Public employees file lawsuit to protect PERS retirement benefits

Nine Oregon public employees filed a lawsuit in the State Supreme court Aug. 9 challenging the constitutionality of a bill passed by the Legislature that negatively impacts their retirement benefits.

In the last session of the Legislature, lawmakers passed Senate Bill 1049, which cut benefits to current employees in the Public Employee Retirement System (PERS). Both the House and Senate were controlled by Democrats, and the bill was signed by Gov. Kate Brown, a Democrat.

The plaintiffs and all PERS members accepted a job in good faith for a salary and benefits package, did the work they promised to do, and planned their futures based on the package they agreed to accept. —Aruna Masih, lead attorney in the lawsuit

The lawsuit contends that the bill targeted working people by taking money out of personal accounts to pay employer’s pension obligations to retirees. The plaintiffs assert that the loss of retirement benefits violates both state and federal constitutions, is a breach of contract, and is an illegal taking without compensation.

Jennifer James is the lead plaintiff in James v. the State of Oregon, et al. A member of Oregon School Employees Association, James has worked as a secretary at Molalla River School District for 19 years. After nearly two decades of service, she earns less than $40,000 a year in salary. She is counting on every penny of her PERS for retirement security. According to the court filing, SB 1049 reduces her individual retirement account by more than 13%.

“I love my school district and have been faithfully doing my job for nearly 20 years with the promise of a secure retirement,” James said. “Now that promise has been broken. SB 1049 is unjust, unconstitutional, and should be overturned by the court. The idea of a poverty-level retirement benefit is terrifying to me.”

Other plaintiffs listed in the filing are Salem firefighter Brandon Silence, a member of the Oregon State Firefighters Council; Lisa Riegel, a member of Oregon Education Association employed at Mt. Hood Community College; Roseanne Scott, a member of Service Employees International Union Local 503 who works for the Oregon Department of Human Services; Robert Martineau, a City of Portland employee and member of AFSCME Local 189; Regina Thompson, a member of Association of Engineering Employees of Oregon employed at the Oregon Department of Transportation; Emily Marx, a nurse for Multnomah County and member of Oregon Nurses Association (ONA); Dustin Andrews, a nurse at Oregon Health and Science University and member of ONA; and Thomas Cleary, a member of the Multnomah County Prosecuting Attorney’s Association employed at Multnomah County.

“The plaintiffs and all PERS members accepted a job in good faith for a salary and benefits package, did the work they promised to do, and planned their futures based on the package they agreed to accept,” said Aruna Masih, lead attorney on the case for Bennett Hartman, Attorneys at Law LLP, the same firm that won billions of dollars in restored benefits by challenging similar cuts before the Oregon Supreme Court in the 2005 Strunk ruling and the 2015 Moro ruling.

“Their service for public employers creates certain contract rights to retirement benefits. As the Oregon Supreme Court has ruled in the past, the State cannot breach the terms of those contractual promises,” Masih said.

This is the second lawsuit for Silence, the firefighter from Salem. He regained some retirement benefits that had been taken from him after he served as a plaintiff in the 2015 Moro v. the State of Oregon, et al case that was filed after state lawmakers cut PERS benefits the last time. If SB 1049 remains in effect, he will lose $26,000 in retirement benefits.

“It is deeply disappointing to be in this position again,” Silence said. “Lawmakers keep coming back for more cuts to benefits from public workers like me who are not the cause of the unfunded liability problem, and I have to again ask the Supreme Court to help protect my contract rights.”

The public retirement system has an unfunded liability of $27 billion, left over from the 2008 market crash. Changes from SB 1049 would only address a tiny portion of that amount.

1 Comment on Public employees file lawsuit to protect PERS retirement benefits

  1. Please do not cut my retirement. P.S. I am not sure how you take my money to pay your bills.Sounds like Social Security to me .

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