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Thursday, April 13, 2017

You Want It Darker (Part 2)

This post is not likely to make very many people happy with me.  But, I have to say that after watching yesterday’s public hearing on SB 560, I can say that PERS members (except two) did themselves in.  They allowed themselves to become victims by total apathy and disinterest.  The blame is shared with others, but I reserve most of my scorn for the members who will be directly affected by anything and everything in SB 560, in whatever form it becomes law — and it WILL become law, mark my words.  Only two active members testified yesterday.  Both were Tier 1 Money Match on-the-edge of retirement.  Both commented about the harm from the annuity rate reductions and made vague references to its timing from the dash-3 amendment and the dash-10, without either actually pointing out the language of the bill that is precipitating their angst.  (we’ll come back to this point in a minute).  There should have been 5, 10, or 20 people signed up to testify, and the room should have been packed with affected members.  Neither happened.  Inside the room, which was anything but full, were about 2/3 professional lobbyists, and the remaining third a mixed bag of people who may or may not have been affected by any of this legislation.  SEIU testified, and basically sold members down the river by urging the committee to move the dash-10 amendment forward.  League of Oregon Cities testified urging moving the dash-10 amendment forward.  AFSCME didn’t testify and may not have even had a rep in the room; OPRI was nowhere in evidence either.  The PERS Coalition certainly didn’t testify and I didn’t recognize the backs of any of their reps heads.  OEA was absent from testimony, OSPOA was absent, the Firefighters were absent.  In short, the testimony was insipid, basically useless, and certainly ineffective.

The one issue raised during discussion was the presence of the “emergency clauses”, and the committee agreed that “…it didn’t want to precipitate a crisis” and would consider removing the emergency clauses before sending the bills up to Joint Ways and Means on Monday.  But, the committee seemed oblivious to the function of the emergency clauses, and unaware that removing them is going to delay the process of resolving these matters before the Supreme Court and prevent the 2019 Legislature from cleaning up after any mess made by all of this (if there is any mess).  It was painfully obvious that no member of the Committee had bothered to read the dash-10 amendment, which we learned from commentary was NOT a Tim Knopp-originated bill, but was a product of a group of luminaries called the Oregon Business Council (which counts among its sponsors the four big Universities - UO, PSU, OSU, and OHSU - as well as my wife’s former private employer, and every major large corporation in Oregon).  This seemed to lend the dash-10 amendment a caché that brooked no criticism and near awe from members of the Committee and certainly the agencies and Union testimony. (Edit:  more than one person has suggested that they detect the fingerprints of former Labor Leader, Kulongoski staffer, Kitzhaber staffer, and Oregonian occasional columnist, Tim Nesbitt on the OBC dash-10 amendment.  I have no evidence one way or the other, but it is an interesting rumor about a labor traitor).

All that said, the Committee announced (in effect) that it was throwing up its hands on PERS, that it could come to no consensus on the bills or amendments, and that it would forward both SB 559 and SB 560 and ALL NINE amendments to the Joint Ways and Means Committee with no recommendation.  Only Senator Laurie Monnes-Anderson objected to this approach, feeling that the Committee was abdicating its responsibility for recommending policy to Joint Ways and Means - a budget committee that normally does not make policy.  This drew agreement from Senators Taylor and Gelser, but no change to strategy.  The form of what goes up remains to be seen on Monday.  Editorial amendments were promised, like taking out the emergency clauses, but a date with Legislative Counsel may change that when they realize what removing those clauses does to the legislation.  Again, they seem completely oblivious to the language pertaining to the decoupling of the assumed rate and the annuitization rate for Money Match retirements (and since dash-3 is still in play, other retirement forms as well if they involve a beneficiary or alternative payee or disability).  They seemed to want to provide a date certain (like 1/1/18) for the effective date of the changes and think that removing the emergency clause would do that, but I don’t see it that way unless either the dash-3 amendment is changed significantly, or somebody actually reads the language related to the same issue in the dash-10 amendment.  Again, the Committee seems to think the Emergency Clause itself is the issue, but that’s a red herring (read my previous post for an explanation of why the emergency clause is there).

So what makes this darker?  First, no effective representation of member interests in the ONLY meeting in which you would have been directly allowed to testify.  That signals apathy, and encourages malice (it sends a message of resignation to Legislators that PERS members are resigned to being screwed over some more).  Second, a complete abdication by the the Senate Workforce Committee whose function was to recommend policy changes, and it punted to Joint Ways and Means.  This empowers Ways and Means to literally do whatever they feel is necessary to make the budget balance, and PERS is a large component of their thinking about ways of balancing the budget.  No more likely public hearings; virtually everything in Joint Ways and Means will be done in closed session except possibly final votes or invited testimony.  The voice of critics has effectively been silenced, and control has passed from a policy committee that didn’t recommend policy to a budget committee concerned only with budgets but being given the opportunity to choose from a cafeteria menu of many expensive (to members) options without any constraint on committee members.  Oh, I encourage you to write to members of the Joint Ways and Means Committee to express your concerns, but I don’t expect those letters, emails, or phone calls to have much impact.

Anything that happens from this point forward will probably come as a surprise to all members.  While I had hoped that members would have something specific to target for Ways and Means, the complete refusal of the Senate Workforce Committee to take a principled stand on these measures, and the complete apathy of affected members have left the door open for any and all of the possible concepts introduced in SB 559 and SB 560 (and all its many and varied amendments) to become reality.

Moreover, there seems to be a cavalier attitude among many of either of two views:  (1) the Supreme Court will invalidate most or all of these; or (2) I can’t do anything about this because I’m not close enough to retirement to matter; I’m generally screwed.  With the possible exception of the $100,000 FAS cap (still there mind you), I see virtually all of the changes meeting the prospective test of the Moro Court.  So, depending on what ultimately comes out of Ways and Means, there is a high probability that much will be upheld as meeting the Moro standard of prospective.  As for those who say, I’m screwed, let me remind you that the graveyard of history is filled with victims who never raised their voice against the injustices perpetrated again them.  I’m not blaming the victim here, yet, but I do have to remind you that there has been an opportunity presented and then squandered.  From here on out, it becomes much harder to make the kinds of changes that might have happened in Workforce if there had been a more concerted effort to get out and actually protest the changes in real time.

So, the original “You Want It Darker” post a couple of weeks ago, has now become “You’ve got it darker”.  Remember, I’m only the messenger.

NB.  Even if the Senate Workforce Committee successfully removes the Emergency Clauses from everywhere in the two bills, there is nothing to stop the Joint Ways and Means Committee from adding them back if it means revenue sooner, or litigation resolved sooner.  In fact, I expect this would happen to facilitate getting the litigation started immediately.  Second, by making no recommendations, not only does Ways and Means have a cafeteria menu of choices, they could also gut and stuff either SB 559 or SB 560 or both to do whatever they wanted to PERS members.  Finally, and this may not be obvious, but from Monday forward, we will be in a nearly complete information blackout with Joint Ways and Means operating largely in the dark, leaving all members in the dark, leaving me in the dark except for the few inside contacts I may have.  Not only does this NOT REDUCE STRESS, it may actually INCREASE STRESS because now we will have little to no advance warning what is coming, and only the projected close date of the legislature of June 23 or the mandatory close date of July 8 to guide us.  As I’ve tried to say, you’ve now got the worst of all worlds while trying to make your decisions.  Tim Knopp’s assurances that “…we don’t want to precipitate a crisis” is meaningless.  Just remember that Betsy Johnson (DINO in chief) is a significant player in Ways and Means, and she was Knopp’s partner in crime in the pre-session PERS Workgroup with a particular animus towards inactive members (of which Dash-10 makes all dual ORP-PERS members the newest victims of Betsy’s animus).  (EDIT:  The dash-15 amendment, introduced 4/14 removes the emergency clause from the original bill, but retains it all of the amendments.  You are left to your own devices to figure out what that scam is about).

38 comments:

jktrudy said...

Thank you for the information you provide, I find it helpful.

I watched the video of yesterday's work group for SB560, I was disappointed by what I saw.
I am new to this whole process, wish I could remember back to high school and what I learned as to how this works. I am only now feeling the urgency to get involved. I realize it's probably too little too late.
I was not at the meeting yesterday to give testimony but I did submit an email testimony, does it hold any weight considering I wasn't there to give it in person?
What can I do now? Email the Ways and Means Committee?

Thank you.

mrfearless47 said...

An email ahead to the committee at least gave them some input, and I don't know how much they actually got in that form and via phone calls and letters. Whatever it was, it didn't seem to affect the outcome, which is utterly irresponsible.

I suppose you could carpet bomb the members of Joint Ways and Means with emails; it can't possibly hurt, but I don't know how much it will help. At this point the process becomes totally opaque, much like a black hole that swallows all light.

The unions seem to be in on the fix as far as I can tell. they seem to be more interested in saving jobs than pensions, which I get, sort of. More dues for them, more clout, but at the expense of member benefits. All the web sites for the unions seem to have gone silent on PERS since the end of March.

ProudMommy said...

Unfortunately, being new to providing testimony and still trying to understand all of the language and the complex in's and out's of the amendments, I didn't realize that removing the emergency clause would not prevent the "takes effect on passage". I, like you, feel frustrated and defeated by the showing of support in that hearing room. At this point, assuming that JWM passes something forward that does decouple the assumed rate and the annuitization rate for MM employees, would it actually go effect on the date the bill was signed or would PERS not have to allow time for an actuarial firm to change the tables and then take it back to a committee to vote on prior to the change actually happening? In other words, they can't go back in time to make the drop in rates effective on the actual date of signage can they? Wouldn't it take a month or two for PERS to get the work done? And do they then decide on what would actually be the effective date?

treehugger1 said...

Thanks Mrfearless! I am a faculty member (Mathematics and Statistics) at a state university who has now retired from PERS (April 1) and am finishing out the academic year on a modified 1039 contract. My take on perceived apathy and empathy is that most folks are not even close to a Tier I retirement situation. I was one of the last-dog-hired in Tier I back in the Fall of 1995. I am 60 years old and full formula at 22 years and 8 months. Had the Money Match remained in play for me, I would have been retired at 55 years of age. I always thought that my decision to stay with PERS and not opt for the university system ORP would be an earned benefit. That was not the case. There is no way that the Full Formula + IAP will come close to the old MM calculations that I would have received prior to the IAP.

From speaking with many folks who were hired between 1990 and 1995, there is very little sympathy for those prior Tier I members. I expect little sympathy or empathy from mid-career Tier I toward the inactive or long-term Tier I employees. I have also heard very little support coming from the various lobbying entities who once had a different take on the preservation of retirement benefits of the Tier I an dearly Tier II members. It is a brave new world.

In terms of faculty members who belong to the ORP, including those who used to be Tier I, the contribution of 25% - 28% of salary is a bit over the top. These folks will keep their mouths shut as to not bring attention to their These folks will sit on the sidelines.

What is my point? Things are changing. Union-backed lobbying, AOF lobbying, etc. are moving to protect employment. The old argument that "I could make more money in the private sector" does not seem to have any evidence based support these days.

If you are Tier I, active or inactive, I would suggest you take your money and run. If you are Tier I, then you have at least 22 years in the system. You are not a new-comer. The world is changing.

capeman said...

It's possible that everyone -- the Oregonian's relentlessly anti-PERS Ted Sickinger and their editorial board -- thinks that PERS "reform" is dead. On the other hand, maybe they have all gone silent on this clusterbomb of a bill because they are, as you say, in on the fix. I personally doubt the latter, but it's always possible I'm wrong.

treehugger1 said...

As a followup to my previous comments, I want to emphasize that we should never assume that the current state employees (union or non-union) support or empathize with the cohorts who came before them.

I worked with a faculty lobbying group (AOF) during the transition from traditional money-match to IAP, and there seemed to be little concern about those mid-career employees caught in the crossfire. We were gunned down at the expense of the old-timers. Am I bitter? Not really. I do understand the lack of apathy, empathy, and sympathy from late Tier II and "Tier III." I believe their numbers significantly overwhelm the remaining Tier I and inactive members.

mrfearless47 said...

@ProudMommy. I didn't really ntend to criticize you, and I'm sorry if my comments seemed critical. That was churlish of me, and unfair to you. You did an excellent job, and you couldn't have known that the Committee you were testifying didn't really understand the point you were making, nor did they seem to care, all expressions of concern notwithstanding.

To answer your question, you have to read the plain language of the bill, which states that it takes effect on passage for all retirements occurring on or after the effective date. Those words are explicit and lead to only one interpretation. I suspect that the Joint Ways and Means people have already requested the AEF adjustments based on the 3.5% number in the dash-3 amendmen; otherwise they would not have been able to estimate the projected savings. So in terms of when this would take effect, it would, if enacted as is, take effct on the first legal retirement date after the effectve date of the bill. I suspect t he actuary could have exact revised actuarial tables to PERS in a day or less.

At ths point, nothing is certain, everything is in flux, and nothing is likely to be finished until ways and means gets the last revenue forecast due in late May.

mrfearless47 said...

@treehugger. I guess my real concern is less for those Tier 1s still active, or possibly even the inactives, but for the hammering that's going to be taken by the majority of Tier 2 and OPSRP members, as well as ORP members more recently hired who don't seem to grasp that they are the real target. It may look like this is attempting to savage Tier 1s not yet retired, but they represent a relatively small and declining target. The long term savings from these bills and amendments s going to come from the hide of those me,bers 10, 15, 20 years from retiring.

Harr17 said...

I am a teacher at tier 1, 30 years in pers this year and I am all set to retire this June 30th from my district. I plan to retire with the Full Formula, using Option 1. It appears from everything I have read and searched for on the net, that I can indeed have
a June 30th date to retire which would be a July 1, 2017 pers retirement date, and
not have anything reduced. Please let me know your opinion, as talking to my Union and
financial planner has given me different information. Do I need to turn my paperwork in early and retire May 31st, or even April 30th?

Thanks so much for all your info and insight!!

Harr17 said...

I am a teacher, in PERS for 30 years. I am planning to retire this year on June 30th.
I am tier 1 and am going to go with Full Formula, Option 1. From everything I have
read, and researched I should not see a reduction with the passage of these two senate bills. I have talked to my Union and my financial planner and they have given me
conflicting information. Crummy that more information is not available as this is a huge decision. Should I retire earlier, on May 31, or even April 30th, ( I can but barely)

Thanks so much for your knowledge and insight!
Harr17

mrfearless47 said...

Nothing in any of the bills or the amendments would affect a Full Formula Option 1 benefit. Just to be certain that we are speaking the same language, Full Formula option 1 is the NO BENEFICIARY OPTION. If that is indeed what you are planning to take then there is nothing currently in any of the bills or amendments that directly affects you. That said, do read the NB carefully and understand what the significance of moving all of the bills and their amendments without a recommendation means in terms of the final sausage roll cming out at the end. But, truth be told, nothing is going to come out from Ways and Means before the revenue forecast in late May, and it will probably take committee several weeks beyond to finalize the budget. Only then will anyone truly know what the PERS damage is.

You will have to be your own counsel on the final decision. Hope this helps.

treehugger1 said...

Thanks mrfearless, I too am concerned that within the university system, there are so few faculty willing to show up or reach to the legislature. This is their future benefits.

AOF is still very much alive and have an excellent lobbyist who is in constant contact with the individual school representatives. They continue to provide written testimony and oral testimony whenever possible. I did not mean to dis AOF. I would love to see some younger/newer faculty take an interest in the complexities of state employee benefits.

Thank you for all the insight you continue to provide.

David Gainey said...

I am a teacher in PERS with 41 years of service. I am planning to retire this year on June 30th. Money Match is the option for me. Do I need to get out April 30th or May 31 to make sure I do not get hosed by the crappy deal that appears to be going down?
Any input would be appreciated.

Thanks
intheboro

David Gainey said...
This comment has been removed by a blog administrator.
David Gainey said...

I am a teacher with 41 years of service. I am planning to retire on June 30th of this year. Do I need to get out the end of April or May to not get hosed by what looks like the crappy deal coming to all PERS members?

Thanks for your ideas.
intheboro

sick and tired said...

From what I have gathered over the past 3 months, if it were me I would have a May 1 Or June 1 as the first day of my retirement.

sick and tired said...

In second paragraph above it says all retirements on or after. Since a lot of persblog info says this applies to MM and T2 with a beneficiary (my situation) where does the SB distinguish this? I see the word "all" retirements.I hope someone might help me understand this in -3 and -10 amendment. Thanks and for nostalgia, TGIF!

mrfearless47 said...

David Gainey. I don't give advice; I just report is going on. That said, you have much at stake. I'd follow my own counsel and protect myself with a safe date and top trying to finish out the school year.

mrfearless47 said...

Sick and tired. Read dash-3 for the all retirements, and the dash 10, pages 24-25 for just the Mm. Notice that in both dash-3 and dash10, the only effective date listed is "on passage". Compare that with all other elements in all the amendmens to see their effective date is 1/1/18. Why the discrepancy? I dont think an omission this consistently absent is an accident!

Parkdude said...

mrfearless - As I feared, I am completely lost (clueless?) - above you said: "Nothing in any of the bills or the amendments would affect a Full Formula Option 1 benefit." - What?! Isn't that exactly what capping the FAS salary cap at $100K, using the top 5 years, changing the multiplier and excluding vacation as part of the formula all do?

mrfearless47 said...

Parkdude. The references have always been to what happens between the bill's effective date and January 1, 2018. Once 1/1/18 rolls around, all bets are off, but we don't know what the final cuts will be. Even in the near yerm after January 1, the FF option 1 benefits will be limited because of the accrued benefits provision. The real damage doesn't begin for all the others, including FF, Option 1 until sveral years past the effective date.

jktrudy said...

Is it true that whatever the JWM committee decides on will have to go before the House and Senate for a vote? Once the bill comes out of the JWM would we have much of an impact by contacting these folks and asking them to not vote for the bill?

Also, if I am looking at the correct information, the JWM committee is made up of mostly Republicans, correct? If this is true then there stands a good chance this bill will come through as is, correct?

I have 4 more years before I can retire with 30 years, I am trying not to assume the worse but only to understand all that is/could happen.

Thanks to all those leaving comments and answers, I am learning alot here.

mrfearless47 said...

Joint ways and means is composed of 12 Democrats and 11 reublicans from both House and Senate.

mrfearless47 said...

JWM decisions are pretty much accepted as is. The full bodies don't need to vote except in a proforma way. Bills from JWM are usually the last bills to go out, just before the session adjourns.

OldTimer said...

I am a tier 2 with 20 years in, at 67 years old. Have been trying to figure out what this means to me. Is it reasonable to wait until 12/01 or get out soon as possible? Retirement really hadn't crossed my mind until it seemed foolish not to.

OldTimer said...

I am a Tier 2 with 20 years in & at 67 years old, I have been trying to piece this together as what it means to me. Is it reasonable to wait until 12/1 or get out as soon as possible. Retirement hadn't even crossed my mind until it seemed it may be foolish to wait.

Scott Cater said...

OldTimer, I'm not answering for Marc (I think he is hoping to rest his fingers this weekend), but I would encourage you, if you haven't already, to go to the PERS Discussion Group to learn more. There is a link on this blogs opening page. Take the weekend to read through the threads from the last couple of weeks or more; most of your questions will be answered. You must be in excellent health, have great genes in your family and really love your job not to have been thinking about retirement at 67!

mrfearless47 said...

My answer exactly. Thanks Scott.

OldTimer said...

Thank you, blessed with both,
I've a bit of reading to do :)

Laurie Hammill said...

I am a tier 1 with approximately 28 years and and my retirement will be full formula period am I safe to wait until December 1 to retire. I am 65 years old

mrfearless47 said...

Basically, you are safe if you have no beneficiary. If you expect to have a beneficiary, the dash-3 amendment still remains in play, althouth PERS' Executive Director has actively encouraged the Legislature to abandon that approach. If the dash-10 amendment is chosen, you will be fine.

Thankful! said...

In case you are unable to make the actual work session in Salem, the text of the bills and agenda are located here: https://olis.leg.state.or.us/liz/2017R1/Committees/SWF/2017-04-17-15-00/AgendaOnline. Undoubtedly there will be a video feed of the work session as well.

I am getting the word out to people I know to inform them of any decision that may affect them.

Shari Harris-Dunning said...

Hello and thank you so much for your blog and for sharing the dismal news to us all. I am planning on taking early retirement. I'm 55 years old and have 21 years 4 months in the system, Tier 1. I will have a beneficiary (my spouse). I am, or was, planning to retire on September 1, 2017 but am seriously contemplating retiring sooner (and then returning to my job on a contract until mid-August, when I was planning on leaving). My monthly amount (with contribution) jumps up quite a bit if I can hang on until July 1, but I don't want to do anything (stupid) that would jeopardize my retirement benefits.

I will spend time on the PERS Oregon discussion, but appreciate any pearls of wisdom that anyone is willing to throw my way.

Shari Harris-Dunning said...

I am trying to decide what to do...I have been planning on retiring on September 1st. I could go out as early as May 1st, but the difference in monthly contribution kicks up quite a bit, if I can even hang on until July 1. I'm going out under early retirement, FF and will have a beneficiary. I'd love any and all advice from any of you who might have some pearls of wisdom regarding waiting versus not waiting or how long/safe it is to wait. In the meanwhile, I'll start working on the retirement paperwork and see how it goes.

Shari Harris-Dunning said...

I need to provide a slight update and perspective to my situation. I worked part-time for many years and went back full time...not quite 3 years ago. If I can hang on until a July 1 retirement date, my monthly benefit goes up about $100/month, based on looking at my top 3 years. So, in the ideal world (which I know we don't live in)...that would be my new goal (versus Sept. 1).

mrfearless47 said...

Assuming you are FF and the Legislature doesn't decide to take a gigantic dose of stupid after being warned not to do so by PERS itself, you should be fine until any of the dates proposed in your posts. Only if they were to adopt the SB 560-3 would this be a problem, and I really don't see that happening.

Josh said...

There is one really scary piece of this legislation that I have not seen discussed.

On page 15, line 18 of the original SB 560 (this particular line does not appear to have been amended) is this carve-out:

(3) ORS 238.005 (26)(c)(J) does not apply in respect to service as a judge member.

On its face this would seem to allow the Supreme Court to not have to face the claim that they have a conflict of interest in ruling on the inevitable lawsuits, but at the same time it would appear to give political leverage to those who want to force these changes through.

I'm an elected official, Tier 1 with about 30 years of service and expecting to leave on Full Formula under Option 2. Several of my colleagues and others in related fields have talked about pulling the pin much earlier than expected. While every position is important within its organization I doubt if the legislature has contemplated what would happen if,, for example, the top 10% of leadership in 0 different Sheriff's Departments suddenly left because of possible PERS changes without any succession planning.....

mrfearless47 said...

@Josh. Your point is well-taken. I noticed that too, but became distracted by other things in this bag of weasels to note what the fate of that particular section. Time for a detailed review. One thing is certain; the Legislature is not operating with any level of intellect this year. It is a about the money. BTW, you are probably safe with the changes until after 12/1/17.