Friday, October 19, 2012
The bad news is out: PERS rates are going up.
“The PERS (Public Employee Retirement System) Board has released employer PERS rates for the 2013-14 and 2014-15 biennium,” said Nick Hogan, Hood River County School District financial director, to the school board at its Oct. 10 meeting. “Unfortunately, the rate for Hood River County School District is close to what we predicted earlier.”
Hogan said the new rate for Tier 1 (employees entering the plan on or before Dec. 31, 1995) and Tier 2 (those entering between Jan. 1, 1996 and Aug. 29, 2003) will include a 18.19 percent employer contribution, plus a 6 percent PERS pickup, plus 8.8 percent for PERS bonds, for a total rate of 32.99 percent.
“This represents an increase of 7.65 percent of payroll, for a General Fund cost increase of approximately $1.6 million for the 2013-14 school year as it stands right now,” Hogan said. “We do not know how much of this expected increase might be mitigated by legislative action, or how much will be offset by increases in state school funds.
“The increase is large, but not unexpected,” Hogan said. “PERS warned us two years ago that a second large increase was expected.”
The increase is scheduled to take effect July 1, 2013. Rates are adjusted every two years, he said.
“There is significant attention being paid to the statewide PERS problem by employer groups and the state legislature,” Hogan said. “I am confident the state legislature will be successful in making system-wide changes to reduce the increase.
“Although certain large changes have been overturned by the courts in the past, the current list of topics being discussed includes many small individual changes that collectively add up to a significant difference,” he said. “In the meantime, we are working on our budget here in Hood River to continue to offer the very best programs we can.”
PERS is Oregon’s statewide pension system for all public service workers and is funded by contributions from state agencies, the university system, local governments and the largest employer group, school districts. Hogan said the city and county would be hit with increases as well.
Hogan said that Jim Green, deputy chief of the Oregon School Boards Association, has asked the PERS board to urge Gov. John Kitzhaber to create a blue-ribbon committee to direct the legislature in reforming PERS during the 2013 legislative session.
“We need statewide leadership on this issue,” Green told the PERS board, according to a story in the News Center on OSBA’s website (www.osba.org). “It’s time for Gov. Kitzhaber to step to the plate and form a blue ribbon panel to get the issue under control.”
Green was also quoted as acknowledging to the board that there are “no villains” in the PERS system — not public employees, their unions, the PERS board or retirees.
The Hood River County School District’s $1.6 million increase pales in comparison to other areas of the state. Jim Green’s own Salem-Keizer School District, for which he is a board member, will be hit with a cost increase of $11 million next year, according to the OSBA website.
A Sept. 28 story in The Oregonian reported that Portland public schools will see increased costs of more than $14 million. That translates to roughly nine days cut from the school year, according to the schools’ deputy chief financial officer, David Wynde.
For Nick Hogan’s full report visit hoodriver.k12.or.us. and click School Board, then Board Meetings, then Oct. 10 Minutes.