PERS reforms do not force contract renegotiations, OSBA concludes

OSBA is advising school districts, community colleges and education service districts that a recently passed public pension reform law does not force contract renegotiations but that they must respond to demand letters sent by the Oregon School Employees Association.

Senate Bill 1049 will lower average Public Employees Retirement System rates through a combination of a longer debt payback period and reallocations of employees’ benefit payments. According to OSBA’s analysis, the reallocation does not change current benefits or employers’ obligations.

Districts may want to check if they have contract language that specifies how the employer contribution will be directed, but in general, the new law should not affect current contracts.

OSBA is offering guidance as well as a sample response letter within the guidance to help members navigate the changes.