In 1943, the Oregon legislature created a retirement plan for Oregon’s judges. Two years later, the legislature created PERS. For the next thirty-eight years, the judges remained in their separate retirement plan and could not join PERS. This fact insured that PERS lawsuits would be decided by judges who did not have a direct, substantial interest in the case.
When PERS was first created in 1945, Oregon legislators were also prohibited from joining PERS. The PERS prohibition for legislators, however, was removed by the Oregon Attorney General in 1971. Between 1971 and 1981, PERS legislators doubled PERS benefits. In 1983, 84 of the 90 legislators had joined PERS and to protect the PERS benefit enhancements they had put in place during 1971 – 1981, they passed a law that put the Oregon judges into PERS.
If the 1983 law required all PERS cases to be decided by PERS judges, the legislature would have stacked the deck in favor of PERS members in every PERS lawsuit. The 1983 law did not say that every PERS cases had to be decided by PERS judges, but that is the position the Oregon Supreme Court has taken. Numerous post-1983 court decisions have held when it comes to PERS lawsuits, PERS judges are entitled to be the judge of their own case, even though that position is repugnant to the concept of fundamental fairness.
I do not believe that the legislature gave PERS judges the right to decide PERS cases and I have asserted that argument in a case pending in the Oregon Court of Appeals. But, assuming that the legislature did give PERS judges the right to decide PERS cases and assuming further that the legislature had the power to enact such a law, a very interesting opportunity would exist for future legislatures. Nothing would prevent the legislature from creating a new retirement plan for judges and requiring every judge to join that plan. The new retirement plan could provide that every time a judicial decision that reduced PERS benefits became final, a percentage of the savings in PERS funding that resulted from that decision would go into the judges’ new retirement plan.
The suggestion that the legislature could pass such a law seems absurd but that is what the Oregon courts have repeatedly held that the legislature did when it required the judges to join PERS. Look at Ballot Measure 8. That measure eliminated three PERS benefits that PERS judges and most other PERS members were receiving: the pick up of their employee contributions; a guaranteed minimum rate of return on their employee accounts; and, the use of unused sick leave to determine their final average salary. When the people passed Ballot Measure 8, PERS benefits for the judges and other PERS members were reduced. But when the judges later invalidated Ballot Measure 8, they made a final decision that increased PERS benefits and they received a share of that increase.
Would turnabout be fair play?