OREGON’S LOOMING PUBLIC PENSION CALAMITY: Oregon officials face truth behind state’s soaring public pension costs: ‘It’s a little bit like a Ponzi scheme,’ the chair of the Oregon Investment Council says.
Just how bad is Oregon’s public pension funding crisis?
Bad enough that Rukaiyah Adams, the normally polished investment professional who is vice chair of the Oregon Investment Council, broke down in tears last week as she spoke of passing a record $22 billion in unfunded promises to future taxpayers.
“My call to the Legislature and to the governor is for leadership on this, and I mean right now,” Adams said during last Wednesday’s joint meeting of the Oregon Public Employees Retirement System board and the citizen panel that oversees its investments. “This is becoming a moral issue. We can’t just talk about numbers anymore.”
The numbers are bleak. Oregon’s pension system owes billions of dollars more to retirees than it has, and the last major attempt to fix the problem was shot down in courts.
This month, cities, school districts and others will find out how much more they’ll pay to help prop up the system. Higher pension costs could come at the expense of funding for other needs, including social services, infrastructure investments and education programs.
Last week’s meeting was extraordinarily candid. And it provided a brief, reality-based peek behind the financial charade taking place not only in Oregon’s pension system, but also in systems across the country.
Experts openly acknowledged they’re understating the magnitude of Oregon’s problem. They’re relying on optimistic assumptions about investment returns. And they’re holding down required pension payments below what’s needed to keep pace with the debt, to avoid eviscerating school and government budgets across Oregon.
“We’re beyond crisis,” Katy Durant, chair of the Oregon Investment Council, said in an interview after last week’s meeting. “We should have been addressing this 20 years ago and it’s just been building. It’s a little bit like a Ponzi scheme. Sooner or later it’s going to catch up with you.”
Politicians just keep kicking the can down the road, hoping the bill will fall due after their time. That’s worked so far, but something that can’t go on forever, won’t.