PORTLAND (AP) - A federal appeals court on Tuesday upheld an Oregon Supreme Court decision in a case that challenged 2003 reforms to the Public Employees Retirement System.

Several groups of public employees have challenged the state's reforms, which cut pensions of tens of thousands of public employees.

Employees in this case asked a three-judge panel in the 9th U.S. Circuit Court of Appeals to reconsider the legitimacy of how employee contributions are managed.

The reforms, passed by the state legislature in 2003, reduced a long-term shortfall in the program but forced a number of cuts to employee pensions. The reforms included a shift of the employee contribution out of regular PERS accounts into other accounts.

The new accounts do not provide the same rights to employees as the pre-reform ones, said Greg Hartman, attorney for the employees. Employees who contribute to the new accounts don't get a guaranteed rate of return, don't have a right to employer matching donations and don't have the right to the cost of living expenses, Hartman said.

Employees argue that the change violated their contractual right to participate in the plans as they existed prior to the reforms, particularly by limiting how their contributions can be used.

Hartman estimated that 50,000 to 100,000 employees were adversely affected by the decision.

The Oregon Supreme Court reviewed a major challenge to the reforms in 2005. The court then decided in favor of the state and also in favor the employees on different issues. Some employees, such as this group, continued to pursue the appeals.

“Obviously we are disappointed with the decision,” Hartman said.

He said his clients have not had a chance to review the decision to determine if they will further pursue the appeal.