PERS has finally gotten around to sending out 1099-R forms to retirees. Most have received them in the past couple of days. Already there are questions as some retirees are receiving two 1099-R forms where before they had only received one. There is a simple explanation for this. Prior to age 59 1/2, retirees are receiving benefits reported to the IRS as an "early distribution exception" signified by a number "2" in box 7 of the 1099-R. Turn the form over for an explanation of the meaning of the code "2" in box 7. The first 1099-R that you receive is for those months during 2006 that you were UNDER the age of 59 1/2. The second 1099-R will be for the months AFTER you turned 59 1/2 and will be signified by having nothing in box 7. Once you've turned 59 1/2, all subsequent 1099-R's will be issued without the early distribution exception. Congratulations. You've crossed over and now all your retirement funds (IRA, Roth, 401-K, 403-B, 457) are accessible to you without penalty for early withdrawal. That calls for a celebration of some sort.
Oregon PERS Information is Copyright Marc R. Feldesman (c) 2003 - 2013. All Rights Reserved. Posts may not be reprinted without proper attribution. 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.
Sunday, January 28, 2007
It has been rumored for some time that PERS staff had gotten their act together and had started invoicing COLA freeze members for the overcredits and had started to revise their benefits. I've been hearing stories for about two months now. I was, at first, puzzled since the official PERS timetable showed COLA freezers not being hit until April 2007. However, the stories I've been hearing have finally been confirmed when PERS posted a revised timetable last week showing that COLA freezer billings began in December 2006. So for those of you hoping that PERS might await the outcome of Arken and/or Robinson, the answer is now in. They aren't waiting, and we can now all join one another at the sad cafe, as more and more of us see what PERS has in store for us.
I guess that if there is any synchronicity in this, it is that I won't have to stare down the barrel at a PERS invoice about the same time the IRS extracts its annual 10,000 pounds of flesh.
Thursday, January 25, 2007
Or know his or her name, or the name of the firm. There are so many different PERS-related lawsuits going on right now that it takes a program to figure out which case is which and who is representing whom in each. One high profile case, captioned Robinson, lost its attorney and law firm at the end of December. Gene Mechanic, who represented the PERS Coalition in the Robinson case, left the firm, which also dissolved, at the end of 2006. Mechanic now works as a labor attorney for the Florida branch of SEIU, while each of the other partners in Goldberg, Mechanic et al have moved on to either their own practices or to other firms in the area. When announcing the dissolution of the firm and his departure from Oregon, Gene Mechanic reported that there would be "continuity" on the extant cases, including Robinson. However, I have been unable to determine who will continue to represent the Coalition in this case. I know to a near-certainty that it won't be Greg Hartman and his firm. Hartman and the PERS Coalition filed a claim against the Legislature in Strunk that was diametrically opposed to the position staked out in the Robinson case and so, to avoid a conflict of interest, Hartman recommended that the PERS Coalition (including OPRI) find a different legal firm to represent the plaintiffs in Robinson. That's how Mechanic got involved in the first place. It would be awkward, to say the very least, for Hartman to become involved in this litigation and make the legal argument that is in exact opposition to the one he made in the Strunk case. I've emailed Gene Mechanic to see what information he can provide. He should know, but I haven't heard back from him yet, and I don't know if he will respond. In the meantime, if anyone else out there knows who the new legal eagle is on this case, I and the readers of this blog would appreciate the information.
Update 3:30 pm. Gene Mechanic just emailed me back with the relevant information. Gene continues as lead counsel in the case. He will be assisted by Jim Coon of Swanson, Thomas, and Coon. Jim will be co-counsel and will be involved with much of the appellate work (should it be necessary). My thanks to Gene for his remarkably quick reply to my message.
Monday, January 22, 2007
I'm now the proud owner of the domain http://www.orpersinfo.com. Since I have a regular readership here, I plan to use my new domain to start another blog about PERS, but let it emerge more organically. The new blog uses an entirely different format and an entirely new and powerful set of tools. My plan is to use that blog to introduce a topic and let people jump in with comments and further the discussion with differing opinions and additional information. It is not intended to replace this blog or to compete with the Oregon PERS Discussion Group. I see it as complementary to all the existing vehicles for us to share PERS information. Unlike OPDG, you don't have to register to post and the engine used does nothing to check the validity of the email address you provide or the alias you use. However, to ensure that spammers don't hijack the new site, there are powerful administrative tools that will allow me to completely block offensive posts, to prevent spambots from posting at all, and to maintain order. Moreover, the way the comments are structured, you have to work very hard to top or bottom post. Every comment is independent and readers can skim the comments without having to put up with rereading the same post a dozen times as posters fail to trim out excessive text. There are still simple ways for posters to ensure that the comments are specifically directed. I've already posted two entries, unrelated to anything here, and both already have a few comments. I have another entry planned for tomorrow after I've had a chance to read the full text of Bush's State of the Union Address. It won't be about PERS specifically, but it is related enough that it will make for a useful and interesting discussion. Please stop by the new blog site and leave a comment about the site, its look, its organization, or the topics posted. All are welcome to join in the fun. I look forward to your continued readership here and at my second blog.
Friday, January 19, 2007
I've been hearing from a lot of people who've been invoiced by PERS for alleged overpayments resulting from the 1999 earnings recrediting. A number of readers have shared their invoices with me and it is fairly clear to me that PERS has to do a better job of explaining how they arrived at the numbers. If it is bewildering to me from their explanation, I can't imagine how challenging these invoices must be for people who aren't numerically inclined. Some invoices have been fairly straightforward, but for people who had a complex scenario that involved a portion of the account in variable, who left money with PERS to withdraw a lump sum settlement on the installment plan, had account balances tied up with divorce decrees, the documentation PERS provides just suck the soul out of you. To even replicate the calculations requires that you dig back through a lot of paperwork, which you hope you've saved. Then you have to tediously re-enter data into a spreadsheet and perform some magical transformations and incantations in the hopes you come up with a matching amount to PERS' calculations. These are some seriously complicated calculations when these factors are involved. I don't envy PERS having to do them, but they are absolutely paralyzing for many receiving them. They don't have a clue what to do. My mailbox is overrun with cries for help. PERS' answers to questions about these invoices is, in many cases, less than helpful or instructive. Since PERS promised that ALL numbers needed to replicate the calculations would be provided, PERS should be held to its promise with easy to follow flowcharts that take the individual through EVERY step of the calculation, filling in all the intermediate amounts along the way. Failing that, PERS should hold weekly meetings around the state where people can go and get specific questions answered about their circumstances in real time. If this is going to suck the soul out of unwitting recipients, the least it can do is suck some life out of the people who brought this disaster to you. Perhaps we can ask a few legislators, the Governor, and some attorneys to join in these Saturday sessions. Maybe then would they understand why so many people are complaining that whatever "soul" PERS once had, it left the building about 2003 and it ain't coming back.
Wednesday, January 17, 2007
During last week's PERS Board meeting, PERS staff reported that the average adjustment to retiree benefits was approximately 1% after the invoicing. This figure was left unexplained and so as a public service, I will attempt to explain this for you. PERS' report is technically correct, but is distracting. The benefit adjustment (plus or minus 1%) uses the CURRENT benefit the member is receiving as the basis for the 1% figure. Once you factor in the recalculated member balance for 1999 at 11.33% earnings and compound it forward to the date of retirement, take the "correct" benefit for the option chosen, and they apply relevant cost of living adjustments (COLA) to the adjusted benefit, figure out the amount PERS believes you've been overpaid, applies the actuarial adjustment, and nets out the benefit, the final benefit is within 1% of the amount you're currently receiving. PERS conveniently ignores the actual words of the Strunk ruling in 2005 and then makes you feel good by telling you it is only a 1% change (for the better or for the worse). I figure that my current benefit has already been reduced by frozen COLA to the tune of about 7% (compounded), so I'm guessing that after the adjustment I'll either be down 8% or 6% depending on where I am in the adjusted benefit-plus-COLA cycle. This is a pretty good snow job - at least as good as the WMD-in-Saddam's-basement scare a few years ago. With friends like these ....
Tuesday, January 16, 2007
No school, no classes, no work. It's a good day in hell. Since I had extensive plans for today, all bollixed up by the weather, I thought I'd spend my morning learning how to use one of the cool new tools Apple has just made available in Beta for developers. I "wrote" a trivial DashBoard Widget to pull RSS feeds down from this site. You can now get your occasional news from my blog without having to visit my blog. If you own a Mac, run OS X 10.4.3 or higher, and can't live without my site, you're just the candidate to play with my new widget. Contact me back channel if you are interested.
On the PERS front, I keep hearing from more and more retirees that they have gotten their invoices for the 1999 payback and actuarial reductions. From what I've discerned from the invoices, PERS seems to be running a bit ahead of schedule as many "ordinary" window retirees are getting invoiced. The last few people I've heard from retired in the latter part of 2002, so that must mean that I'm on the list to get my invitation to repay soon. When I do, I'll share with all. To reiterate a point I made awhile back, unless you can prove that PERS miscalculated on the repayment amount, there is no current venue that I can think of to contest either the method of repayment or the fact of repayment. Both of those are current subjects of ongoing litigation and I'd hate to see any single member waste financial resources beating heads against stone walls. I'm not caving into PERS unless I can demonstrate they have miscalculated my repayment amount. While I don't expect to be treated appreciably differently, I expect that they'll double check my invoice more than twice before placing it in the mail. I don't expect to see any calculation errors and I'd be stunned if there were. I can imagine a few others whose numbers will be run carefully as PERS knows full well that these people can and do run the numbers very carefully and are rarely wrong. If you have any questions about your invoice, there might be a group of us willing to help you check the calculations, but no guarantees at this point. Our group hasn't formed yet. It is just an idea gestating as we get closer to the big mail dump.
Enjoy your snow day, unless you're reading this from Phoenix, or Hawaii, in which case we already hate you so don't read :-)
Monday, January 01, 2007
I hope you've all recovered (or are recovering) from the festivities of NYE and from whatever holiday you celebrated immediately previously. We had a very nice week celebrating Christmas at our vacation home in central Oregon with family and our daughter's new in-laws. Lots of snowshoeing, cross-country skiing, and, for the younger folks, downhill skiing. We spent a relatively quiet New Year's eve dining with a few friends. Between my wife's contacts and mine, we have a diverse group of friends who cross paths with most of the "connected" folks around the state, particularly in the Portland area. This means that we are treated to some occasionally delicious gossip that sometimes shows up here. Last night the gossip included something I found rather disturbing, as it gets to the passionate-over-the-top vindictiveness of this whole PERS fiasco. I learned - and I consider my sources to be pretty darned reliable - that during the peak of testimony at the Legislature during 2003, Jim Voytko, then Executive Director of PERS, started receiving a series of death threats being sent to him at his HOME, as well as to his office at PERS. I find this so utterly reprehensible and morally repugnant that I nearly spilled a glass of wine. Fortunately, I only created a small purple stain. I cannot understand how potential retirees, actual retirees, or active members ever expect to "win over" public opinion by threatening the life of a public official charged with doing a job. We may not have liked what Mr. Voytko had to say, but in my opinion, there is NO excuse that justifies death threats against him and his family. Mr. Voytko is no longer at PERS and is rumored to be very successfully consulting for public employee retirement plans in 20 states from his base in Portland. But, this leads me to wonder whether the current PERS Board and PERS Staff is just as exposed. Folks, I know that everything that has gone on is very distressing, but it isn't worth the risk of being charged with and convicted of a felony. I can guarantee you that making a death threat against a public official is taken very seriously, and that you stand to lose far more than just a pension if you're caught. I realize that probably no one who reads this blog is guilty, but I'd hazard a guess that more than one person has had such thoughts. Do us all a favor. If you have such thoughts, keep them to yourself. You do yourself and the "cause" no good by articulating them.