Nine union participants in the $75 billion Oregon Public Employees' Retirement System, Salem, have filed a petition with the Oregon Supreme Court seeking the overturning of recent legislation that increased some employee contributions.
The petition, filed with the Supreme Court on Aug. 9, alleges that the changes mandated by Senate Bill 1049 violate Oregon's state constitution by impairing the contract rights of PERS members.
The bill, signed into law June 11 by Gov. Kate Brown, redirects 2.5% of the salaries of Tier One and Tier Two employees whose monthly salary exceeds $2,500 to a pension stability account that will be used to pay down the pension plan's unfunded liability instead of going into a defined contribution-type plan. Employees earning less than $2,500 a month will not have a portion of their salaries redirected to the pension stability account.
The changes are currently effective July 1, 2020, and the remaining 3.5% of their 6% contributions would still go into employees' individual account programs.
The law also creates a new $195,000 limitation on subject salary used for the retirement system's benefit calculations and contributions for salaries earned after Jan. 1, 2020.
Aruna A. Masih, attorney at Bennett Hartman Attorneys at Law, attorneys for the plaintiffs, said in an interview: “I think the main issue is that (PERS) is being asked yet again to reduce benefits for active employees who are not the cause of unfunded liabilities.”
PERS spokeswoman Marjorie Taylor said the system cannot comment on pending litigation.