Oregon’s Public Employees Retirement System — PERS — is riddled with problems.
The version of PERS that applies to employees of local and state governments and public schools hired before Jan. 1, 1996, is particularly problematic. It guarantees employees annual returns on their pension accounts regardless of the actual performance of the PERS fund. This has led to some retirees earning more in retirement than they did while working. It has also forced public agencies, including cities, counties and school districts, to pay an increasingly large portion of their budgets into PERS rather than spending those dollars on public services.
But occasionally a PERS provision has the potential to save public dollars. Baker City Manager Fred Warner Jr.’s proposal to retire from PERS at the end of 2019, but to continue working in that job for another year or so, is an example.
The benefit to Baker City in this arrangement is that after Warner retires from PERS, the city has to contribute less for his pension. That will save the city about $6,000 per year (Warner told councilors Tuesday that his initial estimate of $33,000 in savings was in error).
This scenario also gives the City Council ample time to search for Warner’s replacement without having to appoint an interim manager.
The City Council didn’t take action Tuesday, but it would be sensible to approve a one-year contract that keeps Warner on the job, and at a modest discount.
— Jayson Jacoby, Baker City Herald editor