Desperadoes Under The Eaves

At the March 29, 2005 PERS Board meeting, there was a discussion of the uses and limits of various reserves. This occurred in the context of a discussion about reserve crediting. After some brief discussion, it became apparent that both the Board and PERS Staff were somewhat uncertain about the specific uses and funding limits for the Capital Preservation Reserve. At some point, board member Brenda Rocklin asked whether there was any statutory upper limit on the Capital Preservation Reserve. The response suggested that there wasn't and that the 7.5% funding level from 2003 earnings was selected because it was consistent with the Contingency Reserve funding. Following this discussion the Board asked PERS Staff to prepare a report indicating the statutory authority for each of the reserves PERS is authorized/required to fund and maintain, what the funding limits/requirements are, and what are considered authorized uses for each reserve. There was more than a bit of suspicion from some attendees of this meeting that the Board was exploring whether they could put more into the Capital Preservation Reserve than 7.5% of earnings, which further suggested that the Board might be considering this as a place to sequester any of those earnings in excess of the assumed rate.

Yesterday, the PERS Board posted its agenda and handout packet for the April 15th meeting, which included a memorandum from Steve Rodeman, head of the policy group at PERS, outlining the answers to the Board's questions. I read the memo and concluded that the Capital Preservation Fund had no statutory upper limit, which may or may not be significant (see above). I downloaded the packet and was planning to post a link to this memo for readers of this Board. In fact, what I had really intended to do was post a direct link to the April 15, 2005 agenda where this memo could be found. I went back today to find the exact link and discovered, to my surprise, that the memo had disappeared from the PERS packet and the packet cut short by two pages. No explanation was given. Moreover, the agenda item (C.2) vanished completely. I don't know the significance of this, although as you'll be able to read in the "pulled" memo, it hadn't been reviewed by PERS' outside legal counsel. One could assume that there might be some legal issue, or some other technical issue, but given the contents and the origins of same, it does prick my ears a bit to find out what might have been the problem. You can read a copy of this memo here.