Lawsuit alleges new PERS reform law unconstitutional
In August, nine public employee union members filed a lawsuit with the Oregon Supreme Court challenging Senate Bill 1049, stating that it unconstitutionally reduces pension benefits.
Senate Bill 1049 was signed into law in June after narrowly passing the both the Senate and the House with the bare minimum of votes necessary in both chambers. The law diverts a percentage of employee Individual Account Program (IAP) contributions – 2.5% for active Tier 1 and Tier 2, and 0.75% for active Tier 3 and Tier 4 – to go towards paying down the PERS pension debt. The bill also capped the Final Average Salary at $195,000. The lawsuit seeks to overturn these provisions, siting that it is a breach of contract.
OPRI will continue to keep you updated on the progress of this lawsuit. To learn more, go to https://bennetthartman.com/areas-of-expertise/pers-litigation/
The passage of Senate Bill 1049 does not affect current retiree benefits. Changes to benefits only impact current public employees and future retirees.