With the weather as it has been, I find myself pacing the cage, looking for ways to entertain myself until my neighborhood clears of snow and I can drive safely out of my driveway. Our neighborhood was the home of the big slide that took down a house in Lake Oswego. Well, not exactly. Actually, the house that was pushed in by a mudslide is in a newer part of our neighborhood not officially part of our development. It was put in a few years later. Anyone with two firing neurons could have walked up into the side of the hill where the house was built and see the local instability. I don't understand how anyone was permitted to build there. Since we are below the area that had the mudslide, our HOA will be holding an emergency meeting this week (I'm on the Board) to determine whether we need to do anything to the landscaping or drainage to prevent the problem from becoming ours.
Nothing is new in the PERS litigation arena. Judge Kantor is still sitting on the White case, and the Arken case is now before the Oregon Court of Appeals awaiting a date for a hearing. Robinson is still tied up with the question of whether it should be certified as a class action.
Retirees holding money in variable accounts will be paying the piper on February 1, 2009, when PERS adjusts the variable portion of the benefit to reflect performance from November 1, 2007 to October 31, 2008. It is likely to be quite dismal with estimates ranging to nearly -40%. Some people I know are girding for a significant benefit cut. I suppose the good news is that not too many retirees opt for the variable in retirement, and PERS limits the percentage of your retirement check that can derive from variable. Nevertheless, this *might* come as a shock to some PERS members who haven't been following the stock market too closely.
At the end of January, the Bureau of Labor Statistics will release the annual CPI for the Portland-Salem area. This is the number PERS uses to determine the annual COLA adjustment for all retirees. The best estimates are that the CPI will be in the low 1% area, which means that the "official" COLA will be less than 2%. However, for most retirees, prior years' COLAs have been maxed out at 2%, while the CPI exceeded 2%. When that happens, PERS "banks" the excess over 2% for the retirees and then draws on the "bank" to backfill in years when the COLA is less than 2%. So, except for a small number of retirees, most everyone should see a 2% increase this year. Possible exceptions are people who retired between August 1, 2007 and June 1, 2009. You will see either the actual CPI, or a small bump over the CPI depending on when you retired. The actual amounts will be known in February for everyone.
2 comments:
I thought I had followed the lawsuits but now find myself confused with Sartain. We received the COLAs but at the same time PERS billed us for the "overpayment". You updated your calculator to include a Sartain adjustment which would include the PERS underpayment. Where does this issue stand. On another note I have a cousin heavily involved with PERS as a city government official who has worked on several PERS committees. She told me in her opinion that PERS believes they will ultimately have to pay but either did not know how they were going to pay it without raising rates or actually had a plan to delay long enough to earn the funds. Interesting thoughts anyway.
PERS has determined that no "underpayment" existed as the COLA was due only on the "correct" rate. Since the 1999 earnings distribution was under a rate challenge beginning in 2000, that wasn't resolved until April 2004, they believed they had the power to adjust our benefits to the lower rate approved when the 1999 rate order was finalized in 2004 following the "City of Eugene" settlement agreement. Alas, there will be no payment due us. The best we can hope for is that the overpayment, for which we have been billed, will be dropped as a result of the Robinson verdict. The Sartain case has been resolved and no further adjudication is possible.
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