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Thursday, November 10, 2005

Old Habits Die Hard

And the harder PERS tries to change, the worse the muddle they seem to create. Several weeks ago I shared an email I received from an irate active PERS member who was trying to get an accurate estimate on which to base a retirement decision. This letter was the most articulate of those flooding my mailbox, so I posted the letter. I also forwarded copies to the PERB, Mr. Cleary, and others in positions of PERS management. On November 1, PERS posted an announcement on their website that they would henceforth be producing retirement estimates using the Strunk/City of Eugene implementation (I take no credit for the announcement, but the timing wasn't lost on me). Members were concerned that previous estimates (1) did NOT reflect any of the crediting/recrediting adjustments for 1999, 2003, and 2004 and so the estimates were based on very outdated and wrong account balances, and (2) that the variable "match" was still being computed in the "old" (pre-settlement) way also resulting in highly inaccurate variable match estimates. Both of these conspired to seriously mislead (too high, too low, rarely 'just right') members about benefits at retirement.

So, it was with some relief that I read PERS' posting on November 1. Hopefully, PERS would supply reasonably accurate estimates so members could start making INFORMED retirement decisions. Alas, my relief was premature. I'm starting to get the first reports from people who've availed themselves of PERS' new estimates. While PERS seems to have solved the crediting issue, the variable match still remains unsolved and members are still getting estimates with their employee variable balance DOUBLED. From some of the communications that members have shared, this doesn't seem to be problem that PERS either intends to fix. PERS' recommended solution is for members to wait until after they submit their retirement application and get their "Notice of Entitlement", which will then have the variable match correctly calculated. You have got to be kidding!!!!! PERS is asking members to separate from service (because, they can't calculate actual retirement benefits until the separation papers are received from one's employer), and then trust their fate to PERS getting an accurate estimate in a timely fashion. Gee, I think I'll quit my job on the promise that PERS hasn't screwed up my estimate too much and my benefits will be within 80% of what PERS' new, customer-friendly, estimates are. Fat chance! Apparently, PERS is now making administrative policy decisions at the Joseph Heller Catch-22 school of business.

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