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Senate Republicans call for veto override on PERS bill

by In the news Monday, January 25. 2010

Senate Republicans call for veto override on PERS billBy Oregon Senate Republicans,

Salem, OR — Oregon Senate Republicans are calling for an immediate veto override of Senate Bill 897 when the legislature convenes in February. Republicans believe that this bill is crucial to protecting public employees from unfair retirement calculation errors. The bill passed the Senate 28 — 0 in the 2009 legislative session.

“‘It’s time to stop letting bureaucrats dump liability for their mistakes onto the backs of citizens,” said Senator Ted Ferrioli (R-John Day). “Under a policy advanced by the current administration and defended by Governor Ted Kulongoski’s veto, if bureaucrats screw up, retirees lose. If they complain, the government says, ‘You trusted us? Too bad.’” The bill is intended to protect fairness and encourage accountability in Oregon’s Public Employee Retirement System (PERS). The bill allows more PERS retirees to purchase health insurance benefits, allows all eligible service to be credited towards retirement, and allows a retiree to occupy the Board position designated for a PERS member.

Most importantly, the bill demands that data used to calculate retirement benefits be verified by state officials and locked in. In the past, the discovery of misapplied formulas has changed benefit calculations after the fact, leaving retirees with lower retirement income than their plan selection promised.

In some cases, retirees have been ordered to pay back the difference months after the error, upending retirement plans and forcing some workers out of retirement.

“While many people believe we still have a long way to go with PERS reforms, almost no one but Governor Kulongoski believes retirees should pay for state agency math errors,” said Ferrioli. “Overriding this veto is the right thing to do.”

The veto override will be among the first orders of business when the legislature convenes on February 1st.

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Posted by at 06:04 | Posted in Measure 37 | 12 Comments |Email This Post Email This Post |Print This Post Print This Post
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  • retired UO science prof

    So, the Republicans are trying to protect the rights of PERS members. The night before the tax election! This is going to be a hard sell.

  • Steve Plunk

    Once again I find myself agreeing with the professor and wondering what’s up with this?

    PERS is a corrupt system from top to bottom, why would anyone want to do anything but radically change it before it bankrupts the state? First order of business February 1st should be to assess the damage the new rates will impose upon local jurisdictions and especially school districts. PERS is unsustainable and will either be reformed now or it will reform itself in a catastrophic manner down the road.

    Ferrioli sees no common sense in paying back what was mistakenly given? Tell that to a bank the next time they make an error. How about the taxpayers when the state underestimates a project cost? Do we get our money back? Sure bureaucrats screw up but why allow special treatment for retired state employees? Speaking of screw ups, who voted for this in the first place? A 28-0 vote means they all did. Go ahead and give back your pay for doing such a lousy job. That’s fair.

    Even Republican politicians don’t get it anymore.

    • Anonymous

      The chances of “radically changing” PERS are very slim. The courts have already spoken that the 8% guarantee for the Tier 1 people is a contractual obligation. Bankruptcy is not a very attractive alternative. The state is going to have suck it in and cover this. If it is really so onerous to cover it, freeze or cut the salaries of the Tier 1 people. A good bitter strike followed by a union cave-in should do the trick.

      • Steve Plunk

        You may have hit on the solution. Instead reforming PERS reduce salaries of Tier 1 people until total compensation is back in line. The PERS contract is upheld and the state’s taxpayers are saved.

        • Anonymous

          Right. Just remember, you’re going to have to fight the unions very hard to do that.

  • Mort

    They messed up on my calculations and I am getting over 100K a year now from those people! Ain’t life great?
    I only made about 75K when I “worked”.
    Luckily I got out before all the court decisions – you can’t do this anymore.
    Oregon – we love dreamers.

    • rural resident

      Yes, Jerry (AKA Mort, Diamond Jim, etc., etc., too many others to mention). We know you dislike PERS. So what else is new. Instead of creating fake people with fake situations, just state your actual views and go on. This practices gives Oregon Catalyst a bad name. People reading postings don’t know if what they’re reading is real.

  • Rupert in Springfield

    Oh good lord, someone is seriously advancing the argument that mistakes in retirement calculations should not be paid back by the beneficiary?

    On what planet? Look, at some point it has to be realized PERS is a retirement system, not a lottery winning.

    In every other facet of life, taxes, a mortgage whatever, if there is a screw up discovered you have to pay it back no matter which side of the equation you are on. No one is asking PERS retirees to pay for the mistakes of others. They simply shouldn’t be allowed to benefit from the mistakes of others and that’s what we are talking about here.

    If there is a miscalculation in benefits and that mistake is not discovered until later, the proposition that a PERS retiree should get to profit from that mistake as a matter of law is absurd. PERS is more than lucrative enough for those who benefit from it. The idea that those who are already riding a cash cow should benefit from any mistake made is a little absurd.

    This sounds like one good thing Ted has done.

  • mrfearless47

    That actually isn’t what SB 897 does. It simply makes PERS audit and verify the calculations BEFORE an individual retires and makes PERS responsible to audit for errors if an individual points them out in a retirement estimate. The case driving this is one called Kay Bell v PERS. It was a case where Kay Bell repeatedly notified PERS that there were errors in her estimates (over a period of 5 years). PERS reassured her that there were no errors. When Kay Bell retired, her account was audited over a year later. It was then, and only then, that errors were discovered. PERS wanted its money back immediately, with interest. The jury voted 12-0 in favor of Kay Bell. She wasn’t allowed to keep the erroneous money, but she was awarded attorney fees and punitive damages against PERS for $200,000.

    All SB 897 does is to move the audit up to before retirement rather than after. Once the audit is done and the benefit certified, PERS can no longer came back and report errors. It puts the burden of proof on PERS rather than on the member.

    • Steve Plunk

      Thanks for the clarification. Why couldn’t Sen. Ferrioli state the obvious rather than blather on like he did?

      Still, this is less of a priority than a complete PERS overhaul before we are bankrupt.

  • Garage Wine

    And with this bit of silliness, I present to you the Oregon Republican’s plan for holding a permanent minority.

    [Now where do I find "Tea Party" on the voter registration card?]

  • mrfearless47

    To all of the PERS haters in the audience. Please read my post above. Sen Ferrioli simply goes overboard in his description of SB 897. It doesn’t award PERS members anything to which they are not entitled. It simply puts the burden on PERS to make sure its calculations are correct before authorizing benefits to be paid. There is no free money here.

    And, the bill gives PERS until 2011 to figure out how to implement this. There are simply too many sloppy errors that PERS makes when a person retires for anyone to have confidence in the figures PERS provides. Retirees should get what they are allowed – no more and no less. This is intended to restore confidence that the benefits are calculated correctly and that PERS won’t come back later and say, oopsie, we made a little mistakey-poo. You owe us $100,000.

    PERS calculations are incredibly complicated for the average person. The information PERS provides are not always transparent and the calculations not always obvious. Now, the burden is on the individual to determine whether PERS’ calculations are initially right or wrong. SB 897 makes the responsibility belong to PERS, where it rightfully belongs.

    No retiree will get any benefit to which he/she is not legally entitled. This bill just ensures that the retiree’s calculations are correct to begin with.

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