Oregon PERS Part 3: A Historical Look into a Troubled Past


In this last blog of a three part series about The Oregon Public Employees Retirement System (PERS), we’ll take a historical look into a past filled with hardship, new beginnings, record inflation and controversy.

House Bill 344 creating The Oregon Public Employees Retirement System (PERS) was passed March 17, 1945[1]. The bill was motivated by several factors including the ineligibility of social security for state and local government employees, the emergence of pension plans in other states across the US, the “hidden costs of pensions” in the state budget as workers continued to be on the payroll long after they effectively retired and the devastation of the Great Depression that drove the majority of our nation’s elderly to live in poverty. The new legislation, effective July 1, 1946, immediately became known among legislators as one of the best retirement programs in the country despite strong employee resistance to the notion of being “forced” out of their jobs by retirement. 

Since its inception, the program has been heavily debated and reformed many times.

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Oregon PERS Part 2: 2013 Proposed PERS Legislation


In part 1 of this 3-part series we reviewed the current Oregon Public Service Employees Retirement Plan (OPSRP) and the significant events leading up to the plan that became effective for employees hired after August 28, 2003. Now in part 2, we’ll examine what’s being proposed in the 2013 legislative session that sets the July 2013-June 2015 state budget and the potential effects of these proposals on employee retirement benefits. 

There are currently two reform bill proposals submitted to legislation for consideration.

The first is SB8221, proposed by Senator Richard Devlin, Co-Chair of the Ways and Means committee. Second, a proposal first introduced by Governor John Kitzhaber and later codified and expanded on in SB7542, sponsored by the Oregon School Board Association.  Both proposals contain provisions to cap or lower the annual cost-of-living adjustment (COLA) and eliminate state tax remedy for out-of-state retirees.

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The Current Plan, Oregon Public Service Retirement Plan in Review: Part 1

The Oregon Public Employees Retirement System (PERS) has been one of the most controversial issues for the state of Oregon since Governor Snell signed House Bill 344 into law effective July 1, 1946. Since the market downturn in 2008, the system is faced with a potential Unfunded Account Liability (UAL) of over $14 billion of which 99%[1] of the deficit is attributable to Tier 1 and Tier 2 program liabilities. What’s worse is there are approximately 150,000[2] vested Tier 1 and 2 employees, as of September 30, 2010, that have not begun collecting benefits and that’s in addition to the already 110,000 active retirees in Tier 1.

Oregon can’t ignore the weight of the PERS program on state employers and taxpayers.

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