The Associated Press

SALEM - The battle over reforms made to the state Public Employees Retirement System moves to the courts Friday, with a hearing over the constitutionality of changes made to the system.

Several current and former public employees filed suit over the system reforms put in place by legislators, arguing the state had no right to reduce pensions that workers expected to collect.

If the two laws are overturned, it will cost state and local governments $8.2 billion.

But if the laws are upheld, public employees and recent retirees will lose that amount from their pensions.

The case rests on the Supreme Court's definition of contract rights.

Workers' attorneys will argue that public employees got an implicit contract when they agreed to take their jobs and benefit packages.

State attorneys will argue that existing state contract rights guarantee workers the pension benefits they already accrued, but not benefits for work performed in the future.

Among other changes, the reforms ended a guaranteed 8 percent per year increase in workers' regular accounts if they joined PERS before 1996, lowering the ultimate pensions workers will receive.

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Information from: Statesman Journal