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. 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. Also, due to the volume of email I'm getting right now, I am unable to guarantee that I will respond to all personal emails sent to my email address. I am being buried alive under an avalanche of email. Please go to the PERS Oregon Discussion (POD) Group, linked below (left) under LINKS to post your question and get a variety of answers. Thank you.

Friday, July 29, 2005

Gaslighting Abbie

Do you ever wake up and think that you've stepped into the middle of a break in the space-time continuum? Lately that's where I seem to find myself as I try to decipher the pretzel logic of the Supreme Court's ruling in Strunk, the Lipscomb order and opinion, the "settlement", and just about everything else PERS-related. Our riddle for today (anticipated in a afterword placed inside yesterday's post "Still the Same") is: when is a COLA freeze not a COLA freeze? Did you know that none of us "window retirees" have had a COLA freeze? Huh? I retired in 10/2002 and have NEVER once received a COLA. Looks like a COLA freeze to me. But, when you parse the Supreme Court's opinion in Strunk they didn't say that a COLA freeze was illegal. What they said was that PERS could not define a "fixed benefit" to which no COLA attached. So, according to the Court we've all had a "fixed benefit", not a benefit for which the COLA has been frozen. There is this second benefit, called the "revised benefit", which reflects an adjustment for the present value of the alleged overcredit in 1999. It is smaller than the fixed benefit, or still is for most "window" retirees. This "revised benefit" gets COLA adjustments annually. It is only when the "revised benefit" exceeds the "fixed benefit" does the retiree start to get the "revised benefit" to which the COLAs are attached. The Supreme Court ruled that this was not legal - PERS cannot define a "fixed benefit" to which no COLA attaches. Confused? It gets better. The COLA "freeze" is defined in section 14b.1.a as a permissible remedy for "erroneous calculations" identified in the City of Eugene case. Since that case is still in litigation, the court essentially argued that section 14b(1)(b) was not "ripe" for adjudication -- the "trigger" for the COLA freeze hasn't been pulled yet. I can't recall whether the OPRI case (Sartain v PERB et al) directly addressed 14(b)(1)(a), but it isn't addressed directly in the Strunk opinion. So whether you *think* you've been COLA frozen or not is immaterial. It doesn't appear that 14(b)(1)(a) has been applied yet and so you can't claim harm for remedy not applied. Does this mean you won't be subject to a COLA freeze? Beats me. I'm just looking for a new word to describe the fact that I haven't seen a COLA in 3 years, and when I retired no one told me that I was receiving this "thing" called a "fixed benefit" to which no COLA attached. In fact, I retired BEFORE Judge Lipscomb issued his final opinion and well before HB 2003 was even a twinkle in Bill Gary's eyes. So, in my humble opinion, if it walks like a duck, quacks like a duck, it must be .... a beaver? (sorry, couldn't resist a bit of intrastate rivalry there). Welcome to the wacky world of Oregon politics and retributional jurisprudence. It ain't a COLA freeze til we tell you it is.

Greg Hartman confirms that 14b remains one of the unresolved issues in Strunk. Only *after* Lipscomb is decided can there be any pursuit of 14b, if necessitated by the decisions in Lipscomb. In the meantime, there is an odd footnote in Strunk (9 for those interested), which asserts that the PERB agreed(in its "settlement" of City of Eugene) to *not* apply the remedies identified in 14b, yet 14b is never once mentioned in the "settlement". So even if COLA freezes are in vogue, you ain't gonna get one even if you want one. But you haven't had a COLA freeze anyway so what are you complaining about? Are you thoroughly confused now? Don't feel bad. You've been gaslighted and it's contagious. We now return you to the twilight zone.

Thursday, July 28, 2005

Stolen Land

Or is it "stolen money"? Is it just me or are others wondering why PERS has never bothered to post a copy of the "Settlement Agreement" that is now the subject of an active lawsuit - the White case? Here we have a document that materially harms PERS members and beneficiaries, to which the current PERB is a principal signatory (member-by-member no less), but which has NEVER been publicly posted BY PERS for inspection by its members or its stakeholders. If members want to see this document, they have to go to other places to read it! You'd think the PERB was actually trying to hide out from members by depriving them of the opportunity to read this UNCONFIDENTIAL agreement. So much for public accountability and responsiveness to members. You want to read it? Go to here. It is "exhibit 1" in the "White" case. There you can read it and weep and see the contempt towards PERS members and beneficiaries dripping from the pages. Perhaps a few hundred emails to PERS and the PERB might finally goad them into posting this document and responding to questions about it. There is a link on the left side to PERS email addresses. If you're so inclined to write, this will give you the names and email addresses of these public officials.

Fool's Game

It is utterly amazing to me to hear the stories people tell me. At times, I'm torn between laughing so hard that men in white coats will come carry me away ("they're coming to take me away, haha, hoho, heehee....), and screaming from the rooftops that I'm mad as hell and not going to take it any more. Two recent examples: 1) a person retired on 1/1/05 and received his Notice of Entitlement after the Supreme Court ruled in Strunk. The NOE did not include any earnings crediting for 2003 or 2004, but reduced the account balance by the present value of the 1999 earnings "overcredit". The member contested the NOE, asking PERS for the statutory or legal citation from the OAR and/or ORS that permits them to withhold the 2003 and 2004 earnings *after* Strunk. PERS responded by considering the contest and adjusting the benefit accordingly to include the 8% for 2003, 8% for 2004, reduction of 1999 earnings, and allowing for the 2% COLA to be effective 8/1/05. Net result is the member is getting $952 more per month than what the NOE called for. 2) Member retires 6/1/05 - ostensibly within the period of time that PERS claimed it would begin applying both Strunk and the settlement prior to a final ruling in Lipscomb. Member gets Notice of Estimated Benefits which shows that he did *not* get 8% for 2003 did *not* get 8% for 2004, continues to be credited with 20% for 1999. In short, PERS did NOT, contrary to what its Board accepted as a "staff recommendation" in March, implement any element of the settlement or Strunk for members retiring right now. This interpretation is confirmed by PERS reps. This can only make you daft trying to figure out what PERS will do or not do for an encore. More bizarre is the transparently different treatment these two members got. One member, upon raising the perfectly legitimate question of PERS' authority to NOT credit earnings following the Strunk decision, gets the full force of the settlement applied to his benefit, while the second member, who retires 6 months later gets treated as if Strunk never happened, HB 2003 in its original form is still the "law", and the "settlement" is a piece of paper "out there" with no legal import (yet). It seems like attending PERS meetings and reporting on decisions the Board makes is simply a fool's game. PERS and its Board seem to be ruling Al Amok in the same way as the Provisional Authority ran ....

Wednesday, July 27, 2005

Still the Same

Old news. No Lipscomb tomorrow. I'm beginning to feel like I'm in one of those Caribbean countries where the standard response is "No Plane on Monday, maybe one come on Tuesday". If I were placing bets, I'd say that the Lipscomb decision will come the week after the Legislature adjourns. That means if the Legislature adjourns next week, as it is threatening to do, we might see the Lipscomb decision during the week of August 5th. Not a prediction but merely a guess.

More speculation floating around these days. Some wonder exactly what PERS would be permitted to do if Lipscomb were upheld. Take some time to read HB 2003 (passed in the 2003 Legislature) in context with the Strunk decision that voids several sections of HB 2003. The court nullified section 10 of HB 2003. Section 14b describes the specific remedies permissible in the City of Eugene cases specifically. Note that section 14b.1 (COLA freeze) was nullified by the Court, leaving 14b.2 as a valid mechanism for recovering the "excess crediting" identified in the City of Eugene case. This section reads: "(b) The board may treat all or part of the present value of the benefits erroneously paid and payable to retired members as a result of the erroneous benefit calculations as an administrative expense of the Public Employees Retirement System, to be paid exclusively from future income of the Public Employees Retirement Fund, and to be amortized over an actuarially reasonable period not to exceed 15 years." Some people are viewing this section as preventing the Board from recovering money from retired PERS members. While I'd like to share this optimism, I note that the language uses the term "may", not "shall". This suggests to me that the Legislature did not intend to preclude the Board from invoking other legal mechanisms (i.e. ORS 238.715) to collect the money; it simply offers them another option. On the other hand, the Legislature did tip its hand clearly in the run-up by including the preamble statement in 14.b: "If the Public Employees Retirement Board is required to correct one or more of the erroneous benefit calculation methods identified in City of Eugene et al. v. State of Oregon, Case Nos. 99C-12794, 00C-16173, 99C-12838 and 99C-20235, the board shall recover the cost of benefits erroneously paid to retired members as a result of those erroneous benefit calculations by one or both of the following methods:" Note the word "shall" in this section. The court then struck down the "a" option, leaving only the "b" option above. So, while I might speculate that the "may" in 14.b.1 seems permissive, the "shall" in 14.b appears compulsory. Thus, there are causes for optimism amidst the darkness, but the PERS Board seems to be guided by forces other than the law and its fiduciary responsibility to members. I suspect that no matter what the Court rules, we're in for a long haul before this mess is settled.

7/28/05 - A correction. The Supreme Court did NOT nullify section 14b.1.a of HB 2003. They nullified section 10, which creates a "fixed benefit" to which no COLA attaches. According to others, section 14b hasn't yet been applied and so is not yet "ripe" for litigation. So to all of us who haven't seen a COLA at all, or since 7/1/2002, you've haven't yet experienced a COLA freeze. Quit yer complainin :-). What I want to know is: when is a COLA freeze NOT a COLA freeze? If this sounds like Monty Python's "Dead Parrot" skit, it's probably not an accident.

Tuesday, July 26, 2005

Call It Democracy

Some would, some wouldn't. There's been a lot of discussion in various places about what effect the Supreme Court's ruling on Lipscomb will have on PERS' plans to implement the "settlement" in the City of Eugene case. Considerable disagreement exists between opposing sides in this dispute. The PERS Coalition believes that if the Supreme Court strikes down significant portions of the City of Eugene decision that this will invalidate the settlement that implements the agreement between the employers and PERS concerning certain practices that Judge Lipscomb found to be "abuses of discretion". By contrast, the parties to the settlement (PERS and the employers) believe that the Supreme Court's decision will be irrelevant to the settlement and expect to implement the settlement regardless (i.e. reduce member account balances for the alleged 1999 overcredit, and adjust retiree benefits for the same alleged overcredit). Apparently, the only way this could be averted would be for the Supreme Court to address the "settlement" directly in its decision and rule on its validity there. Otherwise, absent any mention of the settlement (or a ruling completely upholding Judge Lipscomb), the settlement will be implemented until the White case (in Multnomah County) wends its way through the legal system. The White case directly challenges the settlement.

So, although the Court's ruling in Lipscomb has to be imminent (next 4 - 6 weeks is my best guess), the ruling could do nothing to clarify or resolve any of the uncertainty still out there. So this is what democracy is all about, eh?

One further question continues to linger. Under Strunk, the Supreme Court held that it was not legal for PERS to use the COLA freeze mechanism to recover "excess benefits", while it was also illegal to pay less than the assumed rate to active and inactive members as a mechanism for recovering "excess crediting". In implementing both these mechanisms, the PERS Board and the Legislature divided retirees into multiple groups, but the most significant division came between those retiring before 4/1/2004 and those retiring on or after that date. The earlier group - the "window" retirees - were COLA frozen and clearly appear to be subject to the "settlement's" recovery mechanisms. However, those members who retired between 4/1/04 and 3/1/05 are in an interesting legal position. They received 0% for 2003 and for the portion of 2004 worked, while they were not COLA frozen. Members who retired on or after 4/1/05 had their benefits calculated "as if" Lipscomb and the settlement were the law of the land. So, only those in the period between 4/1/04 and 3/1//05 remain in a sort of legal limbo? What happens to them? Do they get their 8% back for 2003 and the pro-rate for 04, but have their benefits reduced because of 1999, or do they simply elude any further adjustment of benefits. What a mess. Ain't democracy grand?

Friday, July 22, 2005

Fancy Dancer

Time for another guessing contest. There's a $20 Borders gift card for the reader who comes closest to guessing the date and time we'll record our 200,000th visitor. I'm not going to provide any useful statistics today; you're on your own. Guesses close on August 5th - 5 pm PDT, which should tell you that I don't expect us to be there by then. But who knows, perhaps if the Supreme Court returns from exile, we might get there faster than we think.

The "Lipscomb calculator" is essentially finished. Although it is stuck at alpha 0.8.1, little else will change except code cleanup, bug fixes, and some cosmetics. You can download a copy from the link to the left. All the reports I've gotten on it so far suggest that it is giving the "right" answers for the scenarios thrown at it. So throw out your gold teeth and see how they roll. Those who want a Linux version or who want an OS X version will need to email me. I can provide Linux version almost instantly. It will take longer for an OS X version, but the code is OS independent.

Wednesday, July 20, 2005

Code of Silence

Is what the Court seems to have taken on the City of Eugene case. Another week, another non-decision. It's looking more and more like the Court may be deliberately waiting until the Legislature adjourns to release its decision. Don't ask me why?

While we're waiting, I'm busy programming. Version 0.7.1 of the "Lipscomb Calculator" is now available (see link to left). Verion 0.8 will be ready soon and it will have the "best case" scenario programmed. That way "window" retirees will be able to look at the outcome from multiple perspectives.

NOTE: 8 p.m. I've just posted alpha 0.8. It adds the "best case" scenario to the "worst case" scenario and provides output for both. It also fixes some logic issues with retirees who left before the COLA freeze took effect. Please check the output against your own figures. If things don't work out correctly, it would be helpful if you could email me the file "lipscomb.txt" so I can work back through to locate any bugs. At this point, the feature set is pretty well frozen. Changes at this point will be bug fixes and rearranging output messages or clarifying language. People who've tested the later versions of the program report plausible and stable results. My own results using multiple test scenarios all match Excel output, so I'm fairly certain the logic is correct. PLEASE let me know if you have problems.

Enjoy the sunny weather. Summer might actually be here.

Monday, July 18, 2005

Little Mysteries

Keep getting fixed in the Lipscomb calculator. The latest version (alpha 0.4) is now posted. It fixes a few bugs, adds more output, and stores all results to a text file called "lipscomb.txt", which can be viewed, edited and printed from within Notepad. Alpha 0.5 is due later tonight or early tomorrow morning. Check the link in yesteday's post or over on the left under links. Please keep me posted on bugs, things that don't look right, or suggestions for re-ordering the appearance of output. You can find my email address under my complete profile here.

Note (9:40 p.m.): alpha 0.7 was just posted. It *attempts* to deal with pre-freeze COLAS. I do not have any test data to use and am looking for volunteers to test the program or send me data. If you retired before 7/1/02 (and after 3/1/00), have no variable account in retirement, and are willing to send me 3 pieces of information (initial benefit from Notice of Entitlement, account balance at retirement from NOE - regular and variable - and regular account balance at 12/31/99 from Member's Account Statement), please contact me at "mrfearless47 at yahoo dot com" (you'll have to translate that address into emailish - I get enough spam now). I promise that any information you might send is confidential. If you fit these criteria and have already done the calculations yourself, please test this version and see whether it gives you close answers.


Sunday, July 17, 2005

I Don't Want To Know

But unfortunately I need to know. The first partly working iteration of my Lipscomb calculator is now available via a link on the left of this page. This version (call it alpha 1) only considers the effects of the Supreme Court upholding the Lipscomb ruling and, by extension, the "settlement". The program is crude -- it is written to run in a DOS console under Windows. It has no fancy installer (just the raw executable file), does minimal error checking and is hardly "idiot proof". Just download it to your desktop, click on the icon and a box will pop up on your desktop and take you through the inputs. Be sure you have the required two documents (1999 Member's Annual Statement) and your Notice of Entitlement handy. Be sure you retired between 4/1/00 and 3/1/04. The program is unnecessary for earlier retirees, and will not work for later retirees.

Some notes: 1) there is no Mac version yet; 2) there will NEVER be a native Windows version; 3) the program does not currently adjust benefits of people who received COLAs before the freeze, but the final amount as of 7/1/05 should be correct anyway; 4) the program will NEVER deal with the fluctuations in monthly benefits from continued participation in the variable after retirement. If you're in variable after retirement, your results should be refigured manually to reflect any variable adjustments made along the way.

The current version is subject to further revision and refinement, and the final version will also allow computation of benefits under a ruling that overturns Lipscomb. That piece is trivial to write and so is not of highest priority. The idea is to give retirees a pretty close picture of the current scenario as of 7/1/05. It would be easy to extend the picture out to 6/1/06, but that's not a priority right now.

If you have comments, criticisms, complaints, suggestions, inexplicable results, or just want to lavish praise on my brilliant programming skills, please email me backchannel at the usual address. Just remember that I'm doing this on my own time, my own nickel, and out of the goodness of my heart. While suggestions are welcomed, unless they are both important and easy to implement, I've got other things to do. I'm definitely interested in buggy and ambiguous results, as well as questions.

The link to the program and to future versions is:
http://web.pdx.edu/~h1mf/LipTest.exe

You can check back every few days for updates. Versions will be internally numbered so you can tell whether you have a later version than the one you have. Just copy new versions over old.

Wednesday, July 13, 2005

La Marseillaise

I guess the French will be able to celebrate Bastille Day in relative peace. The Oregon Supreme Court won't offer us peasants our own opportunities to storm the Bastille. No decision this week. Au revoir. A demain.

Monday, July 11, 2005

No Pressure Over Cappuccino

I'll be out of town all day Tuesday and most of Wednesday. I won't be able to update this blog until sometime on Wednesday afternoon. The news people will be looking for is whether the Supreme Court will issue their decision in the City of Eugene case on Thursday. Don't fret, I already have the two optional blog entries written and will need only press the right button to post it.

On a different front, I am making significant progress developing a calculator for "window" retirees to figure out what their benefits will be under both a favorable and unfavorable ruling in the City of Eugene case, while simultaneously implementing Strunk. Virtually everything hinges on how the Court rules on the PERS Board decision to credit 20% to regular accounts for 1999. The settlement of the case calls for PERS to revise that crediting decision to 11.33%, recalculate retiree benefits AS IF only 11.33% had been credited, compound the earnings forward to the date of retirement, and adjust the required benefit downward to reflect the lower earnings. For virtually all "window" retirees (4/1/00 through 3/1/04), this will result in two changes: 1) a lower monthly benefit going forward and 2) overpayments that must be repaid for the period from the date of retirement to date of implementation of the settlement. In addition, the adjusted base benefit must be COLA'd up from the date of retirement to the date of implementation, which reduces both the excess crediting and lowers the current benefit less. While this calculation is relatively easy to do for an individual, it is considerably harder to do with the different variables involved for large numbers of people. I have the program prototyped, all my crucial implementation questions answered by PERS, and have the necessary constant data (COLA by cohort) to calculate. It will probably take me the rest of this week and into next week to finish a working version. The result will not be a "pretty" program like my earlier PERS calculator. In fact, it won't even be a Windows program. It will run in a DOS console under Windows. The program is written in standard ISO C++ (under Linux) and is intended to be fast and accurate, not pretty. Error checking will be minimal, but will prevent non-Window retirees from getting useless answers. Aside from that, it follows the garbage in/garbage out model of programming. It should work very well for members who rolled all variable into regular at retirement. It will only give rough (but close) answers for members who kept money in variable after retirement. When the court's ruling finally comes out, I will begin to harden up the error checking and *maybe* prettify it. Watch this space for more information on how and when you can acquire a copy of this work of low art.

It's Five O'Clock Somewhere

Especially if you live in Sun City, AZ, are former Oregon teachers and relatively recent PERS retirees, and pose for an Oregonian photographer as PERS poster children. One can only ask: "what were they thinking?" when they agreed to have their picture taken for a Sunday feature article (front page) about problems with funding for public education in Oregon. Worse still, they openly admitted that they retired because they feared benefits would be reduced and wouldn't have retired if the system had remained unchanged. Given that, why on earth would they want to advertise this fact to, of all newspapers, the Oregonian? One can only assume they were utterly naive, completely misled about the nature of the story, or were simply thumbing their noses at the people of Oregon. Whatever their motives, they surely helped the Oregonian and all the anti-tax advocates continue their drumbeat against public employees. Perhaps the followup story will show us their family frolics in the Caribbean, where it's 5 O'clock always.

Friday, July 08, 2005

Get On the Natch - Part 3

It's been awhile since I last posted an email. This came a few days ago. I thought people would have the same reaction to it as I did. Egads!! Just when you thought it couldn't get worse. Unfortunately, this member's experience is *not* unique.


"PERS is so FUBAR: I called them today about a couple of things. My monthly retirement checks went down about $5/mo last Feb. Well, the PERS CSR said it was because that was when PERS implemented the annual variable adjustment for those that stayed in the variable upon retirement. I pointed out to the CSR that I got cold feet and submitted a request to roll my variable into the regular account/annuity within the 60-day window of the first retirement check. And that I confirmed with PERS last Oct that they had received my request. And he confirmed that the request is in my file.

But PERS didn't do the roll-over and so I'm still in the variable.... After he had a long talk with someone else, he said that they don't know when they will roll my variable account into the regular/fixed account... sigh...

Then, of course, I still haven't received my IAP statement... And PERS sends letters for other retirees to my address... And those PERS idiots continue to print social security numbers on much of the member specific correspondence they send out, including the monthly checks. They should be using our PERS membership number to reduce the potential for identity theft with the SSAN. Especially since they can't seem to send correspondence to the correct addresses."

Makes you have the warm fuzzies about the handling of your account, your money, your retirement, and your identity.

Thursday, July 07, 2005

Deja Vu (All over again)

Big surprise. No ruling this week on the City of Eugene case (Lipscomb). If this is beginning to feel like Groundhog Day, perhaps there is solace in at all. Phil Conley kept living the same day (Groundhog Day) over and over again until he eventually found the "magic" that would allow him to get past it all. And the movie had a happy ending. So, perhaps we can pretend we're the Phil Conleys of the world, and each day the Court doesn't rule, means that they get another opportunity to make it "right". Think about it this way: if the Court merely wanted to uphold Lipscomb, why would it take them 8 months to make that decision?

Wednesday, July 06, 2005

Before You Accuse Me

Of forgetting that today's Wednesday, let me remind you that Monday was a holiday. If the Supreme Court is planning to issue any decisions this week, they will be announced tomorrow for Friday release. Check this site tomorrow after 9 a.m. to see whether Lipscomb is on the Court's plate for this week.

Tuesday, July 05, 2005

Hotel California

I continue to be amazed, amused, and completely befuddled by the IAP account created by the Legislature in 2003. Not only is the entire accounting process FUBAR (but possibly being fixed), but the whole idea of actually getting the money out of the IAP is utterly inexplicable, especially if a member retires before age 59.5. PERS claims the IAP is an IRC 414(k) plan. If you check the IRS site, you'll note the existence (if you look really, really, really hard) of such a plan, but the IRS refuses to provide any opinions or clear regulations about the rules governing the distributions from such plans. I'm sure they're somewhere, but I sure can't find them. I've asked PERS for the rules; they've promised to get back to me 'soon' with something. In the meantime, the more people dig, the more confusing the situation is. If you want to read some interesting discussions about the IAP, check out OPDG (see my links to the left). I'm at the point where everytime I think about the IAP, the final lyrics from the great song, "Hotel California", keep replaying in my head:

Last thing I remember I was running for the door
I had to find the passage back to the place I was before
Relax said the nightman We are programmed to receive
You can check out anytime you like but you can never leave