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Sunday, May 20, 2007

Can't Get No (Satisfaction)

This morning's FAX brought me a copy of PERS' response to a retiree's petition of the Strunk/Eugene remediation. The case was pretty straightforward. The retiree retired under the "lookback" not too long after the 2003 legislation took effect and right around the time of the PERB "settlement" of the City of Eugene litigation. PERS' remediation of said litigation resulted in their recalculating benefits. This retiree was not in the "window" and was expecting a check and/or a small benefit increase as he had retired when 2003 and 2004 were tracking at 0% rather than 8%. When he got his invoice, he was chagrined, shocked, and staggered by PERS' calculations. Indeed, his account balance was adjusted positively, he owed PERS no money - all expected and good outcomes. His benefit would go up - he thought. But no. It didn't go up. Instead it decreased significantly - a fact that just wouldn't compute for him. We've been longtime correspondents and so he sent me his invoice - the first of many I would see. When I looked at it, it became obvious quickly what had happened, although PERS did not make this even slightly clear. After all the adjustments to his account balance resulting from 2003 and 2004 add backs and 1999 take backs, his lookback balance was lower while his at-retirement balance was substantially higher. As a result, the "lookback" no longer produced the highest benefit. The highest benefit resulted from his at-retirement account balance using the NEW mortality tables. Unfortunately, the highest recalculated benefit was several hundred dollars lower than his previous "lookback" benefit. Consequently, his monthly benefit was lowered. Nowhere in any of the discussions surrounding the remediation plan had this unintended consequence been discussed. Even the PERS Coalition had not seen it before.

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.

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