I presume that Mr Harris means "105% of Final Average Salary", not "105% of pension". In either event, this information is misleading. A small number of Tier 1 retirees jumped on the bandwagon and retired following the run up in the stock market. It would be far more informative to know what the MEDIAN pension benefit was for the same cohort.

For example, if fifty of us are on a bus, and we all make $50,000 per year, both our AVERAGE salary and our MEDIAN salary are $50,000. If Bill Gates climbs on, and he makes $100,000,000 per year, then our AVERAGE salary is now over $2,000,000 per year, but our MEDIAN salary is still $50,000.

Take a look at page 71 of the PERS Comprehensive Financial Report for 2004:

http://tinyurl.com/7uf24

Notice that the AVERAGE pension has fallen from $2666 in 2003 to $2346 in 2004, and will continue to fall with the legislative changes. Unfortunately PERS does not provide MEDIAN figures for the same retirees. I don't know what the average salary is for all state workers, but a $2,346 per month pension benefit amounts to just over $28,000 per year. That's about $13.50 per hour - if that is 105% of FAS, then the average state employee makes about $12.98 per hour.

Doesn't look quite so lucrative, does it?

As and admirer of the former VP Humphrey, I don't recall him as someone who talked perception more than what is actually going on. He would have known the details of the situation, not just "the perception".

So I ask of this quote: The perhaps cruel fact is that the Oregon taxpayer is not willing to pay additional monies for anything so long as it sees public employees retiring at 55 with 105% of their pension, and medical benefits far in excess of the norm. And while the modest changes made recently help, they left largely intact the overly generous retirement, and didn't even address the medical benefits.

1) Where does "the Oregon taxpayer" live, and is it possible to interview him/ her and find out specifically what they believe? Or is this based on election results alone? 2)Just how many retirees fit the description "so long as it sees public employees retiring at 55 with 105% "? Why would "retired" teachers join the substitute list in their district or another district if they all retire with 105%? Which employees in this state have medical benefits which are "the norm"? Or is it possible that is just one example used as propaganda for the whole? Do "all Republicans" agree with Kevin Mannix, Ben Westlund, Karen Minnis? Are "all Democrats" totally in unison with everything that Howard Dean or Harry Reid or Ted Kulongoski has ever done? Or is this just a propaganda device that someone as politically savvy as the former Vice President would have recognized as propaganda? 3) How many public employees in this state retire at 55? How many retire at age 65? 4)If you took all the salaries of every public employee who retired in the last ten years (from agency head to lowest paid secretary or other worker) and lined up all the salaries and retirement pay, how many retirees would have benefits at or above 100% of their last salary? How many would have less than that? Are you willing to say that every public employee in this state retired in luxury and none ever struggle to make ends meet? According to this description, no retired public employee would have to worry about $3 gas. After all, they retired on 105% of their last salary, didn't they?

I revere the memory of HHH, as a late friend had the honor of actually knowing "the happy warrior". But I remember a man with the common touch who would explain jargon and not use terms like "tier one employees". Who would know exactly how many retired early at above their last pay rate---and who probably could have designed a better system way back when. Who would not blame retirees for the system they contracted to work under, but the folks who designed the system.

I reject the idea that "the Oregon voter" is a person with static views. There are people who have turned 18 or moved to Oregon since the Measure 30 election, and I would not presume to tell them how to vote. They have the right to decide that for themselves. Not to mention the friend who abstained on Measure 30 as it was too complicated, or the right of voters to change their minds.

I don't think Sen. or VP Humphrey would stand for telling retirees that the system they retired under was all wrong, and now they will have to pay for it.

I think the political climate is changing in this state, away from "as long as we cut taxes and attack public employees we will have a wonderful state". (See the Tabor Pains II post, not to mention that the US Senate won't be voting on estate tax repeal any time soon.)

As someone who first voted in 1968, I recall the common touch of Humphrey, and this post does not honor the memory of the Senator and VP from Minnesota. He came out of the same DFL tradition as Paul Wellstone. That is a tradition of honoring labor unions. That is not a tradition of saying tax cuts are written in stone and the only way to hire more public employees is to change the retirement system for those who have already retired as there is no other way to get the money to pay for more public employees.

Humphrey was a gentleman of the old school--gracious manners and often quips (when not being long winded) which showed a real grasp of the details in a situation. He was the definition of "liberal" for a generation, and as such respected labor unions. I don't buy the idea that he would say it was the fault of retirees that the system they retired under had some problems, and therefore the public employees, rather than those who set up the system need to pay the price of fixing it.

He would have known just how many employees retired at 55, how many at 65, or whatever age. He would have had respect for the secretary or other low paid employee, and not expected them to be penalized for working under the contract for pay and retirement benefits signed with their employer. He would have known there was a disparity between low paid workers and agency heads, and not lumped all of them into "public employees" as if a group has no individual members.

If someone wants to say that all tax cuts will be there long after we are gone, and therefore the only way to hire more employees is to blame retirees for the system they retired under because it hurting the chance to hire more public employees, that is your right. Just don't claim that if Humphrey were around today he would agree with you.

Robert, What a refreshing comment. You are exactly on target. This situation should not be a red/blue issue. It goes to the point I have been trying to make: individual compensation (led by PERS Tier I) has become a limiting factor in the ability of the public sector to deliver services. I have focused on education, because it is the largest segment of the Oregon budget. But you are correct, it is the entire Oregon public sector.

                   <b>Oregon K-12 Benefits</b>

....................................................................2005 ... 2007 Social Security (employer contribution) ....... 6.20% .... 6.20% Medicare (employer contribution) ............... 1.45% .... 1.45% PERS (employer share, 66.5% of districts) . 6.00% .... 6.00% Unemployment ............................................. .30% ..... .30% PERS (employer contribution) ................... 16.97% . 22.80% Health Insurance (statewide 2003-04) ....... 14.50% . 17.00%

Total benefits as a percentage of salary ...... 45.42% . 53.75%

According to the Chalkboard Project and ECONorthwest, this is the highest benefits package in the U.S. and is "11 percent higher than second place Wisconsin. They continue, "Salaries and benefits measured per full-time equivalent staff member are high relative to other states. This is easily quantified to be $700 million per year above the 25th ranking state, just in K-12 education alone.

The effect of what you have mentioned, is the primary reason why there are funding problems unique to Oregon. It is why we have fewer state police on the road than 20 years ago as an example. It affects every public sector in Oregon.

In education the relatively very high individual compensation (led by PERS) is the primary reason why some districts are terminating teacher contracts, curtailing programs, enduring large class sizes(4th highest in U.S.)

Thank you for your candid assessment.

From the viewpoint of this moderate republican, Mr. Harris has succinctly stated the repercussions of PERS on the livability in Oregon.

As a side note, negotiations with teachers unions typically reflect their lack of concern for new hires and raising the starting salary. Whereas management typically wants to raise the starting salary so that they can be competitive in their employment market.

Mr. Harris was not blaming public employees. The simple truth is that the PERS plan is still out of line with the median private sector benefits package -- so there is room for more correction. Without that correction the livability in Oregon for anyone who is not a public employee or making more than $50k a year is poor. This needed change can only occur when one of the groups influencing the decisions does something about it.

Mr. Harris probably wasn't old enough to vote when Hubert Humphrey was either a member of the US Senate, a Vice President, or a presidential candidate. That said, I know dozens of people who claimed to be "Humphrey democrats" and who are now Ayn Rand libertarians or just good old conservative Republicans. All that said, Mr. Harris isn't a particularly good statistician, plays fast and loose with numbers, and continues to perpetuate the canard about PERS retirees. As Mr. Gornick has already pointed out, the proper measure of PERS retirees' benefits is the MEDIAN. Mr. Harris cites the 105% figure as though it is the long-term average. It is not. It is for a single year (2000) and does not describe the 39 other years of PERS retirees. The year 2000 is heavily weighted by a number of highly discrepant outliers, including senior managers who had worked for the state (specifically) for more than 40 years. The more meaningful figure is that in 2000, the median was approximately 85% of final average salary (note to Mr. Harris - "105% of pension" is an utterly meaningless number. Every person who retires gets 100% of their pension, no more, no less, regardless of who they worked for. While I would dismiss it as an inconvenient and unfortunate error, put together with the misinformation about PERS retiree health benefits, which are far worse and far more expensive to individuals than most retiree plans, undermines the rest of Mr. Harris' points).

The information that commentor "bailie" recites is correct so far as I know, but applies only to K-12 education and is heavily dominated by the metro area. It doesn't reflect the abysmal situation in higher education or the community colleges, where faculty compensation is in the bottom 20% of the nation -- on a par with Mississippi. It doesn't reflect state police compensation, highway engineer compensation, human services compensation, city and county employee compensation or any of the other thousand or so categories not encompassed by the statistics bailie cites. The only conclusion one can draw from bailie's comments is that some public school employees are fairly compensated; the rest of us manage(d) to hover near the bottom.

mrfearless47, Thank you for your comments. Just for clarification:

1) Are you saying Betsy Hammond was incorrect ("Benefits eat schools cash")? "the average PERS member who worked at least 30 years and retired between 2000 and November 2004 got a pension averaging 107 percent of final salary, an analysis of PERS reports shows"

Can you show the correct data, if you disagree?

2) The statewide average salaries for K-12 teachers (2003-04) is represented in this document: http://www.osba.org/lrelatns/salary/0304smap.pdf The NEA lists statewide average salary at $49,169.00 (2003-04)

3) You say, "The only conclusion one can draw from bailie's comments is that some public school employees are fairly compensated; the rest of us manage(d) to hover near the bottom."

Could you continue to explain ,"near the bottom". Oregon K-12 employees have the #1 ranked benefit package in the U.S. and in salaries there are only 12 states with higher average individual salaries (NEA 2005). What is your data showing that most areas of the state are "near the bottom"?

I feel that the relatively very high individual Oregon K-12 compensation, is the primary reason for Oregon's unique funding problems. We are the 36th ranking state in "per capita income" and we are individually compensating the major portion of the Oregon budget at 8th highest in the U.S. The economic realities of this situation are devastating for Oregon K-12 education.

Thank you, I'm always interested in data concerning this situation. Everything I have researched has been quite consistent.

bailie writes:

"1) Are you saying Betsy Hammond was incorrect ("Benefits eat schools cash")? "the average PERS member who worked at least 30 years and retired between 2000 and November 2004 got a pension averaging 107 percent of final salary, an analysis of PERS reports shows"

Can you show the correct data, if you disagree? "

I'm saying that the average is the wrong measure to use. The median benefit is what should be reported. PERS doesn't happen to use that number and so the results report are actively skewed by outliers in precisely the way Mr. Gornick illustrated in his response. The "correct data" don't exist in written form. I know about 2000 because I asked PERS specifically for the median and one of their senior people provided it to me.

As for the subsequent years, I can tell you that I know the stories of literally hundreds of retirees in that period. Of those, I know exactly ONE whose benefit exceeded his final salary. My own benefit, after 31 years in Higher Education, was 84% of my FAS.

Since every labor statistic normally reported uses the median, not the average, there is no reason why PERS would report the average except that people are too stupid to understand the median and why it should be used. I submit that were data to be released from PERS, you'd find that the median benefit received by PERS retirees from 2000 - 2004 hovers in the 80-85% range and is falling.

bailie again writes:

"3) You say, "The only conclusion one can draw from bailie's comments is that some public school employees are fairly compensated; the rest of us manage(d) to hover near the bottom."

Could you continue to explain ,"near the bottom". Oregon K-12 employees have the #1 ranked benefit package in the U.S. and in salaries there are only 12 states with higher average individual salaries (NEA 2005). What is your data showing that most areas of the state are "near the bottom"?"

I was speaking specifically of other "public school employees" - specifically those in higher education and the community colleges. You can check the statistics on higher education through the AAUP's annual survey of faculty compensation. I'm no longer a member as I'm retired, but their last survey reported that Oregon's public colleges and universities compensated their faculty in the lowest quintile in the nation (bottom 20%). Salaries alone placed them in the bottom decile (10%), while adding the benefit piece placed them in the bottom quintile.

I realize that the compensation for K-12 teachers is relatively high, especially in the metro area. But teachers' salaries and benefits are only part of the total compensation of all public employees. Why don't you try to spend your time accumulating all the hundreds of salary and compensation surveys floating around and try to come up with where Oregon public employees as a whole fall in the total compensation package. Focusing only on K-12 teachers leaves out more than half of public employees in the state.

Once again, looking at page 71 of the 2004 PERS Combined Annual Financial Report (http://tinyurl.com/7uf24) shows that less than 10% of PERS retirees leave employment with over 30 years of service. One cannot extrapolate ANY information about the "final salary" from PERS published documentation. How DID Betsy Hammond determine if this data is correct?

By the way, I read MrFearless47 "near the bottom" comment as referring to non-K through 12 employees.

Several true statements can be made about PERS:

• It is an expensive pension system for Oregon governments, especially as it applies to Tier 1 employees, many of whom are already retired.

• Governments negotiated PERS with public employee unions. Retroactively changing a labor contract more than a decade after its affirmation is difficult to do in a fair fashion.

• Critics of PERS commonly use hyperbolic statistics and unrepresentative anecdotes in discussing the system and its costs.

• Non-Tier 1 employees do not have a particularly generous pension.

So, beyond what has already been changed, how should this "problem" be remedied? I haven't heard critics suggest that employees be reimbursed for the raises they eschewed in return for the PERS upgrades of past contracts that have been unilaterally retracted. As much as government budget stresses, this issue is about the sanctity of labor contracts. If public employees stand by while their contracts are trashed, bad things will happen to all workers, now and in the future.

Are you saying Betsy Hammond was incorrect ("Benefits eat schools cash")? "the average PERS member who worked at least 30 years and retired between 2000 and November 2004 got a pension averaging 107 percent of final salary, an analysis of PERS reports shows"

As Mr. Gornick notes, the CAFR for 2004 reports that only 10% of retirees reach the 30+ years of service mark before retiring. So, not only is the figure based on the wrong statistic, it ignores 90% of the data.

As someone who is skeptical of "revealed truth", I don't like being told that there are "accepted" statistics.

If someone was hired by the state 25 years before they retired, they are not a 30 year employee at retirement, and any reporter who says that only the retirements of 30 year employees were used in a report is not telling the whole story.

I don't like the idea of "average" salaries. Take a major urban district with highly paid administrators. Take a look at the salaries of bus drivers, kitchen assistants, instructional assistants, many of whom are part time. Sure you could look at all the salaries (say for round numbers the district employs 900 people). If you add up the high administrative salaries and the low assistant salaries ($9 an hour, 5 hours a day, but only when school is in session so that the December paycheck isn't going to be as big as the January paycheck because of vacation, so on a yearly basis that isn't a lot of money) and divide by 900 employees, it is technically an average. But what does that really tell you? Especially if the district only pays benefits on those working at least 6 hours a day?

Of course, talking about "Total benefits as a percentage of salary" has more propaganda value, as does averaging in Portland or Beaverton pay packages with small rural district data.

1-Critics of PERS continually compare PERS benefits with those of other states. What they fail to point out is what other states have done to reduce the cost of pension benefits. Every state without exception has realized the intrinsic unfairnes of breaking a contract with long time employees. They have instead reduced benefits for new employees so that they have an opportunity to compare these benefits with other employment options at the inception of their career. California has several "tiers" of benefits as does Washington. No state other than Oregon has decided to tell a person who has spent 34 years protecting society as a law enforcement officer that we (the state) are going to renege on our agreement we made with you 34 years ago and confirmed annually with a "Pers Handbook". No other state has decide to use the "bait and switch" tactics of criminal fraud on its own police.

Karl,

Karl says, "They have instead reduced benefits for new employees so that they have an opportunity to compare these benefits with other employment options at the inception of their career."

Karl, are you trying to say that 34 years ago you were promised the pension you now have? If I remember correctly, 34 years ago, PERS was set to offer about 45 - 50 percent of salary. It was only through gross mistakes by the PERS Board of Directors and the legislature that PERS got out of hand to the detriment of the public sector for years to come.

Best recap of what actually happened from Oregon State: http://oregonstate.edu/dept/senate/agen/reports/PERS0210.html

bailie babbles:

"Karl, are you trying to say that 34 years ago you were promised the pension you now have? If I remember correctly, 34 years ago, PERS was set to offer about 45 - 50 percent of salary. It was only through gross mistakes by the PERS Board of Directors and the legislature that PERS got out of hand to the detriment of the public sector for years to come."

What part of stare decisis don't you understand? The PERS Board has made NO mistakes. The Court only found that they went beyond their discretion for a single year, and even that point remains open for challenge. The Legislature and the public was quite happy to offer me pension benefits to be paid in the distant future in exchange for no salary increases to be paid at the time. Sorry, but your dog won't hunt. The pension system I was promised 34 years ago and which evolved over the time I was employed (until 2002), is the system to which I am both legally and contractually entitled. No amount of rewriting history will change that fact.

RE: Mr. Civiletti's comments. He makes several assumptions that I would not agree with.

First, the cases cited by many critics are representative of how the system works. If they weren't somewhat representative, then there would be no PERS funding problem. (I'd also add that supporters of PERS use unrepresentative anecdotal evidence and hyperbolic statistics to make their case, thats how it works.) Plus, its the publics perception that is somewhat important since it effects the taxpayers willingness to fund necessary programs. That needs to be taken into account. I'm a realist.

Second, the cannard that public employees were promised this extraordinary retirement when they went to work for the state 30+years ago. An objective history (see Bailies link above) shows that the PERS board gamed the system. I worked for the State in the late 1980's and no one ever told me I could retire with the type of retirement benefit we're seeing now. This is reconstructed history.

Third, regarding the issue of public employees giving up a raise in 1982 I beleive to get the PERS pickup. That was negotiated I agree. However, it was clear to me that by the time I worked for the State in the late 1980's there was a market rate of pay in my section at least. If you accept Mr. Civiletti's assumption of the "missed raise" then you'd also have to agree that public school teachers day are 6% underpaid. (don't mean to pick on school teachers, but their wages were quoted above) Do you beleive public school teachers are 6% underpaid? This missed raise was quickly made up in subsequent years.

As to remedies: I agree the retired are pretty much set. However An agency could set total employee compensation increase in any year equal to the average annual wage increase. Then let the Union propose how to divy that up between PERS, wages and medical, adn netween Tier Ones, Twos and non tiers. Or, do a market study of appropriate salaries, so that we can't argue that state workers are underpaid, then terminate PERS, fund public employees vested pensions with a bond, and institute a reasonable retirement and medical package. Then, employees would get what they bargained for year to date, and with their increased salaries, they could sock away more retirement funds.

This is hard, if it wasn't there wouldn't be a big argument. Sometimes however, one's got to tell friends that their positions are unreasonable and get in the way of good policy.

Two things: first of all, bloggers don't change public policy, elected officials change public policy. I would like to know which elected officials have been approached with these ideas and with what result. Also, those who are unhappy that the Macpherson proposal for PERS had the votes in 2003 but the Richardson proposal didn't should say so. Or would that be too specific and grounded in the real world?

Policy is changed by votes and other actions, not by peer pressure. That concept seems to be lost on anyone who would say "Sometimes however, one's got to tell friends that their positions are unreasonable and get in the way of good policy. "

And about this...... Or, do a market study of appropriate salaries, so that we can't argue that state workers are underpaid, then terminate PERS, fund public employees vested pensions with a bond, and institute a reasonable retirement and medical package.

As I recall, there was a ballot measure once that all public employees should have the same pay packages as the private sector. Don't remember if it made it to the ballot or just didn't get enough signatures, but I recall a study done to see what the results of the ballot measure would be. And the study identified state positions (managers, for instance) paid more in the private sector than in the public sector.

And I still don't believe that Hubert Humphrey would have supported changing public employee contracts as a way to "help more needy people" by hiring more staff. But of course, in his lifetime, the mighty tax cut was not seen as the be all and end all of economic policy.

Robert Harris muses:

"As to remedies: I agree the retired are pretty much set. However An agency could set total employee compensation increase in any year equal to the average annual wage increase. Then let the Union propose how to divy that up between PERS, wages and medical, adn netween Tier Ones, Twos and non tiers. Or, do a market study of appropriate salaries, so that we can't argue that state workers are underpaid, then terminate PERS, fund public employees vested pensions with a bond, and institute a reasonable retirement and medical package. Then, employees would get what they bargained for year to date, and with their increased salaries, they could sock away more retirement funds."

Ah but were it true that "retireds are pretty much set". Unfortunately, the PERS Board doesn't agree with you and it is going to take more litigation and more uncertainty for retirees to get what they were promised at the time they retired, not what the public wants to pay them after they've already retired.

As for your market study, please do one. When you find out that University faculty are underpaid by more than 35% relative to comparator states - Washington, California, Indiana, Colorado, New Mexico - I'm sure the OUS faculty would happily take the 30% pay increase and some adjustment to their PERS benefits. But this has to be a quid pro quo. We're not talking about K-12 teachers here. In case you want a specific example, I'll use myself. I retired as a Chairman of two academic departments at Portland State after 31 years at PSU. I was a Department Chair for the final 21 years of my career. People in the identical administrative positions in the same academic field at the University of Washington, Washington State University, and Western Washington University earned between $30,000 and $50,000 MORE than I earned when I retired. Washington has a pension system more or less equivalent to PERS' Full Formula. I'd have happily traded my Money Match benefit of 84% of FAS for Washington's approximately 60% of FAS. I'd have ended up with just about the same retirement benefit, but one heck of a lot more salary during the many years I was Chair.

I noticed that you conveniently everyone's comments about your continued use of the 105% figure. You dismissed them with the wave of your hand and the assertion that if they weren't true, the PERS system wouldn't be in trouble. Waving a wand doesn't make inconvenient facts go away. What do you have to say about the pension benefits of the 90% of PERS retirees who aren't represented in the 30+ year category?

MrFearless47. Actually I totally agree that higher education instructors pay is a travesty. I also think that many public employees should probably be paid more, and thats why I proposed a compensation study as a possible part of a remedy. That, coupled with reduced benefits, could help dissarm opponents of government programs, and more fairly compensate public servants.

As to my 105% figure, this is what I do know. Some retirees do get 105% of their last salary in retirement, and the retirement for tier ones is very very generous in comparison to what is available in the private sector.

I really dont get why public employees are so insistent on trying to prove that PERS tier one is not a very very generous retirment. It is. All studies show it is. Note I've never said reduce tier twos or non tier employees benefits.

To LT: I don't know if anyone else made my suggestions to any representatives. I've emailed my reps, and I beleive Mr. Civilette, who asked for remedies above, may have some gov't position. Regardless, I feel that the US constution gives me the right to voice my opinion, just as you have a right to voice yours, and thats exactly how things do get changed. By people voicing their opinions out loud, in public, in blogs or elsewhere. I guess that is a sort of peer pressure. Your free to advocate to your hearts desire as well

Robert Harris replies:

"As to my 105% figure, this is what I do know. Some retirees do get 105% of their last salary in retirement, and the retirement for tier ones is very very generous in comparison to what is available in the private sector."

Yes, a very small percentage -- about 3% in any given year -- get 105% of their final average salary in retirement. The other 97% do not, which is the fact you're leaving out.

Tier 1 retirement benefits are generous relative to the private sector, but total compensation is not. My same job at Reed, Lewis and Clark, Willamette U, or any of a dozen other private sector schools would have paid significantly more than what I got at PSU. The fundamental problem with this comparison is that public sector jobs don't always have comparators in the private sector, and the whole notion of comparing public and private sector retirement plans is bogus from the start. But, I'd trade my PERS benefit for my wife's private sector retirement plan any day. She works for a very large private employer in Oregon and her retirement plan, including fully paid health insurance in retirement, makes PERS Tier 1 look pretty average by comparison.

I won't argue that PERS benefits are, in general, generous. That was the pair of golden handcuffs that kept many of us working for the public sector when private sector jobs were floated. But, keep in mind that I never negotiated any aspect of my PERS benefit. It was a "take it or leave it proposition". You can't bait me into to fulfilling my part of the bargain on the promise that you'll reward me in retirement and then decide that you promised too much after I've already finished my job. It's kind of like buying a house for $300,000 one week, having the housing market bubble burst the next week, have the house now only be worth $200,000 and then suing the seller to get the $100,000 you overpaid back. It doesn't work that way. As an employee, I accepted what the employers offered and did all that I was asked to do -- and much more. It is the least I can expect to have the employer honor the committments made during my working career.

As for your brief stint with the state during which no one told you about the benefit you would receive in the end, you obviously worked in the wrong place. Part of the recruiting material that every higher ed recruit saw was a discussion of how PERS worked and that there was a potential for significant benefits from Money Match. I know because I started my first recruiting efforts in 1982 and hired 17 faculty members over the course of my career. In every instance, the PERS benefit was a significant selling point to compensate for the reality of pitiful salaries.

So, I agree with your desire for a compensation study, but caution that it will be difficult to find comparators for some jobs. I also caution that you should be careful for what you wish for. Unless there is an exact quid pro quo between salary increases and reductions in PERS benefits, the effort will be an exercise in futility. Right now, the benefits are simply being cut while salaries have been frozen. Ask OUS faculty when the last time they saw salary increases (hint, think 1999).

Finally, I don't think ANYTHING will disarm critics of public employees except their complete annihilation. They'll only be happy when public employees have virtually no retirement system, receive poverty level salaries, and have to pay for virtually all health care benefits from their Wal-Mart salaries.

As to my 105% figure, this is what I do know. Some retirees do get 105% of their last salary in retirement, and the retirement for tier ones is very very generous in comparison to what is available in the private sector.

So, if someone were to do a study of EVERY "tier one" and compare their individual salary and retirement to comparable employees in the private sector (agency head with X employees and Y budget matched with a manager of a dept. or division in a private company with X employees and Y budget, or data processing public and private, or computer expert public and private, etc. ) you KNOW (and expect us to take it on faith) that EVERY "tier one" public employee had a better pay package than the comparable private sector employee. I will believe that when I see the proof.

I would like to know how many 105% retirees there are. Are there a finite number of 2000 retirees? Are you saying that every single "tier one" retiree got 105% of final annual salary? Or because "some" got 105% we are supposed to be as upset about that as we are at what Katrina did to the Gulf states and how incompetent the federal response was to that disaster? Individuals have no right to decide what offends them, you get to tell us what we should be offended by?

Or aren't we supposed to ask such specific questions because you (like Baleful the other poster who loves statistics--the 2 of you should start a club ) have the "revealed truth", the "accepted statistics" that everyone in Oregon except us stupid people who question your numbers just "know" to be the "truth"?

Yeah right, tell me another one.

I worked for PERS for 25 years. Final average salary was 3,750 per month or 45,000 per year. My most recent pension estimate from PERS, is 3,000 per month. This is 80% of my final average salary. Thank goodness I had 75% of my money in the variable fund, allowing me to earn higher interest, although I lost a great deal of money during recent market downturns and my principle was not protected like the 25% I had in fixed. Had all my pension been in fixed, I would be receiving much less then 80% of FAS. I sent away for an estimate every few years, and have watched my estimate shrink from 100% of final average salary to 80%. The court determined that PERS made errors in how in calculated the Money Match formula, and went back years, literally years, to fix it, which had a significant impact on my pension estimate. The actuarial tables were updated, reducing my pension because I will theoretically live longer. The court determined that accounts were over-credited in 1999 and PERS has to go back and fix that, reducing my account balance. I received no interest on my fixed account in 2003 and 2004, which they now have to go back and add back. I haven't received a statement in two years. This may seem like poetic justice, but I feel pretty jerked around. Change the PERS system. I can take that. I can understand that. But do it going forward, not backward. Don't take what is already in my account. Don't go back years to fix errors, re-adjust interest rates, or re-write the rules. And to suggest taking back over-payments from retiree's? That's unfair, unreasonable, and a breach of contract.

And one last comment about teachers. I am not a teacher. I personally don't think you can overpay teachers. They have one of the most important jobs in our society and we don't acknowledge or respect that reality. I couldn't tolerate 10 kids at my son's birthday party for more then a few hours. Teachers get to teach, coach, mentor, discipline, model, and educate our youth, 30 of them at a time, five days a week, six hours a day. They have to design lesson plans and keep abreast of innovations and best practices. They have to be on their game every day. They have to put up with the worst kids, the slow kids, the mentally ill kids, and abused kids. They often get to fill in in other areas, attend evening meetings and events, engage parents, advocate for children. Their evenings are spent correcting papers and preparing for future classes. Because of public school teachers, one of my kids is a physician, the other is attending college. I am in the debt of Oregon teachers. So are my children. Amen.

Mr Harris states that PERS retirees receive"...medical benefits far in excess of the norm." Nothing could be further from the truth. PERS retirees DO NOT receive free medical. They have to pay for it out of their retirement pay. It's one thing to have an opinion, but can you at least make it an informed opinion instead of the same old tired PERS bashing rhetoric??

Liz, 1) I am surprised that you would consider being "jerked around". To receive 80 percent of your ending salary for the rest of your life (with cost of living increases), many would consider that extremely generous. So generous that PERS is the highest compensating public retirement plan in the U.S.

2) You say, , "I personally don't think you can overpay teachers. I value teachers greatly, also. But your statement illustrates the evolution of K-12 funding for the last 20 years. Oregon teachers are individually compensated so highly, that it has become an obstacle for Oregon K-12 education. As the 36th most affluent state (measured by the usual yardstick of "per capita income"), I would hope you realize there are limits to compensation. As it is now, Oregon teachers are the 8th highest compensated in the U.S. Or to be quantified, we compensate Oregon teachers about $700 million more per year than the 25th ranked state in individual compensation. More interesting is that the 25th ranking state (New Hampshire) has K-12 academic results considerably superior to Oregon.

http://www.ripolicyanalysis.org/PublicEducation.html

"More interesting is that the 25th ranking state (New Hampshire) has K-12 academic results considerably superior to Oregon."

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Or more interesting, the best results are in northern tier states (Montana, N. Dak.,Minnesota, New England states) that have lower rates of immigrants to deal with in their school systems.

pgornick, Valid point. Demographics are always a concern when comparing states academic results. They should always be taken into consideration. Still, Oregon has favorable demographics for academic evaluation, when compared to most states.

This is an example of collective bargaining failure. It simply doesn't work when you have collectivists on both sides of the table, like with United Airlines.

PERS is what you get when you have a Legislature enact an empolyee benefits scheme outside the rules of collective bargaining, simply in consultation with the same public union officials who seek to influence their legislative election outcomes. At least legitimate collective bargaining offers checks and balances.

Oh, I forgot. In Blue Oregon, as with Portland's unique form of government, we like to remove checks and balances in favor of government efficiency. I read that in The Oregonion a couple of days ago.

Whether or not Oregon public employees retire with substantial pensions is beside the point. Their pensions are the result of trade-offs and bargains made years ago when inflation was high and the state had financial problems of more immediate concern. Oregon was trying to maximize what it got out of its public work force while minimizing current costs. At the time, public employees were told what dupes they were for accepting potential (though, at that time, relatively unlikely) increases in pension benefits in exchange for salary and other benefit increases that did not keep up with inflation.
We were told on any number of occasions by management how foolish we were to accept this bargain. What Mr. Harris and those of similar philosophical bent are really upset about is that the intended shafting of public employees DID NOT occur. In this case, the long shot came in. It may be unfortunate (a matter of opinion) that things turned out as they did, but a bargain is a bargain. Future negotiations between public employers and employees will certainly be negatively affected if the perception of public employees is that the results of bargaining only count if they are to the detriment of the employees.

For those of you who are number junkies, the best source of information is not, contrary to popular belief, the Oregonian. PERS issues an annual report called the Comprehensive Annual Financial Report (CAFR) that describes the state of the system at the end of any given calendar year. The 2004 CAFR (available on the PERS web site) is a treasure-trove of information, especially for those who want to continue to debate the relevance of the PERS benefit as a percent of FAS. On page 71, the 2004 CAFR summarizes retiree history by length of service from 1995 to 2004. Some facts - between 1/1/95 and 12/31/04, 98,686 PERS members retired. Of those, 10,271 retired with 31+ years of service. This represents slightly more than 10% (10.4%) of the total number of retirees. The average monthly benefit for ALL PERS retirees in that time period is $1760.49. Of the total number of retirees, 51,689 retired with 20 or fewer years of service (52.3%). As a result, the numbers the Oregonian have been using discount the retirement experiences of 98.6% of all PERS retirees. For the year 2000, which was the first year quoted for the 105% of FAS, there were 247 retirees with > 30 years of service. There were 4144 retirees that year (the 30+ year retirees represent 5.9% of all retirees that year). The odd year for 30+ people leaving the system was, unsurprisingly, 2003 - the year in which all the reform took place. In that year there were 11,808 retirements, of which 1129 were of >30 year service. The fact that the >30 retirees pretty consistently make up slightly less than 10% of the cohort in any year is one of the remarkable facts to be drawn from this exercise.

Now, for the question of % of FAS. I defy anyone to find any way to learn how the retirement benefits elucidated on page 71 relate in any way to an average member's pre-retirement salary. The information just isn't there. There is no official report published anywhere on the PERS website that derives this statistic. All we have are the Oregonian reports, the sources for which remain unclear to date, and the continued recitation of those unsubstantiated "facts" by people for whom the source of numbers is an act of faith.

We only know that the Oregonian reporters consistently cited evidence for retirees with more than 30 years of service. And by PERS' own audited data, that group represents a small fraction of the total number of retirees in ANY year since 1995.

Also evident from the PERS CAFR statistics is that the average retirement benefit has had a relatively small variance since 1998. In 1998, the average benefit for retirees in that year was $2253.80; in 2004, the average benefit for retirees was $2345.81. The most significant difference occurs between 1997 and 1998. This can be explained easily by the Legislature's passing and implementing HB 3349 as a remedy for the Supreme Court's finding in the Hughes case that taxing PERS benefits breached the PERS contract.

So, I stand on my assertion that the continued citation of meaningless statistics does nothing to advance the cause of PERS reform. It hardens the unwillingness of PERS members to contribute to the solution; it infuriates those who hate public employees. But the fact is that the 105% of FAS has no substantive support from published data and that the average benefit of those who worked more than 30 years misrepresents the benefits of the 90% of PERS retirees who didn't retire with that much service. Moreover, the average of anything related to "salary" is meaningless - the median in the proper measure and nowhere in any PERS report do we find those data. Perhaps we'd have something meaningful to debate if we could see those data.

Before someone flogs me for my own error, there is a statistical typo in my previous comment. I wrote: As a result, the numbers the Oregonian have been using discount the retirement experiences of 98.6% of all PERS retirees.. That should be "89.6%" of all PERS retirees. Sometimes the brain gets ahead of the fingers.

bailie tars Liz with this response:

"1) I am surprised that you would consider being "jerked around". To receive 80 percent of your ending salary for the rest of your life (with cost of living increases), many would consider that extremely generous. So generous that PERS is the highest compensating public retirement plan in the U.S."

I think you've totally misrepresented what Liz said. She didn't feel jerked around because she got 80% of her final salary; what she said is that all the changes have left her in a very uncertain state about what her final benefit will end up being. Right now she's getting 80%, but after all the changes the PERS Board is planning to make retroactively, her benefit will be significantly lower.

Regardless of what you think about the generosity of PERS, do think that PERS has the right to go back and change retiree benefits AFTER the retiree has started drawing benefits? No court has ruled that PERS should do this. In fact, the Lipscomb court urged PERS not to do this. Nothing in either Supreme Court ruling (Strunk or City of Eugene appeal) authorized this, and the "settlement agreement" (a) is not a class action; it only involves 8 employers and (b) never ONCE mentions retirees. So, tell us what YOU think about retroactive changes to benefits that the court has already said were not paid in error?

Thank you, Jack.

And I would add to those who refer to the tiers: What if someone who doesn't understand what Tier One, Two, Three are (young person, for instance, or someone reading this who doesn't live in Oregon) were to run across this topic?

Didn't EB White in the Elements of Style say it is important to explain terms so that people without your background can understand what you are writing?

Jack Roberts writes:

"I hate to interrupt Democrats fighting amongst themselves about PERS, but I can't resist asking a question: Even assuming Mr. Harris is right about Tier One PERS benefits being overly generous, what is his proposed remedy?

Since he's a lawyer, I assume he's read the Supreme Court's decisions regarding the vested rights Tier One employees have in those benefits. After all, that's the main reason we now have Tier Two and Tier Three. Even assuming the state made a bad deal with Tier One, does buyer's remorse justify a breach of contract?"

Thank you Jack for your welcome comments. In addition to founding the reform on some misleading data, there is that pesky matter of contract rights and the breaches/impairments that various Oregon Supreme Courts have already ruled on - Hughes, OSPOA, Strunk to name the three most recent ones. BTW, not everyone writing here about PERS is a Democrat. Some of us prefer to think of ourselves as "anything but Republican".

The court did not give PERS or the Legislature permission to go back and retroactively change the benefit structure. Hughes allowed the structure to change prospectively, and both OSPOA and Strunk reaffirmed that principle. PERS is choosing to ignore the Courts' rulings as well as the legislative reform.

I think that Mr. Harris' remedy is to terminate PERS, buy out the "accrued and accruing benefits" and move all extant PERS members to a new, cheaper system. When things get down and dirty there's going to be a serious legal battle over the definition of accrued benefits, and this matter will continue to be unresolved for many years to come.

LT asks Jack Roberts:

And I would add to those who refer to the tiers: What if someone who doesn't understand what Tier One, Two, Three are (young person, for instance, or someone reading this who doesn't live in Oregon) were to run across this topic?

Tier 1 - any public employee whose membership in PERS began before January 1, 1996.

Tier 2 - any public employee whose membership in PERS began on or after January 1, 1996 and before August 29, 2003.

Tier 3 - any public employee whose membership in PERS began on or after August 29, 2003. (This is sometimes called OPSRP/IAP)

Hope that clarifies.

Reply to Bailie: You wrote, "Karl, are you trying to say that 34 years ago you were promised the pension you now have? If I remember correctly, 34 years ago, PERS was set to offer about 45 - 50 percent of salary. It was only through gross mistakes by the PERS Board of Directors and the legislature that PERS got out of hand to the detriment of the public sector for years to come."

It doesn't matter what someone was promised when they first went to work. The nature of collective bargaining is that the nature and composition of compensation changes during the tenure of employment. Let's extend your logic to other financial situations. Did the people who invested in Microsoft, Intel, or Cisco stock in the late 1980s or early 1990s expect a return of thousands of percent? Using your approach, would you have those investors return everything in excess of the "expected" return (8-15% per year?). What about those who owned real estate before the current surge in property values? Should they only be entitled to reap returns consistent with historical expectations? Addressing your second point, the PERS board didn't make mistakes--unless you contend that decisions made in accordance with the rules set up for the system mandating that they act in the best interests of the public employee members is a "mistake."

Second, to those who think that the current system can be unilaterally terminated, "buying out PERS" by simply taking current account balances and handing them to account holders or rolling them over into another plan yielding a lesser return to employees is simply not an option. Even if the formidable legal impediments could be overcome (not a chance!), non-retired members would have to be given the opportunity to take their accrued balances and opt out of the system immediately. How many billions would this take and where would the money come from?

The only legitimate way out is through bargaining. Offering active and inactive members a chance to "buy out" at a premium could change the long-term economics. (It would likely take at least 150% to 200% of current balances to make the deal sufficiently attractive for enough people to take advantage of it or the long-term impact wouldn't be enough to warrant the offer. Also, non-retired public employees couldn't be forced into accepting it.) This probably wouldn't be politically feasible. It might not be do-able financially. However, it would save money in the long run without violating the spirit of the original agreement.

Since money has a time value, trading reduced employee compensation costs at any given time will cost more absolute dollars later. This point seems to be lost on those who treat the results of collective bargaining so cavalierly.

Ok, the state now regrets having Tier One accounts. I'll make you a deal: give me back the 22 years I spent in public service, and I'll give you back your Tier One account.

And this is the basic issue for me. Certain representations were made to Tier One employees. On the basis of those representations many of us stayed in public service. I work with large computer systems and databases. I didn't have to work in the public sector. But one of the things that attracted me was the Tier One retirement. Not that alone, but the total package, part of which was that I made less money than I would have in the private sector. I had the Tier One retirement, but I didn't have bonuses, profit-sharing, stock options, or anything else.

Comes now the State of Oregon, regretting Tier One. Well, in my view it's a little too late in the game for that now. The decisions made by the PERS board and by public employers were made in full view of every governor, legislator, newspaper, interest group, and voter in the state. You want to change the deal now? Great, give me back my 22 years and we'll talk.

Baile, The PERS Board and the Legislature made perfectly legal changes to PERS over the years including their decisions vis a vis distribution of earnings. In 2000 Pers told me what my account was. I had every right to expect that I would earn at least 8% every year after that. In my case I have retired at reduced benefits because the state has decided that it has priorities higher than living up to its promises to long time employees. That is bad enough but their efforts to reduce the retirements and demand repayment of "excess" distributions is unconscionable. These retirees now have no opportunity to return to work. They would often not have retired if they had known their determination of benefits was at risk from the political machinations of the Governor and Legislature. By the way the rules in effect 34 yrs ago would have resulted in an increase in my retirement from what it is now. You are apparently getting your information from the Whoregonian. I on the other hand have closely followed the PERS rules for all those years. As has been pointed out here by other commentators there is a great deal of erroneous information about PERS that has been distributed by anti-government and anti-public employee ideologues and accepted by people with an axe to grind.

The Oregon Public Employee's Retirement System is very complicated. Developed through Collective Bargaining and supported by Judges (PERS recepients), the Governor (former PERS recepient) and the Oregon Legislature (former PERS recepients), it was sustained through blatent conflict of interest decisions throughout my tenure with the state. However, I never had a vote on decisions made regarding how PERS was defined, implemented, and upheld. I benefited, yes. And it worked for everybody until the stock market gyrations of the late 1990's. I hate it that there is this presumption that I was in on the dirty little secret that was PERS. This "conspiracy" to screw the citizens of Oregon. I am currently in a private sector job paying about 38% more then I received as a 25 year public employee. I'm not currently covered by PERS, but I have a lot more money to put away for retirement. I am a citizen of Oregon, as are nearly all PERS employees who are active members. My very survival depends on PERS being viable and sustainable. To assume otherwise requires a very strange leap of logic.

Bailie says I should be happy with 80% of Final Average Salary when I have been promised 100%. I suspect she (or he)would tell me the same thing if I were to receive 60% of FAS, or 40%. She (or he) is completely missing the point. I paid 6% of my earnings every year for 25 years....a mandatory contribution, not voluntary. I placed 75% of my 6% in the variable fund, dependent on the stock market fickle finger of fate. I accepted the gains or losses thrown my way by the variable selection. I took the risk, and am resented because it paid off. Not only that, I now must face changes in the rules, going back 5 years.....going back 20 years.......because the historical revisionists say the promises made were too generous.

Bailie probably thinks I should be grateful I get anything at all. She (or he) thinks I used the citizens of Oregon. To be honest, they used me. Bailie thinks I should be grateful for the generous pension, "one of the highest compensating pensions in the US". I am proud that Oregonians (used to) believe that career state employees deserve a retirement that assures a comfortable standard of living. A retirement that rewards the dedication, hard work, and loyalty of a career public service state employees.

I know I'm sounding melodramatic and I don't mean to be. But people don't even blink when CEO's in the private sector make a gazillion per cent above their lowest paid employee. But a career employee making 80% of their final average salary after 25 or 30 years state employment is unacceptable. I guess I just don't get it.

The critics say that public employees are too expensive. Good luck recruiting doctors, lawyers, social workers, nurses, accountants, teachers, college professors, and other advanced degree professionals to do the work required by state government at the compensation determined to be fair by the citizens of Oregon.

The above comments by "theanalyst" do an excellent service by clearly explaining the most fundamental issue in this whole mess. That issue, which causes me the greatest concern, is the utter lack of commitment by Oregon public employers, Oregon's legislators, the Governor, the media, and the current PERS Board to promises that were made in the past in exchange for years of personal commitments by thousands of public employees. Politicians, public employers, the PERS board, the media -- and now private attorney Robert Harris -- advocate no less than the wholesale abandonment of promises relied upon by thousands of employees over a lifetime of work. As identified by others in earlier posts above, the preferred technique by these anti-PERS forces to accomplish their goal is the constant repetition of grossly misleading claims about the nature of extent of PERS benefits.

Seems that many of those in the anti-PERS forces have the benefit of higher education, and some law degrees even, which makes their tacky tactics and poorly researched opinions that rely upon mischaracterizations and inflammatory statements even more deserving of rejection as biased and shallow. Given his own education and professional experience, Mr. Harris should know better.

Far more than the potential for reduction of benefits, the single overwhelming motivation for giving full support further litigation of the PERS travesty is the crying need to expose and defeat actions by anti-PERS forces that demonstrate a total lack of commitment to past promises in the current ill-treatment of PERS retirees and future PERS retirees. One would hope that an educated person would think twice, and check the facts, before re-reciting grossly misleading statistics to wage war on thousands of Oregonians who gave much of their lives to this state.

Robert Harris is at least open about his agenda in failing to discover his misleading stats. He merely wants to "rob from Peter to pay Paul" as he made clear at the outset of his rant:

Mr. Harris: "Public employees benefits are destroying the ability of the State to deliver services to children and the needy."

Mr. Harris continues his diatribe against current public employees and retirees by advocating the continued callous, unlawful breaking of promises that were made by Oregon's public employers and politicians to tens of thousands of past and current public employees and retirees, giving them instead a "knife in the back" long after many of them had fully satisfied their part of the employment agreement with the public's employers.

In a flight of fancy, Mr. Harris argues that breaking promises made to those thousands of public employees over a great many years will in some way help Oregon to attract "competent" public employees in the future:

Mr Harris: "Government should seek to decrease benefit packages further, particularly for Tier One employees, and redirect a portion of those funds to increased salaries for all public employees."

One wonders why any competent future public employee would seriously consider the possibility of devoting his or her life to a public employer that shamelessly attempts to change the employment terms drastically to the point of breach, relying on lying statistics, expounding unfounded disparagement about current and past public employees, and doing all of this even after the prospective future public employee had given years of his or her life working for Oregon.

More likely Mr. Harris is just making another basket of empty promises for future "benefits" to potential future public employees.

Again, Mr. Harris' motive for bashing current competent public employees and retirees perhaps has nothing in the world to do with actually attracting future "competent" public employees to devote their lifetime for a career of public service to Oregon. As he states in his very next breath, and with bolded type to boot:

Mr. Harris: "In addition, by reducing employee costs, we could hire more teachers, social workers and hospice providers."

Mr. Harris's motive -- Money, to be robbed from Peter to pay Paul. Or at least to be taken away from promised retirement benefits based on grossly misleading statistics and purposeful breaches.

Do the words "commitment" and "promises" mean anything to these people? Seems not.

To learn how to fight travesties already committed against PERS members, and other travesties planned for the future as urged by Mr. Harris, contact the Oregon PERS Retirees, Inc. (OPRI, whose website is at "opri dot org"). Read about OPRI's mission and success in litigating past attempts by Oregon politicians to break their retirement benefit promises to public employees, and learn about OPRI's current efforts as summarized in its most recent newsletter which can be found at "opri dot org backslash oprilfletter dot pdf)).

Finally, if you are tired of the constant mugging of PERS members and want to fight back, donate what you can to support OPRI's legal fund (OPRLF) to stop the PERS board's "reforms" under the pretext of the PERS Board's purported "agreement" with a few employers -- an agreement that has yet to be reviewed by any court in Oregon since the Supreme Court refused for the time being to reach PERS members' challenge to the agreement in the City of Eugene appeal.

OPRI can be contacted at PO Box 7325, Salem, OR 97303-0065. Donations to OPRI's litigation fund can also be sent to that same address, payable to OPRLF ("Oregon PERS Retirees Legal Fund). And if you want, a membership in OPRI can also be obtained by using forms at its web site.

AS MR. HARRIS MAKES CLEAR, the fight to breach promises made to PERS members has not abated by any means -- and that fight will never cease so long as anti-PERS forces lack an understanding of commitments and promises made in exchange for a lifetime of work, and can't understand stats.

JRS

PS -- Others commentators have mentioned their political leanings. So, although currently registered Republican, here's to say I'm not a Democrat either at present. However, am converted and will sign up as a Democrat in time for the primary to vote against the current Gov, whose personally-appointed PERB is trying to give away vested rights of PERS members even though the Gov adamantly promised that no PERS reform would balance funding on the backs of retirees (Gov's 1/23/2003 press release at governor dot oregon dot gov backslash Gov backslash press underscore 012303 dot shtml), a portion of which is excerpted below:

Governor Kulongoski: "We KNOW that we must fix the current [PERS] system as well. However, we cannot balance our books on the backs of our retirees. I want to be clear on this point: we will not reach into retirees' accounts."

Hope the Gov attends the PERS board's public meeting about PERS reform on Friday, September 23, at PERS headquarters in Tigard and expresses the above-quoted view to his appointed PERS board members before they make a bad decision to "reach into retirees' accounts".

At least the Gov's press release showed integrity.

Jack Roberts asks:

"I also keep hearing people talk about terminating PERS and buying out the current participants, but I've never seen anyone do the math on this. Aside from the legal issues, I think the numbers would be eye-opening."

The system value at date of termination with all Tier 1 members credited with 8% or a pro-rate, plus the unfunded actuarial liability would be a pretty close estimate to the actual "cost" of doing this. Remember that the employer "match" is part of the PERS contract and so would have to be included in any termination cost. Retirees wouldn't be part of the buyout since they have no accounts at the time of retirement. Their "accrued benefit" is exactly what they are receiving plus any future contractual cost-of-living benefits. So a "buy out" would only involve active and inactive members of Tiers 1, 2, and 3. I'd hazard a rough guess that a complete termination of the system and buyout of the accrued benefits for current members of the system would run somewhere in the vicinity of $30 billion. But this ignores elements of the "accrued benefit" that aren't reflected in account balances and which the Court has already defined as part of the "contract".

As for legal authority, the Legislature has the authority to terminate the system 238.600(2) was put in to comply with IRS regulations for qualified public employee retirement plans. But its existence doesn't guarantee that it is a legal mechanism in instances of non-bankruptcy.

In short, the legal and financial barriers to terminating the system are formidable and, IMHO, insurmountable.

mrfearless stated: So, I stand on my assertion that the continued citation of meaningless statistics does nothing to advance the cause of PERS reform. It hardens the unwillingness of PERS members to contribute to the solution; it infuriates those who hate public employees. But the fact is that the 105% of FAS has no substantive support from published data and that the average benefit of those who worked more than 30 years misrepresents the benefits of the 90% of PERS retirees who didn't retire with that much service. Moreover, the average of anything related to "salary" is meaningless - the median in the proper measure and nowhere in any PERS report do we find those data. Perhaps we'd have something meaningful to debate if we could see those data.

I was closely involved with the PERS litigation, and I feel compelled to correct the record here. MF apparently doesn't realize that the numbers he doesn't like came from PERS when PERS was actively trying to avoid disclosing information in the City of Eugene litigation that would support the idea that the system was in trouble. The charts they were forced to provide showed the average replacement ratios for retirees with various numbers of years of service over a number of years. The charts showed, among other things, that the average ratio for a 30-year employees was 71.4% of final salary in 1995, compared to 106% in 2000. The charts did not show medians. Other evidence from PERS showed that 30-year retirees in the late 1980's and early 1990's received 62 to 66% of final salary. The 30-year number is useful because it provides a standard that allows meaningful comparison, especially given that the statutory formula was designed to provide a 50% replacement ratio for a 30-year employee. Studies done by PERS late in 2002 also showed that the average replacement ratio for all (not just 30-year) retirees would increase to approximately 124% if the system were not fixed. In addition, several of the petitioners in the Strunk cases provided apt examples of the size of benefits: One petitioner (a nurse) was projected to receive a benefit of 133% of salary after 30.4 years, and another (an information booth attendant) would have received 155% of salary after 29.8 years. There was plenty of evidence of massive benefits, and there was no persuasive evidence to the contrary. All of these documents are exhibits in the court records in the Strunk and City of Eugene cases.

MsX writes:

The charts they were forced to provide showed the average replacement ratios for retirees with various numbers of years of service over a number of years. The charts showed, among other things, that the average ratio for a 30-year employees was 71.4% of final salary in 1995, compared to 106% in 2000. The charts did not show medians. Other evidence from PERS showed that 30-year retirees in the late 1980's and early 1990's received 62 to 66% of final salary. The 30-year number is useful because it provides a standard that allows meaningful comparison, especially given that the statutory formula was designed to provide a 50% replacement ratio for a 30-year employee. Studies done by PERS late in 2002 also showed that the average replacement ratio for all (not just 30-year) retirees would increase to approximately 124% if the system were not fixed.

I stand by my assertion. I've seen those documents and I'm unpersuaded that the >30 year figure is meaningful when it represents only 10% or less of the members. I'm not disputing the fact that some (still relatively small) number of retirees made it out of the system with more than their final average salaries, or even a lot more than their FAS. I also don't trust PERS' forecasts about what the system might do in the future "if it were not fixed". These are the same people who couldn't figure out that Money Match was going to be a problem until it came up and bit them in the rear. Maybe 124% would be the norm, but maybe a much lower number would have resulted. Simulations and projections are only as good as the assumptions you make to begin with. Change one or two assumptions and the whole outcome changes. Mr. Voytko acknowledged that it was "he" who designed the simulation and since he wore his opinions about the PERS system on his sleeve, it left little doubt that the assumptions figured a worst-case scenario designed to make the system look as bad as it could get.

Moreover, I haven't seen a single instance cited where a member who was exclusively in the Tier 1 regular account program (never in variable) retired at more than FAS. The difference was in the result of the variable annuity program, which the legislation could have eliminated by itself without much contest (yes, I know it was challenged in Strunk, but it was low-hanging fruit given all the other stuff that was more important to most people) probably for the same reason that HB 2001 wasn't opposed by any of the unions.

I again submit 1) that medians aren't and haven't ever been provided (does it occur to you to ask why they are not used when all other economic statistics and salary surveys use medians to avoid the distorting effects of outliers -- it also isn't sufficient to claim that they weren't used in the past. All the data are available and could easily be put together, even on PERS' antiquated system, to settle this dispute and 2) that all the hysteria (my term) was over the impression deliberately planted in policymaker and judicial ears' that implied that "typical" PERS members were retiring at more than 100% of their FAS. Surely you'd be naive to think that this single number (105%, 106% whatever) of FAS did NOT drive a great deal of the public policy discussions.

Finally, the data you report are NOT available on PERS' website. They never have been and never will be. One has to dig through the records of the Marion County Circuit Court and through the near hundreds of boxes of evidence submitted to the Special Master in the Strunk case to find them.

That the documents are not on PERS's website is meaningless. The fact that the litigants in the PERS cases did not (and apparently could not) refute them is perhaps more to the point.

I don't know why PERS didn't provide medians. If it had helped them, I assume they would have. (Remember, that was when they were fighting against the employers.) This suggests that it would not have showed what you suspect. No one else had access to the data.

The 100%+ benefits also went to members with no money in the variable. I've seen them, and I believe some of the Strunk petitioners were in that category. In fact, the information that came out in trial proved that the regular actually did better than the variable over time because of the guarantee. Of course, it depends on what year you start (loss or gain), but you can do the math yourself and see how close the results are.

I guess you can believe what you want to believe, but the issues were thoroughly tried and the evidence was overwhelming. Also, almost everyone I talk to about this knows of someone making more in retirement than while working. It is common knowledge out there.

I don't get your obsession with the 30-year number. Of course 10-year retirees don't get 100%. By using the 30-year number, you can make comparisons that illustrate the rapid and ongoing increases, as well as the relative size of the benefit. Lumping all retirees together would produce a meaningless number because you can't relate it to any particular length of service.

I honestly don't know enough about PERS to comment directly on it's effect on other governmental costs. I am, however, a county employee that receives excellent benefits and is enrolled in PERS. I am one of those tech boom guys that lost big when the tech bubble burst. In my desperation (after 8 months of unemployment) I finally landed a county job. I honestly wasn't too impressed with the pay but since I didn't get unemployment insurance I needed the money. I couldn't believe how little I was making! Since then the IT industry has become more sane with regard to salary and I still make 5 to 10 thousand dollars a year less than someone doing exactly what i do in the private sector. Why don't I leave? The benefits!

Mr. Harris suggests that we get too much health and dental coverage? This is ridiculous. There is a huge debate across this country about access to healthcare, it's cost etc. And his suggestion is to pull this vital benefit from the employees that make this state go? That is just dumb.

Your bottom line goal is noble; providing more services, education etc. However, you are just looking to rob Peter to pay Paul.

MsX writes:

I don't get your obsession with the 30-year number. Of course 10-year retirees don't get 100%. By using the 30-year number, you can make comparisons that illustrate the rapid and ongoing increases, as well as the relative size of the benefit. Lumping all retirees together would produce a meaningless number because you can't relate it to any particular length of service.

And I don't understand why you refuse to acknowledge that it only applies to 10% of PERS retirees; it completely ignores the other 90%. Sure, you can use it to illustrate the rapid and ongoing increases, but you can't generalize from it to all categories of PERS retirees. But the media, the courts, and the legislature, and PERS staff testimony focus on that number and it is that number that virtually every person I've ever talked to about PERS "believes" is the average retirement benefit for anyone retiring from a PERS employer. THAT is the reason I'm obsessed with the number. It might be a meaningful way to describe 10% of PERS retirees between 2000 and 2003 or thereabouts (not me, BTW - 31.5 years in PERS prior to retiring in 2002 at 84% of FAS), but its effect has been to become THE NUMBER to characterize ALL PERS retirements, correctly or not. It sickens me how this NUMBER has become an epithet hurled at all PERS members. Everytime I mention to someone that I'm retired and am in PERS, I'm immediately grilled (by total strangers frequently) about how much more than FAS do I earn. People have accused me of being a liar when I tell them what % of FAS I earn. Sometimes I want to say 200% of FAS just to see what reaction I'd get. It surely couldn't be any worse than the accusations that I'm a liar who's underreporting his real PERS benefit. I'm tired of this number taking on a life of its own. What part of that don't you "get"?

I freely acknowledge that it applies only to 30-year retirees. I don't know what percentage of the total that is, but 10% sounds about right. I'm sorry that some people assume that the 106% number applies to all retirees and that that's caused you grief. But that was the number that had to be used in the litigation to illustrate how much the benefits had grown in a short time. Anything else would have been subject to criticism that it disregarded years of service and was therefore meaningless.

MsX responds yet again:

I freely acknowledge that it applies only to 30-year retirees. I don't know what percentage of the total that is, but 10% sounds about right. <snip> But that was the number that had to be used in the litigation to illustrate how much the benefits had grown in a short time. Anything else would have been subject to criticism that it disregarded years of service and was therefore meaningless.

It was chosen as the only number to use. Math isn't hard; statistics aren't difficult. If the will had been there, PERS has been disaggregating retirement benefit statistics in their CAFR for years. The only number PERS doesn't publish in its CAFR is % of FAS, but it would have been trivial to get the necessary information and tie them together with every half-decade of service time block that PERS uses in its CAFR. The plaintiffs certainly weren't interested in these numbers - they might have diluted the impact of the 30+ year number - and PERS certainly didn't volunteer the numbers because its senior management didn't really care whether it lost or not by that time, and the Intervenors didn't have, IMHO, a sufficiently competent actuary to ask for the numbers. And the Oregonian smelled a story that they could make out of the one number and manage to mount their high horse and repeat it over and over again like a catechism. And that number is all most anyone in the public remembers about PERS. Stop a stranger on the street. Ask them about PERS and they'll tell you about all the greedy public employees who retire at more than 100% of FAS.

For grins and giggles, do YOU think that the public outcry against PERS would have been as great if PERS (and the Oregonian) had reported the 2000 median at 85% of FAS, rather than the average of 106%?

One more comment on Harris's "medical benefits far in excess of the norm."

Exactly what is "the norm"? Does "the norm" come from averaging out the medical benefits of private sector CEOs with the medical benefits of the low level factory/ sales/ etc. staff? Or is that term just propaganda?

Couldn't find it online, but in the print version of the Sept.6 Oregonian Business section (P.B9, Today's Business News section right below BUSINESS at the top of the page) there is a story about the study by Institute for Policy Studies.

It says that in 2004, chief executive officers made 431 times the average worker. Apparently for some folks posting here it is OK for CEOs to make large salaries and have whatever retirement package they want, but the only way to pay for public services in Oregon is to make public employees work for low pay and no benefits? And the best people will be attracted to such jobs? Don't try to tell me that is what Hubert Humphrey believed--I don't buy that.

If people want to talk about statistics, talk about how those salaries relate to Oregon school districts. How many times more than the school secretary's salary does the school Supt. make? If the Supt. retires next year and the school secretary retires next year, will each make over 100% of their final average salary? If each retired in 2000, is the answer the same?

Or are those too specific question for those who throw around statements like "The 100%+ benefits also went to members with no money in the variable. I've seen them, and I believe some of the Strunk petitioners were in that category. "? Apparently there are those posting here who don't want the average person (who may not know what "the variable", Tier One, or Strunk are)to understand what they are talking about.

Or are some of these people posting here out of touch with the real world? Could it be they don't realize "the variable" could mean 10 things to 10 different people who have never studied PERS, "Tier One " could apply to a 3 level wedding cake, and Strunk sounds like the co-author of The Elements of Style who warned about writing above the heads of the intended audience?

Or maybe the intended audience of their remarks is only those who followed PERS legislation and litigation closely as part of their job.

LT observes: "Or are those too specific question for those who throw around statements like "The 100%+ benefits also went to members with no money in the variable. I've seen them, and I believe some of the Strunk petitioners were in that category. "? Apparently there are those posting here who don't want the average person (who may not know what "the variable", Tier One, or Strunk are)to understand what they are talking about.

Or are some of these people posting here out of touch with the real world? Could it be they don't realize "the variable" could mean 10 things to 10 different people who have never studied PERS, "Tier One " could apply to a 3 level wedding cake, and Strunk sounds like the co-author of The Elements of Style who warned about writing above the heads of the intended audience?

Or maybe the intended audience of their remarks is only those who followed PERS legislation and litigation closely as part of their job."

I plead guilty as charged. It is impossible to keep responding without, at some point, taking some shortcuts. The answers would be redundant and more lengthy than they've already become. I confess my excitement that someone who worked on the City of Eugene versus PERS litigation (aka the "Lipscomb case") engage any PERS member or retiree directly.

Anyway, I'll contribute the following explanations of the acronym salad:

FAS = Final Average Salary (highest 36 months of salary in the 10 years preceding retirement. Sum those months and divide by 36). I'll not get into what also gets included with that sum.

Strunk = the Consolidated Supreme Court case that resulted when the 2003 Legislature passed HB 2003 and HB 2004 as part of the overall PERS reform package. The case is known as Strunk et al vs PERS, or something close to that (I know that the State of Oregon was also a defendant in the case).

Tier 1, Tier 2, and Tier 3 I've already defined.

CAFR = Comprehensive Annual Financial Report. Issued by PERS at midyear for the previous calendar year. The 2004 CAFR came out in mid 2005.

The "number" - we are talking about the percent of Final Average Salary earned by PERS members retiring with more than 30 years service for a PERS employer. The number I'm so steamed about is the continued claim that PERS members retire with an average benefit of 105 or 106% of Final Average Salary. That figure applies to a small fraction of PERS retirees in the year 2000 and completely ignores all the rest of the PERS retirees (90+%).

Median: line the numbers up from smallest to largest. Count the number of numbers you have lined up, including duplicates. The median is exactly halfway between the smallest number listed and the largest number listed. Is preferred over the average because it is robust (not affected by) to outliers (e.g. the guy with 42 years of service who retires at 287% of his Final Average Salary)

And, who the hell am I? I'm not involved in ANY way with any of the litigation or legislation. I'm affected by it as a retiree, and I've written lots of software that I make freely available to any PERS member (or to PERS itself) that helps members make an informed decision about the impact of changes to PERS. Thus, I've tracked PERS closely for years and run an active website that reports on PERS-related information. I've also sat in on many of the Legislative hearings, sat through all the Special Master evidence gathering for the Strunk case, and attended the oral arguments for Strunk and sat in the Supreme Court chambers last year. I regularly attend PERS Board meetings and know a large number of PERS staff reasonably well.

mrfearless47, Just to be accurate. What are the correct numbers? Betsy stated, "The average PERS member who worked at least 30 years and retired between January 2000 and November 2004 got a pension averaging 107 percent of final salary".

Everyone seems to be very critical of this data. Betsy said this data was checked by a PERS official who didn't offer any corrections. Change the numbers or words in the sentence so that it reads correctly.

bailie asks:

"Betsy stated, "The average PERS member who worked at least 30 years and retired between January 2000 and November 2004 got a pension averaging 107 percent of final salary".

Everyone seems to be very critical of this data. Betsy said this data was checked by a PERS official who didn't offer any corrections. Change the numbers or words in the sentence so that it reads correctly.

It isn't what it says that's incorrect; its what it leaves out that is more significant. "The average PERS member who worked at least 30 years and retired between January 2000 and November 2004 got a pension averaging 107 percent of final salary. These retirees represent slightly less than 10% of all PERS members who retired in the same time period; the remaining 90% retired at a wide variety of percentages of final salary ranging from 15% on up, depending on the number of years in the PERS system".

I would also be quite specific that the only retirements she's talking about are those under the "Money Match" method, which is unarguably the predominant, but not exclusive, method of retirement. For any Tier 1 member who joined the system prior to 1982, there are three different ways that retirement benefits are calculated - Full Formula (Final Salary x a multiplier x years of service); Formula + Annuity (Final salary x a smaller multiplier x years of service + member account balance annuitized); or Money Match (pension based on member account balance plus a dollar for dollar match by employers). The retiree gets the best of the three calculations. [There are different multipliers for different classes of service; there are different (lower) multipliers for the Formula + Annuity; and the Money Match included (changed now) a dollar for dollar match on regular (guaranteed) account balance as well as the variable (market returns) account balance. If I recall correctly, only about 30% of PERS members have or had variable account balances during their tenure as public employees. It wasn't an account that members could check in and out of. You could get in, but like Hotel California, it was hard to check out again.

Thank you,

mrfearless47 says, It isn't what it says that's incorrect; its what it leaves out that is more significant. "The average PERS member who worked at least 30 years and retired between January 2000 and November 2004 got a pension averaging 107 percent of final salary. These retirees represent slightly less than 10% of all PERS members who retired in the same time period; the remaining 90% retired at a wide variety of percentages of final salary ranging from 15% on up, depending on the number of years in the PERS system".

I can't understand why it is felt that this is insignificant? I'm sure retirement payouts are prorated depending on years of service at this very high rate. Example, Liz (above) getting 80 percent after 25 years. That is an extremely high payout for 25 years of service. Most likely, a person starting right out of college will earn considerably more during retirement than while working.

The problem Oregon K-12 is facing is that individual total compensation is surpassing Oregon's ability to pay. Compensation is going up faster than inflation, while Oregon's "per capita income" has gone down from ranking 26th in 1999 to 36th in 2004. I see PERS (not the members)as part of the total compensation problem that is unsustainable. I realize that the only solution on this forum seems to be to continue the very high individual compensation and ask for more revenue to cover the costs.

If anyone has a different solution, I would like to hear it.

Bailie states: "I see PERS (not the members)as part of the total compensation problem that is unsustainable. I realize that the only solution on this forum seems to be to continue the very high individual compensation and ask for more revenue to cover the costs."

Bailie, I'm sure you realize that it was Oregonians through their representatives who made solemn legal promises over a period of decades to thousands of individuals that certain benefits would be paid in exchange for those individuals devoting their time and energies working as public employees for many if not all of the productive years of their lives.

Often, those promises were made by representatives of Oregonians in order to avoid paying those same public employees higher salaries or cost of living increases due to some budget crisis or another.

Those many thousands of public employees are fulfilling daily, and many have already completely fulfilled, obligations they undertook as public employees. In doing so, they have relied throughout their years of employment -- and continuing for many thousands of retirees into retirement -- on specific promises made to them over many years, even decades, by representatives of all Oregonians.

Those thousands of public employees are also Oregonians with children to be educated, families to be cared for, taxes to be paid, all of life's other expenses to meet -- and retirement to support. Those public employees meet their obligations to their employer, to their creditors, and to their family by performing work that Oregon and its counties and its cities deem essential to serving all Oregonians.

You cite Oregon's "inability to pay" what has been promised over the years, promises that were made to tens of thousands of Oregonians and relied upon by those Oregonians in committing years of their lifetime to public service. For many many of those individuals now retired, their payment has been made. And now, some Oregonians have the gall to say to those retirees and current public employees:

"Sorry, we need the money we promised you for something else now. And besides, we promised you far too much. Anyway, you're just a public employee who's fed at the public trough all these years already."

Budgetary issues facing Oregon should not -- and in the longterm those budgetary issues cannot --- be solved by breaking promises relied upon by so many for so long, especially so late in the game for many.

If Oregon takes the path of breaking yesterday's promises based on its desire today to make promises of other services and benefits to others for tomorrow, what kind of state is this?

And what kind of politician or public media is it that fuels animosity among Oregonians, including repeatedly spreading false and misleading information, in order to pad the favored agenda or budget item de jour?

There has been too much effort devoted to seeking the easy short-term solution of "skipping out" on obligations and promises made to public employees and retirees over decades, promises that amount to legal contracts, and too little effort or interest in finding real solutions.

Why not start with asking who's responsible for this mess and seeking recovery in some significant measure from those responsible?

Why not follow up with taking responsibility for obligations?

Those two simple steps seem to be essential if this state has an ounce of integrity to bring to solving this whole mess.

JRS

JRS - I hate to break the news to you but government made solemn promises about good schools and public safety. Unfortunately, we had to make cuts in these to accomodate poorly thought-out benefits programs.

Why not start with asking who's responsible for this mess and seeking recovery in some significant measure from those responsible?

OK, the government is responsible since they set it up. Now what? Unfortunately, a lot of inexperienced/unknowledgable types made a lot of pension promises that they can't keep. Do I think PERS recipients should take the brunt of it - no, but they need to sacrifice like everyone else in the state who pays taxes to make it work.

Thank you, JRS, for stating the situation so clearly. PERS recepients are not, in general, opposed to PERS reform. What they are opposed to is the governor's plan, already partially enacted and embraced by the Legislature, to apply reforms retroactively. Not only that, it appears there is serious consideration of reducing retirees pensions in an effort to recoup over-crediting, which was determined after these employees had retired.

How would you feel if Uncle Sam decided that their tax tables for 2000 were incorrect,in their favor, of course, and decided to go back to 2000, re-calculate each tax return, and then either add it to your 2005 tax liability, or garnish your current income? And, in determining that you owed more in 2000, it totally screwed up your returns for 2002, 2002, 2003, and 2004, requiring a huge, expensive, time consuming effort to figure it all out. You would have to wait for years to learn how much you were going to be socked for. You would be afraid to retire, to buy a home, to give money to the kids, to make any kind of major life decision. In the interum, Uncle Sam would "estimate" how much you owe, because you can't pay future taxes without knowing how much you paid in past taxes. And who pays the bill for all this? You do, of course, paid out of federal tax dollars. Etc. etc. etc.

But be happy. Taxes in the US are much less then in England and other industrialized nations. Why are you so upset?

I'd be willing to hazard a guess that if the whole issue of the 1999 earnings crediting decision were left alone, that PERS and everyone else agreed that the Board made a stupid, but not illegal, decision but that we aren't going to try and recover that money, most of the legal disputes would disappear and many PERS members would come on board with the rest of the reform. The 1999 earnings crediting decision has become sword on which everyone is impaling themselves. The earnings from 2003, which have been put into reserves to cover contingencies, would pretty much take care of the 1999 earnings decision and we could just move on. The legislation accomplished creating a new retirement tier for new public employees, it stopped employee money from flowing into Tier 1 and Tier 2 accounts, it eliminated further money going into the variable, and it approved a new mechanism for implementing mortality table changes every two years. Moreover, the PERS Board has been restructured completely and new statutes permit and require the AG's office to stay out of legal advice to the PERB where it has a conflict of interest. These changes alone account for about half of the $8 billion savings from the reform, and serve to prevent PERB from making the kinds of misjudgements it made in the past. Moreover, the Oregon Investment Council is now meeting with the PERS Board and Staff much more regularly so that the goals are more fully aligned (in the past, the OIC rarely met with the PERS Board - maybe once a year. The PERS Board told the OIC what it expected and the OIC was expected to deliver. Seems reasonable except when the OIC thinks your expectations might be a trifle unreasonable). So that's changed too.

Instead of seeking the punitive recovery for 1999 earnings, 6 years after the fact, why not just let it drop? It isn't the biggest piece of the pie. The employers and the public accomplished major changes to PERS. Why not quit while you're significantly ahead?

The 1999 earnings decision has become such an incendiary flashpoint that it threatens to tie this matter up for many more years as at least 2 more major lawsuits are planned, and there is one in the pipeline in Multnomah County Circuit Court, and there is still a US 9th Circuit Court of Appeals case pending.

Silly ideas like terminating PERS will become so economically and legally unpalatable that they'll never fly. Even sillier ideas like firing all public employees one day and rehiring them the next day under a new 401-k system are so moronic as to defy comment.

This battle could be a lot closer to over if the 1999 earnings issue were taken off the table. At this point, the PERS members have nothing more to lose by pursuing further legal action, while the public has an enormous stake if it loses more of these legal battles.

JRS, Thank you for your perspective. All of those "promises" were not made by me, or by the taxpayers. Many were made by the PERS Board of Directors, who were self serving/ union serving/PERS serving people. They did not represent the interests of the State. They were not fulfilling their fiduciary responsibility. Corrective measures are important and necessary. To the extent that PERS (TIER I) is sucking life out of Oregon K-12 education, fiduciary malpractice should be addressed (and it is).

When I started paying in to Social Security, my set retirement age was 65. Well, things do change. My retirement age is no longer 65, even though I was "promised".

http://oregonstate.edu/dept/senate/agen/reports/PERS0210.html

A government employer could, or rather must, choose to obtain a signed document from the employee that asserts that everybody is square on past pay for past work as a precondition for any new agreement for future pay for future work. This would then place the burden upon the employee to assert a claim that things are not square and go to court to get a judicial determination of a sum certain that is amenable to resolution by a court as a final determination of rights. This, coincidentally, would coincide with nearly the full set of issues that would emerge if the legislature were to terminate PERS entirely. That is, it differs from universal termination by the legislature only in that a local government need not wait helplessly until the legislature makes a choice that is mandatory upon all local governments. If the local government's are considered the responsible party to cover "employer contributions" that result from their own decisions, rather than as a consequence of decisions by the legislature and the PERB, then they can likewise simply demand that the employee sign the document as a precondition to agreeing to any terms of pay for continued employment. The local government does not need to ask the legislature for such permission.

Steve responded that:

"JRS - I hate to break the news to you but government made solemn promises about good schools and public safety. Unfortunately, we had to make cuts in these to accomodate poorly thought-out benefits programs."

Do you not see the difference between promises that Oregonians make in the form of a legal contract through their representatives on the one hand and "promises" that Oregonians and their representatives make in the form of policy statements and goals?

If legal contracts are no more than promises that are made for social and political purposes, then the problem is solved. The State of Oregon can just stop paying its legal, contractual obligations and collect for free the benefits of any services and goods needed for all of its social and political purposes. And all Oregonians can just stop paying their bills, too. The ultimate welfare state.

And Bailie commented:

"When I started paying in to Social Security, my set retirement age was 65. Well, things do change. My retirement age is no longer 65, even though I was "promised"."

Same thing -- Is social security a promise that is made as part of a legal contract? No, the social security system is a social and political "promise" that does not create any vested contract rights.

JRS

bailie whines: When I started paying in to Social Security, my set retirement age was 65. Well, things do change. My retirement age is no longer 65, even though I was "promised".

How little you seem to understand. The courts have held that PROSPECTIVE (in the future) changes are legal; retroactive changes are not.

You're not drawing Social Security yet. They can change the retirement age nearly "at will" until you do. But they can't change the retirement age to 70 and apply to members who retired at 65. Moreover, they can't reduce your Social Security benefit once you've started drawing it. My point, JRS' point, Liz' point and a whole bunch of other people's point is that the newly appointed (by Governor Kulongoski) PERS Board has given away statutory rights that vest in retirees and plans to not only REDUCE current retirement benefits multiple years after the fact, but also to INVOICE retirees for benefits that PERS Board (and a group of 8 employers) have conspired to claim were "overpaid". (Note: the Legislature provided two mechanisms to recover this money: one mechanism - the COLA freeze - was voided by the Supreme Court, but the second mechanism - repayment as an administrative expense from future fund earnings - PERS refuses to use despite the Legislature's prescription to do so.

<h2>What part of that is difficult for you to understand?</h2>