SALEM, Oregon – It’s back to court for public employees. The Oregon Legislature’s partial fix to the Public Employees Retirement System is being challenged in a lawsuit filed by nine public employees. The suit will be heard by the Oregon Supreme Court.
The suit argues that by passing Senate Bill 1049 the state is illegally taking money without compensation by reducing retirement pay. PERS has a $27 billion and growing unfunded liability. Court records indicate the workers are contending they accepted a job in good faith for a salary and benefits package and thus have certain contract rights to retirement benefits.
Legislative leaders, in passing the bill, have said the bill is legal, citing an earlier supreme court ruling that opened the door for pension reductions for work performed in the future. Under the legislation, the workers hired before 2004, who are the Tier 1 employees, facing having 2.5 percent of their salary diverted towards debt reduction. Newer workers could have 0.75 percent of their salary paid towards that debt.
The Oregon State Supreme Court has previously struck down two bills that it said violated the contract rights of public employees.