Poll: 78% unaware of PERS debt disaster

chart-pers-pollPoll: 78% unaware of PERS disaster
By Taxpayer Association of Oregon Foundation

Oregon’s public employee retirements system (PERS) is now a staggering $20-$22 billion in unfunded liability. Just this week it was announced that it grew by another $3 billion and made front page news.  A 2015 telephone poll of 300 Oregonians by the Taxpayer Association of Oregon Foundation showed that the public is clueless to this gigantic PERS debt hole which will consume state and local budgets for police, fire and schools.

The Foundation asked Oregonians how big Oregon’s public employee unfunded liability is. Nearly half (43%) had no idea. Over a third 34% guessed below the actual amount (1-to-5 billion 9.3% or 5-to-10 billion 24.7%). Less than a quarter of Oregonians (22.7%) guessed correctly that the PERS debt was over $10 billion.

When you put the numbers together you reach about 78% of Oregonians are unaware of the looming Public Employee pension (PERS) unfunded liability disaster. Yet, this mammoth unfunded PERS liability are a key reason that taxes and fees have been increasing over the years. This debt disaster impacts every avenue of Oregon’s government.

This puts the 2016 Special Legislative Session in the spotlight. It is unknown what our elected leaders, Governor, Senate President and House Speaker, plan to do to address and fix the PERS debt disaster.

Note: Here is a breakdown of the poll results:

poll-pers

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Posted by at 07:52 | Posted in Uncategorized | 13 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Roger Enout

    Oregon PERS is like a North Korea rocket launch, bound for nowhere (only) but to fall back to Earth, Wind and Fire the SOB’s wearing the Emperor has no closing attire.

    • DavidAppell

      So you think the state of Oregon should break a legal contract so your and my taxes don’t rise?

      • Roger ‘Enroute’

        Neptune you out, Marshall Appellwipe!

  • Jonathan

    It’s a debt? Does that mean that Oregon is legally and morally required to cover it?

    • David from Mill City

      Yes, whether we like it or not PERS is a contractual obligation of the State of Oregon. It is also a moral obligation as the employees in PERS Tiers I and II have already completed their side of the contract.

      It is also from the point of view of state and local governments and agencies a really bad deal, but it is too late to do anything about the obligation we incurred by establishing the system. The good news is that new and current employees are now under a much less generous retirement plan.

      Frankly we are long past the point where bitching about PERS adds anything constructive to what we need to do, which is figure out a way to meet the obligation while not crippling state and local governments and agencies.

      • Jonathan

        My question was mostly meant to be rhetorical, but I think you have answered it nicely. Especially your last sentence.

        • David from Mill City

          Thank you. I have a rough outline of a way to get the state out of this PERS mess.

          To start with have the State of Oregon relieve School Districts of their Tier I and II obligations, currently they are paying into PERS with money they get from the State so lets cut out the middle man. We should also look at similarly relieving local governments and agencies of their obligations after all the root of problem is a flawed State program which they are required to participate in.

          Next we need to get an accurate picture of the total PERS obligation. We know who is in the program, we have employment data that should make it possible to make reasonable predictions on what the salary should be when they retire, which means we can calculate the amount of the pension each will receive. The total number of current and potential retirees is large enough that normal actuarial tables can be used to predict how long they should live. Plug in a generous inflation rate and a very conservative return on investment over the life time of the program and we can get a estimate of the total cost that is most likely
          higher then the real figure. Then take that figure and divide it by the estimated length of the programs duration. That provides an
          interim amount that the state and PERS obligated agencies would need to put in to meet the obligation. It is important to understand that this results in a level payment to pay off an obligation that will first climb as those that have not retired do so then decline as the recipients die. Which means the later payments to the system will exceed the annual payout and that we will need to borrow money to meet the obligation in the early years.

          Next we need to graph out the estimated payout over the programs duration and calculate the expected annual pay out. Then compare that figure to the available funds in the system and the annual payment into the account. This would identify those years with a short fall and the amount of money that would be needed to be borrowed (20 year revenue bonds) to make up the total short
          fall. The amount of interest, estimated high, that would need to paid on the money borrowed would then need to be added to the total program cost and the duration date of the last set of bonds if later then the last payment date is used as the program duration. Then the annual payment amount be calculated. If the State has assumed the full obligation that would be the amount that would need to be
          included in the State Budget for the duration. Other wise a system to apportion this amount to the various local governments and agencies
          would need established. Lastly, about every 10 years the assumptions used in the estimated process need to to be reconsidered and if needed the annual payment amount adjusted.

          There are two benefits to this proposal, first the amount that would need to be budgeted would become a knowable, consistent amount. Second as it is an average, like in a home mortgage,the amount that would be needed would be less in the early years and higher in the out years. The down side is that
          the total cost of the program would be higher due to the need to pay interest on the bonds sold to make up the shortfalls.

          Comments, thoughts?

  • It’s not bad

  • Bob Clark

    No surprise here. The average Oregonian spends less than ten minutes per year actually thinking about politics, And speeds this distraction by pretty much thinking linearly rather than thinking of unintended consequences. This is why the electorate is so fixated on things such as the minimum wage, because for them the minimum wage would seem to mean someone simply sees their rate of pay increase; ignoring they might see their hours reduced because their employer can no longer afford to employ them full time because the employer’s increased costs of doing business.

    • DavidAppell

      Bob: If company’s don’t pay a livable wage, guess who gets to make up the difference?

  • Roger Enout

    Oregon PERS Tier’s one and two remain as two black holes bouncing off smaller holes still running amok in celestial anomalies.
    Cull the nonsense, let herald angels sing: “Holy, Holy, Holy, Cut the crap out of the still existing anomaly and restore to private sector sensibilities’.”

    • DavidAppell

      Oregon signed a contract, upheld by the highest court in the state. Are you in favor of party’s breaking contracts whenever they feel like it?

      • .

        You pe’er as mutton butt a Neville Chamberlaid, thou Nutsyally Socialist

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