PORTLAND, Ore. — A new valuation by the actuary for Oregon’s public pension determined that the system’s deficit has ballooned to $25.3 billion, meaning higher costs will be coming.
The growing deficit will cost schools and local and state government an additional $1.4 billion, according to the valuation by the Milliman Inc. actuarial and consulting firm.
The increase was likely caused in part by the Public Employees Retirement System Board’s decision to lower its assumption of how much it will get from investments from 7.5 percent to 7.2 percent, taking the deficit from $21.8 billion to $25.3 billion by the end of 2016, the Oregonian/Oregon Live reported (http://bit.ly/2yL321V ) Wednesday.
The board has allowed employers to underfund the system by billions of dollars.
“We’re not paying anywhere close to what we should be paying, and if we did it would absolutely decimate schools,” said Jim Green, executive director of the Oregon School Boards Association.
The additional $530 million school districts will have to pay because of the rising deficit is equivalent to the cost of 2,650 teachers or 11 instructional days.
Local and state governments will be drawing 40 percent of the additional money they will need from state’s general fund, which is speculated to result in a budget deficit in 2019.
Information from: The Oregonian/OregonLive, http://www.oregonlive.com