Two things are clear.

One, public pay for work must be full and complete at the time of the original pay checks.

Two, there shall be no risk that a pension manager or trustee shall come back later and demand extra pay that was not part of the original paycheck and thus not provide any opportunity or excuse for the issuance of pension obligation bonds.

One and Two are related to one another.

Ted Kulongoski says this:

The decision today by the State Supreme Court brings some measure of closure for our state. While the court’s decision is nearly 150 pages long and it will take time for the government’s attorneys and actuaries to fully analyze the opinion, it is clear that this decision brings certainty that our public pension system is now on a sustainable fiscal path – which is critical to the long-term economic stability for Oregon’s future.

He sounds like he wants to abdicate total authority over to the lawyers and actuaries. It is just such abdication that got us into this mess. The actuaries are tied to the bond-rating and bond issuance folks that favor unsound pension design so as to facilitate bonding opportunities. An unsound design is a sound design as far as they are concerned. The lawyers, the public lawyer PERS beneficiaries blithely looked away from valid legal arguments for their own personal gain and for career advancement in the public sector or for their connected post-public careers as connected lobbyists.

A preliminary step toward sound design is for all local governments to measure their full exposure to future liability, future pension liability, in the budget year in which a public employee performs service. If they can't measure it then there is not a bargain. If the future costs can be measured then the money for that cost, if not fully covered by the employee's own participation and contribution, must be noted and covered immediately and itself considered complete satisfaction for those future costs.

School districts such as Portland pretended that they have no control over the pension costs and that they are unknowable within a given budget cycle. I say they are fully measurable, at least by the actuaries trumpeted by Ted. I say too that the tier-three teachers' pay should be adjusted to reflect their lower rights relative to the tier-one counterparts, on pensions.

A “structural problem” had been a judicial ruling (OSPOA) that served to lock-in unsound design where ever and when ever it could be inserted or otherwise discovered within legislation. That lock-in mechanism has been washed away, but for a narrow instance based on one Justice's adherence to stari decisis. The time is ripe for real legislative reform that achieves genuine soundness.

ORS 238.600(2) is available and ready for use.

(2) If the Public Employees Retirement System is terminated, or if contributions may no longer be made to the system, each member of the system has a nonforfeitable right to the benefits that the member has accrued as of the date of the termination, or as of the date that contributions may no longer be made to the system, to the extent that those benefits are funded.(emphasis added)

Does the Oregon Constitution, Article VIII Section 8, requiring Adequate and Equitable funding for education require the cover of the unrecognized cost of past work reflected in tier-one pensions or is it instead a command to keep schools open? I say it is the latter and thus the school budget must exclude costs related to late recognition of PERS related charges for which the schools are demanded to cover. Let the state provide a separate appropriation item for each; one for ongoing teaching expenses and one for delayed payment of real tier-one pension costs.