September 2, 2011 Bend Bulletin Editorial

Take aim at PERS

 Published: September 02. 2011 4:00AM PST
 Bend attorney Daniel Re has been taking on the state’s public employee retirement system in the courts. One of his arguments is that the people who make critical decisions about how Oregon’s Public Employees Retirement System works should not have their judgment clouded by getting a financial gain from it.

All three branches of Oregon government can be made up of PERS beneficiaries. Legislators can get PERS benefits. The governor can get PERS benefits. State judges can get PERS benefits. Is it any wonder then that state law was changed so that obligations to PERS must be paid before paying other bills? That makes funding PERS the state’s top fiscal priority. Is it? We don’t think so.

There are other questions, too. With the legislative branch packed with PERS beneficiaries, is it really a mystery why PERS reforms have difficulty passing the Legislature? And should judges who decide the legality of PERS reforms be PERS beneficiaries?

Re’s latest court challenge zeroes in on the last question. The Oregon Supreme Court decided in 1996 to overturn ballot Measure 8. The measure was approved by voters in 1994 and had several pillars. It would have eliminated a minimum return on pension accounts, limited how sick leave could be used to increase retirement benefits and eliminated the pickup — employers paying the employee contribution to the PERS system.

That employee pickup, for instance, was a matter of debate during the most recent legislative session. Legislators facing as much as a $3.5 billion shortfall proposed now was the time to get rid of the pickup. Gov. John Kitzhaber said so, too. It would have saved the state some $360 million per biennium. The bill died.

Re hopes his case will force the courts to address the issue of PERS judges deciding PERS cases. He recently had a setback of a sort. Court of Appeals Presiding Judge Robert Wollheim rejected Re’s motion to disqualify Court of Appeals judges who are PERS participants from hearing his case. That helps Re’s case, he says. It develops an argument for the U.S. Supreme Court that Oregon courts are denying him his due process rights.

We don’t know if the Oregon Supreme Court judges who decided Measure 8 were swayed by being PERS beneficiaries. It did put them in a position to rule on retirement benefits that provide a clear material benefit to them.

Shouldn’t Oregon come up with a better system? An ideal system certainly wouldn’t have PERS judges ruling on their own benefits or legislators making laws about their own benefits. Some states carve out slightly separate retirement systems for judges or legislators to help minimize such conflict of interest. Why not Oregon?

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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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