It Doesn't Have To Be This Way

Short post to clarify something.  In the past several days I’ve gotten emails from a couple of readers who have had reason to contact PERS’ Customer Support line.  In two instances, callers have received misinformation concerning the assumed rate to take effect January 1, 2020.  On July 26, the PERS Board approved keeping the assumed rate at 7.2%, unchanged from the rate adopted in July of 2017 for the 2018-19 calendar years.  The Board considered a range of possible assumed rates before deciding in a close vote (3-2) to retain the rate already in effect.  

The misinformation was that the rate wasn’t finalized (which is actually true), and that the rate could still change down to 6.8% (the number actually given by one or both CS agents).  Callers wrote to me asking how this could possibly be true when the Board’s vote was supposed to be final.  The answer to that question is:  the rate IS 7.2% and will NOT CHANGE in January 2020.  

The confusion, I think, stems from the true part of the statement and the added requirement imposed by SB 1049 passed by the Legislature in May 2019.  SB 1049 requires that the PERS Board and Staff report to the Interim Joint Ways and Means Committee on actuarial changes (or not), their impacts on employer rates, and on the UAL.  The rate is not considered final until Interim Ways and Means approves the Board’s decision *and* the formal rule change is filed with the Secretary of State’s Office with the required 30 day comment period.  At that point, and only at that point, does the rate become final.

So, while it is true that the Legislature could force the Board to revisit the assumed rate decision, that is so unlikely in this case as to be considered impossible.  Why?  Because SB 1049 was written with the savings based on the assumed rate remaining at 7.2%.  Thus, it is virtually impossible to believe that the Legislature would undermine itself when the Board has done precisely what the Legislature assumed in the writing and passage of SB 1049.

But, there is a bigger problem that this exposes.  How to counteract the misinformation that is communicated by PERS frontline staff, which leads to chaos, despair and utter confusion?  While many PERS frontline staff are extremely helpful and well-intentioned, they don’t always have the answers to questions posed by callers or emailers.  Somehow PERS has to get a better handle on the training of these people, especially in the aftermath of complex Legislative changes.  Instead of being so “helpful”, sometimes it would just be better to say “I don’t know” and offer to either transfer the caller or the problem to someone in a better position to know.  While it took me less than an hour to get this particular matter straightened out and with an assurance that the correct answer would be communicated to all Frontline staff, I think PERS needs to be more proactive in its training of Frontline staff so these wrong answers don’t arise in the first place.  People on the cusp of retiring following a policy change do not need the added anguish that an incorrect answer provides.

Kevin Olinek, if you are reading this, please consider this a strong suggestion that you need to impose a better training regimen on the front-facing staff in your organization.