Kate Brown And The PERS Benefit Tiers

Oregon’s Secretary of State, Kate Brown, was appointed to the Oregon House of Representatives on November 26, 1991.  She remained a member of the House until January, 1997, when she took office as an Oregon Senator.  She continued as a Senator until she became Oregon’s Secretary of State in January, 2009.  PERS records indicate that Kate Brown first became a PERS member in 1992.  That makes her a Tier One PERS member.

From the date Kate Brown first became a PERS member until December 31, 1995, there were no PERS benefit tiers.  All PERS members performing similar services for the same length of time received the same retirement benefits.  Today, there are three separate PERS benefit tiers, Tier One, Tier Two and the Oregon Public Service Retirement Plan (OPSRP).  Public employees who started work for a PERS participating employer before 1996 are Tier One members.  They make up 27% of active PERS members.  Public employees who began work after 1995 and before August 29, 2003 are Tier Two members.  They also make up 27% of all active PERS members.  The remaining 46% of active PERS members were first employed after August 28, 2003 and they are the OPSRP  members.

The retirement benefits available to PERS member depend on what benefit tier the member is in.  Tier One members get the highest and best benefits.  The benefits for Tier Two members are not as good Tier One benefits.  The members of OPSRP receive the lowest benefits.  For detailed information on the benefits available to Tier One, Tier Two and OPSRP members, see: http://www.oregon.gov/PERS/docs/general_information/pers_by_the_numbers_4_12.pdf.

The Tier Two and OPSRP benefit tiers were created for only one reason.  After Oregon legislators were allowed to join PERS in 1971, they substantially increase PERS benefits.  By 1995, it became obvious that those benefits were too expensive if future PERS members were to receive them.  So, the PERS legislators had to make a choice. They could reduce PERS benefits across the board and maintain just one level of benefits for all PERS members, current and future, or they could maintain the enhanced benefits just for the current PERS members, including themselves, and pay for those enhanced benefits by reducing benefits for all future PERS members.

After carefully considering those two options in 1995 and again in 2003, the PERS legislators made their choice and it was the same choice both times.  They decided to maintain the existing PERS benefits for themselves and all other current PERS members and to reduce benefits for all future PERS members even though the future PERS members would perform the same services and would be of equal importance to the people of Oregon.  The decision by PERS legislators to create benefit tiers was not in the best interest of the people of Oregon, since it would likely create resentment among future public employees and that resentment could affect the quality of the services they provide.  The decision to create benefit tiers was in the best interest of the PERS legislators who created them.

Kate Brown is a Tier One PERS member.  She was in the legislature each time a new PERS benefit tier was created and she voted in favor of  creating both Tier Two and OPSRP.  In doing so, she and the other Tier One PERS legislators clearly stated that their PERS benefits were more important than the benefits of all public employees who came after them and that they would do whatever was necessary to protect their benefits.

The problem with the thinking of Kate Brown and the other Tier One PERS legislators who invented the PERS benefit tiers is that PERS retirement benefits are given to public employees by the people of Oregon, not by PERS legislators.  It is inappropriate for legislators who are PERS members to use their position of public trust to benefit themselves at the expense of the people they represent.  If different PERS benefits are to be paid to public employees based solely upon the employee’s date of hire, that decision must be made by the people of Oregon, not by PERS legislators.  Since that was not done, the legitimacy of the benefit tiers is in question and will remain so until the people have voted on whether those benefit tiers should exist.

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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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