Oregon forces lawmakers to keep PERS

by Shelby Sebens, Northwest Watchdog

PORTLAND — Oregon’s retirement plan for lawmakers borrows a line from the Eagles’ iconic hit “Hotel California.”

“You can check out anytime you like, but you can never leave.”

But some lawmakers want to check out and, well, leave.

NO ESCAPE: Oregon law won’t let some lawmakers who want off the state’s pension plan go

State Sen. Tim Knopp, R-Bend, is working on legislation that would take all future lawmakers off Oregon’s Public Employees Retirement System, already $14 billion in the red. The bill, in draft form and yet to be filed, will be amended to change a quirk in state law that prohibits lawmakers from opting out of PERS if they took part in the Oregon Public Service Retirement Plan — created in 2003 when lawmakers last reformed PERS — before they were elected.

I WANT OUT: State Rep. Julie Parrish, R-West Linn

“I’m stuck,” said state Rep. Julie Parrish, R-West Linn, who worked in the West Linn-Wilsonville School District before she was elected in 2010.

Parrish wants out, but the state won’t let her. She even has a letter on her desk from the PERS office telling her she has no choice. But she refuses to sign her retirement election forms — “Why bother,” she says — and upped her charitable giving to compensate for the retirement money she doesn’t want.

Knopp, who served in the Legislature from 1999 to 2005 before he was elected again in 2012, has declined PERS this time around, which was allowed because he closed his account after first leaving office. Other new lawmakers had to make that decision by Feb. 12, and PERS officials have said the list of who opted in and out should be available by the end of this month.

“My point all along has been that there needs to be somebody in the system who is truly looking out for taxpayers that doesn’t have a conflict of interest,” Knopp said. “The Legislature didn’t start out in PERS. They put themselves in,” he said. Lawmakers passed legislation in 1975 allowing them to take part in PERS.

As of November, 25 lawmakers elected for the 2011 session were part of the OPSRP plan. It’s unclear how many were like Parrish and didn’t have a choice. Three members declined any retirement plan, and the rest either opted for the Oregon Growth Savings Plan — a deferred compensation similar to a 401(k) that does not take money from the PERS fund — or were elected before 2003 and chose to stay on PERS. It is unclear how many lawmakers hired before 2003 have opted to stay in PERS.

NO PERS: State Sen. Tim Knopp, R-Bend

Knopp campaigned on a promise that he would not be part of PERS. Instead, he opted for the growth savings plan, which puts 6 percent of salary into a 401(k)-type retirement plan.

But for lawmakers, staying out of PERS is more about conflict of interest than about money. With a $21,936 salary and a $123 per day per diem, they would not pull huge pensions. Still, they are making serious choices about a bleeding system that’s blowing holes in the state budget.

“Whether it’s real or just potential, there is, in the eyes of the people we serve, a potential conflict between being a PERS participant and voting on PERS reform bills,” said state Rep. Jason Conger, R-Bend, who also opted out of PERS and instead went with deferred compensation. He plans to be a sponsor on Knopp’s bill.

Knopp is in the process of shopping for more sponsors.

“We want to create a lot of momentum as it relates to removing the conflict for legislators,” he said.

And he wants to include a way out for lawmakers such as Parrish.

“I think that’s only fair,” he said. “If somebody doesn’t want to be in they should be able to opt out.”

What’s also unclear is why lawmakers wrote and passed a law – Knopp actually led reforms and chaired a PERS committee – that doesn’t give lawmakers a way out, should they choose to leave.

PERS spokesman David Crosley said his office couldn’t comment  because the Legislature produced the law, and the legislature can fix it.

Because of court rulings, Knopp’s proposed legislation won’t affect lawmakers already on PERS.

Northwest Watchdog is a project of the Franklin Center for Government & Public Integrity