TIM KNOPP MAJORITY LEADER OREGON HOUSE OF REPRESENTATIVES HOUSE DISTRICT 54 FOR IMMEDIATE RELEASE Wednesday, June 11, 2003 CONTACT: Fawn McNeely 503-986-1354
HOUSE REJECTS SENATE PROPOSAL TO KEEP LEGISLATORS IN PERS; MOVES HB 2407 TO CONFERENCE COMMITTEE
SALEM – The House of Representatives today voted not to concur with Senate amendments to HB 2407, which would have kept legislators in the Public Employees Retirement System (PERS) and given some legislators preferential treatment. In original form, HB 2407 would have removed legislators from PERS, reducing their pension costs by 67%. The Senate version keeps legislators in PERS and allows those who have been in the system since 1995 to remain in the Hazardous Pay category. “The Senate version of this bill is the most self serving piece of legislation we’ve seen this session,” said House Majority Leader Tim Knopp (R-Bend) who carried the non-concurrence motion. “This is the exact reason why we need to move legislators out of PERS. We should not, as a body, directly benefit from the decisions we make in oversight of the plan. “It’s an issue of credibility. The intent of HB 2407 was to guarantee that decisions made by the legislature concerning PERS in the future are unbiased,” Rep. Knopp said. “The Senate version maintains the conflict of interest that exists for legislators, protects legislators with a long service history and saves no money in the legislative budget.” The successor retirement plan created under the original version of HB 2407 established a defined contribution plan with a maximum contribution by the Legislative Assembly of 6% of the salary paid to members of the Assembly. Legislators elected as of July 1, 2004 would automatically be placed in the new system, including any legislators who began service in the legislature before July 1, 2004. The Senate version, however, allows legislators to stay in PERS and to receive benefits at the 1.67 General Service level instead of the 2.0 police and fire level when calculating final benefits under full formula. The bill maintains Police and Fire level for legislators who served before 1995.
The House version of HB 2407 had estimated savings of $202,267 for the 2003-2005 Biennium and $405,533 for the 2005-2007 Biennium. The savings are based on the difference between the currently budgeted employer contribution of 20.28% of salary and the 6% employer contribution set in the bill. The Senate version has no savings. According to the fiscal, “There would be no perceptible cost savings to the Retirement System because of the lower benefit rate.” “The original version of HB 2407 set up a fair system for legislators similar to benefits received in the private sector,” said Rep. Knopp. “If we are going to ask our public employees to accept a new system, elected officials must show good faith by first moving legislators into a new system. All the Senate version of this bill does is erode the legislature’s credibility with the public.” ###