Parlor Tricks, Public Policy, and PERS
Paul Evans
The Oregon Public Employee Retirement System (PERS) is a framework for compensation that has evolved over time. Like any policy it reflects the ideals of the men and women that established it, and it functions as a bureaucracy: with outcomes both bad and good - mostly good.
PERS is NOT the Antichrist; Public Employees are NOT the Devil.
Though it has become fashionable in the press to highlight a few cases where people will reap extraordinary benefits from the program, these instances misrepresent the larger truth.
Public Employees - those that work for the public good - are people that often opted for stronger benefits as compensation, in lieu of pay.
Private Employees - thost that work for private enterprise (and also for the public good) - are people that often opted for more "competitive pay," in lieu of benefits.
Sadly, the weakened economy has impacted workers across the board: for public employees "furloughs" went from the history books to a monthly reality. And for private and public employees alike, there are fewer jobs (and worse pay).
And there is a case for a thoughtful review of the PERS structure/system in order to adjust to the economic exigencies of our times. But we must stop allowing the PERS issue to divide us.
Employees - those of us that work for a living - have a lot in common:
We do not have Swiss Accounts.
We do not have foreign reserves shielded from taxes.
We do not benefit when a company takes jobs overseas.
And we are all mutually dependent upon a complex economic network that rewards creativity, hard work, and sustainability.
Measures 5 and 47/50 set into motion a downward spiral of government capabilities and discontent. It was the means and the ends for Sizemore, McIntyre, Parks, and their supporters.
Since then a cottage industry has sustained an unrelenting (and often, ill-informed) war upon the government.
Government is not inherently bad, nor is it inherently good: it is an instrument reflective of the people willing to make it function.
Since the 1990s, governments have done what they could within the available constraints of law and resources and we are now consuming the seed corn at an alarming rate.
Private sector workers and public sector workers are partners: government does the things that cannot (or should not make a profit), so that private industry can.
Oregon is strongest when employment is high in both sectors: we are weakest when we fight over the scraps left on the table by the folks that benefit regardless of economic conditions.
This election recognize the parlor tricks for what they are: if we fight over stupid things, those pitting us against each other can advance a different, opposing agenda.
In simplest terms, while we fight over the color of the drapes our real adversaries can rob the money from our matresses and steal us blind.
PERS needs thoughtful reforms - fine.
But we do not, and must not demonize the public employees in the process.
How many of us really know the kind of tasks our family and friends working for the cities, counties, and state perform?
Let us push for leaders that will fix the problems, not the blame.
Let us push for leaders that understand how a robust public sector is empowering to an innovative private sector.
And let us stand up to the lies and mischaracterizations spread by those that seek a weaker, less free Oregon.
 |
More Recent Posts | |
Albert Kaufman |
|
Guest Column |
|
Kari Chisholm |
|
Kari Chisholm |
Final pre-census estimate: Oregon's getting a sixth congressional seat |
Albert Kaufman |
Polluted by Money - How corporate cash corrupted one of the greenest states in America |
Guest Column |
|
Albert Kaufman |
Our Democrat Representatives in Action - What's on your wish list? |
Kari Chisholm |
|
Guest Column |
|
Kari Chisholm |
|
connect with blueoregon
11:15 a.m.
Aug 2, '12
Paul - thanks so much for this beautiful articulation of the root causes of dissent on this sadly polarizing issue
Every day I watch public employees who serve with passion to build stronger and more successful communities. I never cease to be amazed at the negative impact that the "lies and mischaracterizations" have on them; and how the impact compounds over time.
You are right - we ARE all in this together. Thank you for encouraging those of us who recognize our interdependence to speak up and to push for leadership that works for solutions, rather than blame. I will take your lead.
1:04 p.m.
Aug 2, '12
I like your article. However, I would push back and say that private employees don't work for a public good. Private sector serves a private good. In the case of large companies that is to turn a profit for shareholders. For smaller companies that means wages for workers and overhead expenses. There is nothing wrong with the private sector serving a private good, it is their mission, but let us not confuse that with the public sector and the public good.
9:57 p.m.
Aug 2, '12
The lack of portability for PERS and other public pension plans creates problems for people moving in and out of the private sector. Both private and public employers benefit from this, but even the most recent version of PERS is geared heavily towards career public service. PERS is not evil, but we should acknowledge its shortcomings and reform it so that it is both transparent and portable.
9:41 a.m.
Aug 3, '12
Paul, you are a gifted writer and orator. However, I think you should spend a lot more time explicating this statement: "there is a case for a thoughtful review of the PERS structure/system in order to adjust to the economic exigencies of our times."
PERS currently promises pensioners an 8 percent return on investment. The actual performance of the fund is closer to 4 percent.
Government, mostly local government, needs to cover the difference between investment performnce and actual payouts. In 2012, the difference figure is approximately $1 billion.
That is not a sustainable situation for Oregon. And we need to have an actual conversation about how to reform the system in a way that is fair, both to public employees, and to taxpayers who are seeing some fairly substantial reductions in services to cover these additional costs.
I would also point out that the "demonizing" door swings both ways here.
It should not be lost on anyone that what happened in Wisconsin was only avoided in Oregon because Governor Kulongoski and Greg MacPherson pushed for reforms in 2003 that were bitterly opposed by Oregon's public employee unions.
Greg MacPherson's efforts resulted in SEIU spending around a half million to beat him in the 2008 Democratic Primary for Attorney General. The point was not only to defeat MacPherson, but to send a message to future Democratic candidates about what can happen if you push for reforms that the union opposes.
I think the most reasonable reforms to consider are tying the return on investment to the actual performance of the fund, and also reconsidering how final benefits are calculated to prevent people from padding their hours in the last few years to game the system into getting substantially higher retirement benefits than would otherwise be permitted.
I think that most Oregonians would support those reforms given where we are at financially.
But how many Democratic candidates would have the courage to "go there", knowing how SEIU and other dominant Demcoratic funders will react?
11:22 p.m.
Aug 3, '12
Sal - Thank you for the kind words. And I agree that we need a thoughtful, rational, transparent reform process. In the wake of the Great Recession we must all work together as we adjust the various threads of the social safety net. I appreciate the comments and look forward to more discussion on this issue.
1:49 p.m.
Aug 3, '12
PERS is the frozen flagpole of Democratic party politics. Stiok your tongue out at your own risk.
11:27 p.m.
Aug 3, '12
Paul, thanks for a thoughful, respectful article. If every stakeholder came to the table with the same attitude, I don't doubt consensus could be reached on solutions that satisfy most. However, when I see or read bashing like the one above demonizing SEIU for looking out for its members, or members who would LIKE to have a pension, it does not help. SEIU does the same as any other "special interest" group (NRA, Planned Parenthood, Right to Life, etc,) in trying to look out for the interests and priorities of its members. People want a voice in their democracy and banding together under the banner of a union is one option. Actually, it seems more and more like you have NO voice if you have no $ and no strength of numbers behind you. No one wants to take you seriously or give you the time of day. If it comes down to a system where you can't have a voice because you want an outcome that benefits your group or point of view, then there should not be ANY lobbyists allowed in Salem. I would add that participation in PERS is mandatory and PERS participants have zero say in who is on the PERS Board or the OIC. Voting for the state treasurer is one option to have some voice, but beyond that, PERS particpants are shut out.
4:01 a.m.
Aug 4, '12
Astounding. Far too often conversations about "Dat Gubernment" seem to imply that it is something 'other', perhaps some invader from another planet sent to attack us and drain away our freedoms or something.
Government. Is. Us.
And yes, some things go wrong. PERS did take on insane commitments that should have raised red flags back then. But it didn't, and now we have to figure out the mess. We. The people.
1:38 p.m.
Aug 8, '12
I would like to point out that the guaranteed 8% return disappeared for employees hired somewhere around the year 2000. We are tier 2 employees. The guaranteed 8% return was foolish public policy.
9:21 a.m.
Aug 10, '12
The guaranteed 8% return is also something that privatizers like to point out as the historical returns of the market. Big funds like PERS can bridge the dips and surges of the markets better than individual funds would. But also keep in mind that the "private sector" alternatives return worse rates with more fees. So in order to sustain the competitive compensation provided by PERS, the state would have to spend much more money.