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Deschutes County approves PERS side account, commits $5 million to secure state match
Summary
The board voted to establish a PERS side account using $5 million from county reserves to receive a 25% state match, a move county staff said should lower employer contribution rates over time and yield estimated lifetime savings.
Deschutes County commissioners voted Sept. 24 to establish a PERS side account by depositing $5,000,000 from the county PERS reserve fund to receive a 25% match from the State of Oregon (a $1,250,000 state contribution). County staff said the deposit would be amortized over 20 years and reduce future employer PERS rates; staff presented an estimated $10.3 million gross rate relief over the 20‑year period tied to a 0.39% credit in the current projection.
Robert Tinto, the county’s chief financial officer, and Cam Sparks, budget and financial planning manager, explained the mechanics and history of side accounts. Tinto summarized the county’s two existing side accounts: a 2004 deposit that has produced significant rate relief and a 2020 deposit ($13 million from the county plus a state employer incentive match at the time) that currently yields a roughly 1.5% reduction in employer rates. Tinto said PERS amortization re‑calculates each biennium as the remaining balance declines and that credits change over time; the proposed new account would expire after 20 years and be re‑amortized on that schedule.
Why it matters: staff said establishing a side account now offers an above‑market match from the state while the county holds cash in its PERS reserve; staff argued the match and historical earnings on side‑account investments make the transaction fiscally advantageous compared with investing the same cash in the county’s more conservative portfolio.
Key figures presented in the meeting: - County deposit requested: $5,000,000 (from PERS reserve). - State match: $1,250,000 (25%). - Projected credit on employer PERS rates (initial projection): ~0.39% producing an estimated $10.3 million in savings over the amortization period. - The county’s total portfolio balance and PERS reserve balance were discussed; staff said $5.0M was available in the PERS reserve at the time of the vote.
Board action: a motion to establish the PERS side account and accept the 25% state match was moved and seconded, and commissioners voted to approve the measure. County staff noted that the match program’s availability depends on state funding and that a waiting list can exist for future opportunities.
Ending: Commissioners said they viewed the vote as building on long‑term management choices and previous boards’ decisions that created the reserve; staff will complete the side‑account paperwork and submit it to PERS for finalization.
