It's Money That I Love

Well, not really. But it is always nice to get a raise. I noted that my bank listed my September 1 PERS benefit as already in my account. As I expected, my benefit check did, indeed, go up by 2% and my net benefit was noticeably higher than either my August 1 check or my July 1 check. This should convince the "doubting Thomases" out there that the legal fees really were a one-time reduction.

Please be safe out there this weekend. I've already had to be about several times and the old saying "it's a jungle out there" wouldn't be sufficient to describe how bad the traffic really is. Stay home and enjoy our most excellent (just kidding) Labor Day weather. This reminds me more of July 4th than Labor Day. Here's hoping for a long, pleasant fall. I don't want the rains to return anytime soon.

Foolish Mind Games

It has been said that foolish consistency is the hobgoblin of small minds. The Oregonian has once again demonstrated its miniscule mindedness. In yesterday's (Friday August 29) editorial, they displayed foolish consistency insisting that, although it would be painful, the Portland Police and Fire retirees who have benefitted from the erroneous calculations of benefits since 1995 (because of the Legislature's bill resolving the income tax gridlock coming out of Hughes v Oregon and Davis v. Michigan , should have to repay the overpayments. The PPFRS did not calculate the adjustment correctly and retirees have been receiving approximately 2.58% higher benefits since retirement. So, as in the case of PERS retirees, the Whoregonian insists that beneficiaries should repay their overpayments. My oh my, haven't we heard this line before. I hope that the coalition supporting PPFRS retirees is as agressive with their litigation as the PERS Coalition has been for PERS retirees. These are not errors for which the victims should be blamed. And there ought to be a statute of limitations on how long the funds have to recover the errors. Three years ought to be sufficient for auditing of payments and for finding mistakes. We are talking about errors that began as many as 13 years ago. Just because the administrators of these funds are totally incompetent, it doesn't mean that the beneficiaries should have to pay for their mistakes.

Tumbling Dice

My neighborhood fishwrapper (the Boregonian) reports that the Portland Police and Fire pension fund has been (surprise!) paying out about $3 million too much to retirees and their beneficiaries since about 1995. The Board will meet next Tuesday (August 26?) to discuss how to remedy the mistake, whether to recover the "overpayments" or to "eat the extra costs". This affects about half the current retiree cohort.

You can bet that the Portland Police and Fire pension fund Board will be taking cues from the PERS Board and will, if one were betting, follow PERB in collecting the overpayments. What makes this case somewhat different is that the Board is clueless about who is responsible for the mistake or how it was even made. This group didn't bother to keep minutes or notes during the period and so there is no way to actually figure out the inspiration for this error. The overpayments range from about $50 per month to slightly over $100 per month. The birdcage liner also reports that Portland Mayor Tom Potter and Portland City Commissioner Randy Leonard are among those currently being overpaid pension benefits.

I wish the Portland Police and Fire Bureau the best of luck in working through this uncertainty. In my fantasy world, the retirees are left untouched and this becomes a legal precedent that can be used to benefit PERS retirees afflicted by this latest case of "no good deed ever goes unpunished."

Skandalouz

A recent post on the PERS Oregon Discussion group raises an interesting question about the behavior of PERS towards active members in collecting from them for Attorney Fees this past April. Recall that the Oregon Supreme Court ruled that the PERS Coalition was entitled to Attorney Fees under the "common fund" provision. This provision allows that attorney fees be collected from the winners of a civil suit in some proportion to the gains they made by the ruling. In the case of active Tier 1 PERS members - who are entitled to the 8% rate guarantee - PERB ruled that 0.03% of the guaranteed earnings for 2007 be withheld one time only at the time the earnings were payable. This is to compensate attorney fees for the nearly $400,000,000 returned to Tier 1 members by virtue of the Strunk ruling that the guarantee is in fact the minimum rate that can be paid to Tier 1 members under any circumstances. For most Tier 1 members, the 0.03% "hit" represented a relatively small sum of money - about $60 or so for the typical member. What no one really worked out was how much this really will cost Tier 1 members over the long haul. Using some simple math, we can figure that the average member is losing not only $60, but the compounding effect of the loss of that money for the rest of his/her career. In a matter of 9 years, the $60 "hit" has doubled to $120 at 8% interest. The attorneys got paid in fixed 2008 dollars in one lump sum. PERS appears to have taken enough money from active members to cover their assessment towards the attorney bill. But what becomes of the money that PERS no longer has to pay towards retirees' retirement - the money that is no longer earning 8%? By my back of the envelope calculations, there is a considerable amount of money at stake here - probably much more than the attorney fees themselves. Who gets *that* money? No provision is made for that to go back into employee accounts. It seems to me that PERS deduction takes out far more than it needs to cover the one time attorney fees.

In the larger scheme of things, PERS probably had no alternative to deducting the money. Billing active members would have met with mixed results and driven up collection costs. But it seems to me that PERS could have discounted the attorney fee assessment so that over a period of say 5 years, the compounded amount would have covered the attorney fees. In short, I think some accounts must have been padded as a result of this one time fee. By any criterion I can think of, this is hardly a one-time hit for active members? Perhaps PERS will tell me where I'm wrong, but I don't see how any alternative explanation can obtain here.

P.S. I'll be off the grid for a few days as I recover from minor surgery on Friday. Regular programming should return next week.

What Are Their Names?

The witnesses, the various people covered by the plaintiffs' (PERS Coalition in White) motion for discovery. The ubiquity of technology is on display as the attorneys go for broke in trying to gain access to all the various ways the lawyers, the PERB, and the employers communicated in the run-up to the settlement agreement culminating in the White case now. The web site for the Coalition Attorneys (here), is ripe with every document produced so far for this trial. Of course, we won't get to see all the good stuff uncovered in discovery until the trial. But you can bet that the defendants are scrambling right now to either ditch crucial technology (at some risk, I might add), or are madly trying to assemble it in an order that won't reveal their true motives in rushing the settlement agreement out of the door. Stay tuned. This is bound to get a lot more interesting and exciting as time rolls on. It will be "fright night" on display in Judge Kantor's court just before Halloween. I'll be there complete with costume.

Limbo No More

The Bennett Hartman law firm has posted documents related to the White case and the recent hearing on August 7, 2008. You can read them here and here. These documents make it clear that the discovery phase of the trial is going to get very interesting as the PERS Coalition attorneys are seeking virtually every document in electronic form ever produced in the City of Eugene case and successors/ These documents include emails, voicemails, faxes, instant messages, Blackberry messages, text messages and virtually anything else involving communications between the attorneys and plaintiffs. As a tech geek, I was fascinated by the completeness of the request and the detailed form in which the request was made. It will be really interesting to see how the wide boys escape, dodge, and elude this request. Discovery is such a nasty weapon and it can be used so effectively in cases like this. For the first time in awhile my blood is quickening at the possibility of seeing what those sleazebuckets were up to in drawing up the "poison pills" in the "settlement agreement". The "settlement agreement" has always seemed to me to be such a brazen act of collusion between a group of employers, lawyers, and PERB.

The main act of this case begins October 23 and runs through October 27th in Judge Kantor's Courtroom.

Unbelievable

Tim does it again. Last week I noted that the blog was about to cross the 600,000 visitor threshold. In an offhand remark, I asked my predictive expert, Tim, to predict when this event would occur. Tim privately emailed me that the blog would crossover at 8:08 p.m. last night. While I don't know precisely when last night it occurred, but we have crossed over and Tim guessed it right again. I don't know how you do it Tim, but perhaps you want to predict the vote in the next presidential election?

On the PERS front, most window retirees have gotten their August 1st check showing the deduction for Attorney Fees in the Strunk case. As expected, the August take home benefit increased by a small amount, or it decreased by an equally small amount. The amount by which your benefit changed on August 1 over July 1 should indicate how much your benefit take home will *increase* on September 1. Add the amount of the attorney fee back to your take home and you'll have your future take home resulting from the August 1, 2008 COLA. PERS sent out the stubs for the August check yesterday and most members should start to see them today or in the next few days.