Surprising memo moves away from PERS reform bill provision

A state Public Employees Retirement System policy release caught many people in Salem by surprise.

An email (see below) sent to state agencies Friday, Sept. 13, addressed the issue of “Employment of returning retirees.”  State agencies will not take advantage of an option in last session’s Senate Bill 1049 to allow public sector retirees to return to work full time.

Allowing retired PERS members to work more than the 1,039 hours already permitted for fiscal years 2020-24 was a key portion of the highly contentious bill. The inclusion of a five-year period for retirees to work full time was thought to make the bill more politically palatable and help some employers address chronic staffing challenges in difficult-to-serve areas.

The bill, in section 35(1), says, “A participating public employer may employ any retired member without limitation on the hours worked by the retired member.” This is the legal permission for full-time workback. However, that sentence says public employers “may” employ, and the word “may” also implies “may not” is an option.

The executive branch has decided not to take advantage of the option, according to the human resources policy included with the email.

The ramifications are clear for school districts, education service districts, community colleges and other public employers. If the state can elect to not allow workback, then it is an option for all other public employers.  

The email distributing the memo explains the policy choice simply, saying that agencies “do not have enough information about the implications of the work-after-retirement provision on the Executive Branch’s workforce needs.” The email leaves open the possibility there could be changes to the policy, including position-specific decisions, by saying that there is a process ongoing to “determine if any adjustments to the current policy would better allow us to serve the Oregonians who rely on state services.”

The email also mentions other motivations, referencing “consistency for all Executive Branch employees” and the desire to “better enable the state to achieve its diversity and equity workforce goals.”

The political implications for the Legislature are unclear. The bill passed with the votes of legislators who have been fierce friends of labor and in the face of staunch opposition from labor organizations.

For public sector employers, workback choices are another tool to manage district needs in the best interest of students. If the workback provisions make sense for your district, then there is every reason to take advantage of it.

- Richard Donovan
Legislative Services specialist

Text of PERS email:

SB 1049 work-after-retirement implementation

The Governor’s Office and DAS have been evaluating the long-term effects of Senate Bill 1049 implementation for state government and our workforce needs. As part of this evaluation process, we have recognized that we do not have enough information about the implications of the work-after-retirement provision on the Executive Branch’s workforce needs to move forward with an informed implementation plan.

In order to ensure consistency for all Executive Branch employees and better enable the state to achieve its diversity and equity workforce goals, the Executive Branch will maintain current work-after-retirement restrictions for Tier 1 and Tier 2 retirees, and extend those policies to OPSRP retirees. This means, all retirees will be subject to the 1,040 hour limitation and the exemptions in statute prior to the passage of SB 1049. Please see the attached policy. You can view a full summary of the current and ongoing work-after-retirement provisions here.  

While the current 1,040 hour work-after-retirement limitation will be extended to OPSRP retirees and remain in place for Tier 1 and Tier 2 retirees, the Governor’s Office in coordination with the Chief Human Resources Office will conduct a process to assess the Executive Branch’s workforce needs and determine if any adjustments to the current policy would better allow us to serve the Oregonians who rely on state services. This process will be open and inclusive. Stakeholder representatives from state employee unions, state government leadership, other public employers, legislative leadership and other interested parties will be invited to participate.

Your feedback and perspective on this issue is critical. Please take a moment to share your thoughts with us at CHRO.policy@oregon.gov. We’re committed to keeping you updated on our progress throughout this process and responding to your questions and concerns.

Thank you in advance for your patience and participation in this important conversation.  

Sincerely,

Katy Coba
State COO and DAS Director