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Monday, July 09, 2012

Lawyers, Guns and Money

For those of you who are concerned that you are just going to get an invoice from PERS, guess what:  "you are correct."  PERS does *not* intend to justify the amount invoiced this time through.  They assert that you were invoiced once in either 2006 or 2007 and you had 60 days to appeal or contest the amount.  Thus, they are not required to either document how they arrived at the amount you owe, or give you any further appeal rights.  

While all of this may be true, it seems bad policy to send an invoice with no explanation for how PERS came to the amount you owe,and claim they notified you 6 (or 5 or 7) years ago of the amount and that you have no right now to ask for an explanation or be able to challenge the amount.

There are many people genuinely concerned about this matter.   They may have been invoiced back in the day, but many are under the impression that when the invoices were enjoined from being collected, they were effectively nullified.  Again, the policy is clear, but the implementation seems a bit heavy handed to me.  Since they have copies of the 2006 or 2007 letter, it would add little to the collection costs to include them again to remind people how they came to the amounts.  This would probably save more money in the long run than cost in the extra postage and printing.  Penny wise, pound foolish.  Also, a chance for more lawyers to get involved.  PERS cannot prove they actually sent the invoices since they weren't sent certified or registered.  People can easily claim they didn't get them.  Ugly and foolish if you ask me.  


Bo said...

Thank you for your blog. On Friday I received my 1st letter from PERS regarding overpayment recovery.
I took my lump sum in June 2005. My investment had been in the 8% fixed income guaranty fund since the late 1970s.
How could my account have been over paid? If so, why didn't I get a letter in 2006 or when I was counseled and paid the lump sum? Since PERS made this mistake how likely is it that many of us are getting letters in error? How do we obtain authenticated account detail that will confirm or deny the incorrect credited amount? Do those of us that believe our letters are in error have to retain an attorney to demand this information? If I was wrongly paid too much I have no problem with the return but I cannot pay back an amount on faith. I have no faith in the accurate administration of these funds.
Pls. assist me with any information.Thank you. bpallari@gmail.com

mrfearless47 said...

I've emailed you privately about the specifics of your situation. But, to answer the larger question, do recall that the 8% "fixed" income guarantee fund was anything but "fixed". The 8% was the floor under all Tier 1 regular accounts beginning in 1989 (before that it ranged from 5.5% to 7%). In 1999, the Tier 1 regular fund earned 24.98%, one of the highest earnings period in history. The PERS Board decided in March 2000 to pay out 20% to Tier 1 regular accounts (yours) and place the residual in reserves. In April 2000, a group of 8 employers challenged the Board's earnings crediting decision, arguing that PERB did not properly fund the mandatory reserve accounts. That case went on to become the "City of Eugene" case, which was decided in 2002. Between that case, the 2003 Legislature, and a 2004 "settlement agreement" between PERS and the employers, PERS agreed to reduce the 1999 earnings crediting from 20% to 11.33%. PERS then went about recovering 8.67% worth of earnings from all open accounts, and tried collecting from those of us who had already retired. For a small group of people who retired in 2005 (such as yourself), there appears to have been a window of time in which PERS collected the money before you retired, but still thinks you owe them money. What PERS did in 2000 could hardly have been considered a "mistake". It was done deliberately and with considerable thought. Unfortunately, the Courts held that they "abused their discretion" in awarding 20% and not funding the required reserves. And it has taken until 2012 for all the various court cases to resolve to the point where PERS can, again, resume collections.

Vicki Hopkins, Author said...

So I get a letter today in the mail, and I'm not even a State employee. I was married in 1999 to my ex-husband who had a PERS account. My divorce judgment was in 2001 and I was awarded half of his retirement. I took the option in 2002 for the double out and rolled it over into another annuity. Why in the hell am I being charged to pay back money? I'm not a PERS retiree, but a beneficiary of a divorce settlement.

mrfearless47 said...

Your ex- husband had an account in 1999, which received 20% earnings crediting in his account information 1999, instead of 11.33%. The courts haved decreed that ALL who benefitted from the crediting decision for 1999 must return the excess benefit. This includes, retires, members, beneficiaries, and alternate payees. The initial notification of this obligation came in 2006/2007. If you didn't get that notification, with all the associated documentation, including how the calculation was done, I suggest you contact PERS.this has come as a surprise to quite a number of people, but I assure you that PERS is quite serious about collecting what is owed, and they will use the Oregon Department of Revenue to collect from Oregonians, and private collection agencies if you are out of state. One other thing: I know you are angry, but remember I'm only the messenger.