Legislators Shouldn't Govern PERS and Benefit from It, Too
Byline: Daniel Re
The year 1975 was a turning point. It was the year that the Oregon Ethics Code became effective. It was also the year that the Oregon Legislature, despite the ethics code, passed a law allowing them to join retroactively the Public Employees Retirement System. With most legislators in PERS, control over PERS shifted in 1975 from the people to PERS-covered legislators.
The ethics code had been referred to the people by the Legislature, and it was approved by voters in the 1974 general election. The code declared that a public office was a public trust and that public officials were prohibited from using their official position to obtain personal financial gain, other than salary, honoraria or expense reimbursements.
All the legislators who joined PERS would have the opportunity to use their positions to obtain financial gain each time PERS legislation came up. During the next 20 years, numerous PERS laws were enacted that substantially benefited PERS members and drastically increased the cost of funding PERS benefits.
In 1979, legislators passed the PERS employee contribution pickup law. Before 1979, all public employees were required to make contributions to their retirement plan. After the pickup law, every public employer was allowed to make the people of Oregon, rather than the employee, pay each employee's PERS contribution - and most public employers did just that. The people were even required to pay the employee contribution for each PERS legislator.
In 1983, legislators forced almost all Oregon judges to become PERS members. That created a conflict of interest that prevented PERS cases from being decided by independent judges.
In 1989, legislators passed a law that made PERS funding Oregon's highest financial priority. Under that law, public employers were required to pay their PERS assessments before providing the services they were created to provide.
That is why a school district facing a budget shortfall cuts back teaching children rather than reducing its PERS payments.
By the mid-1990s, the changes had created PERS retirement benefits so generous that public employees were able to retire in their mid-50s with a retirement benefit equal to their full salary. That was not only unreasonable, it was unsustainable.
Many bills were introduced in the 1995 Legislature to address this problem. House Bill 2476 proposed lower retirement benefits for public employees hired after 1995. House Bill 2477 provided that legislators and statewide elected officials would be prohibited from joining PERS after their current terms expired. …