The PERS Board (PERB) meets this coming Friday (Feb 15). The agenda is chock-a-block with interesting tidbits. Perhaps the most interesting item is the Board's decision to fund the Strunk litigation costs by reducing the guaranteed rate on regular accounts for active members from 8% to 7.97% during 2009. While this is a trivial amount of money for most members, the problem is that this sends the PERB down that slippery slope that got them into trouble with the Oregon Supreme Court in the Strunk case. The court was quite clear that regular accounts are to be paid no less than the guaranteed rate. The "between the lines" interpretation here is that if the PERB gets away with this action, it is the first step towards reducing the guarantee.
If you explore the agenda further, you discover that the PERS Staff is asking the PERB for permission to set aside several hundred thousand dollars for "future litigation." It doesn't take too much imagination to reconcile this agenda item with the reduction in the guarantee to pay for the Strunk litigation costs. The PERB must expect the PERS Coalition to sue - as well they should - to prevent this action.
There is still no word from Judge Kantor on the verdict in Arken or Robinson. Judge Kantor was excused from hearing a nasty murder case; one presumes that his caseload must be horrendous. I hope this means that he'll have more time to rule on those cases he's already heard. God knows, he's had six months to think hard on Arken/Robinson. The verdict can't be that complicated. I can easily envision the outcome. Maybe that's why he's a judge and I'm just a retired college prof <g>.
Not much else to report. My posts will probably diminish a bit over the next few weeks as I await for the verdict on my knee. I blew out all the cartilage over the weekend and I'm trying to get in to see the orthopedic surgeons soon to get the repair scheduled. It is no fun to have a 75 lb dog take a header right into the lateral knee while neither she nor you are paying attention. I can honestly say this this is the first mortal being to have ever brought me to my knees.
My Mini Cooper is on the boat awaiting its journey from Oxford, England to South Carolina to Portland. I hope to take possession of my new gas sipper by about this time next month. I'm still trying to figure out why it takes nearly a month to sail from England to the east coast. In my condition, I could swim faster.
Happy Valentines Day to all. Enjoy your time with the valentine of your choice. I have two lovely sweethearts to spend my evening with. I have two more who'll call. What more can a guy want?
7 comments:
I finally located the proposal to reduce the "guarantee" to 7.97 % to pay attorney fees in Agenda Item C-1. I thought the PERS Board already had reserve accounts established to pay for legal issues including attorney fees. If they get away with this it means they will have substantial reasons to create issues that we will litigate since PERS members will not only have to pay to complain on the issue, but even if we win we'll have to pay attorney fees out of our "guarantee". This is "horse pucky"!! I'll be at the meeting Friday! Bill R. Tier 1 active (unfortunately!)
Bill: If you are going to the Board meeting on Friday, would you be willing to share your notes with me. I'm not going to be able to make it. I already have two conflicting events in the same time period, and this would add a third. I may have many qualities, but transhumanence isn't one of them.
I agree that this is just absolute BS. I'm surprised there is no explicit opposition to it included in the agenda packet. I just can't believe the PERS coalition will accept this.
I'm hoping your knee gets very well, because if I remember correctly you're getting a manual transmission in the Mini C. I agree with Bill on the road apple nature of the PERS board and its 7.97 % proposal. Apparently there are no consequences for their bad decisions that we don't end up paying for twice one way or another.
Terry:
It's my right knee. I'd be more concerned if it were my left with the Cooper on the boat. I can still drive with my gimpy right knee, and my left leg is what will be needed to depress the clutch. It would have been a major bummer if I trashed my left knee on the eve of the delivery of a manual transmission Mini.
I imagine audience participation is allowed at this meeting. Last night I spent a few hours reviewing the discussions in the Strunk decision. I didn't find the language they reference; "The court directed PERS to take the specified plaintiff's attorney fees from the 8% earnings that would otherwise be credited to Tier One member regular accounts for 2007."
I did see a number of references to the assumed rate and all indicated it was unacceptable to pay less than the assumed rate. I'll provide my notes to you.
Bill:
Keep in mind there are two Strunk decisions. The first is the actual ruling in the Strunk case back in 2005. The second is the more recent (late 2007 if I recall correctly) on the attorney fee award in the Strunk case. When you say that you found references to the 8%, but not to the sentence referenced in the PERB agenda, which of the two decisions were you referencing?
I was looking at Strunk 2005. However, I did a search of the 2007 Strunk decision on attorney fees and did not find the language the PERS board is relying on to reduce the assumed rate to below 8%. All the language I have seen related to the assumed rate indicates the rate cannot be reduced to less than the assumed rate, which is currently 8%. In fact if the returns are less than 8% the board is required to tap a reserve account and make up the difference. I propose the same logic applies to the proposal before the board that they reduce the assumed rate to less than 8%. It may be that they are directed to charge the members for the attorney fees, but they must still credit our accounts for at least the assumed rate. I propose that since the account earned more than 8% that the attorney fees must be taken from the earnings greater than 8% and that they are not allowed to divert all the earnings greater than 8% to the reserve accounts and then charge the attorney fees to the remaining 8%; thereby reducing the credited amount to 7.97%. If they attempt this approach I interpret ORS 238.255 to require that they dip back into the reserve fund and bring the assumed rate back up to 8%, a decidedly convoluted approach in order to reach the same endpoint, which is the assumed rate of 8%.
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