Enhancement of PERS Benefits Between 1975 and 1995

The PERS website has a chart that shows the enhancements, caps and reductions in PERS Benefits from 1972 through 2009.  That chart shows that after the legislator’s allowed themselves to retroactively join PERS in 1975, more PERS benefit enhancements were implemented than at any other time in PERS history.  By 1995, those enhancements enabled PERS members to retire in the mid-fifties, with full pay.  That was not supposed to happen.  To deal with that problem, the legislature began making changes to PERS, starting in 1996.  From 1996 through 2009, 18 separate benefit caps and reductions were put in place.  Only 4 of those 18 caps and reductions applied to PERS members who began working for the state before 1996.  That included the legislators who had made or allowed all of the PERS enhancements during 1975 to 1995. 

Once the legislators allowed themselves to join PERS, the majority did and those PERS legislators placed their own financial interest above the interests of the state and the people of Oregon.  That is why Oregon again is facing a budget crisis.  $2.5 billion will be required to be paid to PERS in employer contributions and picked up employee contributions during the 2011 – 2013 biennium.  That is most of the projected budget deficit and it clearly establishes that the PERS legislators have made PERS the highest funding priority in Oregon.

Go to: http://www.oregon.gov/PERS/section/news/agency_news_archive.shtml to see the PERS chart.  Click on 2010 Benefit Changes History and then click on History of PERS Benefit Enhancements, Caps, and reductions by Year.

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About Dan Re

I am an attorney who has lived in Bend and practiced law since 1981. In educating myself about the Oregon Public Employees Retirement System (PERS), I was shocked at how the PERS laws were changed by the legislature, once legislators were allowed to join PERS in 1971, 26 years after PERS was first created. Those changes personally benefitted the legislators who made them at the direct financial expense of the people they were elected to represent. That is wrong and I intend to change it. In 2009, I started a non-profit 501(c)(4) corporation, In RE The People, Inc., for the purpose of informing concerned citizens of what happened regarding PERS and other issues of social and civic importance. I then created this blog to further that objective.
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4 Responses to Enhancement of PERS Benefits Between 1975 and 1995

  1. Jeff Tomlin says:

    Hi Dan. I found your site while doing research on PERS yesterday before my testimony to the Springfield School Board last night. Above, you said that the upcoming PERS contribution will be 2.5 billion per year. On page 186 of the Governer’s full budget, however: http://governor.oregon.gov/Gov/docs/priorities/BUDGET_Full_Budget.pdf, it says that the contribution for 2011-2013 is 7.5 billion. That’s 3.75 billion per year, and the total budget for Oregon is $14.55 billion http://governor.oregon.gov/Gov/priorities/budget.shtml (per year, I think-not for the biennium). Is it true that almost 25% (3.75 billion out of 14.5 billion) of our entire state budget will go towards PERS next year? Can that be right? If so, it’s a travesty. And the 24% of payroll the Springfield district will contribute toward PERS next year is on top of the state contribution, I suppose.

    • danre says:

      Jeff, thank you for your comment. I beleive that my post stated that $2.5 billion in employer contributions and employer pick up of employee contributions would be paid to PERS during the 2011 -13 biennium. Th difference, $5 billion, is projected to come from investment returns so that is why the governor’s proposed budget show $7.5 billion. But, if the investment returns are not that high, employer contributions will be increased again. That is because Tier One PERS beneficiaries, person hired before 1996, are guaranteed that their accounts will never lose value. That guarantee, of course, was made by Tier One beneficiaries for their own benefit.

      You are right that it is a travesty but once the people of Oregon understand how this happened, they will insist that changes be made.

      You may want to look at my guest editiorial in the Regiaster-Guard today about this.

      Thanks.

      Dan

  2. Jeff Tomlin says:

    Thanks Dan. I really liked your editorial. Much of the same info as in the PERS history page on your site. Good stuff. I appreciate your quick response. Keep up the good work. Now I can make a more accurate argument to the Springfield School Board. BTW, what do you think would be the most we could accomplish, given the political climate in Oregon? My thought is that the best we could possibly do is to make the pre-1996 people pay taxes on their income, the same as the rest of us, and to discontinue paying for their investment losses. I wouldn’t think we would be able to actually decrease their benefits, although that would be ideal.

  3. danre says:

    Jeff, Thanks again for your comments. Personally, I think the most we can accomplish is to have the changes made to the Oregon Constitution by Ballot Measure 8 restored and to prohibit judges who are PERS members from hearing PERS cases. Ballot Measure 8 eleminated, as of Jan 1, 1995, the pick up of employee PERS contributions, the 8% guaranted minimum return and the use of unused sich leave as part of the computation of a person’s final salary for retirement benefit purposes.

    I have filed a lawsuit to do those things. The state will fight hard to have my case thrown out of court but if I win any of those issues it will be a major victory and, I beleive, the begining of major changes to PERS.

    Keep up the good work.

    Dan

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