The Associated Press
SALEM A final surge of retiring public employees is expected this month, before a series of cost-cutting changes to the Public Employee Retirement System by the 2003 Legislature go into effect.
As of Jan. 19, the pension system had received almost 1,400 requests for benefit estimates for a March 1 retirement date, according to state data.
Asking for an estimate doesn't mean workers will retire on that date, but the numbers still suggest is likely.
The incentive is a final big payday: Workers who leave on March 1 will be the last to get a guaranteed annual growth rate of at least 8 percent in their PERS accounts for 2003, plus 1.3 percent growth for January and February of this year.
And when added to a money-match plan, that would double their account balances at retirement.
For people who are eligible to leave, that can be hard to pass up. For example, Redmond City Manager Jo Anne Sutherland will retire as of March 1, as will nine employees of the Redmond School District, including four teachers.
Still, public employee union officials and PERS administrators are urging workers to be careful before deciding to bail out.
"For some members, it might even be financially beneficial to wait until April to retire," said Dale Orr, the system's fiscal services division administrator.
Because PERS calculations are based on several different formulas and individual investment mixes, each person's portfolio is different. The wild card is each worker's investment mix and how much of their portfolio is eligible for 8 percent returns.
However, models from PERS show that, by waiting to retire even one more month, most workers can expect their pension accounts to gain more over time because 2 percent cost-of-living adjustments, which are now frozen, will resume for people who retire after April 1.
Workers who retire in March, meanwhile, won't get cost-of-living increases for several years, the Legislature decided.
"Folks, you need to be very careful about your decision," said Mary Botkin, a lobbyist for the American Federation of State, County and Municipal Employees, which represents 21,000 workers.
The March 1 dilemma applies only to government workers who were hired before 1996. Those so-called Tier One employees have the generous benefits that looked to send the pension system into insolvency and sparked the cost-cutting reforms by the 2003 Assembly and Gov. Ted Kulongoski.
Because of the stock market dips and the benefit levels, the system was estimated in mid-2003 to have a long-term debt of $17 billion.
The reforms enacted last year cut that deficit roughly in half, and improving market conditions are shrinking it further.
However, many of those cost-cutting moves have been challenged, and their fate is up to the courts.
There are roughly 305,000 PERS members and retirees in Oregon, who include schoolteachers, road crew workers, welfare office staffers, firefighters and prison guards.
Workers hired between 1996 and August 2003 are in a less-generous Tier Two, while those hired since then are in a new plan approved by lawmakers last year. That new plan is a hybrid between a pension and 401(k) plans offered by much of the private sector.
The expected rush to retirement continues a trend that started last year, when PERS saw a record-setting 12,107 people retire, statistics show.
The previous high-water mark was in 1999, when 6,843 people retired.