Negative cash flow may strain options to fix Oregon PERS

Warnings about Oregon’s public pension system have been consistent for nearly two decades. But a deficit of roughly $26 billion, seesawing financial markets and years of political inaction continue to drive painful cost increases for schools, municipalities and government employers across the state.

The pension system’s appetite for more dollars is the backdrop to every budget discussion. It was a wedge issue in the 2018 governor’s race. And it will lurk around the legislative session that starts Tuesday, even if Democrats decide not to take up legislation to tackle the problem.

Even as Gov. Kate Brown proposes $2 billion in new taxes to fund schools, much and potentially all of that money could eventually disappear into the pension system, leaving little for Brown’s promise of smaller classes, more teachers or a longer school year.

Now a new alarm is ringing, one that’s triggering a different conversation among the folks who manage the pension fund’s investments. On the surface, it’s about structuring the investment portfolio to meet growing needs. But dig a little deeper, and it’s also about the basic solvency of the pension plan.

Read more: https://www.bendbulletin.com/nation/6864737-151/negative-cash-flow-may-strain-options-to-fix