A6
OREGON
East Oregonian
Tuesday, February 8, 2022
Growth boosts status of public pensions
By PETER WONG
Oregon Capital Bureau
Ben Lonergan/East Oregonian, File
Sen. Ron Wyden, D-Oregon, left, listens to Debbie Radie, vice
president of Boardman Foods, center, during a tour Aug. 31,
2021, of the Neal Early Learning Center in Boardman. A bill
in the Oregon House to change how the state fi lls vacancies
of its U.S. senators recently set off a wave of speculation that
Wyden could opt out of his 2022 reelection bid or not serve
his full six-year term if elected.
Mystery bill fuels
speculation on
Wyden’s future
By GARY A. WARNER
Oregon Capital Bureau
SALEM — A mystery
proposal to change how
Oregon fi lls vacancies of its
U.S. senators set off a wave
of speculation that Sen. Ron
Wyden, D-Oregon, could opt
out of his 2022 reelection bid
or not serve his full six-year
term if elected.
The questions about
Wyden, 72, and the proposal
intensifi ed Feb. 1, when the
proposal was on the agenda
of the House Rules Commit-
tee in its fi rst meeting after
the beginning of the 2022
session.
It appeared as “LC 282”
on a short list of four commit-
tee bills, a controversial form
of submitting legislation
without including the name
of the bill’s author or who is
requesting the action.
“Why are we doing this
now?” asked House Minority
Leader Vikki Breese Iverson,
R-Prineville, who is vice-
chair of the Rules panel.
Rep. Barbara Smith
Warner, D-Portland, the
committee chair, had little
information about the gesta-
tion of the idea, other than it
came to the panel as a request
from a source she didn’t iden-
tify.
Wyden spokesperson
Hank Stern said the Twit-
ter-driven scenarios were
“silly and uninformed.”
“Sen. Wyden is running
hard to win reelection to a full
six-year term,” Stern said.
“He will serve a complete
six-year term if reelected.”
Oregon is one of five
states where the departure or
death of a sitting U.S. senator
requires a special election to
fi ll the seat, which remains
vacant in the meantime.
The proposal would allow
the governor to align the
replacement of a U.S. Sena-
tor with the current system
for replacing Oregon’s exec-
utive offi cers.
The governor names a
replacement drawn from the
same political party as the
person who had the seat. An
election to fi ll the unexpired
portion of the officehold-
er’s term is held at the next
general election.
The proposed legislation
that would allow the gover-
nor to choose an interim
senator was circulated by
bloggers and Twitter-users,
including the popular Oregon
conservative website, Oregon
Catalyst.
GOP activists specu-
lated it could be a vehicle for
a Democratic governor to
replace Wyden if he either
withdrew from the 2022 race
prior to the general election
or won re-election and didn’t
fi nish his new term.
Stern said Wyden does
not know where the proposal
came from and has no role in
its drafting, presentation or
possible introduction.
After the House Rules
Committee meeting, the
legislation remained in
committee with no further
action scheduled.
Wyden has $10 million
in his campaign fund, and
declared his intent to run for
reelection in a Federal Elec-
tion Commission document
fi led at the beginning of 2021.
He fi led a statement of candi-
dacy with the Oregon Secre-
tary of State on Jan. 26.
Wyden fi rst went to Capi-
tol Hill when he challenged
incumbent U.S. Rep. Bob
Duncan, D-Portland, in the
1980 Democratic primary
for the 3rd Congressional
District.
Wyden won the primary
and then defeated Republican
Darrell Conger that Novem-
ber.
When U.S. Sen. Bob
Pack wood , R- O regon,
resigned in 1995 amid a
sexual harassment scandal,
Wyden won a special election
to fi ll the seat, the fi rst vote in
Oregon done entirely by mail
ballot.
Wyden has been elected
to four terms as senator. If he
were to win election in 2022,
he would serve until January
2029, when he would be 79.
SALEM — Oregon’s
projected unfunded liability
for public pensions appar-
ently shrunk signifi cantly
last year, mostly attribut-
able to healthy investment
earnings that pushed the
fund past the $100 billion
mark for the fi rst time in its
75-year history.
A fi nal accounting will
come later this year, but
preliminary numbers for
2021 peg the unfunded
liability at either $19.7 billion
or $14.4 billion, depending
on whether “side accounts”
are excluded or included.
Side accounts are amounts
of money that participat-
ing governments set aside
to cover part of their future
pension liabilities, but not
all of the 900 government
employers in the Public
Employees Retirement
System have set up such
accounts.
The comparable figure
for 2020 was $28 billion.
The PERS fund was at
$85.4 billion in December
2020; the preliminary fi gure
one year later is $100.4
billion. Its investments go
beyond common stocks,
which PERS started back in
1973, to other things. Oregon
has one of the nation’s largest
public pension funds.
“It’s a good marker to
know what the investment
returns of last year did,”
said Scott Preppernau of
Millman, the fi rm that does
the actuarial work for the
system, in a Jan. 31 report
to the PERS board. “Clearly
a strong asset year makes a
signifi cant improvement in
these results over a one-year
time frame.”
A decade ago, under
Bryan M. Vance/Oregon Public Broadcasting, File
The Oregon Public Employees Retirement System building in
Tigard. Strong investment earnings in 2021 cut Oregon’s pro-
jected unfunded liability for public pensions signifi cantly.
then-Treasurer Ted Wheeler,
the Oregon Investment
Council changed its strat-
egy so that the PERS fund
will not grow as much when
fi nancial markets surge, but
also does not drop as much
when markets plunge. The
change emerged after the
Great Recession, when the
PERS fund lost 28% of its
value as it declined from $66
billion in December 2007 to
a low of about $48 billion in
March 2009. It took several
years for the PERS fund to
get back to its pre-recession
level.
PERS Board Chair-
woman Sadhana Shenoy
said Oregon’s long-term
liability for public pensions
hasn’t gone away, given
that the funded status of the
system is still below a target
of 90%.
“We have a long way
to go,” she said. “But this
shows that one good year
gives us a little bit of respite.”
Rate-setting is next
The valuation of the
PERS fund as of Dec. 31
will be a factor when the
board sets pension contribu-
tion rates for the 900 partic-
ipating governments for the
2023-25 budget cycle, which
starts July 1, 2023. The board
will likely set those rates at a
Sept. 30 meeting.
However, the average rate
of 17.9% is likely to be main-
tained, instead of reduced.
The board changed its policy
last year so that increasing
the funded status of the
system to a specifi ed target
of 90% takes priority over
lowering contribution rates.
The “average rate” is
a misnomer, because no
participating government
pays it.
Rates are determined by
the mix of employees within
a government agency, based
on when they were hired and
whether they are classifi ed
as public safety employ-
ees, who qualify for higher
pensions upon retirement
but also require higher rates
than other employees for
pension contributions. State
law defi nes “public safety
employees” for pension
purposes.
Rates tend to be higher
for governments with a
greater share of employees
hired before August 2003
— although those numbers
have declined because of
retirements — or those with
more public safety employ-
ees, such as police, sheriff ’s
deputies and fi refi ghters.
Of the 228,000 public
employees covered by the
system as of mid-2021,
PERS reports that more than
162,000 of them were hired
after the Oregon Legisla-
ture overhauled the system
in 2003. The rest, all hired
before then, fall into more
generous defined-benefit
plans from prior years.
But of the 156,500 retir-
ees as of the end of 2020,
most of them (130,000) get
benefits under a pre-1996
plan and are classified as
Tier 1. Another 18,000 get
benefi ts under a plan (Tier 2)
that is in eff ect from January
1996 to August 2003.
The retirement plan that
applies to most now blends
contributions from employ-
ees and their employers in
what are known as individ-
ual account plans.
Contribution rates for
participating governments
also are “collared,” which
means part of the increase
is carried over into future
budget cycles, so that partic-
ipating governments do not
get hit with the full amount
in a single cycle. The board
approved a change last year
in how rates are calculated
for the collar, which limits
what a rate increase would
be otherwise.
“Emotion is not part
of being an actuary,” said
Matt Larrabee, also of Mill-
man. “But we are happy that
the rate-collar structure is
performing for this first
biennium (two-year cycle).”
Nike co-founder gives $250K to Johnson campaign
By GARY A. WARNER
Oregon Capital Bureau
BEAVERTON — Nike
co-founder Phil Knight
threw his wallet into the
2022 political ring Thurs-
day, Feb. 3, giving $250,000
to Betsy Johnson’s campaign
for governor.
Knight’s contribution
made the biggest splash into
a growing pool of campaign
cash for 2022 campaigns for
governor.
Oregon’s open-ended
fi nancing laws allow contri-
butions of any size to candi-
dates as long as they are
reported to the Secretary of
State.
The numbers so far are
just a drop in a possible fl ood
of cash. The 2018 race won
by Gov. Kate Brown over
Republican Knute Buehler,
the former state representa-
tive from Bend, generated
almost $40 million in contri-
butions.
Knight contributed $2.5
million directly to Buehler’s
campaign. When Buehler
left the Republican party
As of this week, the
and announced his endorse- governor’s race has attracted
ment of Johnson on Dec. 15, 31 candidates: 15 Repub-
speculation grew whether licans, 13 Democrats, two
Knight’s fi nancial support non-affi liated and one Inde-
would follow.
pendent.
Christine Drazan, the
That’s not counting
former House Republican Democrat Nicholas Kris-
leader from Canby who tof, the ex-New York Times
columnist who was
gave up her seat to
knocked off the ballot
run for governor,
when Secretary of
said fundraising is
a constantly moving
State Shemia Fagan
target depending
determined he didn’t
meet the residency
on what opponents
requirement to run.
are receiving and
While Kristof’s
the ability of some
to self-fi nance their
Johnson
status is in limbo,
eff orts.
his fundraising has
During a Wednesday continued non-stop. He’s
campaign stop in Madras, raised just over $198,000
Drazan said she had no set since Jan. 1.
Adding to the final
goal beyond the $1 million
that she has raised so far.
money-spending binge is
“Whatever it takes, we the likelihood of a three-
will raise it,” she said.
way race in November
Fueling the raising and between the winners of the
spending machines are the Democratic and Republican
absence of an incumbent on primaries in May, and John-
the ballot for the fi rst time son, who can wait to see who
since 2010. Brown cannot survives the crowded fi eld.
Under Oregon campaign
run again because of term
limits.
law, she won’t be on the ballot
in the May primary. She must
collect nearly 25,000 valid
signatures of Oregon voters
to submit to the secretary of
state by the end of August. If
the signatures are verifi ed,
she would go on the Novem-
ber general election ballot as
an unaffi liated candidate.
Johnson leads the pack
with just under $3.58 million
in the bank. Along with
Knight’s contribution, she
also reported receiving
$100,000 on Wednesday
from Columbia Sportswear
CEO Tim Boyle.
In the Democratic
primary fi eld, former House
Speaker Tina Kotek, D-Port-
land, has reported $908,202
in the bank. Labor union
political action committees
were the biggest givers so far
in 2022, with $50,000 from
the PAC of the Laborers’
International Union of North
America and $15,000 from
the union-backed Orego-
nians to Maintain Commu-
nity Standards, which lists
its goal as ensuring a living
wage for Oregon workers.
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