Oregon

Overview

The Oregon Public Employees’ Retirement System is the sole retirement system in the state, administering retirement benefits for employees of the state and its political subdivisions, including public school teachers and employees of cities, counties, and other public entities that have elected to participate. A few political subdivisions, including the City of Portland, sponsor their own retirement system. PERS assets are managed by the Oregon Investment Council (OIC).

Plan Design

Those hired into the Oregon PERS since August 2004 participate in a DB-DC hybrid plan, featuring a traditional pension combined with mandatory participation in a defined contribution plan.
 

According to the US Government Accountability Office, 97 percent of employees of state and local government in Oregon participate in Social Security.

Access plan design detail

Authorizing Statutes and Board Structure

Oregon Revised Statutes Title 22 establishes the Oregon PERS, including its five-member board.  
The OIC is made up of six members, including the executive director of the PERS, who serves in a non-voting capacity.

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

Oregon Revised Statutes Section 293.706  describes the Council’s “standard of care in investments” as follows:
The investment funds shall be invested and the investments of those funds managed as a prudent investor would do, under the circumstances then prevailing and in light of the purposes, terms, distribution requirements and laws governing each investment fund. (2) The standard stated in subsection (1) of this section requires the exercise of reasonable care, skill and caution, and is to be applied to investments not in isolation but in the context of each investment fund’s investment portfolio and as a part of an overall investment strategy, which should incorporate risk and return objectives reasonably suitable to the particular investment fund. (3) In making and implementing investment decisions, the Oregon Investment Council and the investment officer have a duty to diversify the investments of the investment funds unless, under the circumstances, it is not prudent to do so. (4) In addition to the duties stated in subsection (3) of this section, the council and the investment officer must: (a) Conform to the fundamental fiduciary duties of loyalty and impartiality; (b) Act with prudence in deciding whether and how to delegate authority and in the selection and supervision of agents; and (c) Incur only costs that are reasonable in amount and appropriate to the investment responsibilities imposed by law. (5) The duties of the council and the investment officer under this section are subject to contrary provisions of privately created public trusts the assets of which by law are made investment funds. Within the limitations of the standard stated in subsection (1) of this section and subject to subsection (6) of this section, there may be acquired, retained, managed and disposed of as investments of the investment funds every kind of investment which persons of prudence, discretion and intelligence acquire, retain, manage and dispose of for their own account.

Legal Protections of Retirement Benefits

No explicit constitutional protection for public pension benefits, but courts protect contractual pension rights based on impairment of contract principles. Strunk v. Public Employees Retirement Bd., 108 P.3d 1058 (Ore. 2005) (holding that suspension of COLA benefits breached obligation of contract under OR. Const., Article I, §21); Oregon Police Officers' Ass'n v. State, 918 P.2d 765 (1996) (once employee provides services in reliance on promise to provide benefits on retirement, employer is contractually bound to honor promise); but see Goodson v. Public Employees Retirement System, 264 P.3d 148 (Or. 2011)(public Employees Retirement Board (PERB) did not unconstitutionally impair contract rights of certain retirees by reducing earnings credit for 1999 from 20 percent to 11.33 percent, where PERB lacked statutory authority to promise 20 percent earnings credit). (OR CONST., Article I, §21) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits

See also the following search tools:

More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)