Nothing strikes more of an anti-union chord among Oregon taxpayers than the Public Employees Retirement System.
A major complaint has been that under the old PERS system, retirees received a guaranteed 8 percent return on investment even if the stock market faltered. That system is being phased out, though the cost of maintaining it continues.
PERS also has been the subject of derision over the years because some employees continue to work for part of the year while they receive retirement benefits, a practice known as double-dipping — also a common practice in the private sector.
A majority of PERS employees now have two retirement plans, though many conservative legislators have called for a change to that practice.
A public worker who qualifies for PERS today receives two separate pensions. One is a defined benefit plan that ensures 45 percent of the final salary after 30 years of work. Another retirement plan that is similar to a 401k puts aside 6 percent of a worker's salary into an account. In Oregon, 70 percent of public employers pay the entire 6 percent share.
Senate Republicans have pushed to eliminate the 6 percent plan, which would save $750 million every two years.
Many legislators believe a lot of work still lies ahead, particularly because PERS faces a large shortfall. Schools, local governments and other agencies had to make up billions of dollars in liabilities for PERS, which saw a dramatic downturn in investments in 2008.
Union representatives say the revisions to PERS in 2003 eventually will eliminate some of the problems.
PERS spokesman David Crosley said the 6 percent pickup by employers was part of a bargaining agreement reached years ago in lieu of a wage increase.
He said costs for PERS will come down as older retirees are no longer in the system.
In 2000, retired employees who had worked 30 years received on average 100 percent of their salary under PERS. By 2009, the average retiree received 77 percent, but eventually the average will be down to 50 percent, Crosley said.
About 68 percent of retirees receive $3,000 or less a month, Crosley said.
The unfunded liability for PERS as of December 2010 was $7.2 billion, driven up by market losses since 2008. Before PERS reform was enacted by the Legislature in 2003, the unfunded liability was $17 billion.
Reach reporter Damian Mann at 541-776-4476, or email firstname.lastname@example.org.