Oregon PERS Ponders Pension Payback Details

September 23, 2005 (PLANSPONSOR.com) - With some 43,000 former Oregon state and local government workers owing the state $800 million because of pension overpayments, state pension officials have proposed to give those system members a long payback period.

In fact, the board of the Oregon Public Employees Retirement System (OPERS) is scheduled to consider a suggestion that the retirees make up for overpayments five years ago by paring pension benefits over the course of their retirements – spreading out repayments for some pensioners until they die, the Associated Press reported.

However, the pension board first must decide if it should take money back from retirees and others who left the pension system and, if so, how the money might be repaid. Instead of going after the retirees for the money, some retirees and union leaders want the pension system to instead use reserves or take the money out of future investment earnings.

The issue arose when Marion County Circuit Judge Paul Lipscomb ruled that the pension system’s board should have put more of the pension fund’s 1999 earnings into reserves instead of beefing up workers’ pension accounts. The Oregon Supreme Court last month let Lipscomb’s decision stand (See  Oregon Supreme Court Turns Away PERS Ruling Challenge ).

The ruling affects workers who joined the system before 1996 and received pension investment earnings in their accounts for 1999. Pension accounts of those employees who still are working are to be reduced. Workers who retired from April 1, 2000, through March 31, 2004, or otherwise left public employment could have to pay back some money to the system, according to the news report.