Regarding the issue of PERS reform, Secretary of State Kate Brown’s campaign recently proclaimed that “Any debate around PERS should be centered on fairness, not political grandstanding.” That is general statement that most people can agree with. Fairness is important to the legitimacy of any governmental action. But fairness means different things to different people. What fairness means to you will depend upon your interest in the matter being discussed.
One way to learn what fairness means to a person regarding a specific matter is to review how that person has acted with respect to that matter and to assume that the person acted in the way he or she believed was fair. Using that method, an examination of how Kate Brown has acted on PERS matters will show what her concept of PERS fairness is. Kate Brown took many actions regarding PERS while she was a member of the Oregon legislature between 1991 and 2008. Those actions significantly changed PERS and they demonstrate what her view of PERS fairness really is.
After reviewing the PERS actions Kate Brown took while a legislator there can be no doubt that she would do everything and anything required to protect her own PERS benefits, no matter how many future public employees or the people of Oregon would be hurt by those actions. To use paraphrase Sarah Palin, while a legislator Kate Brown fought like a mama grizzly to protect her PERS benefits and nothing could prevent her from doing so.
Here are actions that Kate Brown took while a legislator to protect her PERS benefits:
In 1995, she voted to create PERS Tier One and Tier Two. Tier One consisted of the PERS members, including Kate Brown, who were first employed by the state before 1996. Tier Two was made up of PERS members who started working for the state after 1995. Tier One members got to keep all the PERS benefits that existed before 1996. Tier Two members received lower benefits and the cost saving generated by those lower benefits were used to make sure the Tier One members would continue to receive their full benefits. These are some the benefit differences between Tier One and Tier Two:
1. Normal retirement age of Tier One is 58, for Tier two it is 60;
2. Tier One members receive a guaranteed minimum rate of return on their member accounts, Tier two members do not;
3. A formula plus annuity benefit is available to Tier One members but not available for Tier Two members;
4. Tier One members receive an Oregon state income tax remedy but Tier Two members do not;
5. Tier One members get to include unused vacation pay as part of their final average salary which increases their PERS retirement benefits, Tier Two members do not receive that benefit.
By 2003, it was clear that the 1995 benefit reductions forced upon the Tier Two PERS members would not be sufficient to allow the Tier One benefits to be fully funded. More drastic PERS cuts were required. That is when Kate Brown and the other Tier One PERS legislators invented the Oregon Public Service Retirement Plan (OPSRP) which imposed additional retirement reductions on all PERS members first employed by the state after August 28, 2003. These are the retirement benefit reductions imposed on OPSRP members:
1. Normal retirement age increased to age 65;
2. No member accounts, which eliminated the ability to receive earnings on regular accounts and on variable accounts and also eliminated the ability to get the money match;
3. The employer funded benefit factor was reduced from 1.67% to 1.5%, which reduced that benefit by 10%;
4. No more lump sum vacation payout being included in covered salary, this reduced the employer funded benefit;
5. No more use of unused sick leave being included in final average salary, this reduced the employer funded benefit;
6. No more use of 6% employee contribution pick up being included in final average salary, which reduces the employer funded benefit; and
7. If OSPRP member retires in mid-year, the COLA payment for the retirement year is pro-rated, where as if a Tier One or Tier two member retires mid-year, that person receives the full COLA for the entire year.
A review of the actions taken by Kate Brown to protect her Tier One PERS benefits shows that when she says PERS fairness, she means protecting Tier One benefits at any cost and any action taken to do that is fair. The end justifies the means. Consistent with that philosophy, Kate Brown has never seen a PERS benefit reduction for future public employees that she didn’t vote for. While not all PERS members would agree with that position nor would many of Oregon’s non-PERS citizens, Kate Brown’s idea of PERS fairness would clearly be supported by every Tier One mama grizzly.