By Jeb Bladine
As Oregon Supreme Court justices prepare to preside over perhaps the most important financial case in Oregon history, I have just one question:
Who do I sue?
Years ago, professionals told me how valuable a 401-K pension plan would be. They talked about average stock market gains over time. They convinced me that payroll deductions combined with company matching funds and deferred taxation would create a significant nest egg.
I followed their advice. But the last few years, I joined millions of Americans who watched as their pension plans lost 30 percent of value, or more.
Who do we sue?
Decades ago, Oregon public employees were promised that after 30 years of work, their pension plan would pay between 50 and 60 percent of their top salary. Coming on top of Social Security benefits, it was a generous promise.
The system was supposed to protect both public employees and taxpayers, but something went wrong. Employee interests gained control and manipulated loopholes that allowed pension payments to balloon out of control over the past decade. By the time a distracted Legislature caught on, the Public Employee Retirement System had a $17 billion shortfall. And rising.
The situation threatened Oregon with bankruptcy, and legislators finally responded. It might be too little, too late, but at least they applied a Band-Aid. The unions were incensed and this week, as promised, they sued.
"A promise is a promise" goes the union mantra. Action by the 2003 Legislature, they say, broke a contract with public employees.
What happened, I wonder, to the contract with Oregon taxpayers? When did we sign a new contract saying we would pay tens of billions to guarantee offensive pension payment levels?
All this talk about fulfilling promises has me looking for the names of those professional consultants who set up my pension plan. Even if the stock market hadn't tanked last year, payoff levels would never have approached the "old" PERS, much less what PERS has become.
Legislative action this year cut costs, but conservative leaders will salt away those "savings" from PERS rate reductions. Despite pleas from some union voices to spend that money now on needed public services, the savings could disappear (with interest) when courts finally decide these cases. If it goes that way, the PERS shortfall could become an all-time albatross around our necks.
And then, who do we sue?