Sunday, May 5, 2013

Meet the 1 Percent: Oregon PERS Tier 1 retirees

Oregon's Public Employee Retirement System is a messy patchwork of "tiers" in which Tier 1 old timers get away with outrageous pension benefits while folks who were hired more recently sit in the bottom PERS tier with a plan that looks something like a 401(k).* Indeed, some Tier 1 retirees get more in PERS payments than they ever earned while working!

Today's Oregonian has a profile of a family that spans all the tiers.  Here's one of the few money quotes from the story:
Reiner won the PERS generational lottery. Thanks to money match, he retired at age 53 with a pension benefit of about $61,000 a year, 93 percent of his final salary. COLA increases have pushed it to $67,574. If he never receives another cost-of-living adjustment and lives to the age of 86, about the average life span of a PERS member, he will collect more than $2 million in benefits from the state.
What's really perverse about PERS is that you can two employees sitting in the same position, in the same agency, earning the same base salary, but the the employee sitting in Tier 1 can be earning 50 percent or more in total compensation than the younger employee.

*Disclosure: I have about $1,500 sitting in a bottom tier PERS account somewhere.