Why Can’t Portland’s Pension Problem Be Solved Voluntarily?

August 15, 2012 0

By Shane Young

In 2008, the Portland public safety fund realized it had been accidentally overpaying pension benefits to 980 police and firefighter retirees for the last 13 years. This cost the fund $2.89 million. In 2011, the fund tried to recoup this money by withholding the cost of living increases for the retirees until the amount they were overpaid was returned. Alternatively, the retirees were given the option to repay the amount they were overpaid directly back to the fund.

However, as a response to a class action lawsuit brought by five of the affected retirees, a Multnomah county judge has recently declared that the fund cannot recoup the overpaid money by withholding cost of living increases, as such an act would violate the wage claim statute. The fund is now forced to figure out new ways to recoup this money.

While the retirees are not to blame for the overpayments, it is sad that such great lengths have to be taken to recoup what was overpaid. Only 52 of the 980 beneficiaries have chosen voluntarily to pay back their portion of the overpayments.

As ex-public servants, these retirees should be doing all they can to figure out how to voluntarily repay taxpayer money that they did not earn. It shouldn’t be the taxpayers’ job to force them to do the right thing.

Shane Young is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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