The state's bipartisan leadership games the system for personal and political advantage.
They sent a message regarding PERS. Don't be a sap. Get yours.
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| Oregonlive Story |
Oregon's Public Employee Pension Plan is underfunded and in trouble. It is a budget albatross around the neck of every public body whose employees are part of the system. Current needs--like paying teachers who are going to work today--are underfunded to pay the pensions of long retired employees, plus the calculated future benefits for older current employees. In hindsight, the formula for retirement pensions was much more generous than expected, but they have a contracted right to get what they bargained for.
The PERS pension idea was that employees would get income in retirement following their long career as a government employee. It was based on a formula: number of years of service times a percentage of the employees salary at the final 3 years. Another assumption was a person would have a typical career progression and the salary (and therefore deposits into the pension investment pool) in the early and middle years predicted the salary at the end, so the deposit pool would be big enough to pay the pension.
"Spiking" games the system. Spiking is making the final three years' income unusually high, which causes the formula to calculate a happy result for the employee: lifetime income based on those splendid final three years. Sometimes the spiking is incidental and manageable, for example a teacher gets a promotion to Vice Principal.
But sometimes it is pure, simple, and obvious political deal making and trickery. The governor appointed two senior legislators to the Northwest Power Council. Everyone in a position to solve Oregon's pension program--statewide office holders, legislators, union representatives, pension consultants--sees what is going on. It was a deal. It was spiking to game PERS.
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| Willamette Week Story |
Governor Kate Brown is a Democrat. State senator Ted Ferrioli is a Republican. State senator Richard Devlin is a Democrat. These senators are people in a position of unusual power. Devlin was co-chair of the Joint Ways and Means Committee. Ferrioli was the Senate's minority leader. Both have been serving in the legislature since election in 1996, over twenty years. Legislator incomes are PERS eligible. State legislators are paid just under $24,000 a year, and deposits to PERS reflected that income. The Northwest Power Council is a three state consortium that advises on energy and fishery issues. The job is considered a plum political appointment. It pays $120,000 a year.
Governor Brown made a lucrative thank-you gift to two powerful legislators. Legislators avert their eyes. It is a bi-partisan deal. Senators Ferrioli and Devlin are good guys, long serving people. Somebody has to get the appointments, and who better than them, and the pension based on 24 years at $120,000 a year--thanks to the three year spike--is five times a pension based on 20 years at $24,000 a year.
No one wants to raise a voice. It is bi-partisan.
No one wants to raise a voice. It is bi-partisan.
Politically motivated spiking isn't new. This area's long serving Lenn Hannon, a Republican, after some 20 years as a state senator, received an appointment by Democratic Governor John Kitzhaber to be on the state Parole Board. It was win-win politically and personal. Hannon gets a state funded retirement based on a great final three years; a Republican incumbent vacates a seat facilitating replacement by a Democrat. People stayed quiet. Lenn Hannon was a good guy.
It was all completely legal. The appointments were arguably legitimate. Nobody was hurt--except, of course, the solvency of PERS and Oregon's reputation for good, clean government.
The problem with gaming the system is that people notice. A PERS solution requires the various stakeholders to think big and courageously about the real, long term mission of Oregon government. It take a civic mindset. Bi-partisan state leadership just demonstrated that the integrity of PERS is secondary to that. The legislators got a very nice bonus. Oregon became just a little bit more like New Jersey.
It was all completely legal. The appointments were arguably legitimate. Nobody was hurt--except, of course, the solvency of PERS and Oregon's reputation for good, clean government.
The problem with gaming the system is that people notice. A PERS solution requires the various stakeholders to think big and courageously about the real, long term mission of Oregon government. It take a civic mindset. Bi-partisan state leadership just demonstrated that the integrity of PERS is secondary to that. The legislators got a very nice bonus. Oregon became just a little bit more like New Jersey.
PERS employees get the message: don't be a sap. Take care of number one.
2 comments:
Kate Brown, pulling these kind of BS shenanigans is going to turn this state over to the Republicans, and is feeding directly into their playbook. She is obviously not as smart as I had previously thought. I won't read any comments in the papers after this is reported, the bile and venom will be more than I care to partake of.
I didn't see it pointed out, in the otherwise solid piece of reporting, that Ferrioli spent his career in the Legislature railing AGAINST PERS, and how awful it is. Devlin may be an opportunist, but Ferrioli's an opportunist and DAMNED HYPOCRITE! How unusual for a Republican "leader."
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