Cascade Report Exposes $2.6 Billion in Unfunded Liabilities

By Kathryn HickokCascadeNewLogo

Cascade Policy Institute has released a new report showing that Oregon public employers have more than $2.6 billion in unfunded actuarially accrued liabilities associated with non-pension benefits promised to current and future retirees. Referred to as “Other Post-Employment Benefits,” or OPEB, these liabilities include various forms of deferred compensation.

The Governmental Accounting Standards Board mandates that public employers clearly state financial obligations for OPEB in their comprehensive annual financial reports. However, employers are not required to set up trust funds to pay for these promises. As a result, the Cascade review of 125 financial reports of state, regional, and local governments shows that most employers have no money set aside and are paying for OPEB obligations out of annual operating revenues. This cannibalizes funds needed for actual services.

The Cascade paper is a call to action for the legislature to impose some form of fiscal discipline on public employers by requiring them to make annual contributions to OPEB trust funds. Legislation to accomplish this has been considered in past sessions but never approved. The Cascade report can be viewed at cascadepolicy.org.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland at Cascade Policy Institute, Oregon’s free market think tank.

 

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Posted by at 01:14 | Posted in Economy, Government reform, Government Spending, Leadership, Oregon Government, Oregon House, Oregon Senate, PERS, Portland, Portland Politics, Public Employee Unions, Public Employees Retirement System, Public Transportation, State Budget, State Government, Taxes, Transportation, TriMet | Tagged , , , , | 12 Comments |Email This Post Email This Post |Print This Post Print This Post
  • raven6

    Eric, where are you? inquiring minds want to know?

    • thevillageidiot

      don’t worry he is perfectly content because contracts cannot change. so the taxpayers are on the hook. apparently he does not pay taxes.

    • Kk

      Maybe unlike you, he actually has a job and can not sit around blogging. Are you retired, unemployed, or just screwing your boss by not actually working when you should be?

      • raven6

        NO, but I have a feeling he has a pension that he would sell his soul to keep. Any bets Kkkkkkkkkk?

  • Moe

    when the tier one people die off, we should be ok.

    • thevillageidiot

      yeah in 30 to 40 years. Tier one ended in 1995. If the last into the system retire at 25 yrs service and they live another 30years the teir one pay out continues until 2050 at least.

      • Kk

        69% of Tier 1 retirees receive $0-3000 a month. 27% receive between $3001-6000 a month. That leaves 4% that make a crazy amount (the ones we all love to complain about)

  • Kk

    PERS unfounded liability in 2008 was 16 billion……..now it is half that.

    • thevillageidiot

      yeah thanks to the taxpayers.

      • Kk

        Partly yes, 74% of PERS funding comes from investments. 6% from employees and 20% from employers. If the liability continues to drop employers share will also drop.

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