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Monday, June 17, 2013

Train of Fools

Things have been awfully quiet on the PERS front for the past several weeks.  With so much sturm und drang over PERS dominating the entire session, with so much media muckraking driving much of the discussion, with the heavy lobbying effort by the group FIX PERS NOW (and all its high profile backers, including the CEOs of nearly every major Oregon business and public utility), and the Governor's wish to be a lame duck, there is no shortage of speculation about where the next "shared" sacrifice will be coming from.  If you were to hit the bookies on London street corners, the gaming parlors in Las Vegas, or Chinook Winds casino, you would probably find the oddsmakers taking bets that the next victims of the "draw and quarter" club will be (surprise!) PERS retirees who have, apparently not felt the cold steel of a loaded gun severely enough; they might be in line for another round of financial rape with further cuts to their COLA increase because, obviously, the pain of SB 822 hasn't been enough "shared sacrifice". The logic must be that if the legislature is going to be sued over cutting the retiree COLA anyway, why not go for more cuts.  The litigation won't change, so, what the hell?  Of course, that isn't enough for the blood-suckers in Salem, so the next candidates for a significant financial haircut will be those unretired, inactive PERS members.  Obviously, they had the gall to leave, and thus don't deserve the benefits they were promised so lets cut THEIR projected benefit by roughly 37% by cutting the interest rate assumed for computing monthly retirement benefits.  Apparently these fools think that because the inactives are not represented by any of the PERS Coalition partners, the inactives will have no labor or organizational support for litigating these cuts.  I think that would be a bad assumption to make.  There are more than inactives in the mix whose oxen will be gored by a change like this.

 
I don't want to alarm people that these things WILL happen, but I'd also not wager any money that they won't happen.  For those curious enough or worried enough there is a town hall meeting in Lake Oswego's Heritage House tomorrow evening starring two of the major players in this year's Legislative session.  Senator Richard Devlin, co-chair of the Joint Ways and Means Committee, and Representative Chris Garrett, Speaker Pro-Tempore of the Oregon House will be on hand to discuss the current happenings, future directions, and take questions from the audience.  The Heritage House is at 398 10th St, Lake Oswego and the party will start at 7 pm.  Lake Oswego has usually supported these events with decent turnouts.  I suggest arriving about 10-15 minutes early if you want parking and a seat.  This may be your last chance this session to have an opportunity to have any input into whatever the train of fools in Salem have cooked up for those of us dumb enough to believe that our work was wanted, needed, and honorable, and that the retirement promises we accepted in place of tangible up-front cash were has honorable as we were.  This session has finally put the lie to that fairy tale, and confirms the real opinion towards PERS members.  It also completely redefines the meaning of that feel-good phrase "shared sacrifice" as the Democrats new slogan for sharing PERS retirees' money with everyone but PERS retirees.  Apparently, PERS retirees are the only ones who get the privilege of sharing their sacrifice with everyone else.  That low rumble you hear in the background should not be ignored; it is the train of fools barreling down the track at high speed towards retirees and inactive PERS members.
 
More after tomorrow's love-fest with Devlin and Garrett.  Hope to see you there.

15 comments:

Befuddled said...

An interesting sidebar: When the state puts the screws to the retirees and then spends the money, what is going to happen to the multi-100 million dollar hole in the budget that is going to occur when the courts overturn these illegal take-backs.

mrfearless47 said...

If the employers were smart rather than just greedy, they'd escrow the money until the court decides. That would mean no tangible "benefit to them in this biennium, but also no harm, no foul if they lose. But this isn't going to happen any more than the schools will rush the money to the classrooms. There is always an administrator with an empty wallet and no scruples to relieve the fools from their money.

mrfearless47 said...

Let me clarify my answer based on new information. State employers have been instructed to set aside any potential savings from the PERS cuts until the OSC issues its ruling. Thus, the state will have the ability to recover from an adverse ruling because the money can't be spent until the legal decision is issued. I have no such comparable answers about local government and the school districts. They are the group leading this assault on PERS Benefits, so it would not surprise me one bit if they already have the money targeted for whatever. You can rest assured that "saving" money is not part of their genome.

Streetboss59 said...

Marc,
As usual you are spot on with your comments about school administrators and board members. In the last two weeks, we have seen Beaverton give their Superintendent an 8k per year raise while Portland Public Schools have awarded another no bid contract at 15 K per month to retired City of Portland H. R. Director Yvonne Deckard to consult on HR matters.
I have pointed this out to several of our esteemed legislators who respond that they have no control over this stuff. I then point out that if they had listened to you and others that testified, there would be accountability and strings attached to that extra funding.
KPW

Karen Anderson said...

I've been differently active now for a number years. I left my PERS money in the system, so have accumulated a tidy amount even though I never made over 20K per year during my almost 8 years as a state employee. I'm Tier One and over 58. Still plan on working elsewhere for another several years though. How soon do you think this will all happen? Should I apply to retire today so that I'm officially retired as of July 1 for PERS purposes?

M&S said...

Thoughts for you latest thoughts on Ye Ol' Salem PERS Bill Perculator. In reference to your writing: **"Apparently these fools think that because the inactives are not represented by any of the PERS Coalition partners, the inactives will have no labor or organizational support for litigating these cuts. I think that would be a bad assumption to make. There are more than inactives in the mix whose oxen will be gored by a change like this."** I am an 29 year active worker and am concerned by your "more than inactives in the mix" Can you elaborate on what you mean there? Igjeup.

mrfearless47 said...

M&S. If you aren't in higher education then you aren't included in my thoughts here. If you are in higher education then you might have reason to be concerned. In 1996, Higher Ed came up with its own separate retirement system that was optional for all actives and future hires. Those who went into the the OUS Retirement Plan (called ORP) left PERS in 1996, but weren't allowed to roll their money over into the ORP. Thus, technically, and for all intents and purposes these faculty and staff who enrolled in the ORP at the time it was established are inactive PERS members even though they still work for PERS employers. There is considerable concern that those who went into the Optional Retirement Plan will be victims of any change to the rules regarding retirements from PERS for inactive members. That's what I meant.

mrfearless47 said...

Karen: Everyone's circumstances are different. I don't know what to suggest for you. There is no assurance that retiring by July 1 would even accomplish what you want, although you could submit your retirement application and then withdraw it quickly if no bill materializes by the mandatory sine die date of July 13. If you do this, beware of waiting too long to withdraw your application. I know several people who didn't really intend to retire but were trying to play both sides from the middle and accidently retired. Just be sure that if you apply, you can really afford to retire if you do to preserve benefits. Run the numbers carefully and determine what your benefits would be if you left money in for another couple of years, versus retiring immediately. I will not make recommendations because so many people are in different circumstances.

socialworker1 said...

My friend and I went to The Heritage House in Lake Oswego for the 7pm talk and noone showed up.

mrfearless47 said...

Socialworker1. When did you go? I was there last night with 75 other people in a very small and airless room having a heated discussion with the legislators, about 60 anti-PERS ignoramuses, and about 10-15 fellow travelers. Don't know how you could have missed this event unless you went to the wrong location or on the wrong day.

mrfearless47 said...
This comment has been removed by the author.
janedoe said...

Marc, it was amazing to see how they kept perpetuating the idea that PERS is underfunded in the wake of the financial downturn, therefore we must cut retiree benefits...when there's other information that says PERS is one of the best funded programs in the U.S. which is quickly rebounding from the downturn. I guess they are grabbing at any justification available and when all else fails, they can croon "for the children."

mrfearless47 said...

Jane, if you repeat a lie often enough it becomes the truth. That was Hitler's grand plan. I know it is the wrong example and is probably offensive, but you have discovered one of the great parlor tricks of politics. In addition the lie is being fueled by the very school districts who want our dollars, and gobbled up by legislators eager to be reelected or to leave a lasting legacy, even if built on a lie.

To play devils advocate for a moment, PERS is one of the best funded systems in the US right now, but if you follow retirement plan literature, it is considered one of the most volatile and subject to great swings in funded status. But that is an entirely different and unrelated issue. Just want to make you aware that all is not peaches and cream.

Finally, if PERS is in such dire straits, why are the legislators not requiring agencies to pay their full tab to replenish pers coffers rather than letting them spend the savings. After, isn't this about saving the fund, not about saving the children. Under the current scheme the system will be no better off after all the benefit cuts than it is now. So in 2015-17 we will be back to the well again, even if the fund makes above the assumed rate.

mpguy said...

When the stock market was roaring, the (public) employers often used the market gains to supplant their contributions to the PERS fund.

If the system is now underfunded as badly as legislators say it is, shouldn't they be requiring those employing jurisdictions to make the contributions they were supposed to make but didn't?

mrfearless47 said...

Your first statement may be only partly true. Your second is absolutely correct and consistent with what I've been arguing with every legislator who will listen, and even some who don't want to listen. If the system is in bad shape, how do the current and proposed changes improve the financial health of the system, rather than improving the financial health of the employers who have used every tactic known to humankind to avoid paying their proper and known share of the bill. It seems more than disengenous to state that the system is in bad shape, pass some changes that purport to help the system, but really don't help the system any more than doing nothing since the savings are heading directly back to the people who are supposed to (are required to) contribute proper amounts to keep the system solvent.