The Associated Press
SALEM - The state Public Employees Retirement System board is considering revisions that could mean smaller pension checks for future retirees.
For two decades, the board has been using 1978 mortality tables when it calculates the monthly pension checks due to many new retirees.
Yet Americans at retirement age now are living four years longer than those in 1978.
Instead of reducing monthly pension checks to make retirees' accounts last longer, the board has simply been paying bigger checks based on 1978 life expectancy assumptions, then stringing out the payments an extra four more years, on average.
That's about to change.
"Chances are that what's going to happen is benefits will be reduced," said spokesman David Amick.
If the board adopts 1999 mortality tables, it could save state and local governments $140 million a year, said Mark Johnson, an actuary for Milliman USA on contract to the public retirement system.
State government would save an estimated $46 million a year.
The flip side is that pensions would go down for future retirees.
Those retiring at age 65 would see their monthly checks cut by an average of 10.9 percent, Johnson estimated.
Those retiring at age 60 would see them drop 7.3 percent. The average retirement check for public workers covered under the system would be reduced by $73, Johnson said.
However, those with 20 or more years in the system would see even steeper reductions.
Immediately updating the mortality tables would be unfair, said Tricia Smith, lobbyist for the Oregon School Employees Association.
"It's important when they make these changes that they not harm people about to retire," she said. "We're going to have to find the right balance, understanding that it needs to be changed."
The board is considering several options, including ideas for phasing in the new tables.
A committee of the PERS Board meets at 2 p.m. Wednesday in the Capitol to make a recommendation.