PERS, Judges And Their Financial Conflict Of Interest, Part 1

Since 1984, all regularly elected or appointed Oregon judges automatically become judge members of the Oregon Public Employee Retirement System (PERS) the day they assume office, unless they are 72 years old or older on that day*.   Prior to 1984, the judges were members of the Judges Retirement Fund, which was not part of PERS.  The provisions of the Judges Retirement Fund were independent of and substantially different from the provisions of PERS.

The PERS laws provide a number of special provisions that apply just to judges.    Judges are the only elected or appointed persons who automatically become PERS members.  All other Oregon officials who are elected or appointed to an office with a fixed term have the choice to join PERS or not to join PERS.   Judges are the only persons who do not become members of the Oregon Public Service Retirement Plan (OPSRP) if they first take office on or after August 29, 2003.   A judge first taking office anytime after December 31, 1995, becomes a Tier Two PERS member.  All other Oregon public employees starting work on or after August 29, 2003 must join OPSRP which has lesser benefits than Tier Two.  Judges also have a 7% employee PERS contribution that is required by law to be paid for them by the people of Oregon.  All other PERS members have a 6% employee contribution and their employers are not required to pay those contributions for them, although most do.

There are also many general PERS provisions that apply to judges as well as to all other PERS employees.  Those common provisions include the use of unused sick leave in determining the person’s final average salary and, for persons who became PERS members before January 1, 1996, their member accounts are credited with the assumed guaranteed rate of 8%.

Prior to 1984, when a PERS case was heard in the Oregon courts, the judges did not have a financial conflict of interest in the outcome of the case, unless they had been PERS members before becoming a judge.  In that case, there would still have been many judges who did not have that conflict of interest and so the case could be decided by a neutral judge.  After 1983, however, all regularly elected or appointed judges had direct, personal financial conflicts of interest in every PERS case because of their automatic PERS membership.

In 1992, 1996 and 2005, the Oregon Supreme Court heard important PERS cases and PERS won each one of them.   In all three cases the court held that while all of the justices were PERS members all other Oregon judges were PERS members so they had no choice but to hear the case.  That conclusion was unchallenged by the Oregon Attorney General who represented the people of Oregon in each of those cases.  It was a convenient excuse for the judges, for the PERS legislators who put the judges into PERS and for the Attorney Generals who were PERS members but it has a serious constitutional problem.  That problem and what is being done about it will be described in Part 2.

*A judge age 72 or old on his or her first day of office can still become a general PERS member if the required period of service (six months) and hours worked (600) are met.

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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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