If you wish to help support the ongoing costs of running this blog and you haven't purchased anything through Amazon on this site, please consider a small donation to defray basic costs. Thank you. Marc Feldesman.

Oregon PERS Information is Copyright Marc R. Feldesman (c) 2003 - 2014 All Rights Reserved. Posts may not be reprinted without prior consent.


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.

Thursday, June 27, 2013

Burning and Looting

You know you are in a world of hurt when the lead witness in the testimony in favor of the full blown red herring bill called SB 857 is the robber in Chief for Oregon, John "who used to be a 'do no harm' physician" Kitzrobber.  The bill began its life last week as a proposal to form an nterim committee to study potential PERS reform.  By this morning, the cat had escaped from the bag and the lovelies who represent Oregonians, acting complicitly with the Guv had cobbled together 4 amendments to the original bill.  The dash 3 amendment removes all the language inthe original SB 857 (the gutting) and replaces it with changes to the COLA adjustments to SB 822, adopted about 7 weeks ago.  This bill imposes only 2 levels of COLA and screws everyone just a little bit more.  It changes the COLA max from 2% to 1.25% (for everyone up to $60k) and 0.15%for amounts greater than $60k.


The dash 4, 5, and 6 amendments take to new COLA language and provide a multiple choice of options for legislators to choose among.  Rather than describe the complicated choices, it is really about two issues - by how much shall the actuarial equivalency factors be adjusted for inactive members (choice include the commercial annuity average rate, or the current assumed rate minus 4%), and the effective date for the changes (August 1 or September 1, 2013).  Those dates are crucial to understand.  If you aren't eligible to retire either due to age or service or both) you are screwed (unless the court overturns these changes before you retire) as your money match benefit will see a 37% or more reduction.  The PERS Board is considering changes to the assumed rate, which will affect Tier 1 earnings guarantee on August 1, 2013 and thereafter.   Since the time is not adequate for the bill to be completely processed by close of business tomorrow, anyone who is inactive and who is already eligible to retire is taking a huge risk if tomorrow passes and a retirement application for July 1 isn't already in PERS'hands.  If the legislature passes this bill with an effective date of August 1, missing tomorrow's last eligible day for a July 1 retirement means that you cannot retire without exposing yourself to the severe effects of this bill.  Of course, you can gamble that the Legislature would have this bill not take effect until September 1, leaving you an additional month to organize for your retirement.  If this were my decision, the benefit difference between a July 1 and an August 1 retirement is trivial.  Moreover, a July 1 retirement gets you the 2013 COLA of 1.5%, which isn't available if you retire after July 1.  In the end, even assuming a September effective date, in these circumstances the July 1 date might actually be more beneficial than waiting til August 1.  Of course, if the effective date is August 1, you will not only lose out on the July 1 COLA, but also suffer a 37% cut in the benefit you would have received had you gone July 1.  I don't give advice, but the choice here seems completely self evident.

Lest you think this bill isn't going to survive the end of session games, think again very carefully.  The bill has the support of the Governor, Senate R and D members, OSBA. OBA.  We don't know how the bill will fare in the Oregon House, but it is fair to say that theD caucus holds all the needed votes to pass this bill even if the Rs were to hate it, something highly unlikely.

The culls we have managed to elect to represent us have aligned to perform a full scale arson on benefits of retirees -70% of all the "shared sacrifice" this session, - the soon to retire if not quick enough inactives -about 10% of the "shared sacrifice" - and the rest from the hospital provider tax and a further insult to retirees in a general phasing out of the senior medical deduction.  All in all, this has been the most hostile assault on senior citizens ever mounted in the state of Oregon. I hope the legislators running for reelection on this record will be reminded of how badly they tried (and possibly succeeded) to burn and loot benefits earned, promised, and contracted benefits.

32 comments:

Plutodog said...

This is a quid pro quo with a tax element requiring a supermajority to pass, right, Mark?

M&S said...

I posted this on the Yahoo"s PERS Ore Discussion site but it did not appear after an hour. I hope this means that there are SO many PERS members that Oregon is overwhelming YAHOO worldwide. > My point: Twitter today from Oregon Stand for Children [sorry title of group makes me ill when they "stand" but won't pay more]: "Paul Cleary: 4% of the people eligible to retire represent 40% of the liability." This sounds too amazing to be correct. Do we have 4% high paid coaches? what is 40% of the liability -- Is "liability" $14 billion so I take 40% of that number? Cann't be. Is Cleary's and OSFC's Pants on Fire and spreading false info ??? Thanks, IGJEUP.

Russ Rinker said...

Your warnings about getting your retirement papers in now are directed at inactive Tier 1 members. I am an active Tier 1 member eligible to retire. What about me? Am I in danger of losing the money match benefits if I wait?

gms59 said...

I appreciate your posts and look forward to them every few days as I find it's the best way to stay informed on what is going on.

I do have a question....What is the Senior medical deduction you refer to as being eventually phased out?

mrfearless47 said...

@russ. No, this doesn't affect active tier 1 members. You are safe, for now. This bill is a stalking horse, however for mitre significant impact if the court allows it to stand.

mrfearless47 said...

@plutodog. As far as I know there is no quid pro quo. The hospital provider tax passed on Weds with the required number of votes. There are, to the best of my knowledge. No supermajority tax bills remaining.

mrfearless47 said...

@M&S. yahoo is very slow tonight (last night). Posts are takings hours to appear and some posts are being lost. It isn't related to POD; it is more widespread.

mrfearless47 said...

@gms59. The senior medical deduction allows retirees of all stripes on social security to deduct tall medical expenses, including health care costs on the Oregon Income tax without the limitations imposed by the federal return.

mrfearless47 said...

M&S. the 40% number that Cleary uses refers to the total number of inactives. There are approximately 10,000 inactives eligible to retire right now. There are probably 400 people of that 10,000 who alone have such big accounts that they account for 40% of the liability of the entire pod of eligible inactives. I hope they all retire today.

Unknown said...

Every Union in the State needs to withhold 100% of their funds to any Legislature who voted to cut retiree pensions. Democratic legislators who rely on union political dollars need to learn they cannot play both sides. Retirees cannot be any worse off losing Kotek - Burdick - and others.

paulchristi said...

Nice blog! As I've frequently experienced in my career, I'm about to get screwed again....I turn 55 in June, 2014, so my eligible early retirement date will be July 1, 2014. Salary freezes, reclassification, furlough, even having to repay holidays when I left state service last June...My hat's off to those smart folks in the back room who continually figure how to squeeze more from state employees without making it look too obvious. I can say it all added up to a significant amount over my 25+ year career!

PDXMB said...

Hi Mr. F:

Been trying to find more information on the inactive Money Match situation. I have not found any information yet that would allow me to calculate the impact on my Tier I account. I'm inactive (left government in 2005) after 11 years of service. I'm 46, so not eligible for retirement. It seems the only option I have is to swallow whatever medicine is coming my way.

Can you either describe or point me to information that I can use to calculate the impact on my account? Is it a matter of reducing the interest rate on my MM from 8% to 4% after August (or September) 1 but the 8% will be used up to that point for the purposes of calculating the match? I assume none of this affects the earnings on the employee account.

Thanks in advance. Very informative blog.

Befuddled said...

Russ, is it fair to assume that those of us that never stopped working for the state but moved into the ORP plan in 1996 will be spared this outrage?

By the way, the long-term effect of that COLA, should inflation rise well above it, will be staggering. If inflation run 3% above the COLA cap, in 10 years the earning power of a pension will be reduced 34%!

CW NP Trip said...

Ah, the mad scramble begins. They may need traffic cops at the intersections leading to the Tigard PERS office today. This legislature leaves me speechless. What a spineless bunch of SOBs. It's like waiting too long for your meal at a restaurant, and to save face---and get your money---they throw some slop on your plate at the last minute. Lets all make a pact to unseat everyone of them next election, Ds AND Rs.

Unknown said...

From Snuzer: I submitted my July 1 PERS retirement application in mid-June by certified mail and received an acknowledgement from PERS last week. I've been an inactive for over 4 years after 30 years of teaching in 2 states. The PERS legislative rambles are just too much stress, even if they don't actually do much of anything. I've got peace of mind now. Thx for all the information Marc.

mrfearless47 said...

@PDXMBI: I can't tell you where to look for specific tables or formulae to calculate the hit because they don't yet exist. The PERS actuary suggests about 37% over current rates.

mrfearless47 said...

@Befuddled. I dont think that is a fair assumption. Go back one post "Ship of Fools" and read the lengthy comment from "treehugger", who is a member of AOF's Board, writing as an individual, not as a Board Member. It ispretty clear that treehugger sees the OUS faculty in theORP as sacrificial lambs in this. Also if you read the text of any one of its three versions, there are no exceptions specifically noted. I think you are flying without a net right now.

mrfearless47 said...

@plutodog. There may be a quid pro quo afterall. It isnt evident from the bill, but it is described more fully in the states major papers. That may still trip things up, but im still betting this is a done deal.

CW NP Trip said...

Marc, I'm a little confused about the proposed COLA cuts. As it stands now, per SB822 it's 1.5%, but if this latest amendment survives it's cut to 1.25%. That's what I get from the beginning of your article. But later you refer to the COLA cut-off date for 2013 as July 1, with a COLA of 1.5% If someone has already retired, is their COLA locked at 2%, or 1.5%, or what?
Finally, what are the chances these COLA cuts will stand up in the OSC? Any thoughts on what basis these cheats are using to get the cuts to stand legal test?
Thanks a million times.

Rye Grass said...

I hope all of us are firing off e-mails or letters to our elected representatives. It can't hurt to let them know they are being watched, that they have damaged their re-election campaigns, and that, in the case of the pathetic Democratic leadership, they have damaged the credibility of their party in Oregon. Maybe they don't care--as this pack of thieves appears to be beyond care--but it is satisfying to write write write and point out the damage they are doing/have done to their political career. Bruce Hanna or Tina Kotek for governor one day? Maybe not.

treehugger1 said...

AOF provided testimony as to the ORP issue for past TIER I PERS members. The AFT also expressed frustration before the committee at the lack of exception for ORP members. I have heard that Denise Yunkers and others in the Chancellor's office are doing what they can to protect the "inactive" PERS ORP members. Given the current reorganization or dismantling of higher education at the highest levels, I seriously doubt there will be a great deal of sympathy from legislative ways and means. I apologize for my post not making it to this particular blog. I failed to read mrfearless' post asking that I only submit once. I meant for the post to be submitted to this blog.

mrfearless47 said...

@CP NW. No need for confusion. SB 822 cut the 2013 COLA to 1.5% for every retiree, including those who retire ON July 1, 2013. The revisions apply to what happens after this July 1, 2013, in 2014 and after. SB 822 saved lower paid retirees from the cut from 2% to a lower amount. The new bill amends SB 822 to reduce the COLA max from 2% after 2013 to 1.25% after 2013, thereby affecting every retiree hither and yon. There is no protection for low income retirees; all retirees will get 1.25% on July 1, 2014 except those earning more than $60,000 per year. These people will get 1.25% on the amount up to $60,000, while the amount over $60,000 will only be eligible for a 0.15% COLA. This works out slightly better for the higher paid PERS beneficiaries (I think, but am not certain because I haven't run the numbers; I just haven't had the time things are moving so fast), but just royally flushes those making less than $60,000, including all the retirees and their beneficiaries in the less than $20,000 per year bunch. This is cruel, inhuman, and only makes the case even stronger in the Court.

You asked about the likelihood of the court overturning this decision or SB 822. I strongly believe that the worse they make the COLA, the better chance we have to prevail as the COLA is no longer linked at all to the real change in the Cost-of-living, but is an arbitrary number designed to reflect political convenience. I hope the court will see through this charade and turn it down, just like they did when they undid the COLA freeze in 2003.

janedoe said...

I don't know which is worse, being persecuted by the greedy R's or betrayed by the spineless D's. I have no idea who to vote for anymore,--at least a vote that will count. I am particularly appalled that they think it's fine to cut COLAs for low income retirees AND to cut medical income tax deduction for all seniors...but oh, wait, they're probably going to through a few coins at some senior program and loudly proclaim how they helped all seniors. I am so ANGRY I just don't know what to do.

I may have dodged the bullet (this time) regarding the anti-spiking bill, but my heart goes out to all the money match folks who are going through the worry and hell I was in for the past five months. I will revisit the hell next February and have to make a similar snap decision then. If it looks dicey I'm bailing, I can't live through another siege like this one.

This blog is the ONLY thing that helped me feel like I wasn't alone in the horrible journey, plus it supplied information I could never find in the news media. I almost feel like we all need a support group to get through all of this stress.

janedoe said...

yikes, i'm watching the session from yesterday that someone videotaped. WHAT is cleary's problem? the head of PERS is trying to encourage cola cuts?

Thomas Andre said...

We can't know what's going on in the back rooms at the capital but I'm suspicious about the speed at which all this is happening. Former Chief Justice Paul DeMuniz kicked the window retirees butts and promptly retired. He then said he was especially proud of the close relationship he had with the legislature. I really hope the court hasn't already signed off on this with Kitzhaber and the legislature. I hate thinking our gooses are already cooked.

Unknown said...

Tried emailing Courtney and Kotek this morning regarding the latest PERS rape and the state system is not accepting messages to their box.

Plutodog said...

Senate's in session and SB857 is on the agenda - http://www.leg.state.or.us/listn/asx/SEN.asx

Unknown said...

Marc, I deeply appreciate everything that you are doing to spread information about SB 857. I decided to put a post on FaceBook, even though I have few Friends. My hope is that others will also do this and/or pass along such posts in the hope that Inactives around the world might get the information in time to defend themselves. As an example, this is what I posted to my FB Friends:

"MAJOR ALERT to any Inactive-but-not yet-Retired Oregon PERS members. The Oregon legislature is attempting a major bite out of the retirement you were expecting. If you will retire under Money Match they propose to match your account at 2% or 3% instead of the 8% you have been planning on! This bill has gone to the floor of the Oregon Senate. There are some exceptions, but very few. This will impact any Inactive MM PERS member retiring *after* September 1, 2013! For the actual language and to track progress of this bill look for SB 857 on OLIS (the Oregon Legislative Information System available on the Internet). Please share this information with anyone you know who might be hit by this raid -- Oregon PERS will NOT be sending out information to the over 10,000 people who have a chance to retire before the law is implemented. "

Unknown said...

What a difference with our neighbors to the North. The Washington legislature is split, Republicans control the Senate and Dems the house. The legislature added substantially to the education budget, R's stopped the expensive Columbia River Crossing, and both chambers did not attack PERS retirees who will receive from 2.54% to 3% cola's depending on the year of their retirement. I am not surprised Dems turned their backs on the very groups that make their campaigns possible and there will be no surprise if those same groups continue to only fund Dems again with more of the same results.

Michele Wollert said...
This comment has been removed by the author.
Unknown said...

MW - As a resident East of the Cascades my views and views of others are far different than what we see as the "Portland elites". As for light rail and other urban programs if you want them you should pay for them with your area tax dollars. Instead in Oregon we have an area that politically controls the entire state but are clueless.

Chas. Jones said...

Interesting outlook from "East of the Cascades." I'm a fourth generation eastern Oregonian, born in Ontario and lived here all my 65 years except for college and military. Here in the rural eastside we are lucky to have Portland and the metro area subsidize us. Eastern Oregon receives far more federal and state dollars than it pays in taxes. Conversely, Portland metro area pays more state taxes and fees than the moneys it receives from the state. No way could we locals support our eastside infrastructure without westside dollars.

Clicky Web Analytics