Do It Again

Interesting discussion involving Spake and DIH2 over at the OPDG corral. Spake wants a “do over” and DIH2 is making some interesting noises about the “finality” of the new PERS 1999 rate order. When someone takes a PERS retirement, he/she gets a “Notice of Entitlement” (henceforth NOE). This NOE details the calculation method that “wins” for you and lays out precisely what your initial benefit will be. Once the NOE is issued, a member has 60 days from the first check to rescind the retirement or change to a different payment option. Also once the NOE is issue, the member has 240 days to contest the calculation of the initial benefit. This is spelled out in the Oregon Revised Statutes under ORS 238.450. If one contests the NOE, it automatically extends the “change your mind” window by 30 days beyond the final decision in the contest. This effectively means that it could be quite awhile before a member has to finalize the retirement decision IF the member believes there has been an error in computing the initial benefit.

With this as background, consider that all of us who retired since 3/1/2000 up to about 6 months ago have already received our Notice of Entitlement and have had the opportunity to contest the calculation of the initial benefit. But – and this is really important – our NOE’s were based on PERS’ account balance calculations that included the 20% regular earnings for 1999. In 2004, the Public Employee’s Retirement Board entered into a “settlement agreement” with a group of 8 litigating public employers to CHANGE the 1999 regular earnings credit order from 20% to 11.33%. And as a result of the Supreme Court’s NON decision in the City of Eugene appeal, the PERS Board intends to implement the revision of the 1999 earnings crediting order and try to recover overpayments from retirees (and from active members as well). In effect, the PERS Board gets to “do over” the 1999 earnings crediting decision and completely change account balances and initial retirement benefits for anyone who ever had an account in 1999 and did not retire before 4/1/00. So, following this logic out, if PERS gets the opportunity for a “do over”, do members, who retired based on information PERS now claims was erroneous, also get the opportunity for a “do over”? In short, does the revised earnings credit order necessarily require PERS to issue NEW Notices of Entitlement based on the “corrected” information? And if so, does this then result in members getting a new 240 day clock for contesting the benefit calculation, and a new 60-day window to rescind the retirement decision altogether and return to work? Now if you were an employer and wanted something to worry about, THAT would be worrisome. Imagine somewhere between 29,000 and 47,000 post 3/1/00 retirees deciding to return to the jobs they retired from? Talk about havoc? Talk about a delicious irony. Let’s “do it again”.