If you wish to help support the ongoing costs of running this blog and you haven't purchased anything through Amazon on this site, please consider a small donation to defray basic costs. It isn't free to me to keep this site current. I have to pay for bandwidth, costs of duplicating documents when they exist only in paper form, and keep printer ink around to read lengthy documents, and the time to do the research. Thank you. Marc Feldesman, site owner and publisher.
Oregon PERS Information is Copyright Marc R. Feldesman (c) 2003 - 2017 All Rights Reserved. Posts may not be reprinted without prior consent.


Please don't post your comments more than once. I moderate all comments and a delay between posting and appearing is part of the drill here. I get to all comments in due time. Please don't continually repost the same comment. Only one will be posted. Thank you.

Wednesday, September 21, 2005

Math Suks

Especially PERS math. I've been dissecting the PERS implementation plan as outlined by Steve Rodeman's memo to the PERS Board (see yesterday's entry). It is hard for me to imagine that the PERB will NOT adopt this plan, especially since Rodeman's analysis essentially leaves them with no other alternatives. Memo to Steve: the Board likes options, even if you recommend they choose one in particular. You chose to leave them no choices. You even played judge and jury and ruled on the "illegality" of a statute that has never been tested in Court (14b). That makes folks like me really cranky.

But, no matter. Math is hard; let's go to the mall instead. Or not. Let's figure out what PERS has up its sleeve. Assume that after all the smoke and mirror calculations are done with COLAS and overcredits and overpayments, you find yourself owing PERS $15,000 on August 1, 2006. Let's further suppose that you are 60 years old when you get the bill (or whatever you get). If we look at PERS last study of life expectancies of PERS retirees, we see that a 60 year old retiree is expected to live an additional 24.4 years (293 months). Using PERS' method, your benefit reduction would be $51.19 per month for the rest of your life, whether you actually live 50 months or 400 months. If you have a beneficiary who will continue to receive a benefit after your death, the reduction would extend to that person's lifetime as well. This approach doesn't charge you any interest (good) and you get to repay the money in depreciating dollars (that's OK too). The cost for thisis that you and your surviving beneficiary could end up paying back far more than you owe. Since there are few of us around who actually believe we OWE anything, it is hard to work up any enthusiasm for a method used for no other reason than the fact that SOMEONE has decided that the Legislature's statutory remedy is illegal prima facie, before any judge has ever commented on it. That math and that calculus sucks.

No comments: