Home Opinion Editorials PERS, revealed
BAKER CITY HERALD EDITORIAL BOARD
We have a much better idea now why officials from PERS, Oregon’s retirement system for public employees, were so reluctant to release details about the benefits paid to retirees.
So reluctant they went to court to try to shield information to which Oregonians are clearly entitled under the state’s public records law and which PERS, prior to 2002, routinely divulged.
Fortunately, PERS lost.
And late last week The Oregonian, which along with the Salem Statesman Journal had sued to gain access to the PERS records, published quite a lot of material.
In general the story that material tells is a familiar one.
PERS, which covers employees from school districts as well as most city, county and state agencies, is a fiscal debacle. The system guarantees pensions to many of its 117,000 beneficiaries that more resemble lottery windfalls than a prudent use of public dollars.
The most egregious aspect, which was available only to PERS members hired before 1996 (the so-called “Tier 1” cohort), guarantees employees an 8-percent annual return on their accounts.
Bear markets? No worries.
Well, we’re worried.
Last year, to ensure PERS could meet its obligations to retirees — a minority of whom earn more in retirement pay than their highest salary while they were still working — the system increased the amount that cities, school districts and other public employers have to pay.
Baker City, for instance, saw its annual PERS bill rise by about $75,000. The Baker School District will pay an additional $543,935.
Statewide, the PERS tab went up by $1.1 billion for the two-year budget cycle that started July 1, 2011.
That’s money that could be — and should be — available to hire teachers, police officers and other public employees.
To be clear, we’re not suggesting that any PERS member is not entitled to his or her pension.
And, just as the booming beef market that benefits local ranchers also enriches the county’s economy, so do lucrative public pensions.
PERS is perfectly legal.
It’s also perfectly ludicrous in its generosity, seemingly the product of fantasy rather than fiscal reality.
The Legislature has fixed the worst parts of PERS since Tier 1 ended 16 years ago.
But school districts and local governments, and the taxpayers who support them, will be saddled with the effects of Tier 1 for at least the next few decades.
Many of those PERS members who are drawing a bigger pension than they did a salary retired in their 50s. Those pension checks are for life, and they can’t get smaller (in fact there’s a 2-percent annual cost-of-living increase).
There is, though, a lesson to be gleaned.
Among the more annoying facts about PERS is that most of the people who designed the system are also beneficiaries — legislators and state elected officials among them.
One of the best ways to pull the blanket off this sort of too-cozy arrangement is to make sure the public, and the media, have the full access to public records and public meetings as enshrined in Oregon law.
Without that access, we might not have realized the extent to which PERS is forcing public employees to pay retirees rather than hire new workers.
And without that access we might not prevent another PERS-like mess from fouling public agency budgets for the next half century.