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.
Friday, October 31, 2008
The good news is that PERS is better prepared to weather the crisis than most public employee retirement funds across the country. The OIC has done a remarkable job in keeping the fund in the black and I have confidence that once the current crisis settles down, they will be able to place funds where they can once again return in excess of the assumed rate.
In keeping with the Tom Joad theme, I do think that there will be pressure on PERS to *reduce* the actuarially assumed interest rate (currently at 8%). Right now, this is tough to do because the rate is linked to the construction of the mortality tables, linked to the payouts at retirement, and intimately bound to the rates charged to employers. Any reduction in the assumed rate would not only negatively impact members, it would also raise the employer contribution levels. At a time of shrinking budgets, the employers would protest vigorously any proposal to change the "guarantee". Nevertheless, I think a change is inevitable in the current climate and it would not surprise me to see either next year's legislature or the current actuary (Mercer) propose that PERS do just that.
The second Tom Joad theme is that I rather doubt any proposal constructed by OPRI to give current PERS retirees an ad hoc rate increase will get through the Legislature. While the purchasing power of all PERS retirees has declined, especially that of long-time retirees, the fund simply doesn't have the resources to pay such increases. Moreover, since COLA increases and ad hoc increases come directly from employer contributions or from earnings on the Benefits-in-Force reserve (currently negative), the enthusiasm for digging deeper into budgets isn't there.
Finally, the $13 billion loss in the PERS Fund does *not* include the month of October, which has been the worst in recorded history. If there were any residual belief that any of the above would or wouldn't happen, October should just about erase that.
Trick, no Treat, Mr. Joad.
Wednesday, October 22, 2008
Alley has been running on his business acumen and experience; Westlund has been running on his own business experience as well as his experience in the Legislature. He has reached across the aisle (when he was a Republican to Democrats, and as a Democrat to Republicans). All things considered now, I am convinced that Ben Westlund would be the best choice for State Treasurer. I endorse him wholeheartedly. I think he will be the best person to safeguard the PERS Fund. While Alley *might* do a good job, his experience at Pixelworks and their stock performance in the recent past do not give me a warm fuzzy feeling about how well he would do with a fund valued at $60 billion. To be sure, the fund is actually managed by the Oregon Investment Council, but the OIC is nominally headed by the Treasurer. I think I'd prefer someone who hasn't had the kind of experience Alley has. And, as for Alley's advisory role with Governor Kulongoski, I believe that was in Ted's first term - a term in which the PERS contract was broken repeatedly by Ted and his henchmen in the Legislature.
So, to reiterate, if you are still undecided in the Treasurer's race, I wholeheartedly endorse Ben Westlund.
Tuesday, October 14, 2008
This is about the strangest turn of events I've seen yet. I'm trying to get confirmation from Greg Hartman and the PERS Coalition that this preposterous (to me anyway) sequence of events has been accurately reported. Stay tuned for more information. In the meantime, you might want to hang tough a bit longer before jettisoning those plans to attend the hearings.
P.S. 1:40 pm. Greg Hartman just got back to me. He explains that Judge Kantor did cancel the hearing. He (Judge Kantor) noted that he believes that he has a sufficient record upon which to base a decision. This means that Judge Kantor doesn't believe that there are factual issues requiring resolution. According to Greg Hartman, Judge Kantor also stated that he had not determined how he would rule and therefore might invite the PERS Coalition to file a cross motion for summary judgment. Hartman noted "while this is unusual I think it reflects the fact that most of the dispute in this case is how to apply the legal principles to facts which are largely not in dispute."
Thanks to Greg Hartman for his quick reply to my query. Let's all hope that Judge Kantor shows some wisdom this time, unlike his ruling in Arken.
I guess those of you who had plans to come to the hearings can safely cancel them now. We'll wait for the chalk outline to appear on the court docket. Hopefully the outline will be of PERS, the State, and the employers, and NOT the Coalition.
Friday, October 03, 2008
So that people can plan in advance, I urge every member and retiree to try to find time and means to attend all or part of the hearings. I firmly believe that attaching human faces to the dry proceedings playing out in a courtroom gives all sides a look at who is affected by the litigation before them. The hearings are held in the Multnomah County Courthouse in downtown Portland. I will be posting directions and other information as time goes on. For those who live in the Eugene or Salem areas, carpools typically get formed and this makes it easier and less costly for people from the valley to attend. I will help facilitate organizing these carpools through the PERS_OREGON_DISCUSSION group (POD). You can access the newsgroup by clicking on the link to the left of this post. I hope to see many people there.