The Associated Press

SALEM - Upset over last week's court ruling in a landmark pension lawsuit, retired public employees are resisting calls to return some of their past retirement payments.

Pensioners - including the 36,000 recent retirees expecting to receive bills for past overpayments - will meet Friday to discuss their legal options.

The meeting comes after the Oregon Supreme Court let stand last week a lower court ruling that the state's Public Employees Retirement System, or PERS, put too much of its 1999 earnings into members' accounts instead of saving the money.

The immediate result of the decision is that $1.6 billion of the pension fund's $6.9 billion in 1999 earnings will be shifted from state and local government employees' accounts to reserves.

The suit was first brought by local governments, which pay a percentage of their payrolls to fund the pension plan.

After last Thursday's ruling, PERS Executive Director Paul Cleary said retirees should expect to get invoices notifying them of money owed to PERS and to see their future pension checks reduced by 2 percent to 10 percent.

But now, PERS officials said a final decision on how to implement the court's ruling won't come until the system's full board meets in September.

PERS spokesman David Crosley said there are other options besides billing retirees, including using PERS reserves instead.

Using reserves could quiet retiree protests and ease political pressure on Democratic Gov. Ted Kulongoski, who is closely associated with PERS reform efforts and appoints the PERS Board.

But that move could anger local government leaders, who filed the original lawsuit to lower pension benefits and ease rising government costs for state pension benefits.

Salem retiree Kathleen Beaufait, who once crafted state laws as a Legislative Counsel employee, said the implications of last week's court ruling are not clear.

"I do think there's a lot of uncertainty whether they have to withhold money, how they go about doing it and how they recompute their accounts," she said.

Beaufait is the new chairwoman of Oregon PERS Retirees Inc., which claims more than 8,600 dues-paying members. Leaders are awaiting a legal opinion from their attorney on the Lipscomb case and will gather Friday to plan the next steps, Beaufait said.

PERS Board Chairman Mike Pittman promised a full airing of retiree concerns at the Sept. 23 board meeting in Tigard.

"I just want us to be very thoughtful about how we proceed," he said. "We're dealing with people's retirement checks, both present and future."

Although no final decision will be made until that meeting, Pittman said, he tends to concur with Cleary's initial comments on how to proceed.

"At the end of the day, I think Paul's right, that the interpretation of the law is that we have to collect funds from retirees," Pittman said.

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Information from: Statesman Journal, http://www.statesmanjournal.com