The Oregonian – Ted Sickinger
Editor’s note: This is a weekly Q&A focused on the Oregon Public Employees Retirement System. Got a question? Submit it to politics@oregonian.com.
Q: How many PERS retirees receive $100,000 a year or more?
A: Call them the one percenters, as in, about 1 percent of current PERS retirees get more than $100,000 a year in benefits.
There were 2,032 former public employees who fell into that category in 2017, according to state data released to The Oregonian/OregonLive. That number excludes alternative beneficiaries or survivors, who may be receiving that much too, but are redacted from the database for privacy reasons.
Collectively, the $100,000 club earns a disproportionate percentage of the $4.5 billion in benefits the system pays out each year. Still, it’s only 5 to 6 percent of the total benefits paid.
Obviously, $100,000 is an arbitrary cutoff. But let’s continue. There are 62 former public employees who earn more than $200,000 in annual benefits; 10 who collect more than $300,000; six who take in more than $400,000; four who get more than $500,000; and two who rake in more than $600,000.
Right at the top, in a league of his own, is Joe Robertson, the former president of Oregon Health & Science University. He retired last year after 33 years of service with an annual benefit of $913,335 a year – about 58 percent of the $1.6 million he made in his last year at OHSU.
At the bottom is Michael Klobertanz, a 58-year old Tualatin Valley firefighter who retired in 2015 after nearly 30 years on the job. After cost of living increases in the last two years, his benefit crept over six figures in 2017, to $100,017, about 82 percent of his final salary.
So that’s the top of the heap. By contrast, there are 93,735 retirees (about 65 percent of retirees) who receive less than $36,000 a year. Collectively, they account for about one-third of the system’s benefit stream.
About 70,000 retirees (nearly half of the system’s monthly beneficiaries) collect less than $24,000 a year, and about a quarter see less than $12,000 a year.
Pension reform proposals have been floated to put a $100,000 cap on annual benefits, though that might not pass legal muster.
Another proposal – one backed by the Republican gubernatorial candidate, Rep. Knute Buehler, would cap the salary used in pension benefit calculation at $100,000 a year. That might have an easier time surviving the Oregon Supreme Court. But it would apply only prospectively, to service rendered after such a proposal became law. Moreover, it would affect a far wider swath of employees, eventually limiting pension benefits for career employees with 30 years’ service to $45,000 a year.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System. https://www.wweek.com/news/2018/10/04/current-and-former-oregon-lawmakers-file-ballot-initiative-to-block-further-pers-debt/
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
A trio of sponsors—state Rep. Julie Parrish (R-West Linn), former Rep. Mark Johnson (R-Hood River) and Kim Sordyl, a Portland lawyer and education activist—want to put a measure on the 2020 ballot that would prohibit Oregon government bodies from borrowing money to pay their obligations to the Public Employee Retirement System.
The three filed paperwork yesterday with the Oregon secretary of state to amend the Oregon constitution.
Their initiative seeks to block a common practice: local governments and school districts borrow money to meet pension obligations. The governments’ hope is that investment returns will exceed the cost of interest that they pay, creating a positive return on investment that they can use to accelerate paying down their PERS obligations.
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Here’s how the issuance of so-called “PERS bonds” are supposed to work: the borrower issues bonds that pay, for example, four percent interest. The borrower takes the proceeds of the bond issuance and invests them in stocks and private equity and earns, for the sake of argument, eight percent. That four percentage-point difference between borrowing costs and investment returns can then be applied to paying down PERS obligations. (And of course the exercise can fail if investment returns turn out to be less than the cost of borrowing. That has happened.)
The initiative Parrish, Johnson and Sordyl filed yesterday seeks to do two things: It would calculate the PERS system’s unfunded liability (which is currently about $22 billion) as of Dec. 31, 2022 and freeze it at that level. (The unfunded liability is the difference between assets set aside to pay future pension obligations, i.e. savings and investments and the actual future liability). Second, the initiative would prohibit borrowing to meet PERS obligations, forcing government entities to pay their pension obligations out of current budgets.
Parrish and Johnson, who served on the Hood River School Board for seven years, both voted for pension reforms in Salem. Sordyl has regularly spoken out about the need to get more money to into K-12 classrooms.
“We cannot continue to tax and borrow our way out of pension obligations,” Parrish says. “Fully funding pension obligations in the budget cycle in which the liabilities are incurred gives retirement surety to public employees.
“They will have the security that any dollars we put into their retirement are 100 percent available. But it also gives every government entity the ability to plan and budget, and taxpayers surety that they’re not on the hook for billions of dollars of unfunded pension liability going into the future.”
The petitioners now need to gather 1,000 signatures in order to begin the ballot title drafting process. If they meet that threshold, they then need to gather about 118,000 signatures to qualify for the 2020 ballot.
