In 1995, a number of bills were introduced in the Oregon legislature to reduce PERS benefits. PERS had been intended to provide a general service PERS employee with a retirement benefit of approximately 50% of the employee’s salary at age 65. But by 1995, 20 years after the legislators allowed themselves to retroactively join PERS, the benefit had increased to where a PERS member could retire in the mid-fifties and receive a retirement benefit equal to 100% of salary or higher.
It was not a coincidence the PERS retirement benefits escalated dramatically after the majority of legislators joined PERS. PERS membership created a conflict of interest for each PERS legislators that was prohibited by the Oregon Ethics Code and which caused those PERS legislators to favor PERS over the interests of all Oregonians. While that result was nothing more than human nature and it was exactly what the Ethics Code was intended to prevent.
To address the conflict of interest problem regarding PERS and many elected officials, HB 2477 was introduced. That bill provided that the following elected officials could not join PERS after their current terms expired: members of the Legislative Assembly; the Governor; the Attorney General; the Secretary of State; the State Treasurer; the Superintendent of Public Instruction; and, the Commissioner of the Bureau of Labor and Industries.
The objective of HB 2477 was similar to the objective of HB 2476 as both bills were intended to address specific PERS problems. Unfortunately, HB 2477 did not experience the same results as HB 2476. HB 2476 benefited the PERS legislators by insuring that they would be entitled to the highest PERS benefits. It passed easily by a vote of 16 to 11 in the Senate and 45 to 15 vote in the House. HB 2477, which would prohibit all PERS legislators from continuing in PERS, did not pass. In fact it didn’t even get a vote. It died quietly in committee when the legislature adjourned on June 10, 1995.
For those who think that PERS benefits for legislators are so insignificant that they could not possible effect a legislator’s actions, consider the testimony of Rep. Barbara Ross during the General Government and Regulatory Reform Committee hearing on February 23, 1995.
“The retirement is very important for me. I am 59 years old and have been a PERS employee a long time. The way I supplement my income when I am not here, is in some other PERS system. I think that for those who don’t need it, it is fine to say we shouldn’t have it. But I wouldn’t have run if I thought I wasn’t going to get a retirement.”
While Rep. Ross’s candor was refreshing and her concern understandable, it is clear that her personal interest in PERS influenced her view on PERS legislation. That left all of the non-PERS members of her House district without any effective representation on PERS matters. And the same situation existed and still exists today for the people represented by PERS legislators.
PERS members make up less than 10% of Oregon’s population but they have controlled the Oregon legislature since 1975. That is why PERS has been made Oregon’s highest financial priority. That is why when public employers, such as school districts, do not have enough money to provide the services they were created to provide, such as educating our children, and to paying their PERS assessments PERS is always paid first. That is the law and there is nothing the school district can do about it. That is why as Oregon faces a $3 billion plus deficit for the 2011 – 2013 biennium, $2.5 billion will be paid to PERS right off the top during that same two year period. This situation could only have been created by legislators who were personally benefitting from it. If the legislators had not joined PERS and all Oregonians had been represented in developing the PERS laws, PERS would be much different from what it is today.
Part four of this series will look at a solution to the existing PERS problem.