How PERS Took Control Of Oregon

In Oregon today, there is no doubt that PERS is king.  PERS funding is the state’s highest financial priority.  The people of Oregon have created over 900 governmental agencies and almost all of them participate in PERS.  Each one of those agencies was created to provide a service, such as educating children, providing police and fire protection and to assist persons in need.  Providing the service for which the agency was formed, however, is no longer the agency’s primary obligation.  The first responsibility of each PERS participating employer is to pay PERS  contributions for the agency’s employees.  If there is not enough money to pay PERS and to provide  services, the services must be reduced so that the PERS payments can be made.  No state service is immune from  cutbacks if PERS needs money.

The basic purpose of Oregon’s government has been totally reversed, from providing for the state’s citizens to providing for the state’s public employees.  This change, however, was not made by the people of Oregon.  It was made by PERS members who seized control of Oregon’s government during a thirteen year period from 1971 to 1984.    On January 1, 1971, PERS members did not control a single branch of Oregon’s government.  By January 1, 1984, PERS members controlled every branch of Oregon’s government.  And they used that power to give PERS the top priority.

What happened to give PERS complete control over Oregon in such a short period of time?  That’s an easy question to answer.  You just have to follow the facts.

In 1971, the Oregon Attorney General ruled for the first time that legislators could join PERS.  That single event opened the door for PERS domination of Oregon and most Oregon legislators stampeded through that door as fast as they could.  In doing so, those legislators abandoned their obligation to provide independent representation  to the people of Oregon on PERS matters.

Once they were allowed to join PERS, here’s what the legislators did:

1973.  They authorize unused sick leave to be used to determine part of PERS retirement benefit.

1975.    (1) They passed a law that allowed any person who ever served in legislature to retroactively join PERS.  This retroactive right was kept open for the next twelve years.

(2)  They passed another law that allowed legislators to earn PERS retirement credit for service after age 65.  They became the only elected officials who could do that.

(3) They passed yet another law that made the people of Oregon guarantee them that their employee PERS accounts would never earn less than a “guaranteed minimum rate of return”.   Then they gave PERS members the right to decide what that guaranteed rate was going to be.

1979.  31 of 60 Representatives and 24 of 30 Senators were PERS members.  They passed the PERS pick up law, which was to expire June 30, 1981.  The PERS pick up allowed PERS members to make the people of Oregon pay their employee PERS contributions for them and it increased their employer funded benefit.  Then they passed a special law that specifically allowed  the employee contributions of all PERS legislators to be picked up.

1981.  They made the PERS pick up permanent.

1971 – 1981.  During this ten-year period, they increased the employer funded retirement benefit from 20% of final average salary to 50% of final average salary.

1983.  84 of the 90 legislators were PERS members and they passed a law making all Oregon judge join PERS.

(1)  Persons who became a judge for the first time after 1983 automatically became PERS members if they are less than 72 years old.  PERS judges had a 7% employee PERS contribution but the law required that contribution to be picked up for the judges.

(2)  Existing judges were given the option to join PERS or stay in their original retirement plan.  If they stayed in original plan, they had to pay the 7% contribution.  But if they joined PERS, their 7% contribution would be picked up for them.  That gave every judge who joined PERS an immediate 7% salary increase.

Then, in 1989, when 82 of the 90 legislators were PERS members, they passed a law allowing the State to withhold all money owed to a public employer until that employer’s PERS assessment was fully paid.  This law made funding PERS Oregon’s top financial priority.

None of the above PERS provisions existed BEFORE legislators were allowed to join PERS.  After the legislators joined, they stacked the deck totally in favor of PERS.  That is why the education of our children and grandchildren is being cut back.  That is why cities, counties and the state are laying off police officers.  That is why the State Department of Corrections is releasing inmates before they have served their mandatory sentences.  There is not enough money to go and PERS comes first.  And with PERS members in control the government, no PERS law can be made or changed with out the express approval of those PERS members.

That’s how PERS took control of Oregon but it’s wrong and it must change.  And it will change, if the people demand it.


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.
This entry was posted in fundamental fairness, Oregon judges, Oregon legislators, Oregon legislature, Oregon PERS and tagged , , , , . Bookmark the permalink.

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