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Monday, April 17, 2006

Gallows Pole

The wait is over. Today I went to the post office (the gallows pole) to mail my 2005 Federal Taxes and my Multnomah County I-Tax (hooray, this is the last year, ever!). Now that I've climbed and survived that pole, the next pole awaiting us is May 9th. That is the drop-dead date for PERS retirees to file appeals of the METHOD used to recover alleged overpayments resulting from the Strunk/City of Eugene litigation/settlement. This deadline has generated a huge amount of angst as retirees debate the merits of filing individual appeals, group appeals, PERS Coalition appeals, and/or OPRI appeals. Loosely organized groups of individuals, fed up with the lack of information from the PERS Coalition and, especially OPRI, are considering filing their own appeals based on the language of section 14b of HB 2003, passed by the Oregon Legislature in 2003. For those unfamiliar with that section, it decribes the "exclusive" remedy for the City of Eugene case in the event the court upheld Judge Lipscomb's decision. The exclusive remedy consisted of freezing COLAS and/or charging off retiree overpayments to PERS administrative expenses. The Supreme Court held that freezing COLAs was a breach of contract, while it declined to rule on the "administrative expense" petition by the PERS Coalition during the Strunk case. In considering its options, the PERS Board declined (some say refused) to use the "exclusive remedy" because they felt that taking the funds from administrative expenses (off the top of earnings) would disadvantage active Tier 1 and Tier 2 members. The concern over active Tier 1 members is entirely bogus and misplaced - Tier 1 members will never have access to earnings in excess of 8% again. The issue with Tier 2 may also be misplaced, although the concern might well be genuine depending on the Board's future actions and the system's earnings.

Driving much of the angst is the refusal of the PERS Coalition and OPRI to offer even a smidgen of advice to members other than to suggest consulting an attorney of the member's choice. The Coalition and OPRI have declined to comment on the entire 14b argument, although it is well-known that many of the unions in the Coalition are pressing for a separate 14b lawsuit to be filed before May 9th. I'm reasonably confident that something will be filed on 14b on or before the drop-dead date. I've even heard back-channel rumors about who might be involved. But the rumors are vague and amorphous. I'm not certain who will be filing it - a group of retirees pursuing it on their own (I know of such a group) - OPRI, the PERS Coalition, or a separate organization apart from the Coalition. I can't imagine letting this opportunity go by - section 14b is a very ripe fruit begging to be picked. Whether the Courts would find any merit in the argument that the Legislature compelled PERS to use this remedy and PERS chose to defy the Legislature remains to be seen. But it strikes me that to NOT challenge the legality of what PERS is doing, in light of section 14b, would be a travesty of justice.

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