Unfunded OPEB Liabilities for Oregon Public Employers: A $2.6 Billion Time Bomb
Most Oregon taxpayers are likely to have heard of the multi-billion dollar problem of unfunded pension debt for public sector workers. Oregon’s Public Employee Retirement System (PERS) is one of the most generous in the country, and paying for it has forced cities, counties, and school districts to repeatedly cut services to current residents in order to transfer large amounts of revenue to retirees. Despite robust stock market returns on PERS investments, the fund is still billions of dollars short of being fully funded. There is another aspect of retirement debt that has been discussed much less: Other Post-Employment Benefits (OPEB). These are benefits provided in addition to pensions. With tougher Government Accounting Standards Board rules pending, public entities with large, unfunded OPEB liabilities would do well to begin planning for compliance.