Gov. Ted Kulongoski and members of the state Legislature are making progress. And it's good to see.

Lawmakers admit that improving the Public Employees Retirement System financial tangle will go a long way in relieving the pressure on city and county government and school boards.

With a $15 billion estimated shortfall over 25 years facing the system, it's pretty obvious to everyone something has to be done.

It's impossible to spend any time with any governing body impacted by paying for PERS not to realize the system's stability is crucial to Oregon's financial health.

This past week, the governor signed a bill that places an 8-percent cap on the annual return that retirees could receive on their pensions.

That's a pretty good deal, especially considering most of us are afraid to even acknowledge our financial losses due to the weakness in the market.

Still pending is a bill that was introduced earlier this month that would eliminate seven of the PERS board members. Advocates say shrinking the board would make it easier to find qualified members who are not pension recipients.

The bill would mandate that only one in five members of the board be a recipient of the system and that one must be a PERS employer. At least three members must have experience in pension management or financing.

A further clause would limit awarding any benefits beyond those guaranteed in the statutes. Other measures would replace the outdated life expectancy tables to create a new pension plan to cover newly hired workers.

Another idea being discussed would stop employees from contributing 6 percent of their salaries to their pension accounts. The move would save money by shrinking the size of the accounts that are matched by employers when workers retire.

Updating the actuarial tables used to calculate retiree benefits is one of the most contentious proposals. The PERS board wants to update the tables beginning Jan. 1, 2004, giving current employees the chance to retire before any changes are implemented.

Employers of PERS recipients want the change to be retroactive. The cities of Portland and Eugene, Multnomah County and four smaller public employers filed suit asking for the change to be effective "immediately and fully."

The timing of updating the tables and changing the mandatory pension contributions are prompting threats from the unions worried that they would reduce pensions of current employees.

"If they do anything drastic then we'll turn up the heat," one PERS recipient said. Other threats such as "storming the capitol" have been voiced. We find such comments lacking in good judgment.

The worst thing unions can do is to make statements such as these that will turn the public against them. Instead, voices on both sides must use common sense, which hasn't been in abundant supply in past PERS decisions.

Unions, employers and lawmakers must work together to find and implement responsible reforms.

The alternative is more employee layoffs and greater stress on an already overburdened system. And that doesn't serve anyone.

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