LOC News
PERS Changes Withstand Court Challenge
In a unanimous decision, the Oregon Supreme Court this week upheld changes to the Public Employee Retirement System (PERS) made by the Legislature in 2019. In contentions were the provision that employees pay a portion of the pension cost while the system is less than 90% funded and a final average salary cap of $195,000 adjusted for inflation. Under SB 1049, employees in the Tier I and Tier II pension plans will pay 2.5% of their payroll into an account that funds their individual pension cost and employees in the Oregon Public Service Retirement Plan (OPSRP), also known as Tier III, will pay .75% of their salary. This will be accomplished by diverting a portion of the employees’ existing 6% contributions into their Individual Account Program. The court’s ruling that neither change impaired the contract with employees allows both provisions of SB 1049 to be implemented. Other aspects of the bill that extended the amortization period of the PERS debt and created a matching fund for employer side accounts were not subject to the court challenge. SB 1049, with its combined parts, is anticipated to reduce employer PERS rate increases in 2021 and 2023.
Contact: Scott Winkels, Lobbyist, swinkels@orcities.org
Last Updated 8/7/20