TIGARD, Ore. (AP) - The board overseeing Oregon's public pension system has lowered assumptions about how much return the system will make on its investments.
The Public Employees Retirement System board voted unanimously Friday to cut assumed earnings from 7.5 percent to 7.2 percent.
The change will increase the system's unfunded liability from $22 billion to $24.4 billion, forcing government employers to boost their required contributions into the system.
Market experts said a 7.5 percent return was too rosy an outlook. But lowering expectations too much, even if realistic, was politically difficult because of the budget problems it would cause school districts and other governments.
House Republican Leader Mike McLane (R-Powell Butte) issued the following statement after the PERS Board voted to reduce the pension system’s assumed rate of return from 7.5% to 7.2%, which is expected to increase the PERS unfunded liability by more than $2 billion:
“Today’s vote by the PERS Board should serve as a sobering moment for our state’s political leaders. As our pension debt continues to explode, so does the burden placed on our schools and local governments. We cannot ignore this problem any longer. It is well past time for us to act. If our current cast of politicians in Salem are unwilling to confront this problem head on, then perhaps it is time for new leaders to take their places.”