The Associated Press
SALEM - Gov. John Kitzhaber says he will form a task force to study the state's financially strapped public retirement system and may lead the effort himself.
Kitzhaber told The Oregonian that he is concerned about the Oregon Public Employees Retirement System's rising costs.
The governor, scheduled to leave office in January, said his task force will not produce ideas that can slow PERS' costs any time soon.
"What you can do is use it as an opportunity to help people understand the system a little bit better," Kitzhaber said. "I don't think that it's going to produce any sudden silver bullet that's going to solve the short-term fiscal issues."
The PERS shortfall shot up to $8.5 billion in 2001. As a result, the annual cost of the retirement system to taxpayers will jump 37 percent beginning next year.
Government agencies and public school districts will need an additional $260 million a year to cover the costs, according to PERS estimates.
Every two years, PERS sets the rates it charges to government agencies based in part on the size of the shortfall, the difference between what the PERS fund has on hand and what it needs to meet future obligations.
The $36 billion PERS fund covers 293,000 working and retired public employees. PERS officials say the system is not in immediate danger of failing to make payments.
House Speaker Mark Simmons, R-Elgin, also has created a work group to study PERS.
Any efforts to change PERS faces limitations imposed by the courts, which have ruled the state must uphold contract rights promised public employees by the current system.
The Legislature originally designed PERS to provide career employees with about 50 percent to 60 percent of their salary at retirement. But 30-year employees are on average retiring today with pensions equal to 105 percent of their salaries.
The PERS shortfall has widened as the pension fund's investments have been hammered in the stock market.
Almost all of the PERS liability is driven by the retirement accounts of public employees hired before 1996. Those accounts are guaranteed to grow 8 percent a year, whether or not PERS has the money.
Public employee unions have argued the system does not need a major overhaul.
Kitzhaber said the "highly charged" nature of the debate over PERS has complicated his search for a task force chairman. He said naming himself chairman could settle the issue.