Pgsql conditions do not short circuit?

I have the following condition in a trigger function:
 IF (TG_OP = 'INSERT') OR (TG_OP = 'UPDATE' AND NEW.aggregate_flag !=
OLD.aggregate_flag)

When I cause this trigger to execute on an insert, it complains that OLD
is not defined yet.  If I reformat this so I check the last condition in
an IF nested in the "UPDATE" case, it works fine.  From this, I'm
concluding that pgsql conditions do not short circuit?

--
Guy Rouillier