Showing posts with label Lipscomb. Show all posts
Showing posts with label Lipscomb. Show all posts
Monday, October 23, 2006
Lowdown
I've finally gotten information that settles the question of how PERS will implement the recovery after year one. This is explained and confirmed in this document from the actuarial firm contracting with PERS - Mercer. You can read the explanation here. The Mercer explanation matches almost exactly with how I interpreted the implementation method in my Lipscomb calculator. The most important "bullet" point is the last one on the page. I think it is self-explanatory. My thanks to David Crosley and Mercer for supplying this needed clarification.
Saturday, October 21, 2006
Dirt and Dead Ends
During the week, I spent a lot of time wrestling with stupid compiler tricks trying to get my Lipscomb program to compile so it would run on several flavors of Macs. Thanks to a couple of persistent testers and one particular Mac expert and PERS retiree, I solved the problem and learned a lot in the process. Thanks Dick! The program now available is the penultimate version. I still haven't added the wider age range (sorry Peg). That is on hold right now until I complete a backlog of other work. Give me a week or two and the Lipscomb project will be as complete as I can make it.
Apropos of Lipscomb, the wide boys representing PERS were busy assuring Judge Kantor (in Robinson) that they weren't invoicing anyone yet. That was only a small prevarication as I'm in possession of a real invoice carrying the date of 9/26/2006. Rather than quibble over the PERB lawyers' bending of the truth, I'll focus today's angst on the invoice itself. Despite repeated assurances from PERS that the recipient would be able to see clearly how PERS arrived at the adjusted benefit, that too is an even larger prevarication. The invoice is a 5 page document consisting of a two page 'explanatory' letter, which cuts to the chase (what you owe, when the payment is due, and how much the actuarial reduction in the benefit will be). They include a phone number for Strunk Eugene questions and a number of other pieces of helpful information. The other 3 pages are of numbers, but none truly useful. One curious page is a revised Notice of Entitlement (yep, one of those) with the new benefit. Its most curious feature is a Notice of Entitlement just like the one we got when we retired. It even includes the SAME statutory right to change benefit options within 60 days and the right to appeal the calculation over 240 days. Since the PERB specifically disallowed changes to benefit options this time around and they limited the contest period to 60 days, this is yet another small distortion that may have legal ramifications for PERS. Surely they didn't intend to offer these options to people again. Perhaps they just had a lot of extra old Notices of Entitlement laying around and were trying their hand at sustainability. The truly pissy thing is that anyone trying to challenge PERS (within 60 days or 240 days) wouldn't have enough information from this 5 page "invoice" to do it. That flatly contradicts what PERS told the assembled masses at their 9/23/05 meeting that would happen. Not there in any form.
During the 2005 and early 2006 discussions of the implementation method, PERS staff recommended against allowing retirees who wanted to pay the full lump sum of the "invoice" by rolling over tax sheltered assets (e.g. IRA, 401-K, 457, 403-B, etc) directly to PERS. PERS claimed there was no IRS basis to permit them to do this. Well, now there may be. A newly passed Federal law trumps PERS on this matter and may require PERS to permit this kind of payback. It was discussed at Friday's PERB meeting, but no decision was made. Before long, however, this option may be forced on PERS over its own objections. It will certainly make their bookkeeping a headache. Poor things.
On the labor front, Gene Mechanic, the lawyer handling the Robinson case will be leaving his firm at the end of December. In fact, the entire firm is disbanding with the principals going in different directions. One of the partners will continue to handle the outstanding labor cases, which presumably is the Robinson case, but Gene himself is taking a position in Miami with the SEIU. I have no idea what the ramifications of this will be.
Finally - at least for today - I'm now officially a voting member of Clackamas County. We got our property tax bill last Thursday and our ballots today. I'm still studying many of the ballot measures (I tend to follow the motto that if it takes me a long time to read and to understand a measure, there are too many unintended consequences and so I vote NO. It is a principle that has served me well through many initiatives. I don't care how much I agree with the ballot title or the central intent of the measure, if it takes me long to read it and longer to try to understand it, it is too complex to be enshrined in the Oregon Constitution and too difficult to remove). I will vote for Governor Kulongoski (with my nose pinched); I will proudly vote for Virginia Linder for the Supreme Court vacancy; and I will also vote for my two representatives - Richard Devlin (happily) and Greg MacPherson (grumblingly). I can't wait for election season to be over. Am I the only one who simply can't stand the sleazeballs any longer? If I see one more smarmy and distorted Ron Saxton ad I'm gonna puke.
Apropos of Lipscomb, the wide boys representing PERS were busy assuring Judge Kantor (in Robinson) that they weren't invoicing anyone yet. That was only a small prevarication as I'm in possession of a real invoice carrying the date of 9/26/2006. Rather than quibble over the PERB lawyers' bending of the truth, I'll focus today's angst on the invoice itself. Despite repeated assurances from PERS that the recipient would be able to see clearly how PERS arrived at the adjusted benefit, that too is an even larger prevarication. The invoice is a 5 page document consisting of a two page 'explanatory' letter, which cuts to the chase (what you owe, when the payment is due, and how much the actuarial reduction in the benefit will be). They include a phone number for Strunk Eugene questions and a number of other pieces of helpful information. The other 3 pages are of numbers, but none truly useful. One curious page is a revised Notice of Entitlement (yep, one of those) with the new benefit. Its most curious feature is a Notice of Entitlement just like the one we got when we retired. It even includes the SAME statutory right to change benefit options within 60 days and the right to appeal the calculation over 240 days. Since the PERB specifically disallowed changes to benefit options this time around and they limited the contest period to 60 days, this is yet another small distortion that may have legal ramifications for PERS. Surely they didn't intend to offer these options to people again. Perhaps they just had a lot of extra old Notices of Entitlement laying around and were trying their hand at sustainability. The truly pissy thing is that anyone trying to challenge PERS (within 60 days or 240 days) wouldn't have enough information from this 5 page "invoice" to do it. That flatly contradicts what PERS told the assembled masses at their 9/23/05 meeting that would happen. Not there in any form.
During the 2005 and early 2006 discussions of the implementation method, PERS staff recommended against allowing retirees who wanted to pay the full lump sum of the "invoice" by rolling over tax sheltered assets (e.g. IRA, 401-K, 457, 403-B, etc) directly to PERS. PERS claimed there was no IRS basis to permit them to do this. Well, now there may be. A newly passed Federal law trumps PERS on this matter and may require PERS to permit this kind of payback. It was discussed at Friday's PERB meeting, but no decision was made. Before long, however, this option may be forced on PERS over its own objections. It will certainly make their bookkeeping a headache. Poor things.
On the labor front, Gene Mechanic, the lawyer handling the Robinson case will be leaving his firm at the end of December. In fact, the entire firm is disbanding with the principals going in different directions. One of the partners will continue to handle the outstanding labor cases, which presumably is the Robinson case, but Gene himself is taking a position in Miami with the SEIU. I have no idea what the ramifications of this will be.
Finally - at least for today - I'm now officially a voting member of Clackamas County. We got our property tax bill last Thursday and our ballots today. I'm still studying many of the ballot measures (I tend to follow the motto that if it takes me a long time to read and to understand a measure, there are too many unintended consequences and so I vote NO. It is a principle that has served me well through many initiatives. I don't care how much I agree with the ballot title or the central intent of the measure, if it takes me long to read it and longer to try to understand it, it is too complex to be enshrined in the Oregon Constitution and too difficult to remove). I will vote for Governor Kulongoski (with my nose pinched); I will proudly vote for Virginia Linder for the Supreme Court vacancy; and I will also vote for my two representatives - Richard Devlin (happily) and Greg MacPherson (grumblingly). I can't wait for election season to be over. Am I the only one who simply can't stand the sleazeballs any longer? If I see one more smarmy and distorted Ron Saxton ad I'm gonna puke.
Tuesday, October 17, 2006
Seen it All Before
My sources at PERS remind me that I've "seen it all before". I posed this question to them earlier this year, as they remind me, and they claim to have settled the matter of my question in the last post. They report that the method that will be use to adjust benefits after year 1 of the Strunk Eugene plan, follows the description I give in method number 2. This means that your year 1 "net gross" benefit (adjusted minus actuarial recovery amount) becomes the new base for the COLA in the next year. This is the entire assumption of the actuarial recovery tables used to construct my program. See "Gimme Some Truth" for more details about the differences in methodology.
The more I think about this and discuss it with mathematicians, business people, and engineers, the more I'm thinking there may be a difference of interpretation between the approached intended by the actuaries in using these actuarial recovery factors, and PERS' implementation of the recovery mechanism for producing the monthly benefit check. In the main, my question lies with Option 2 -- the mechanism that PERS has multiply told me is the way they plan to apply the reductions. What still isn't clear in PERS' answer, and what makes a really big difference is how the benefit is figured beyond the first year. We all agree that the first year benefit is computed as: take the revised benefit with all COLAS and subtract some amount representing the proper actuarial recovery factor for your retirement option and your single (Option 1) life expectancy. From this, we come up with the net gross benefit - an amount that has de facto been subjected to the actuarial recovery factors. From this point further, there is no actuarial reduction remaining as the benefit has been reduced by the flat amount in perpetuity. It should be this simple. Future COLAS should be applied to the "net gross benefit" starting after year 1 and should continue to grow without further reduction thereafter. If this is what PERS is planning to do, they should acknowledge it. Perhaps I haven't been clear enough in formulating my question, but I understand the ramifications much more clearly now than I did when I first asked the questions. Watch this space for a more definitive answer.
Speaking of programs, I released version 1.0PR (release candidate 1) for Windows and OS X early this afternoon. You can visit the link over on the left, which will take you to the web page where the program links can be found. Please do read the instructions. They will save you (and me) a lot of time later.
The more I think about this and discuss it with mathematicians, business people, and engineers, the more I'm thinking there may be a difference of interpretation between the approached intended by the actuaries in using these actuarial recovery factors, and PERS' implementation of the recovery mechanism for producing the monthly benefit check. In the main, my question lies with Option 2 -- the mechanism that PERS has multiply told me is the way they plan to apply the reductions. What still isn't clear in PERS' answer, and what makes a really big difference is how the benefit is figured beyond the first year. We all agree that the first year benefit is computed as: take the revised benefit with all COLAS and subtract some amount representing the proper actuarial recovery factor for your retirement option and your single (Option 1) life expectancy. From this, we come up with the net gross benefit - an amount that has de facto been subjected to the actuarial recovery factors. From this point further, there is no actuarial reduction remaining as the benefit has been reduced by the flat amount in perpetuity. It should be this simple. Future COLAS should be applied to the "net gross benefit" starting after year 1 and should continue to grow without further reduction thereafter. If this is what PERS is planning to do, they should acknowledge it. Perhaps I haven't been clear enough in formulating my question, but I understand the ramifications much more clearly now than I did when I first asked the questions. Watch this space for a more definitive answer.
Speaking of programs, I released version 1.0PR (release candidate 1) for Windows and OS X early this afternoon. You can visit the link over on the left, which will take you to the web page where the program links can be found. Please do read the instructions. They will save you (and me) a lot of time later.
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