Tuesday, May 24, 2005

Torn and Tattered

Just when you thought it couldn't get much worse, along comes ....... the IAP and its assorted fiascoes, catastrophes, and just plain fubars. Things have gotten so bad that PERS has had to post a Q&A over on its site just to explain some of the questions they've already fielded. I won't repeat what's there, but I will report that I've heard from readers who work for the SAME agency in the SAME Department who've received different rates of return on their IAP investments. You have to ask yourself: how is it possible for two people working in the same department at the same agency to get two different return rates on their IAP investments? Kinda curious, doncha think? Who do you blame? Darth Vader? This one has me flummoxed. Worse still, everybody's pointing fingers at everyone else -- the employers didn't submit payroll data in a timely way, PERS didn't process the data in a timely manner, the Legislature didn't provide enough time for PERS to implement the IAP, the investment bankers didn't invest the money quickly enough. It's enough to sound like a Monty Python skit, except this one involves real money.

It only gets worse. Today I received a note from a reader who reported that she retired on 3/1/04. She contributed $524 to the IAP for January and February 2004. She couldn't get access to the money when she retired; she's had to wait for it until just last week. Today, 14 months after retiring, the account is worth $410, despite the fact that the fund didn't lose a dime while the woman was working. But because they couldn't figure out how to get her money in timely fashion, she eats the losses for 2005, which exceed the gains from 2004. Now I suppose you could argue that PERS would have to pay out the gains in to those people whose accounts gained in value and I would agree with you. But, don't you think that the members SHOULD HAVE BEEN GIVEN A CHOICE? How difficult would it have been to say: "we can't get your money to you when you retire; do you want to keep it fully invested or move it to a safe money-market type account?" Why is it that the involuntary beta testers of any system are the ones with the broken computers, and programmers saying, oh we're sorry but we have no liability.

The more this stuff surfaces, the more I think I'm walking torn and tattered into a "close" room where there are three or four others in the room - PERB, the Employers, the Legislature, the Governor, and some right coast investment bankers. Someone has just cut the cheese and it stinks. The only thing I know for certain is that it ain't me who let one rip, but somehow I'm always the one downwind of the stench.

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