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Staff warns PERS-related rate rise will cost district roughly $726,000 in year one
Summary
Presenters told the committee a roughly 5.5% employer-rate increase tied to the unfunded actuarial liability will raise district payroll costs; staff estimated the first-year district impact at about $726,000 and described long-term uncertainty.
District staff told the budget committee the largest single increase in the proposed budget is an employer retirement-rate increase tied to the unfunded actuarial liability (UAL). Denise and staff said the district’s blended increase is about 5.5 percent, which the presentation translated to an estimated $726,000 increase for the district in the first year.
Denise described background on tiered retirement benefits and said the state-wide employer-rate increases are being driven by past guaranteed rates not matched by market earnings: “The amount that's unfunded because of the market not keeping up with the guarantee,” she said. Staff emphasized that other districts are facing higher employer rates and that the district previously used bond proceeds to lower its exposure; the committee was told the district’s approach keeps its blended increase lower than some peers.
