Ted Sickinger has the report here on PCC’s plan to borrow $200M to use to pay its PERS tab. The bonds will go on sale soon.
While this is portrayed as a bet that stock-market returns will exceed the interest rates on the bonds (and it is) as Sickinger explains it also will give PCC access to some money up front and mitigate the effect of the PERS board’s obsessive desire to get PERS to 100% funding ASAP, regardless of what it costs current taxpayers, workers, and students.
A more economically rational approach would be for PERS to convert to a partly-funded partly pay-as-you go pension scheme, and make it explicit that we expect that a more populous and richer future Oregon will have the resources to pay the retirement benefits of its workers.
This is the decision that most other states have made, generally on a de facto basis. Of course such an approach is opposed by those who are impatient to shrink the size of government right now by increasing the cost of having state employees, and those who earn their living trading stocks and bonds on Wall Street.
Unfortunately, it seems that PCC’s sensible workaround is unavailable to UO, because while PCC has its own PERS account, we are part of a larger state agency account. So UO’s current employees will continue to see downward pressure on their wages, and students will see higher tuition, as the cost of getting PERS to that magic 100% increases.