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Tuesday, December 05, 2006
Ain't Gonna Look The Other Way
"I would agree with the latest article summarizing the 2006 PERS By The Numbers. Steve Law has accurately and fairly portrayed the effects of numerous things that have transpired since 2003. In fairness, I would argue that the greatest impact on the PERS condition today has been the superheated stock market that reawakened in 2003 and has continued pretty much unabated since then. The PERS reforms have produced modest results and have resulted in numerous and very expensive and time-consuming litigation, much of which continues unresolved. I agree that PERS is in better health today, but I would for once like to see some coverage of the role that irresponsible public employers played in getting PERS into this mess in the first place. Fair reporting would acknowledge that the public employers badgering and hectoring of the previous PERS Board into granting creative accounting solutions so the employers' wouldn't be required to pay their true costs in a timely manner. Things like smoothing asset gains and losses, amortizing underpayments, and other more creative "solutions" to a non-problem actually accounted for at least 50% of the UAL as the legislature convened in 2003. The employers made the problem out to be one that essentially was the fault of the PERS Board, the Unions, and greedy Tier 1 PERS members, but conveniently ignored their own culpability in creating the crisis of that began in the early 1990's and peaked in 2000 - 2003. Given the same hindsight afforded to the employers by way of the retrospective review of a PERS Board decision to credit arguably excessive earnings in 1999 (earnings that were, by the way, presented to the Legislative e-Board and approved by same before decisions were announced), it could also be argued that the growth from 2003 - present wasn't unexpected and a set of reasonable and completely prospective changes could have been implemented without all the litigation that arose from the clumsy way everything turned out. If legislators and the employers and the governor had been willing to place some faith in market forces, ended the variable contributions, redid the variable match calculations, and enacted a ceiling and floor on Tier 1 regular account earnings at the "assumed rate", adopted the original actuarial equivalency proposal first introduced by the PERS Coalition in 2000 (segmented rates), introduced the new Tier 3, I'd hazard a guess that the system would be nearly as well off as it is now, without endless litigation that is costing the system and taxpayers a large sum of money. And without the rancor, bitterness, betrayal, and massive early retirements that are costing the public boatloads of extra money. Mechanisms were already in place for PERS to absorb the 1999 "overcredit" without reaching in to active members accounts, and retroactively altering certain retiree benefits *after* members had made their retirement decisions and without any option to change their decisions. PERS got a "do over" while retirees got the shaft.
The media continues to overplay the piece about a small number of retirees that ended up with more than their final average salary in retirement. We all acknowledge that it happened, but the actual number of people for which this effect is known is a small number out of the total number of retirees. Yes, it *is* true that about half of the people who worked more than 30 years retired with more than their final salaries. But what gets left out - until the most recent Steve Law piece - is that at the absolute peak, less than 1 in 7 retirees worked that long before retiring and so the percent of "overachievers" actually represents about 1 in 14 individuals. Yet, this one fact, above all facts, is the one that was deemed newsworthy and was used to justify "the sky is falling" media blitz.
The SJ can congratulate itself (and Steve Law) for finally getting the real facts out (a point that is completely alien to the Oregonian, by the way), but getting it right once is no reason to be smug. There are a bunch of us bloggers who write about PERS issues who are watching the media extremely closely and are using our pulpits to call out the media every time it misrepresents or selectively reports facts in a biased way. The Oregonian has been punished in two ways -- by a steep decline in circulation, partly caused by PERS members and retirees absolutely fed up with its anti-PERS, anti-public employee bias; and by refusing to patronize local businesses that advertise regularly in the Oregonian. There is no way one could argue that the Oregonian isn't hurting from this. The point here is that the same fate could befall the Statesman-Journal if we start to see a resumption of the biased muckraking we saw in the near past.
We don't ask for much. We want the truth to be told - the good, the bad, and the ugly. There are plenty of culprits in all this. We, as both public employees and now public retirees, are just tired of being made out to be the only cause of whatever problems resulted from legislative tampering, employer whining, and inept PERS administration. We worked hard and accepted the pension system we were offered, not the one we desired or the one we would necessarily have chosen if we were given a choice. We had no choice. We accepted the employers' representations that while they understood our salaries were low, the best they could do was to pick up our 6% contribution instead of giving us a pay raise. Deferred benefits sounded good to the employers and the legislature when they were reaping all the financial savings, but they became a disaster when the bill came due in the late 1990's. So, we want the correct villians singled out here. We didn't cause the problem; we had no choice in the system foist on us; we performed our work in good faith and accepted the retirement representations of PERS, the Legislature, and our employers. Why should WE be expected to be financially responsible for the mess left by others?
Instead of congratulating yourselves too much, why not call for an end to the litigation. Editorialize for the state and the employers to settle these current cases (Arken and Robinson) out of court and back off collection efforts from retirees. This would end the uncertainty for all parties and would let PERS (the system) move forward on more productive uses of their staff and their earnings. It can't be very cost-effective any more to be tying up expensive analysts time to continue to produce reports just for the purpose of litigation. These cases are doomed to drag on for several more years unless some settlement is reached. Call for a retiree-friendly end to the current litigation and we shall be in your debt and you will have performed a genuine public service. "