My Problem With PERS

My problem with PERS is the changes that were made to it between 1971 and 1989.  I believe those changes were unfair to the people of Oregon.

Original PERS Provisions.

PERS was created in 1945 and it provided for the following:

(1)  All Oregonians were required to contribute to funding PERS.

(2)  Legislators and judges were not allowed to join PERS.

(3)  All Oregonians were represented when legislature made PERS laws.

(4)  Judges had their own separate retirement plan and all PERS lawsuits would be
decided but judges who did not have a financial stake in the outcome of the lawsuit.

The Changes To PERS During 1971 to 1989.

1971. Oregon AG withdraws 1963 Opinion which held that legislators could not
join PERS and holds that they can join PERS.

1975.  Two changes were made this year:

(1) Legislators pass a law that allows any person who has ever served in legislature the right to retroactively join PERS.  This right kept open for 16 years.

(2) Legislators pass another law that makes the “assumed rate” used by PERS to compute employer PERS contributions, the “guaranteed minimum rate of return” on all employee PERS accounts, including their own.

1979.   55 of 90 legislators were PERS members.  They passed the PERS pick up law, which was to last from July 1, 1979 to June 30, 1981.  The PERS pick up allows PERS
members to make the people of Oregon pay their employee PERS contributions for them.

1981.   Legislators eliminate the June 30, 1981 sunset date for the PERS pick up.

1983.   84 of 90 legislators are PERS members and they put the judges into PERS:

(1)  Anyone becoming a judge for the first time after 1983 becomes an
automatic PERS member, if under 72 years old.  PERS judges have a 7% employee PERS contribution but that contribution is required by law to be picked up for them.

(2)  Existing judges given option to join PERS or stay in original retirement plan.  If they stay in original plan, they must pay 7% of salary to that plan.  If they join PERS, their 7% contribution will be picked up by the State, giving them an immediate 7% salary increase.

(3)  Judges are the only elected officials who are required to join PERS.

1989.   82 of 90 legislators are PERS members and they allow the State to withhold all money owed to a public employer who has not paid its PERS in full.

The Culmination Of The 1971 to 1989 Legislative PERS Changes.        

 1994.  People of Oregon pass Ballot Measure 8 which eliminated:

(1)  PERS pick up;

(2)  “Guaranteed minimum rate of return” on employee PERS accounts; and,

(3)  Use of unused sick leave as part of final average salary.

1995.  Oregon Supreme Court hears the Oregon State Police Officers’ Association case in which PERS members argue that Ballot Measure 8 is unconstitutional. If Ballot Measure 8 is upheld, PERS members will no longer: have their employee contributions picked up, receive a guaranteed minimum return; or, be able to include unused sick leave in final average salary.

(1)  The persons asking the court to declare Ballot Measure 8 unconstitutional are PERS members.

(2)  The persons defending Ballot Measure 8 on behalf of the people of Oregon, are PERS members.

(3)  The judges who will decide the case are PERS members.

If Ballot Measure 8 is upheld, all of the people involved in the lawsuit will lose substantial PERS benefits.  If Ballot Measure 8 is found to be unconstitutional, all of the people involved in the case will get to keep substantial PERS benefits that the people of Oregon had taken away from them when they passed Ballot Measure 8.

1996.  Oregon Supreme Court decides that Ballot Measure 8 is unconstitutional.

The procedures used to decide the Oregon State Police Officers’ Association case permitted it to be argued and decided exclusively by people who had the same financial interest in the outcome of the case.  The people on the other side, the people of Oregon who passed Ballot Measure 8, were excluded from meaningful representation in the case.  If the procedures used in the Oregon State Police Officers’ Association case were fair, they would be fair in any other case.

I do not believe those procedures were fair.  I believe that they were fundamentally unfair.  That is my problem with PERS and that is why I will insist that this issue be reexamined by judges who are not PERS members.    I expect that to happen in federal court.  Only  then will fairness and justices be restored to the PERS decision making process.