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Sunday, June 29, 2008

Letters Home From the Garden of Stone

Sometime back last year, OPRI and the PERS Coalition began to consider whether to push for an ad hoc increase in retiree benefits to make up for the effects of inflation. In January 2008, the OPRI Board heard a report from the Coalition that it intended to make ad hoc benefit increases an issue in the 2009 legislature. The crucial factor in ad hoc benefit increases is whether purchasing power of retirees has fallen significantly (to, say, less than 90%) from its current value. Apparently, the PERS Board also was concerned about this and so they requested that their actuarial firm, Mercer, study purchasing power of retirees for the entire retiree cohort. On Friday (last week) PERS posted the results of that study, which you can read here. The upshot is that the retiree cohorts going back into the early 1990's are still within the acceptable window for purchasing power and would not be candidates for any ad hoc benefit increases. Mercer considered the original benefits as well as all applicable COLA increases to figure where retirees are with respect to purchasing power. While this does not bode well for recent retirees, it is possible that when the figures for 2008 are totted up, the situation might change. It is unlikely that retirees within the current decade would benefit, but earlier retirees might qualify. The problem is that unless there is a heavier weighting for transportation costs, food costs, and insurance costs (especially medical), the actual CPI will not go up anywhere near the rates of inflation most of us are experiencing.

It would be nice to get something more than we're getting right now, but consider this just another letter home from those folks who run the garden of stone.

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