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Tuesday, July 28, 2015

Just Pleasing You

The rule-making process for implementing the Moro decision (COLA case) is beginning to unfold.  The PERS staff, and hopefully the PERS Board, are trying to make sense of the Legislature’s 2013 cluster-f**k with the COLA.  The PERS staff has been studying ways to implement the second piece of the COLA restoration project - making retirees whole again after the court unraveled the mess made by 2013’s ineptness.  I’m happy to report that staff posted their proposed rule making for this part in today’s PERS Board packet for Friday’s Board meeting.  The staff is proposing to treat SB 822 as though it never happened, since it was amended five months later with SB 861.  The effect of this is that PERS staff, assuming the rule is approved without revision, will treat the period between May 1 and October 1, 2013 as part of the “old rules”, not subject to the mess created by SB 822.  This would settle the question of whether those who retired after May 1, 2013 and before November 1, 2013 would have to be treated somehow different than everyone else, while those retiring after October 1, 2013 would have to be treated a third way.  The proposed rule basically eliminates SB 822 and treats those who retired before November 1, 2013 (last possible retirement date, October 1, 2013) as if they remained under the old COLA rules, while those who retired after October 1, 2013 would be credited with an additional 5 months of time under the “old” COLA rules before their revised COLA enters the blending phase.  This change makes it possible for PERS to program their ORION system (their retirement benefit calculation system) to simply treat new retirees as either under the old system (all work completed by October 1, 2013) and therefore subject to the “old” COLA rules, or under the new system, whereby their work time is segmented in a way similar to the HB 3349 (tax remedy for in state residents) is handled.  Therefore, if you retire(d) after October 1, 2013, your working career will be apportioned by the work time prior to October 1, 2013 as a percent of your total working time.  If you worked 90% of your career prior to October 1, 2013 then 90% of your COLA will derive from the “old” COLA rules, while 10% will come from the rules under SB 861 (1.25% COLA up to $60,000, 0.15% on amount over $60,000).  This will tremendously simplify their work at a small benefit to retirees and a nominal cost to employers.  It is going to be a long time before most employees are away from the old rules, and this solves the fairness problem.  Alternatives might have been an income weighting, an FTE weighting, and all kinds of other grubby calculations.  This route simplifies life for all concerned, although it is almost surely going to agitate someone in the media, somehow.

Speaking of the media, what ever became of a discussion of the “other” part of the Grand Bargain?  You know, the part where the legislature exchanged about a half a billion dollars of PERS benefits for about a half a billion dollars of small business tax cuts.  It is really amusing to watch the media wrap themselves in a ball of fury over the Supreme Court’s ruling (the one every legal adviser to the Legislature suggested would NEVER fly), while conveniently ignoring the other cost driver in their ill-considered effort to steal benefits legally earned by PERS members.  I guess PERS members are just too easy a target for the media, while small businesses (whatever that actually means) just continue to get a pass.  Me?  I’m going to remember the idiots who brought on this mess in 2013 and consider them in my sights in 2016.