TIGARD (AP) — Because of weak investment earnings, Oregon school districts and government agencies face another big increase in payments to the state’s public pension plan.
The average will be 45 percent more in the two-year budget period that begins in July 2013, the Bend Bulletin reported Wednesday.
Government agencies are paying $2 billion for pensions during the current two-year budget period, and will have to put up an additional $900 million during the next one, said David Crosley, a spokesman for the Public Employees Retirement System.
Much of the revenue for the system comes from its investment fund. When that fund doesn’t do well and earnings fall, employers must make up the difference to keep the fund stable.
The spike in pension contributions announced at a meeting of the system’s board Tuesday will be the second attributed to the 2008 downturn in the economy, and it was expected. Contribution rates will likely remain high or even increase in the foreseeable future, board members and their advisers said.
“We’ve seen this coming,” said Patrick West, a member of the board, “but that doesn’t mean it doesn’t hurt.”
The rates vary among government units, which will learn next month what their specific increases will be.
School districts are likely to see a greater increase, closer to 50 percent rate, than other public employers, such as state government.
A 45 percent increase in the Redmond School District could mean a $2.3 million budget shortfall for the 2013-14 school year, an official said, the equivalent of 30 teachers or 13 school days.
“That is a big hole to for us to fill,” said Kathy Steinert, the district’s director of fiscal services.