What problem does this solve exactly? There are plenty of universities and community colleges in Oregon that are not research focused. I have not heard that Oregon students have any trouble enrolling in this type of school if they desire. Yet they choose to attend a research university. Converting UO to a non-research university will merely force Oregonians to go out of state and pay even higher tuition to get the kind the kind of education they want. 

The document at the bottom of the story here breaks down the PERS cost explicitly.
Retirement costs: $7.1 million
Wage increases for faculty and staff: $11 million.

I think PERS cost increases are high from those numbers. The increased amount to pay all current workers at the university is just a bit higher than the increased cost to pay for PERS shortfalls for people no longer working.