OSBA workshop explains relaxed PERS side account rules
OSBA’s workshop Wednesday on Public Employees Retirement System side accounts explained changes to the rules that make it more inviting to create side accounts.
Labor and Workforce Policy Adviser Elana Pirtle-Guiney presented Gov. Kate Brown’s plan to encourage more use of side accounts to corral runaway PERS costs. New rules change the minimums for accounts, to allow additional deposits to existing accounts and to reduce fees. The governor is also proposing a bill to create a limited employer incentive fund to match 25 cents for every dollar sent to a side account.
The governor’s PERS legislative efforts for 2018 are focused on side accounts because accounting rules make side accounts more effective at lowering employer rates than paying down the PERS unfunded liability, according to Pirtle-Guiney.
Piper Jaffray Managing Director Carol Samuels and Senior Vice President Jeb Spengler explained what side accounts are and how they work as well as how to fund them and how to evaluate their usefulness for a district. Ralph Mastromonaco shared an ECONorthwest risk vs. reward analysis created for registered attendees.
Samuels said that PERS funds’ recent high returns did not significantly change the near-term trajectory of increasing rates.
School districts learned in the fall that PERS costs for 2019-21 would increase $530 million, pushing PERS payments up more than expected. Average rates are predicted to go up 6.48 percentage points, with an average school district rate of 20.37 percent.
School district rates, however, can vary widely, depending partly on districts’ use of side accounts to pay down their liability.
Interest in the workshop was so great that OSBA moved it to the Chemeketa Community College Auditorium.
Nearly 200 people registered to attend in person and an additional 35 registered for remote access. Registrants were able to bring multiple people. Representatives came from school districts, cities, counties and other agencies.
- Jake Arnold, OSBA
jarnold@osba.org