Rumors

AFSCME (one of the PERS Coalition union members) sent out an email yesterday that contained the following concerning the upcoming (September 23, 2005) PERS Board meeting:

" So what will happen? We don't know for sure, but there may be some good news for retirees. You will recall that Lipscomb declared that members — including those now retired — had received too much interest crediting in 1999 and that the "extra" money would have to be paid back. We are now hearing rumblings — nothing official, mind you — that PERS staff intend to propose to the board that it take no action with regard to retirees until August 2006. The reasoning, apparently, is at that point in time another COLA will have gone into effect, making those retirees' then current monthly benefit higher than the recalculated one. Therefore, retirees at that point could "pay back" what they owe without seeing a decrease in their monthly check — it would essentially stay the same instead.

Additionally, with regard to any lump sums that may be owed by retirees who took lump sum payments, the PERS staff may recommend that the board pursue the "actuarially determined" method with no interest, which would result in only a small subtraction of benefits over the life of the remaining payments. Again, this is not official but it is more than just an idle rumor. If in fact it works out this way, it's good news for our retirees for the immediate future and would hold them fairly harmless while our legal appeals continue.

Of course, there can never be all good news when it relates to PERS. Despite objections from our legal counsel as to the legality of taking any steps on this whole payback issue, it appears the PERS Board will move forward with some implementations that we oppose. Rather than speculate, we'll report back to you as soon as we can after the fact. The PERS Board meetings are open to the public, and several members of our AFSCME Retirees Chapter intend to be on hand to monitor the proceedings; we will have staff there too, of course."

As others have commented, it's disturbing what some people consider "good" news. It is also distressing to read that AFSCME expects "several members of our AFSCME Retirees Chapter" to attend the Board meeting. I'm concerned that if too FEW people show up, it might give the PERB reason to suspect that less of us are interested and concerned about the outcome than they are. There is strength in WELL-BEHAVED numbers.

I'm also concerned that if PERS chooses to implement in this particular way, it would be impossible to figure out, in advance, exactly what the "hit" will be, to figure out what COLA benefit any member might be entitled to now or in the future (what is the base benefit?). I would agree, however, that if this were the only alternative after the litigation has run its course, it appears to be better than the "just hit 'em hard with an invoice and reduce their benefits approach". But good news really seems to me to be relative. In case you don't understand what is being rumored for non-lump sum retirees, the rumor suggests that the PERB is simply going to do what the legislation proposed -- and was struck down -- and call it something else. It does appear that they *might* not try to get money they don't already have from retirees, and they might not reduce benefits from their current levels, but I'm not really sure this is what the law says. Clearly, the intent here is to exchange those withheld COLAs for the "invoice" and call it square. Again, if this were my only option, I'd prefer it to the punitive approach of the settlement, but personally I still don't feel PERB has any legal authority to do even this. [NOTE: there are considerable disagreements about what the 'real' meaning of this rumor is, what it is suggesting that PERS might try or not try to do. At this point, it is useless to speculate. The only information anyone has put out is the rumor I've posted above. Read it and draw whatever conclusions you wish. Mine is simply MY OWN reading of the words. I have NO other information.]