I spent two hours yesterday sitting through a pretty content rich but sizzleless PERB meeting. I could report on the whole meeting, but much of the meeting was pretty tedious and there wasn't much to get into a fuss over. I'm going to focus on several things that members/retirees/future retirees should be concerned about.
First, the system is in pretty good shape - indeed better than most of the other public retirement systems nationally. The earnings for 2010 are on track to meet the assumed rate, though not much more. The system needs earnings greater than 8% for quite a few years in a row to return to fully funded status and keep employer rates stable. For the system, the bad news is that there are currently 66,000 PERS members who are actually eligible to retire right now. I think that is about 1/3 of the total public employee workforce. PERS is in no way equipped to manage a sudden blast of retirements much in excess of about 6000 per year, which is normal and expected for 2010.
The bad news. PERB and PERS staff continue to fight SB 897 (the verification bill). Despite being passed in the 2010 special session, both staff and board are bothered by the word "guaranteed" in the bill's language and passed a legislative concept to amend the bill to remove the guarantee. Despite an impassioned plea from new Board member Pat West - a retiree - having the "guarantee" removed would be tantamount to gutting the bill's intent, which is to provide potential retirees of the correctness of their information up to two years before retirement. PERS is simply uncomfortable with "guaranteeing" anything. If they win on this battle, potential retirees will be no more assured of the accuracy of their retirement calculations than they are now. It is frustrating to see the number of ways that PERS and PERB is trying to thwart the intent of the law.
The big-ticket item - the laundry list of potential actions against PERS members and retirees described in "Tiny Apocalpse" - was not a subject of discussion at the Board meeting. It was information presented by Director Cleary to show the format in which all such proposals will be reported back to their proposers, the Legislature, etc. There will not be provided any legal analysis of the bills since that properly is the AG's jurisdiction. Cleary pointed out that these were just "some" of the ideas that have been gathered from the publishing ozone over the past few years and do not represent anything substantive or indicative of what might be proposed in the upcoming Legislative session. Cleary also pointed out that "some" of the items are clearly only the purview of the Board (e.g. setting the 'assumed rate'). This telegraphed to the Legislature that PERS was going to be proactive in preventing the Legislature from trying to micromanage PERS. This was good news, at least to me.
Next, Mercer presented a very brief overview of the rate setting process and explained clearly *why* employer rates would be going up in the next several biennia. It was informative and it revealed that Mercer is a bit uncomfortable with the current 8% rate assumption. Following Mercer's presentation, there was a report on the audit of Mercer by yet another firm. This is considered "best practice" to audit the actuarial work every half decade or so. This is PERS' third such audit since 2000. Again, the auditor reported an extremely "clean audit" with only several areas where Mercer should be rethinking some of the actuarial assumptions. In particular, the auditor reported that although PERS' assumed rate of 8% is at the median of public employee systems, that many are beginning to lower that assumption to figures under 8%. She suggested that Mercer and the PERB consider the possibility that 8% is too high for these times and that something along the lines of 7.5% or 7.75% might be more appropriate (see above for Cleary's stance on proper venues for consideration of certain changes). This is much better than the numbers floating around now, such as 6%, and probably represent the most likely scenario for the next actuarial valuation in July 2011.
Lastly, the Board and PERS staff had a somewhat lengthy discussion of the Oregonian's request(s) for retiree information, as well as the Statesman-Journal's request for even more. Recall that the Oregonian asked for detailed information on retirees earning more than $100,000 annually. They subsequently asked for the same details on all retirees who returned to work in some capacity during 2009. These requests are placing PERS in a difficult position, bringing into conflict two core values of the organization - transparency and privacy. The present law allows "public records requests" to be contested on an individual basis. PERS has three such general requests - all declined - hanging out in some phase of litigation. PERS staff has recommended, and the Board approved, a concept that includes writing the Judge in Marion County and asking him to appoint a special panel to review these general requests and to guide all stakeholders towards a clearer way for PERS to evaluate these requests. If litigation is the only route, it could take years before any request is ultimately ruled on. Rodeman also mentioned that the costs of these requests are not only non-trivial, they are ridiculously high. He gave the example of the Statesman Journal's request for complete information (similar to the Oregonian's) on ALL PERS retirees (110,000), not simply those making more than $100K annually. He pointed out that each individual requested requires about 20 minutes of staff time to pull together all the information from the various systems, collate the information into requested and redacted, and get it to hard copy. With 110,000 retirees, each taking 20 minutes, it would take approximately 20 man-years to collate the necessary information. He remarked that "...it hardly makes sense for someone to order us to give out the information and for us to say 'OK, come back in 20 years' and prepare for a large bill". Hartman advised the Board to be working with the AG's office since that office has stated that it wants to amend and update the open records' law in the next Legislature. He argued that it doesn't make a lot of sense to be worrying too much about the current issues since whatever the Court might decide could be undone by the Legislature in 2011 anyway.
In the meantime, you can all be assured that PERS has come down on the side of retirees' privacy in this instance, asserting that it can see no public interest to be served in releasing the names along with the other information, which is already public in many documents. The names add nothing to the public's "need to know" and that "PERS By The Numbers" provides all the detail that the public and any stakeholder needs to see exactly how and where the money is going.
Next meeting set for January just after the Legislature convenes. Happy Thanksgiving to all.
2 comments:
Arizona Republic has already published personal retirement information. They were successful in Arizona in obtaining all the retirement information. They are also blasting retirees for receiving 'excessive' benefits. [ran a multi- day series on the 'excesses' and solutions]. I know each state constitution and state statutes vary, but here is a troubling precedent.
The difference in Arizona is that retirees knew this could happen when they signed their retirement papers. There was disclosure. In Oregon, there has been no such disclosure. In fact, in every state where such information is public, retirees are told of it at the time of retirement. So, I'm not concerned the precedent in other states.
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