We are back from our short refresh in the American Southwest. I'm happy to report that Idaho is still hot, Utah has 80 mph speed limits, Arizona 89 is presently closed from Page north, and 89A is as crappy as ever. Also, I was pleased to find out that in Arizona, firearms are not allowed in restaurants that serve alcohol. That saved me from any confusion before I walked in. Also, Oregon still has 65 mph speed limits that make the drive from Portland to Boise as tedious as ever.
On the PERS front, the only news is that the PERS Board meets this coming Friday (July 26) to finalize the change to the assumed rates. No one knows for sure whether the new rates will be 7.5% (likely) or 7.75% (less likely). One thing certain is that whatever the new rate is, Oregon employer rates will have to rise in 2015-17 just to accommodate the reduction in rates. A 50 basis point reduction in the assumed rate will probably wipe out most of the savings from SB 822, which will bring us to replay in the 2015 Legislature, if not much sooner.
The PERB will also take up the new administrative rules that cover the changes from SB 822 - the gradually reducing COLA with benefit level, and the elimination of the SB 656 and HB 3349 subsidies to benefits for retirees living out of state. Apropos of SB 822, the COLA for retirees out July 1, 2013 or earlier is a fixed 1.5%, which will show up on the August 1, 2013 benefit check.
The PERS Coalition has filed its 13-plaintiff lawsuit against the State of Oregon and PERS for reductions to benefits resulting from SB 822. The suit details are posted on the www.bennetthartman.com website. In addition, two other suits were filed by out of state retirees as individuals. Both these cases focus exclusively on the loss of the SB 656 and HB 3349 income tax remedies. The Coalition suit focuses exclusively on the loss of the SB 656 remedy.
At the close of the 2013 Legislative Session, both the Governor and Senate President announced that if there was some compromise struck on additional taxes and PERS reform, either or both would call the Legislature back into Special Session prior to the February 2014 short session. People have asked me when this might occur. I don't have the faintest idea, but I suspect that if one were to occur, early Fall might be the earliest. These legislators need to get back to the reality-based world for awhile before they can go back into the fantasy-fueled world of partisan politics.
I'm sure I'll have more to say once the PERB meeting has passed and both the assumed rate and the associated actuarial equivalency factors for January 1, 2014 show up. I expect some significant changes to the AEFs.