The Associated Press
SALEM - A House committee on Oregon's Public Employees Retirement System approved a bill Thursday to reduce the number of board members from 12 to five, the second piece of PERS reform legislation sent to the House in as many weeks.
The bill also stipulates that only one of the five members can be a recipient of the retirement system, one must be a PERS employer, and at least three members must have experience in pension management or investing.
Term limits for nine of the 12 current members have already expired, and Gov. Ted Kulongoski has said he doesn't plan to reappoint any of them. Rep. Tim Knopp, chair of the committee, echoed that message Thursday.
"We want to get some new blood," said the Bend Republican.
The committee's decision to approve HB2005 comes only a day after the House voted 55-0 on another PERS bill that would cap annual earnings at 8 percent. That bill, HB2001, now goes to the Senate.
With the system facing a $15 billion long-term shortfall, lawmakers have increasingly blamed the board for decisions during the stock market boom in the late 1990s. For example, in 1996 and 1999, the board gave members as much as 20 percent returns on their investment portfolios, a move that didn't leave sufficient reserves to soften the market's plunge the last three years.
But despite negative returns in the market, many PERS recipients are guaranteed an 8 percent return, contributing to the shortfall.
Board members are appointed by the governor and confirmed by the Senate. They serve three-year terms. All that will remain the same under the bill.
Because reconfiguring the board won't affect the pensions of current recipients, the PERS committee doesn't expect opposition in the House or Senate.
And union members who represent the 294,000 past and present PERS recipients don't see it as a threat.
Mary Botkin, a lobbyist for the American Federation of State, County and Municipal Employees, which represents about 21,000 pension-employees in Oregon, said the board only had five members in the 1980s.
She said members were gradually added to better serve recent retirees, who often had to wait more than a year before receiving their first PERS check.
"I hope we don't go back to that," Botkin said. "But if it doesn't work we'll be back in two years to fix it."