SALEM, Ore. (AP) — Oregon House members will vote Wednesday on a Democratic plan to cut inflation adjustments in pension checks for retired government workers — a proposal that has angered Republicans and school board members who say it’s far too timid to curtail the system’s rising costs.
The decision will affect the pocketbooks of dozens of lawmakers with state pension savings, spurring critics to worry that legislators might be motivated by their own financial interests to maintain benefits the state can’t afford.
“It is a huge conflict of interest for us to vote on a program that benefits us so personally,” said Rep. Julie Parrish, a West Linn Republican. “This directly affects our paychecks.”
Two-thirds of Oregon lawmakers are in the Public Employees Retirement System because of their legislative service. Additionally, just over half have separate PERS investments for themselves or a member of their immediate family because of prior work as a teacher, police officer or other public servant.
For her part, Parrish said she tried to opt out of the pension system as a legislator but was unable because she had an existing account.
House Speaker Tina Kotek, a Portland Democrat, says there isn’t any conflict. As a citizen legislature, made up primarily of members who have jobs outside the Capitol, she said, “We reflect the entire state.”
“I don’t think anybody in this building is making a decision around PERS based on their personal situation,” Kotek said.
Underscoring her point is the size of the system, about 330,000 people, a number that equates to almost 1 in 10 people in the state.
Also, the Legislature’s lawyers — the Office of the Legislative Counsel — say that lawmakers aren’t required to declare a conflict of interest when they vote on the pension bill, since they’ll be affected in the same was all other members of the pension system.
The system provides retirement income for nearly all government agencies, including police officers, firefighters, teachers, office workers and road crews.
Most lawmakers are enrolled in the same state pension plan available to public employees, but about a third have opted out. With an annual salary of just under $22,000, legislators accrue only minimal pension benefits unless they do other government work at a higher salary at another point in their career.
In a survey of all Oregon legislators, just over half — 48 out of 90 — told The Associated Press that they, a spouse or an adult child has a state retirement account separate from any service in the Legislature. Others said they had a sibling, parent or more distant relatives in PERS.
The pension sizes vary significantly. Some said they have a spouse who worked in a school district for a few years and might get a small check every month in retirement. Others spent their careers as a school principal, firefighter or state trooper and will rely on the pension for the lion’s share of their retirement income. Some are already retired and collecting their pension; others are still working.
“There is a perception of conflict. Whether it’s real or not, it’s harmful,” said Rep. Jason Conger, a Bend Republican who opted out of the pension system when he was elected in 2010.
Republicans are backing a separate proposal, crafted by the Oregon School Boards Association, which would cut costs more than twice as much as the Democratic plan. That plan passed the Senate in a party-line vote earlier this month. Some Republicans have also urged legislation that would prohibit legislators from joining the pension system.
The Democratic plan would reduce the size of annual inflation increases, excluding the first $20,000, on a graduated scale. For retirees living outside Oregon, it would also eliminate supplemental payments intended to offset income taxes.
All Republicans are expected to vote against the proposal. Also, public employee unions say the plan is unconstitutional and are vowing to challenge it in the Oregon Supreme Court, whose justices are also members of PERS. In a previous PERS decision, the justices found that a “rule of necessity” allowed them to handle the case. No impartial panel of jurists could be seated because state law requires nearly all Oregon judges to be part of PERS, the court found.
Daniel Re, a Bend attorney and critic of the pension system, has challenged that decision in a case pending in the state Court of Appeals.
Rep. Kevin Cameron, a Salem Republican, said he opted out of PERS, although his daughter is a teacher.
“The bigger voices to me are my constituents and close friends that are on PERS,” Cameron said. “They give me an earful all the time.”
Copyright 2013 The Associated Press.