OSEA President Sarah Wofford testified on Tuesday, Feb. 6, to the Oregon Investment Council (OIC) about the state treasurer's proposal to decarbonize Oregon's Public Employees Retirement System (PERS) over the course of the next several decades. Here is her testimony:
Chair Samples, Treasurer Read and members of the Oregon Investment Council, my name is Sarah Wofford and I am the president of the Oregon School Employees Association.
On behalf of the over 24,000 current and retired members of OSEA who support all levels of public education in all 36 counties of Oregon, including Head Start programs, K-12 school districts, education service districts, parks, and community colleges, thank you for the opportunity to give comment as you consider Treasurer Read’s Decarbonization Plan.
Classified employees are a key group of frontline caregivers who support Oregon’s students, including some of the most economically and medically fragile. Many classified educators’ wages are lower than the average annual PERS benefit, which was $33,550 in January 2023, according to Treasurer Read. For us, there is little room for error when it comes to PERS stability.
The timeline that Treasurer Read identifies in his plan provides a much more precautionary offramp to divestment of fossil fuels than the recent proposal considered during the 2023 Legislative Session that directed the state to divest from fossil fuels in less than a year. OSEA adamantly opposed that concept. By contrast, Read’s plan identifies 50 percent decarbonization across the whole state portfolio by 2035 and a net zero total portfolio level for all Greenhouse Gas emissions by no later than 2050.
We appreciate that Treasurer Read’s more deliberate approach reflects his fiduciary responsibility to manage the funds that we as PERS beneficiaries trust the state to protect and nurture – just as we protect and nurture Oregon’s future in educational facilities every day. The retirement funds you manage give us some peace of mind that someday we may be able to retire. Our wages are not high during our careers, but we get great satisfaction from our work with students. We chose this work based on the full employment package that includes both wages and benefits. Some, though not all, of our members are scheduled for enough hours over the years to vest in PERS, so we can look at our statements and dream about tomorrow being a little brighter.
The economic fragility of our members – both while working and in retirement – necessitates our concern that this more gradual transition could still endanger members’ benefits. We appreciate Treasurer Read naming the protection of members’ retirement as a top priority throughout this process and we understand that the plan’s intention is to move away from fossil fuel assets that have diminishing reserves while gradually transitioning to renewables that are gaining greater value and stability – which avoids known risk. Unfortunately, we have lived through several periods of unexpectedly high economic instability and, as Oregon moves toward a reduced-carbon portfolio, we must strongly advocate for ensuring the stability of investment returns to the Oregon Public Employees Retirement Fund. Those returns ensure the economic future of our members and minimize the unfunded liability that drives public employer costs.
We look forward to giving feedback on future iterations of the plan. We appreciate the Oregon Investment Council’s expertise in identifying risks, economic uncertainty and investment opportunities in a decarbonizing economy. Strong collaboration among us will best achieve a more stable, cleaner investment portfolio for Oregon and economic security for hard-working public servants.
Thank you for the opportunity to submit testimony.