The clown of Mahonia Hall is at it again, running around with all the little people trying to figure out a way to stab us PERS members (actives, inactives, retired) in a variety of evil ways. More than that, it isn't enough to beat up on retirees, they want to take away the $183 personal exemption for individuals earning more than $100,000 per year, or families earning more than $200,000. And just when you thought it couldn't get any worse, discussion is circling around the "senior" medical deduction, setting the benefits only for those over 67. All you PERS retirees between 62 and 67 can just bite the little man's weenie.
The latest "leak" from Mahonia Hall is that retirees will see yet another smack to the COLA before the next one is awarded in 2014. The "plan" is to set the COLA at 1.25% for everyone, and then for those earning more than $60,000 per year, the benefit would drop at the margin to 0.15% of the amount over $60K. There is a very tricky legal definition floating in the sewer the legislators are swimming in. The word COLA stands for "Cost of Living Adjustment". The legal question is how can a fixed and invarying amount be considered a "Cost of Living Adjustment". The COLA is an amount determined annually by the bureau of labor statistics to measure the increase or decrease in a market basket of goods and services that the average consumer must buy. Perforce, the amount varies from year to year, and prior to SB 822, there was a cap on the size of the COLA increase, but the amount over the COLA would be banked and drawn on in years when the actual COLA was less than the 2% cap. Since the 2013 legislature, the concept of a COLA has been shredded. They have unlinked the COLA from the annual BLS market basket change (a true measure of COL), they have removed the "bank", and so the "cost-of-living" has become a gratuitous 1.25% benefit increase annually without any regard to inflation. Just think, when inflation roars back to 8% or 9% and seniors can no longer afford their medicine, expect to see them applying for food stamps at Mahonia Hall. Left in the mess, is the question that the legal beagles will have to sort out: when is a COLA not a COLA, because the Strunk court mandated that PERS cannot pay a benefit to which a COLA does not attach. So, if what is changing is ruled a gratuity, not a COLA, then the Legislature will lose again on this spawn of satan.
Buried inside a sentence discussing the changes to COLA, is another time bomb intended to hit inactive PERS members who haven't yet retired. Although not specific, the general consensus seems to be that the inactives who are eligible to retire under Money Match will see their annuity rate decrease from 8% (7.75% after December 31) to something in the vicinity of 3.5%. This will cut the prospective benefit by about 37%. Many inactives are all over the country. They vested in PERS, PERS would not let them take all their accrued benefits out (including the employer match), and so they've been stuck in PERS all these years, expecting that they would retire and have a decent pension for the time they worked in PERS and compensating them for the time value of their money kept in trust for them because they had no other way out. Now that there are quite a few of these people out there, it is time to retroactively change the rules. Sure, you can still retire under the different benefit arrays, but you will no longer receive the benefit you thought you were going to get.
Related to the inactive issue is another, far more perverse and cynical. These are people still working for public agencies in Oregon full time. In 1995, just before Tier 2 began, OUS offered its faculty the option of moving to their own (OUS) retirement system, called the Optional Retirement System. Members were allowed to join up into the new system, advertised as equal to or better than PERS, and have all future contributions directed to the ORP. Members electing this were assured in person and in writing that their PERS benefits would remain as they were and that accounts would continue to grow as the money is being held in trust for them. The new ORP works more like a 401-K and many are discovering that it is anything but equal to or better than PERS. Nonetheless, people accept the choices they made, but now they've come to discover that they are classed as "inactive" PERS members and will fall into the same morass that all other truly "inactive" members will be. So despite the fact they were promised their PERS benefits as contracted, the Legislature is now trying to take away about 37% of their benefits earned while they fell victim to the OUS' bait and switch routine.
As the title says, "not gonna beg", but you can bet your life that these issues - ALL OF THEM - will be played out in full Shakespearean drama before the Oregon Supreme Court. And when all the various questions are asked and answered, it would not shock me to see the PERS member side win a few for the hipper.
One thing is also fairly certain. This blog will not support a single member of the Legislature who votes in favor of this bill. It doesn't matter what party, what else he/she may have done. The buck stops right here. If you are a legislator and you are reading this, I promise you I will use this space to campaign for every one of your primary rivals in May.