Call for more PERS transparency

By In the news
In: PERS, Public Employees Retirement System
Sunday September 28, 2014

Dan Lucas_July 2012_BW

by Dan Lucas

For whatever reason, Oregon media outlets continue to present very deceptive impressions around how much PERS is costing all levels of government within Oregon. The Oregonian and the Salem Statesman Journal ran articles this past week on the latest PERS employer contribution rate news. The Statesman Journal took the deception to a new level with this headline: School districts see a large drop in PERS rates.

Both the Oregonian and Statesman Journal did selective reporting on a portion of the total PERS costs. As I wrote last month “PERS employer contributions only represent a portion of the PERS costs for school districts, the state and local governments.”

TOTAL PERS costs include:

  1. Employer contribution rate charged by PERS
  2. Payments to PERS for retiree health care
  3. Cost of debt service on PERS bonds
  4. 6% PERS employee pickup (IAP) agreed to by some school districts and other government employers in Oregon

I gave the example last month of the Salem-Keizer School District. Based on the type of selective reporting being done by the Oregonian and the Statesman Journal, they would say “The Salem-Keizer School District 2013-2014 PERS employer overall contribution rate would be around 13% of payroll.” But when you dig in to their 2013-2014 Budget, the Salem-Keizer School District reported their “total PERS rate down from approximately 31% to 27% of payroll.” So their total PERS costs were 27% of payroll, not 13%. And as I noted last month “payroll (salaries & benefits) is 87% of the Salem-Keizer [General Fund] budget.”

For Oregon voters to make meaningful decisions, they need to have all the facts, not selective reporting.

One thing that would help toward that end would be a requirement that all levels of state and local government in Oregon, including school districts, must include clear information in their budgets on their TOTAL PERS costs. That would provide more true transparency on the cost of PERS.

The Oregon Legislative Fiscal Office has a nice, easy-to-understand pie chart in their budget documents. It shows the major funds in the Oregon state budget.

2013-15 Legislatively Adoped Budget

Using that as a model, the requirement could then be that all levels of state and local government in Oregon have to include a chart showing their total PERS costs relative to their payroll costs.

PERS sample1

For perspective, they could also be required to include a chart showing what the comparable non-Social Security retirement pensions are in the private sector – information that’s readily available from the U.S. Department of Labor, Bureau of Labor Statistics.

PERS sample2

Having that kind of easy-to-understand information then could inform Oregon voters when they are asked next to increase taxes, pass bond measures or decide if PERS reforms should indeed be “off the table.”

To read more from Dan, visit www.dan-lucas.com

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