After a weekend of confusion, chaos, and disbelief, it appears that PERS has updated its "Assumed Rate FAQ" and script used when getting calls. According to the revised "Assumed Rate FAQ" at the PERS Oregon Official Website -http://www.oregon.gov/pers/docs/financial_reports/assumed_rate_faq_5-31-13.pdf - the date for implementation of the revised Actuarial Equivalency Factors is 1/1/2014, which is what we thought it was supposed to be from the very beginning. I don't know whether this represents a shift from PERS and the Board, or whether it was just clumsily presented on Friday. In any case, it would appear that the assumed rate change (to 7.5% or 7.75%) will take place on August 1, 2013, as promised, but the revision to the accompanying mortality tables and annuitization factors won't take place until January 1. This means that members who expect to retire this year will not be adversely affected by the AEF change unless they retire after 12/1/2013. While earnings crediting will take place at the new rate (one of the two amounts above) beginning on 8/1/2013, the underlying annuitization tables won't change until 1/1/14, meaning that retirements up to 12/1/13 will be figured under the old mortality tables. This should ease some of the pressure for potential retirees. If you want more information, the PERS website is your friend. It is now there in black and white at the above link, which appears to be updated as new questions and answers arise.
23 comments:
Any word yet on deals at the Governor's Grand PERS/Revenue summit?
Nothing yet. A press release saying progress is being made, whatever that means, and more meetings tomorrow.
Not that you care but I am leaving your pers group. Your relevance to pers issues increasingly is saturated with your liberal beliefs. Your a typical liberal college professor and I will leave it there. It is your site so your certainly entitled to your opinion but then you know what they say about opinions. Hopefully you live long enough to see just how destructive Obama and Democrats have been to this country. Oregon was far better served when we had Wyden (D) and Smith (R) instead of idiot Merkley and the Oregon legislature is nothing short of disgusting.
@Unknown. sorry you feel that way. This isn't the appropriate place for your complaint, but I'm going to let it slide. I don't make any apologies for who I am or what I happen to believe. Your concern is the primary reason why I don't like politics in the group. I allowed it because it started tangentially relevant to PERS and devolved from there, which is the problem. I hope you find happiness in your life and valuable information about PERS elsewhere. Good luck.
Marc, "unknown" is a jerk. You provide a very valuable service. It's incredibly hard to get reliable PERS information, even from PERS itself. Also, press releases re. the ongoing legislative circus are often late, absent, or incomplete. Back to trying to get answers from PERS (not about legislation, i KNOW they won't speak to that, i'm talking about questions about benefits). The one-year presentation I recently attended had a piece of faulty information and the phone line staff often give contradictory answers. I'm starting to wonder if this is just me or if this has happened to others. ANYWAY, this is really the only forum we can get information and support. Your answer to that R jerk was classy although he/she didn't deserve it. Thanks for all you do.
I'll be one of many who seconds (and thirds!) janedoe.
Keep up the good--and valuable--work, Marc.
Both my kids, having watched the devolution of teaching in Oregon as a secure
and respected career, have taken teaching positions in other western states.
Does anyone know how they can retrieve the money they have in their PERS
accounts before the legislature figures out how to steal it?Info would be
greatly appreciated.
Wow. Thirds!
Where on earth could anyone get better up to date information on PERS gyrations than from an astute retiree's point of view right here?
I have so very much appreciated a FEARLESS review of the facts as well as a studied assessment of the spin.
Thank you Marc!
I have read the PERS FAQ but would like to know if I am interpreting correctly. If a tier 1 goes out under money match Dec 1, 2013 he will be retiring under the old AEFs? Does that mean the 8% assumed rate and the old morality rates, or the new assumed rate and the old mortality rates?
Thanks for all the information you share, Marc.
@Les. It is the latter. Old mortality tables with built in 8% annuitization,the new rate for creditting earnings from 8/1/13 to 12/1/13.
Remember that the earning crediting for this portion of the year is the least significant part of the retirement calculations as you can see in the example.
McFearless replies to posts in the wee hours of the morning... up worrying like me perhaps.
Visions of a smokey room, mirrors and haze, the governor in a mask performing surgery, the patient under, lifeless. Forceps into a helpless body, extracting bloody coins. Masked assistants, 8 of them, four on each side quietly planning who to put down next.
@Bob. I did enough worrying for 100 back in 2003. Now I'm just a light sleeper who rests in fits and starts. I've past the worry stage for me personally, but not for many friends. Mostly I'm worried about how clueless many of them are to what might be going on.
Your dreamscape is probably accurate.
I honestly believe we will see something horrible come out of this "PERS summit". My premonition has the governor in a mask... it is that of a robber, not surgeon.
I put my own "retirement plan" in motion last fall by selling my home in Oregon, buying one in Arizona, and never dreamed that I'd be "forced" to technically retire in order to protect my 8% money match instead of my plan which was to just go inactive for a few years.
Now I wonder if I shouldn't even do the dreaded double lump sum rather than take a monthly disbursement plan... all just because the only certainty is that the leadership of this state clearly can not be trusted.
I feel totally cheated after 30 years now at the final month... who to trust?
Do I or don't I submit my retirement paperwork for a July 1, 2013 retirement? Thoughts on the sick leave and vacation use for final average salary remaining in place.
Not a clue. It had been off the table prior to May 31. It might be back after we find out what the Gov and his merry band of legislative henchmen finish their confab at mahogany hall. You can certainly wait a few days to find out what the gang of fools propose before making your decision. If there is no agreement then you could hold on.
Do these changes affect a small (5k) IAP account.? I retired in 2004 and this account was ot figured into my benefit. I wanted to just leave it because the return is decent....but now I don't know.
This has NOTHING to do with IAP accounts. The return on the IAP is market driven so there is no risk profile to your account other than the risk that attends the stock market.
@Bob. The double lump sum is tempting, but perhaps because it is tempting it is USUALLY bad advice to go for it. I know of no annuity that would do as well as PERS, especially with a Cost of Living increase, no matter how diminished. Plus you get the anguish and worry of managing your life's savings in place of the anguish and worry about the legislature. I see the risk of them trying to attach, reduce, or eliminate our benefits once we have retired as extremely small; however, I would worry all the time about running out of money before my natural pull date if all I had was my total lump sum. My opinion, for whatever it is worth.
The SRA instructions indicate that "To change or establish a new retirement date, you must fill out a new retirement application and any additional forms, PERS must receive these, as required by law, before the issue date of your first benefit payment."
If I understand this correctly, if one submits an SRA for a July 2013 retirement date, one has until at least end of July to submit another SRA that could change the retirement date, since the first benefit payment will be issued no sooner than Aug. 1. So, one could buy another month of time to watch the action in Salem.
I would not make that kind of assumption. There is a perilous story of someone who tried to game PERS this way by changing his retirement date for several months running. By the time he got to the third attempt to change retirement dates, all properly done, it took PERS 4 days to process his first retirement check. Don't be too cavalier about the amount of time you have to change dates. I understand the rule, but PERS can act quickly if it wants to.
I am so confused. I left the State after 20 years as Tier 1 and went to work for the Feds at a job where I have to retire at 65 -- another six years. My plan was to leave my PERS in place and then start drawing both pensions at the appropriate time. It could even be 62. Now I'm not sure WHAT they're going to do...does my planed PERS pension get cut in half without Money Match? Should I take the lump sum and run? This is awful.
@bev. I think you would be best served by reading my June 17 blog post - Train of Fool. It updates what I believe is going on. You planned pension won't be cut in half, but if you fail to act, your money match benefit could be reduced by about 37% if the legislature opts to reduce the assumed interest rate for calculating the Money Match benefits of inactive PERS members. The is a small chance this wont happen, and a large chance it will. The only affirmative defense would be to try and beat the implementation on the assumption that they can't get the law passed before July 1. If you don't beat the deadline then it would probably be wise to wait, both for the litigation to play out, and to let your account continue growing for 5 or so more years.
Thanks, Marc, this helps, although I still feel betrayed. If I didn't read the Oregonian on line once in a while, I never even would have known this was happening!
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