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The state House and Senate are at odds over whether lawmakers should remain in the state pension system.
House members voted in March to yank lawmakers from the embattled Public Employees Retirement System and create a special 401(k) plan for them.
Rejecting that idea, the Senate voted Friday to reduce lawmakers’ PERS benefits, by eliminating their preferred benefits package normally reserved for police and firefighters. The Senate passed House Bill 2407-C by a 16-11 margin.
“It’s unjust enrichment” to keep getting benefits as if lawmakers were in public safety jobs, said Sen. Tony Corcoran, D-Cottage Grove, whose committee reworked the earlier House bill.
Preferred PERS benefits for lawmakers often provokes howls of protest. It allows lawmakers to get the same pension after 25 years that most public employees take 30 years to earn. Police and firefighters get that treatment because of their hazardous jobs and earlier retirement age.
In the past, some lawmakers determined that their long hours and low pay — $15,396 a year— merited the premium level.
House members argued it’s a conflict of interest for lawmakers to oversee a system that pays them benefits.
Corcoran rejected that notion Friday.
“My view is that there’s nothing inherently wrong with us being part of PERS,” he said. “We should live under the same rules as everybody else.”
Public servants should have a guaranteed benefit at the end of their careers, not a 401(k) account that offers no set pension, Corcoran added.
Sen. Lenn Hannon, R-Ashland, who presided over the floor debate, declared he had a conflict of interest in the matter. And Hannon suggested lawmakers all had a conflict of interest “as a class.”
One provision in the bill illustrated why the issue stirs so much controversy. It exempts lawmakers who first served in the Legislature before 1995.
That means six veteran lawmakers who voted for the bill won’t see any reduced benefits: Senate President Peter Courtney, D-Salem, Senate Democratic Leader Kate Brown, D-Portland, Sen. Frank Shields, D-Portland, Sen. Joan Dukes, D-Astoria, Sen. Avel Gordly, D-Portland and Sen. John Minnis, R-Wood Village.
“They’ve exempted longtime serving members from having to switch,” said House Majority Leader Tim Knopp, R-Bend, who championed the House bill. “It’s the exact reason that legislators need to be removed from PERS completely, so they don’t continue to deal themselves the best deal.”
A few days before Friday’s vote, Courtney said he wasn’t following Senate changes to the House bill and the issue hadn’t come up for much discussion. “I think treating (lawmakers) like everybody else might be the way to go,” he said.
New PERS reforms signed into law will phase out the Money Match system. That means future pensions will be set by workers’ final salary and years worked, not the size of their accounts.
Police and firefighters get a pension equaling 2 percent of their final salary for every year on the job, or 50 percent of their final salary after 25 years. General service PERS members get 1.67 percent of salary per year worked, or 50 percent of final salary after 30 years.
“To take them out of police and fire, I think, was a good idea,” said Russ Walker, a PERS critic and Northwest director of Citizens for a Sound Economy. But no lawmakers should remain in PERS, he said.
“There’s a real loss of trust in government and most public officials, and this kind of thing, I don’t know if it serves them well.”
Walker said his group will turn in an initiative petition next week that would scrap PERS for all public employees and replace it with a 401(k) plan.