portland Oregonian. The state as an employer is about $2.3 billion short of meeting its future obligations through the Public Employees Retirement System (PERS) despite the legislature’s already having approved a series of cost-cutting moves at PERS.
The liability is calculated with the assumption that it will grow by 8% a year. Pension bonds can be sold at 5%, generating significant savings during the 24-year life of the bonds, Edwards told the newspaper.
The House Revenue Committee approved a proposed constitutional amendment giving the treasurer authority to issue the bonds. The measure would go to voters in a special election September 16. The Legislature would have to complete action on House Joint Resolution 18 by July 18, to give elections officials enough time to set up the election. The House could vote on the bill as early as Monday.
Several local governments and school districts have issued pension bonds in the past year, Edwards said. For example. the state of Illinois recently sold $10 billion in pension bonds (See S&P: Public Pension Problems Bleed Over To Bond Ratings ).
The last piece of Oregon’slegislative pension reform package – the issue of what type of pension to provide new state and local government employees – went to a House-Senate conference committee this week to work out differences between similar bills in the two chambers (See Last Oregon PERS Reform Piece Moves to Conference Committee ).