HEADLINES : Oregon
Study: PERS shortfall billions worse
A recent study claims that Oregon's Public Employees Retirement System has a shortfall more than five times larger than calculated, and concludes that Oregon households will need to pay more than $2,000 in additional taxes every year to eventually pay it off.
However, the study essentially presents a worst-case scenario based on low investment rates, outdated employer contributions and a 30-year amortization period, which does not reflect the model used by the PERS board to fund the system. The board says it has a $16 billion shortfall; the study claims it's $90 billion.
The study was co-authored by Robert Novy-Marx of the University of Rochester and Joshua Rauh of Stanford University's Graduate School of Business and Hoover Institute. Both are members of the National Bureau of Economic Research. The study was published in September but recently is garnering national attention.
It presents striking findings.
The researchers determined that Oregon would need to raise about $3 billion more in taxes and fees every year for the next 30 years in order to fully pay off its PERS obligations, which include payments to retired employees, promised pensions to working employees and any payments it would expect to make to future employees.