PERS Legislators Benefit From PERS Bamboozle

According to the Merriam-Webster on-line dictionary, the word “bamboozle” is a transitive verb that means to deceive by underhanded methods: dupe, hoodwink.  If that definition is accurate, 1983 was the year that spawned the granddaddy of all PERS bamboozles.   In 1983, 84 out of the 90 Oregon legislators were PERS members.   And 1983 was the year that the Oregon PERS legislators made the Oregon judges join PERS and that action secured the preservation of prior PERS benefit increases made by the PERS legislators.   After 1983, there was nothing the people of Oregon could do to change PERS without the consent of the PERS judges. 
 
One of the biggest PERS benefits created by the PERS legislators was the PERS Pick Up.  Under the general PERS law, each PERS member must make an employee contribution to PERS each month out of his or her salary.  The Pick Up law allowed PERS members to shift the obligation to pay their employee PERS contributions from them to the people of Oregon.  That is a great deal for the PERS members making that decision and for all other PERS members because their pension contributions will be paid for them by someone else and they will get to keep the money that they had previously paid to PERS.  It’s a pay increase for them.  But it’s not such a good deal for the people of Oregon.   Remember though, the Pick Up law was not made by the people of Oregon who would have to pay for it.  It was made by PERS members in the legislature. 
 
When the Pick Up law was  passed in 1979, the law provided that it would only last for two years, from July 1, 1979 to June 30, 1981.  By 1981, however, the PERS legislators and all other PERS members were so happy with having other people pay their pension contributions for them that they decided to make the Pick Up permanent.
 
There was a problem, however, with protecting the Pick Up benefit.  The people of Oregon could eliminate it  by using their initiative power under the Oregon Constitution.  So it was not a coincidence that in 1983 the PERS legislators decided to put the Oregon judges into PERS.  That would be the only way of stopping the people from eliminating the Pick Up and that is just what the PERS legislators did.  Not only did they put the judges into PERS but the gave the judges the largest Pick Up benefit.  For non-judge PERS members, the Pick Up amount was 6% of salary but for the judges, the Pick Up amount was 7% of salary.  If the Pick Up was eliminated, the judges would lose more than any other PERS member but the Pick Up would only be eliminated if the judges approved.
 
You can guess what happened.  In 1994 Ballot Measure 8 was passed by the people of Oregon and it eliminated the Pick Up.   PERS members sued arguing that Ballot Measure 8 was unconstitutional.  In 1996, the Oregon Supreme Court threw out Ballot Measure 8 and, by a vote of 4 to 3,  reinstated the Pick Up for themselves and for all other PERS members.   The act of the PERS legislators putting Oregon’s judges into PERS has been the PERS legislators greatest bamboozle of the people Oregon.   It is an act that truly belongs in the Bamboozle Hall Of Shame.
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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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