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Sunday, July 21, 2013

Outside Looking In

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.

Monday, July 08, 2013

Postcards from Paraguay

The Fearless one is charting course for a brief vacation in the American southwest.  Regular blog posts will resume upon my return on July 19.  In the meantime, the Oregon Legislature closed up shop today, bidding sine die until next February.  The only bad bill to emerge this session is SB 822, which cuts this year's COLA for retirees to a flat 1.5%.  In addition, the bill repeals the income tax subsidies embodied in SB 656(1991) and HB 3349(1995) for any PERS retiree not subject to Oregon Income Tax (essentially all retirees no longer living in Oregon).  Supposedly PERS is required to contact every retiree fairly soon and get an affidavit of whether the retiree's pension is subject to Oregon Income tax for 2013.  Just in case you haven't retired and spun the roulette wheel to decide whether to retire while the legislature was in session, there is more possibly bad news on the horizon.  Both the Governor and the Senate President announced that they are going to let legislators rest and then try to revive the grand tax and PERS cuts bargain that eluded legislators in the waning days of this session.  If the leaders can get the right number of legislators to commit to voting for the two pieces, they will call a special session (probably in the Fall) to enact additional legislation.  It will take more PERS cuts to get the Rs to sign on, but they would also have to agree to Revenue measures the Ds want badly enough to sell out more PERS members and retirees.  It is unlikely that a special session will take place before the ongoing labor negotiations conclude.

I will continue to post any relevant updates while I'm gone.  You can get those by following my Twitter feed @mrfearless47.  It is filled with as much snark as I can manage in 140 characters.  Sometimes the most snark can be found in the hash tags (#), which provide guidance on the topics you can follow on twitter to get even more information (or not).  One useful hash tag is #orpers.

Tuesday, July 02, 2013

Shadow Days

The end of this year's Oregon Legislature is near at hand.  So far the two bills critical to PERS members, retirees, and seniors seem to lack the necessary support to make it to a final vote.  HB 2456 is a revenue vote on a package of tax increases that can't seem to get the required 18 votes in the Senate to pass.  Without that outcome, SB 857 doesn't move.  To keep it from passing without the packaged revenue bill, the Senate Ds shipped it back to the Senate Revenue and Finance Committee, where it originated, and there it remains with no scheduled action.  It just may die there.  If these bills fail, there will be no cut to inactive benefits, no additional cuts to the retiree COLA, no phase out of senior medical deduction, and a host of other noxious tax increases.

For on the spot news coverage of PERS, please follow me on Twitter @mrfearless47, checking hash tag #orpers