In a nutshell: The Public Employee Retirement System exists to give those who have committed themselves to state, county and municipal work a steady pension upon retirement. This is fair and definitely well-deserved. However, there are some former public workers receiving outrageous amounts of monthly PERS benefits.
I’m talking about people like Mike Belloti, former University of Oregon head coach. Belloti is making somewhere in the neighborhood of half a million dollars annually due to his PERS pension. In a reasonable world, the idea of a pension is to give you something to live off of when you retire, not enable you to continue to live the same extravagant lifestyle you have undoubtedly become accustomed to in your time making millions at the University of Oregon.
Am I jealous of Belloti? You bet I am. Admittedly, through public work, I too am vested in the PERS and will myself be entitled to a small pension when I retire. However, it will be a drop in the bucket compared to what Belloti receives.
In fact, there are over 800 people in this state whose annual PERS benefits are in excess of $100,000. Many members of the working poor, like me, have contributed to this fund and have worked just as hard and are just as deserving of a bloated pension as the aforementioned 800 people.
Unfortunately, the PERS seems like one big scheme that is designed to further benefit those at the top. Massive payouts such as these are poison to our state general fund, and the issue will only get worse as more and more high-paid bureaucrats and overpaid football coaches retire.
My contributions to the PERS previously went into some mystery fund which I had no say in the investment of. Then I would receive annual statements telling me how much my money had made for me on the market. Of course, I could not see this money. Unlike my current retirement plan (which is more like a 401k than an actual pension), I was unable to borrow money from my PERS account and then pay it back at a later time. I would attribute this to the fact that the money needs to stay in the pool to fund the massive payouts to people like Belloti, who are at the very top of the pyramid. Seems like an advanced Ponzi scheme to me. You take the money from the new entrants to pay those who have been involved in the scheme for longer. Bernie Madoff could not have done it better.
I suppose I do not have much room to complain. My PERS benefit was paid for completely by my employer. However, I suspect there are others out there who probably had to pay into this system out of their own pockets only to receive peanuts each month in the very end. That is, if they even live to see these benefits.
Let us also not forget that the Oregon PERS lost $80 million in the fiasco that was Enron. Is the state really the best steward of our money? Are they going to funnel this money into their buddies’ companies? It is hard to say. I will tell you this though, I really enjoy having the freedom to invest my retirement money where I want instead of having to rely on the Oregon Investment Council. This council is nothing more than an appointed pack of pencil-pushing bureaucrats who think they know something that we do not. They are not special, and they do not necessarily know what is good for my money. The fact that members of this council, such as Keith Larson, work for companies with a very local presence like Intel gives me some reservations about their ability to invest my money in an impartial manner.
If you have the time and the inclination, I implore you to conduct your own thorough research on the matter of the PERS and whether or not it is superior to a 401k style retirement account. However, PERS recipients might also want to get details from the Oregon Investment Council to obtain relevant information.