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Thursday, June 21, 2007

How Much Did You Get For Your Soul?

The Oregonian's Betsy Hammond swallowed the kool aid again with her latest editorial (oops, was that supposed to be a news article?) on the outcome of two related PERS court cases in the Multnomah County Circuit Court.   In her article "New Retirees will pay for old mistakes" (Oregonian, 6/21/07), Ms Hammond again fails to read either (a) the court's opinion or (b) the legislation to which the court's opinion refers.  Nowhere in Judge Kantor's decision does it say that "new retirees" (or active members) will pay for Judge Kantor's decision.  Judge Kantor merely ruled that the Legislature established two methods for dealing with the actions of the 1999 PERS Board - either to freeze the cost-of-living increases for those retiring between 4/2000 and 4/2004 or to charge the expenses to administrative costs.  Since the Oregon Supreme Court ruled that withholding cost-of-living increases was illegal, Judge Kantor ruled that the Legislature left the PERS Board with only one viable option - the administrative charge off.  It is true that administrative expenses are taken out before earnings are distributed and so the potential exists for active members to subsidize benefits for this small group of retirees; HOWEVER, PERS has been reserving funds like crazy since 2003 and now has nearly $2 BILLION in reserves from which these expenses could come.  These reserves are not available to any members and charging expenses to them will not reduce the benefit of ANY member now or in the future.  Instead of pointing this important fact out, Ms. Hammond draws the financial implications out of the air and creates a potential conflict where there is none.  In so doing, Ms. Hammond again wears her bias on her sleeve and continues the Oregonian's long history of bashing public employees.   

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