Two people have recently asked nearly the same question. The answer may be obvious to some, but since so many are standing in the doorway trying to see what's going on inside, I thought I'd offer a response.
Question: Does the "lookback" as of June 30, 2003 take precedence over the "payback" provision of the PERS Settlement agreement of the City of Eugene case?
Answer: To the best of my knowledge, the "lookback" is part of HB 2004, which was totally upheld by the Supreme Court in the Strunk case. In essence, the Supreme Court held that not only implementing new mortality tables going forward was permissible, but that the "lookback" was an acceptable method of preserving the members' accrued benefits. The City of Eugene case and the "settlement" are different entities altogether. In that case (and the settlement) the issue is whether the 1999 earnings crediting (among many other things) for Tier 1 Regular Accounts was "lawful" or "an abuse of discretion" (I fail to see how one is the antithesis of the other, but that's for the court to deal with). In any case, whether the 1999 earnings crediting decision was legal or not is immaterial for the lookback EXCEPT to the extent that IF the Court rules that the PERS Board unlawfully credited 20% in 1999 when it should have credited 11.33%, THEN the "lookback" amount established effective 6/30/03 would have to be adjusted to account for the effect of the "unlawful" credit. And that, in turn, would affect the balance used to compute the "lookback" benefit. Nothing in the Supreme Court's Strunk ruling challenges the legality of using the 6/30/03 account balance as a floor under the benefits currently accrued by Tier 1 members, but the unstated point is that the "lookback" amount as of 6/30/03 is presumably computed correctly and legally.
Question: Does the "lookback" as of June 30, 2003 take precedence over the "payback" provision of the PERS Settlement agreement of the City of Eugene case?
Answer: To the best of my knowledge, the "lookback" is part of HB 2004, which was totally upheld by the Supreme Court in the Strunk case. In essence, the Supreme Court held that not only implementing new mortality tables going forward was permissible, but that the "lookback" was an acceptable method of preserving the members' accrued benefits. The City of Eugene case and the "settlement" are different entities altogether. In that case (and the settlement) the issue is whether the 1999 earnings crediting (among many other things) for Tier 1 Regular Accounts was "lawful" or "an abuse of discretion" (I fail to see how one is the antithesis of the other, but that's for the court to deal with). In any case, whether the 1999 earnings crediting decision was legal or not is immaterial for the lookback EXCEPT to the extent that IF the Court rules that the PERS Board unlawfully credited 20% in 1999 when it should have credited 11.33%, THEN the "lookback" amount established effective 6/30/03 would have to be adjusted to account for the effect of the "unlawful" credit. And that, in turn, would affect the balance used to compute the "lookback" benefit. Nothing in the Supreme Court's Strunk ruling challenges the legality of using the 6/30/03 account balance as a floor under the benefits currently accrued by Tier 1 members, but the unstated point is that the "lookback" amount as of 6/30/03 is presumably computed correctly and legally.
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