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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. Also, due to the volume of email I'm getting right now, I am unable to guarantee that I will respond to all personal emails sent to my email address. I am being buried alive under an avalanche of email. Please go to the PERS Oregon Discussion (POD) Group, linked below (left) under LINKS to post your question and get a variety of answers. Thank you.

Thursday, December 17, 2009

Heartaches By the Number(s)

I've been keeping score over the past year of the number of inquiries I've received, or of questions I've seen posted at various newsgroups concerning the accuracy of PERS' retirement estimates. The typical story goes like this: "I've been getting estimates for some time so I'm familiar with what they used to look like. The current version is almost impossible to interpret, much less replicate. I don't understand how PERS arrives at current account balance and why by my own calculations PERS' numbers are almost always lower than expected. Now they assume that the 6 month buyback is part of the account balance with the employee always purchasing waiting time. They used to make everything easy to understand; now the estimates are completely opaque."

Alas this story is so familiar that I've tried to replicate PERS' numbers on numerous occasions. I can come close, but never reach the elusive amount that PERS gets. The errors are beyond rounding and suggest a systematic bias of some sort. What is frustrating about this is that PERS speaks with a forked-tongue about such estimates. On the one hand, they are the only solid evidence one gets upon which to make a retirement decision (that and the semi-useless online calculator). Yet PERS absolutely, positively declaims the accuracy of these estimates, leaving potential retirees helplessly frustrated. On the other hand, PERS offers no other way to help a member get a fixed amount that can lead to a confident decision to retire. This led to the calumny known as the Kay Bell case, in which a member sued PERS (and won) because she tried repeatedly to point out errors in the estimates and PERS kept telling her not to worry about them. So she didn't, untill PERS billed her for the very errors after she retired.

The Legislature tried to "right" some of this uncertainty with SB 897 in the past legislative session. This bill would have made PERS take "ownership" of the estimate process and require it to place its money behind its estimates. The bill passed 58-0 in the Legislature, and was then vetoed by Governor Ted (the coward) Kulongoski. Perhaps we can work towards a reversal of the veto in next month's special session. In the meantime, members close to retirement seeking to get an estimate for their final retirement benefit probably get better odds of accuracy at one of Oregon's casinos. There is absolutely no way that pre-retirees should have to live with the kind of uncertainty that PERS produces. You can't get a reliable retirement benefit estimate, you can't depend on the estimate or hold PERS accountable for errors, and if there are errors, it becomes your fault and your bill. It is like the old coin flip joke: Heads PERS wins; Tails you lose.


Saturday, December 12, 2009

Gypsies In The Palace

I guess my rhetorical concern yesterday about OPRI's lobbyist helped prompt one reader to remind about this. OPRI's use of lobbyists with few or no ethical constraints on who they represent has been going on for awhile. I'm not a purist by any means, but I have little use for lobbyists like these. C'mon OPRI. Do you not have an ounce of self-respect that you throw yourselves under the bus with slime like these.


Friday, December 11, 2009

Radio Nowhere

I have been in lengthy back channel discussions with a very bright and analytical future PERS retiree about the Option 0 benefit. I confess to having been taken aback by the fact that the algorithm for Option 0 is poorly described and documented. I am unable to duplicate PERS' calculations of it and my correspondent has spent much time with PERS people and they too have been unable to replicate their own calculations. This is very scary for if PERS cannot replicate its own calculations in its own estimates, how then is a member expected to have any confidence in choosing Option 0. It is true that few members select Option 0 as a retirement option, but it is there, in statute, as an option and there is absolutely no excuse for PERS' inability to replicate the calculations they provide in their estimates. Whether Mercer - the PERS actuaries - is immaterial. If the agency can't duplicate its own results, then how can any of us be confident that in selecting Option 0, we are safe from the potential of an "error" along with a "bill" coming down the road when PERS finally sorts all this out. Advice to PERS - you better get this figured out real soon now or you'll be expecting a phone call from your friendly neighborhood PERS advocate or coalition member.

On an unrelated topic, is anyone else besides me a bit concerned about having Mark Nelson and his PAC Counsel office representing OPRI as their lobbyist, while also representing the folks opposed to Ballot Measures 66 and 67? Since the failure of 66 and 67 will affect PERS members and, perhaps, retirees, the conflict of interest is obvious to me. I find that all the groups Nelson represents - the tobacco groups, the business groups, and a host of others - to be among the more repugnant aspects of our society. I can't for the life of me figure out why OPRI has to team up with this ugly lobbying group, which would sell its own mother to make a buck. They don't seem to think there is anything wrong with a conflict of interest so long as the dollars keep rolling in. The answer, no doubt, will be that Nelson's group "gets the job done", but surely there are lobbyists who aren't quite as two-faced as Nelson. I make no secret of my opposition to Measure 66, but I am strongly in favor of Measure 67. In opposing Measure 66, I am not throwing my hat into the ring with Nelson's group. Their opposition is the typical opposition to liberal "tax and spend", whereas my personal opposition in on the principle of how the Legislature chose to implement the Measure. But I am deeply concerned that OPRI and Nelson are joined at the hip, while Nelson's firm has the job of defeating tax measures that would benefit PERS active members and future retirees. This simply makes no sense. If you are concerned about this, you should express your displeasure to OPRI. I've certainly rethought my donation to OPRI's lobbying efforts. I don't want a dime of my money to end up in Nelson's pocket.