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PERS briefing warns of rising employer rates as pension-bond relief expires

Newberg-Dundee School Board of Directors · February 11, 2026

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Summary

District finance staff explained PERS basics and warned that pension-obligation bond relief will expire in 2028, likely raising employer contribution rates materially and creating multi-million-dollar budget pressure.

A district presenter (speaker 14) briefed the Newberg-Dundee School Board on Feb. 10 about the Public Employees' Retirement System (PERS), explaining the system’s tiers, funding sources, and the district’s use of a pension-obligation (side‑account) bond that currently offsets a portion of employer rates.

Presenter explained that PERS combines defined-benefit tiers (tier 1/tier 2) and an individual-account program (IAP) introduced after 2003; employer rates include contributions for active employees, debt service on pension bonds and other components. The presenter said the district’s existing side-account relief is scheduled to expire in 2028 and cited an advisory employer contribution illustration showing substantially higher rates in the next biennium without that relief.

The board discussed budgetary consequences, noting the district’s need to identify additional revenue or make staffing changes to absorb higher PERS costs. The presenter referenced Sen. Bill 849 (rate relief enacted in the current biennium) and said the advisory rate did not yet reflect a recent strong investment return that could reduce pressure, but the combination of expiring bond relief and higher rates poses a significant fiscal challenge.

Board members asked for more precise modeling; the presenter said part two of the presentation will include specific district-dollar impacts, savings history from the bonds, and options for managing the increased PERS exposure. The board was alerted this is a major driver for the district’s broader budget and levy conversations.