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.
Monday, May 21, 2007
The Lipscomb methodology deprives retirees of the employer match to actual earnings in the variable account. Instead, the revised method considers employer match only as if the money had been in the regular account for the total length of time the retiree was in variable. There are two calculations done: var@var (the old method which provides a dollar for dollar match to variable account balances) and the var@regular (which matches only what the variable dollars would have earned if the money had been in the regular account). There have been claims of massive harm, but to date the claim has not been backed up with a sufficient number of documentable cases to file suit. If you are in the category of having experienced harm (i.e. lost money that you thought you should have been entitled but for the change in methodology), get in touch quickly. Both the time and motivation for filing suit is getting shorter each day.
Sunday, May 20, 2007
At my recommendation, he forwarded his concerns and my interpretation to the PERS Coalition attorney, Greg Hartman. Mr. Hartman reviewed the situation and concluded that it was unfortunate but fell within the parameters of the remediation. Only the outcome of existing litigation could possibly change the result. My correspondent then petitioned PERS following the procedure contained in the recalculation letter. Yesterday they responded. After a lot of yada, yada, yada, it concluded: "The appeal is denied because it does not raise a bona fide dispute of material fact, the pertinent statutes and rules are clear in their application to the facts, and there was not an administrative error". Not surprising, but disappointing. He's left now only to appeal to an administrative Judge petitioning for a contested case hearing. In the meantime, PERS has offered to provide him with the material facts of his calculation for a simple toll-free phone call.
I suspect that anyone else who tries to appeal the Strunk/Eugene calculations will find the same result. I don't discourage members who genuinely believe that PERS has MISCALCULATED something to challenge them. But appealing on the grounds that you don't believe you owe the money isn't going to get you anything but a response much like Mr. T.
Wednesday, May 16, 2007
Sunday, May 13, 2007
When PERS set out to do the Strunk/Eugene remediation, it decided that it would completely recalculate the benefit by reviewing the entire employment history to make certain that as the new computer system was phased in, it began with entirely accurate information. As a side effect of this, the Strunk/Eugene remediation also adjusted the 1999 account balance to reflect the revised earnings crediting for 1999 (from 20% to 11.33%), and to recalulate 2003 and 2004 balances using 8% earnings rather than the 0% mandated by the legislature and struck down by the Oregon Supreme Court. Unbeknownst to most, the one group for which this recalculation was about to produce a most curious and deleterious effect was the "lookback" group. The "lookback" recipients had benefitted from the 20% in 1999 and received a pro-rate of 8% for 2003 at the time of retirement. No further additions occurred to their accounts. When the recalculations occurred, a curious thing happened. The "lookback" was no longer the winning benefit method. As PERS is obligated by statute to give the highest benefit to an individual, this should a moment for happy celebration. Unfortunately, "winners" in this situation found themselves with a significantly higher at retirement account balance, a lower balance for the "lookback", and a higher benefit from the non-"lookback". Paradoxically, the higher benefit is lower than the current benefit. Thus, "lookback" winners have been turned into big losers with a lower adjusted benefit and a higher repayment amount than they ever imagined. They expected a check; instead they got an invoice for a lot of money and a monthly benefit sizeably lower than their former benefit. Moreover, because these people were outside the "window", they had no COLA freeze dollars to rely on to offset some of the debt.
At my encouragement, several of my correspondents did two things: (a) appealed to PERS following the procedures described in the invoice and (b) communicated directly with Greg Hartman. To date, there has been no response from PERS, and very discouraging responses from Greg Hartman. In a nutshell, unless the White case wins and holds through appeals, there is no litigation potential for these folks. Talk about your caught between a rock and a hard place. Hence the title for my entry today.
I wonder how many other surprises still lurk out there? Back to celebrating Mother's Day. A reason to take pictures, look at a slide show, and not think about PERS for half a day.
Saturday, May 12, 2007
For a brief moment last week, an unsubstantiated (and incorrect) rumor was floating that Judge Kantor was going to release one or more of his PERS-related rulings. For those of you who've forgotten, Judge Kantor is the Multnomah County Circuit Court Judge who heard the Arken and Robinson cases last September 28, 2006. He promised all in attendance - lawyers, reporters, PERS members and others - of a relatively quick resolution. We're starting to measure quick in geological time, not clock time. I don't have any sense that Judge Kantor is any closer to releasing a verdict in either case anytime soon. Maybe I'm wrong, but he's managed to redefine "relatively soon" so many times that I no longer know what it means.
Our Quebec foreign exchange student left this morning and we're all feeling a bit sad. It is wonderful to have the opportunity to spend time with young people from another culture. They try so hard to speak English and we try so hard to speak French. Regardless of language barriers, we and our daughter had a wonderful time. And, by way of symmetry, our daughter had a great time staying with our student in Quebec.
I hope I have some interesting, relevant, and useful PERS news before we leave on our next trip to New York City in June. At the current rate, that seems unlikely.
Friday, May 04, 2007
Tuesday, May 01, 2007
In other news, a PERS-sponsored bill to eliminate the "Break In Service" statute enacted in 2003 has gotten its first hearing. This statute has created more havoc, more unintended consequences, and more headaches for PERS and for many employers and employees than anyone imagined when HB 3020 (formerly 2020) passed in 2003. The City of Portland has blessed PERS' efforts to eliminate the rule, as has the PERS Coalition. Our friendly Oregon School Boards Association is opposed to eliminating the rule, in part no doubt because they were instrumental in drafting it during 2003. Hopefully this statute is headed for the dustbin of history.