By Knute Buehler
Last week’s education rallies raise important questions about our K-12 education system. Despite years of growing frustration, little progress has been made. This is due, in large part, to the misinformation being spread, especially about PERS, that prevent constructive solutions. There are five big myths about PERS that Oregon government employees’ unions propagate because they do not want you to know the truth:
Myth No. 1: Oregon PERS is better funded than most state pensions.
Oregon is in better position than other states systems as measured by the percentage of pension debt that is funded, but the unfunded portion is still huge for such a small state. We are one of the worst funded states when you look at our ability to pay our debt — the ratio of our unfunded liabilities to the size of our incomes, tax base or per capita. In fact, studies show that per capita, we are worse off than debt heavy California. As the editor of the Bend Bulletin put it, “It’s like towing a yacht with a Prius.”
Myth No. 2: Our PERS problems were caused by a singular event — the financial meltdown in 2008 — and are not a sign of structural flaws.
Rates have been increasing unsustainably for a decade and will continue to rise until 2035. This means the worst is yet to come.
For an example, look at Bend-La Pine School district. Their net PERS contribution plateaus in 2025 at nearly $60 million but then spikes again in 2029 at over $80 million (increase equivalent to 100 new teachers) due to expired investment side accounts. It then steadily increases until 2035. And keep in mind, this assumes very optimistic year after year returns of 7.2%, which most actuaries believe is unrealistic.
Myth No. 3: The Oregon State Supreme Court has ruled, and there is nothing more we can do to lessen our PERS obligation.
In 2015, the Oregon Supreme Court recognized its previous misinterpretations of contract law and overturned its position that PERS obligations could not be changed once employment was initiated. In its new position, outlined in the case Moro v. State, benefits and who pays for those benefits can change until the time of retirement.
This opens many more possibilities for PERS reform such as transitioning government employees to a 401(k)-type plan, requiring all government employees to contribute to PERS and eliminating pension spiking.
Myth No. 4: Most of the burden is generated by PERS Tier 1 and 2 retirees, who have retired, so there is nothing we can do.
Tier 1 and Tier 2 beneficiaries have generated most of the unfunded liability. But Tier 1 and 2 members still comprise more than 40% of payroll in the workforce. A lot of costs to school districts could be offset current employees would contribute (Tier 3 at a lower rate since they have lower benefit structure), to the cost of their PERS pension.
It is long past due, since we have been the only state in the nation where our government employees have not contributed to their pension fund. It’s true that about 70% of the PERS debt is attributable to those retired, and there are limited ways to recover these legacy costs. But one is the work back/pay back proposal where limits on post retirement work would be lifted in exchange for former retired employees paying back 6% of their new salary towards the PERS debt.
Myth No. 5: PERS reform “break the promise” made to retired government employees.
PERS reform should not and cannot, based on court decisions, take away benefits from government employees who have retired and are counting on the earned benefits. We owe these benefits, both legally and morally, that have been constitutionally promised.
However, some of the past contracts have been excessive and cannot continue without change for those who have not yet retired. A lack of PERS reform for current employees will perpetuate a classroom funding crisis in Oregon that has gone on for much too long.
This issue is complex and has vast implications for our kids and our shared future as a state.
It deserves robust debate — but it needs to be based on truth, not information carefully crafted to protect the status quo.
— Former state Rep. Knute Buehler, R-Bend, was the Republican candidate for governor in 2018.