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House passes bill to apply school unfunded-liability fund balance to school employers’ 2025–27 PERS rates
Summary
Senate Bill 849 directs PERS to apply the School Districts' Unfunded Liability Fund balance against school employers’ 2025–27 contribution rates, producing an estimated average reduction of 1.68 percentage points, sponsors said.
The House approved Senate Bill 849 on third reading, directing the Public Employee Retirement System (PERS) board to apply all monies in the School Districts’ Unfunded Liability Fund as of Feb. 28, 2025, against school-district and ESD employer contribution rates for the 2025–27 biennium.
Representative Scharf, speaking for the bill, said the fund — created by earlier legislation and supported by sources such as unclaimed-property interest and portions of estate tax proceeds — contains about $167 million. Most statutory funding sources for the account ended in 2023 and the final source expires in 2027, Scharf said.
Under SB 849, PERS would allocate the existing balance in equal amounts to all school district employers for the 2025–27 rates; any future unexpected credits to the fund would be applied equally to employer rates for the following biennium. PERS estimates the measure would yield an average reduction of about 1.68 percentage points in employer rates for the 2025–27 biennium, Scharf said.
Scharf said the bill grew from discussions with labor, management and PERS staff and is supported by COSA, OSBA, OEA and OSEA. He urged passage so school districts and ESDs could factor the expected savings into their budget development. The clerk declared SB 849 passed after voting.
