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State retirements nearing record level
Wednesday, May 14, 2003 | 2 comment(s)
TIGARD (AP) -- Public employees are rushing into retirement ahead of reforms to the state pension system.
More than 6,300 workers have filed to retire so far this year. The state's record for an entire year is 6,843.
With rumors swirling over upcoming pension benefit cuts, workers are to some extent "panicking" over whether to retire, said George Russell, superintendent of the Eugene School District.
Across Oregon, 40,000 teachers, state workers and other public employees are eligible to retire and to start receiving pensions from the Public Employees Retirement System. There also are ex-public employees who moved on to other jobs, but are counting on their PERS nest egg.
Berry Scheib of Portland is one of those. He worked for the state 20 years, but isn't quite ready to retire at age 62.
"I'm trying to figure out, am I going to have any money left with all these changes," Scheib said. "My biggest concern is whether the PERS amount of money will actually be cut."
Right now, there are more questions than answers about how a trio of pension reforms will affect retirements, and public employees are simply deciding to retire because "that feels safer," said Dawn Morgan, the president of the PERS board and a state employee.
Reforms approved by the Legislature are:
-- House Bill 2001, which limits the kind of double-digit increases in pension accounts many PERS members enjoyed in the 1990s.
-- House Bill 2004, which forces PERS to use updated life-expectancy tables when setting pensions. That will reduce pensions from levels workers otherwise would get. Workers who retire before July won't see any impact, which is one reason many are rushing to quit now.
-- House Bill 2003, which will have the biggest impact because it erodes the most lucrative features of PERS. It effectively phases out an 8 percent annual earnings guarantee in many worker accounts. Workers will continue to get employee contributions equaling 6 percent of salary, but those will go into a separate 401(k)-style account.
In total, supporters say the reforms will cut in half the $16 billion longterm deficit facing the pension system, and free up hundreds of millions of dollars that schools and local governments can use over the next two years.
The reforms, however, are expected to be challenged in the Oregon Supreme Court by the unions that represent many of the 294,000 people in the retirement system. The unions claim the reforms are a breach of contract rights.
More than 6,300 workers have filed to retire so far this year. The state's record for an entire year is 6,843.
With rumors swirling over upcoming pension benefit cuts, workers are to some extent "panicking" over whether to retire, said George Russell, superintendent of the Eugene School District.
Across Oregon, 40,000 teachers, state workers and other public employees are eligible to retire and to start receiving pensions from the Public Employees Retirement System. There also are ex-public employees who moved on to other jobs, but are counting on their PERS nest egg.
Berry Scheib of Portland is one of those. He worked for the state 20 years, but isn't quite ready to retire at age 62.
"I'm trying to figure out, am I going to have any money left with all these changes," Scheib said. "My biggest concern is whether the PERS amount of money will actually be cut."
Right now, there are more questions than answers about how a trio of pension reforms will affect retirements, and public employees are simply deciding to retire because "that feels safer," said Dawn Morgan, the president of the PERS board and a state employee.
Reforms approved by the Legislature are:
-- House Bill 2001, which limits the kind of double-digit increases in pension accounts many PERS members enjoyed in the 1990s.
-- House Bill 2004, which forces PERS to use updated life-expectancy tables when setting pensions. That will reduce pensions from levels workers otherwise would get. Workers who retire before July won't see any impact, which is one reason many are rushing to quit now.
-- House Bill 2003, which will have the biggest impact because it erodes the most lucrative features of PERS. It effectively phases out an 8 percent annual earnings guarantee in many worker accounts. Workers will continue to get employee contributions equaling 6 percent of salary, but those will go into a separate 401(k)-style account.
In total, supporters say the reforms will cut in half the $16 billion longterm deficit facing the pension system, and free up hundreds of millions of dollars that schools and local governments can use over the next two years.
The reforms, however, are expected to be challenged in the Oregon Supreme Court by the unions that represent many of the 294,000 people in the retirement system. The unions claim the reforms are a breach of contract rights.
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