Oregon’s public-pension contribution rate has an 80 percent likelihood of exceeding 30 percent of payroll within the next few years, according to an analysis presented to the system’s governing board.
The projection was offered by Milliman, the firm that does the actuarial work for the Public Employees Retirement System, as the agency and lawmakers consider how they can deal with rising costs.
Those increased payroll costs will mean less money available for other government services, or potentially higher taxes.
The PERS board and agency staff say that policy changes are up to the Legislature, but through Milliman, they can analyze potential effects of various proposals. Milliman has offered such reports already.
A legislative work group has reviewed proposals for the 2017 session, which gets down to business starting Feb. 6.
The base rate set by the board for employer contributions the 2017-19 budget cycle is already at 20.8 percent. Although none of Oregon’s more than 900 government employers pays that rate, it is an indicator of upward trends – more than 3 percentage points greater than the current rate.
Actual rates paid by employers hinge on the mix of employees hired before and after August 2003 – when lawmakers made pension benefits less generous for future workers – and the employer’s proportion of public safety employees, who qualify for greater benefits.