Oregon Panel Unanimously Backs Pension Separation Legislation

March 28, 2003 (PLANSPONSOR.com) - Oregon state lawmakers will be forced out of the state pension system and into a new 401(k) plan under a bill that unanimously passed the state House of Representatives Public Employees Retirement System (PERS) Committee.

Lawmakers already in the PERS plan could retain their accounts and accrued retirement benefits. However, Under House Bill 2407, once their current legislative terms end, the elected officials would be pushed into the new 401(k) plan along with newly designated legislators, according to a Salem Statesman Journal report.

“It removes any inherent conflict of interest of us being part of the PERS plan,” said House Majority Leader Tim Knopp, (R-Bend).

Under the terms of the bill, Oregon would contribute 6% of lawmakers’ salaries into a mix of investments chosen by each member. Their ultimate retirement benefits would depend on how well those investments fare in the market.

A spokeswoman for the majority leader said the bill would save the state $202,267 for the upcoming budget cycle, and more in following years. As the PERS plan sits now, it is starring down the barrel of a roughly $14 billion long-term shortfall.

Reality Check

Knopp acknowledged that the participation in PERS by lawmakers has been a sore point with the public. This is due in part to some officials who went on to earn lucrative PERS benefits by moving into other public sector jobs after leaving office. They took advantage of rules that set retiree benefits, in some cases, pegged to the PERS member’s three highest years of salary. Three years as a state agency manager could cause their legislative pension to balloon.

However, despite the public perception of legislators making off with heavy retirement payouts, the bulk of lawmakers retire with PERS benefits of only $100 to $150 per month, Knopp argued.


Offering a dissenting opinion to the bill was a lobbyist for the American Federation of State, County and Municipal Employees (AFSCME) Mary Botkin. She contends the new plan may keep some good candidates from running for the Legislature.

Currently, Oregon state l awmakers earn $15,396 per year, plus expenses, keeping with the state’s preference for a “citizen’s Legislature,” not a body of professional politicians. But, Botkin argues, “Being a legislator is not a part-time job any more. We don’t pay them very much; the least we can offer them is a decent retirement system.”