Pretzel Logic

Awhile back, after receiving the first part of the "actuarial reduction tables" Mercer developed for PERS, I questioned various PERS senior officials about them. In the main, my query involved the "life expectancies" implied by the tables. In my reading of the tables, it appeared that Mercer was assuming extraordinarily long lives and, that by so assuming, PERS would never collect the full amount. I was quite skeptical that this was the intent, and raised a hypothetical with PERS. In one response, PERS told me that "...when you factor the impact of COLAs on the reduced benefit, it brings the payback period in line with current longevity assumptions". I responded: "...how do COLAs on the revised benefit factor into anything related to the payback since the payback is based on amounts allegedly paid illegally, frozen on a date certain, and to be repaid based on actuarial life expectancies." I further wrote: "...if Joe Blow owes PERS $5000...is 60 years old, and .... will live to 80 years old, then Joe would pay back $5000/240 [$20.83] per month no matter how long he lives." And finally I concluded: "...the revised tables suggest that Joe is going to live to 98, virtually guaranteeing that he will never repay the full amount (unless the $5000 which is owed is actually inflated by a 2% COLA that he isn't receiving and, according to PERS, isn't entitled to receive.)"

I've waited patiently for PERS to get back to me on this. Earlier this week, I received an email from PERS which contained "the" answer to my question, direct from Mercer. I'm going to quote it directly in italics to set it off from the rest of the text: "The overpayment is a fixed amount that is collected over the expected lifetime of the retiree and his or her beneficiary with no interest charge. The method of collection is to reduce the benefit the retiree would otherwise be entitled to. Because this benefit amount is entitled to an annual COLA, by reducing it, we are also reducing future COLAs. By including an assumption of a 2% COLA in the development of the reduction factor, we are taking into account the reduced future COLAs as a part of the repayment so that we do not collect too much from the retiree. So, the retiree is not making level payments on the overpayment, but is making payments that are assumed to increase 2% per year. Using your example of a retiree who owes $5000 and is expected to live 20 more years, monthly payments would start at about $17 per month, but would be expected to increase 2% each year. The starting payment is less than the method you proposed ($5000 / 240 = $20.83), but with the 2% increases becomes about the same after 10 years and collects the same $5000 after 20 years."

It took me quite a bit of time to parse carefully what Mercer is saying, but I finally think I understand it. The actuarial repayment tables are an artifact of the 2% COLA. What Mercer has proposed is that we will be paying back a fixed amount each month, determined by the actuarial factor at the time repayment begins. Although we will not "see" this, the repayment amount is "assumed" to increase by 2% annually, although it will not, in fact, increase. By "assuming" a 2% annual COLA on the payment, it is also assumed that by the time we reach our TRUE actuarial life expectancy, the original amount we owed would be paid back. I suppose one could view this as good news because the actuarial reduction is smaller than common sense and simple math suggest, but it actually changes nothing significant. If you die early, you pay back less; if you reach an older age than actuarially expected, you pay back more. The only consolation is that you pay back in dollars that are deflating by the true cost-of-living less the 2% COLA assumption, and your monthly amount is fixed at a lower amount from the beginning.

Addendum: If you are concerned about the implications of this explanation, you should definitely express them to PERS, to its Board, and to the PERS Coalition. I plan to make a portion of the Actuarial Repayment Factors available shortly. I have only those for Option 1, 2, and 3 retirements. I don't have those for Option 0, 2A, 3A, or 4. You can use my "Lipscomb Calculator" to get some rough idea of how much PERS thinks you'll owe (use this as a guide, not as a statement of fact), and what your adjusted benefit will be (without actuarial reduction). Then use the actuarial reduction factor table for your retirement option to determine the "factor". That will tell you what your monthly repayment amount will be. The hard part (for some) is to take that starting amount and increment it by 2% annually for as long as YOU expect to live based on your known history. That will tell you how much you're actually repaying over your lifetime.

Gallows Pole

The wait is over. Today I went to the post office (the gallows pole) to mail my 2005 Federal Taxes and my Multnomah County I-Tax (hooray, this is the last year, ever!). Now that I've climbed and survived that pole, the next pole awaiting us is May 9th. That is the drop-dead date for PERS retirees to file appeals of the METHOD used to recover alleged overpayments resulting from the Strunk/City of Eugene litigation/settlement. This deadline has generated a huge amount of angst as retirees debate the merits of filing individual appeals, group appeals, PERS Coalition appeals, and/or OPRI appeals. Loosely organized groups of individuals, fed up with the lack of information from the PERS Coalition and, especially OPRI, are considering filing their own appeals based on the language of section 14b of HB 2003, passed by the Oregon Legislature in 2003. For those unfamiliar with that section, it decribes the "exclusive" remedy for the City of Eugene case in the event the court upheld Judge Lipscomb's decision. The exclusive remedy consisted of freezing COLAS and/or charging off retiree overpayments to PERS administrative expenses. The Supreme Court held that freezing COLAs was a breach of contract, while it declined to rule on the "administrative expense" petition by the PERS Coalition during the Strunk case. In considering its options, the PERS Board declined (some say refused) to use the "exclusive remedy" because they felt that taking the funds from administrative expenses (off the top of earnings) would disadvantage active Tier 1 and Tier 2 members. The concern over active Tier 1 members is entirely bogus and misplaced - Tier 1 members will never have access to earnings in excess of 8% again. The issue with Tier 2 may also be misplaced, although the concern might well be genuine depending on the Board's future actions and the system's earnings.

Driving much of the angst is the refusal of the PERS Coalition and OPRI to offer even a smidgen of advice to members other than to suggest consulting an attorney of the member's choice. The Coalition and OPRI have declined to comment on the entire 14b argument, although it is well-known that many of the unions in the Coalition are pressing for a separate 14b lawsuit to be filed before May 9th. I'm reasonably confident that something will be filed on 14b on or before the drop-dead date. I've even heard back-channel rumors about who might be involved. But the rumors are vague and amorphous. I'm not certain who will be filing it - a group of retirees pursuing it on their own (I know of such a group) - OPRI, the PERS Coalition, or a separate organization apart from the Coalition. I can't imagine letting this opportunity go by - section 14b is a very ripe fruit begging to be picked. Whether the Courts would find any merit in the argument that the Legislature compelled PERS to use this remedy and PERS chose to defy the Legislature remains to be seen. But it strikes me that to NOT challenge the legality of what PERS is doing, in light of section 14b, would be a travesty of justice.

Kiss & Tell

Just heard back from PERS. The definitive answer is that NO invoices for Strunk/Eugene have gone out to any retiree. Invoices won't start until Fall. A few retirees may have received notices of adjusted benefits along with a listed "overpayment" amount. But, that isn't the official invoice and the retiree owes nothing until the actual invoice is sent and received in Fall (???August for September 1 due date). So, whatever reports I've been getting, PERS denies they represent official invoices for the Strunk/Eugene settlement.

Always Look on the Bright Side of Life

Don't let the title of this post fool you. Read Bruce Cockburn's lyrics and you'll see why. Just a quick note to say that I've heard from two correspondents who have "window retiree" friends that have recently (as in last week) received "invoices" from PERS for their alleged overpayments due to the Strunk/Eugene settlement. None of these invoices has been confirmed, nor has PERS responded yet to my inquiries about their authenticity. Nevertheless, if you look closely as the PERS timetable for recovery, the very first invoices were to go to "window retirees" who took some form of lump sum settlement at the time of retirement. Those invoices were scheduled (on the timetable) to go out during the April - July timeframe of 2006. If confirmed, PERS is keeping to its schedule. As soon as I have confirmation, I will post. I'd really like to see a copy of an actual invoice to find out what information PERS is providing to retirees and whether it is sufficient for the member to reconstruct the amount accurately. Stay tuned.

Concrete Jungle

I just returned from a vacation in San Diego. To be fair, I lived in San Diego for 18 months from early 1989 until mid-1990. I became extremely familiar with the politics and local issues that were "hot" back then. Imagine my surprise when I returned for a week almost 17 years later and found that the "hot" issues now were exactly the same as they were when I left. The San Diego City Council is still a stinkpot of corruption and panderer to special interests (for Portland residents, this may sound achingly familiar). Despite this, the City Council did manage to figure out a way to corrupt the public employee's pension system (of which the Council is a part). Now, faced with a voter revolt, the newly elected Mayor managed to finesse through two ballot measures for November 2006 that will try to undo some of the pension mess. Although the Mayor and Council negotiated with the labor unions to get them to "buy in" to the ballot measures, the unions refused and expected "labor friendly" city councilmen to support them. Alas, the mayor sandbagged the unions as he already had the votes to put this on the ballot. The measures were referred out by a vote of 6 - 1. Moreover, to rub salt in the unions' faces, neither the Mayor nor the City Council offered any explanation of how these measures would be implemented if they passed. One measure requires that the Council look towards outsourcing *many* of the City jobs (again, not a clue which ones). The second measure would require that voters in the City of San Diego approve ANY changes to the current public employee pension system. This means that added benefits (unlikely) or decreased benefits (highly likely) would be decided by a vote of the people. The council did make one small concession to the unions and active employees. Employees with at least 15 years of public service in the system, or those who are already vested and within 15 years of normal retirement age (60), would be exempt from voter-approved changes. All this would be "news" if the same kind of stuff weren't under discussion in 1989. The more things change, the more they stay the same.

Other non-news. San Diego is still searching for a place to site a new airport. This discussion has been going on since about 1984. They've narrowed the search down to 9 possible locations, at least 4 of which are so preposterous as to not deserve comment. When the Pentagon announced the latest round of Base Closures, the Port Commission in San Diego prayed that either the Mirimar base, or the San Diego Marine Corps recruiting depot would close. Alas, neither did. As it happens, those two sites are the most logical place to relocate or expand the existing airport. The Marine Corps Depot sits immediately adjacent to and North of the current airport. Its size would allow the current airport to remain and build at least two new runways. San Diego is the largest big city airport to have only 1 active runway - and their passenger volume is about 3 million more than PDX.

More non-news. San Diego continues to fill its coffers from overtime parking fines. I'm convinced that overtime parking is the biggest revenue source outside property tax. In 1989, parking past the meter time was a death-penalty offense; now they've dropped the death penalty in favor of a fine that will cost anyone $60 minimum for the first offense, and $120 and "booting" for the second offense. They use collection agencies to recover unpaid parking fines and they don't give a damn whether you're visiting or permanent.

The one astounding fact is that San Diego has grown more than Portland since 1989. In itself, this is no surprise. The surprise is that San Diego's traffic situation has not changed since then. We were able to drive at all times of the day, over dozens of freeways and in all directions and never once encountered a traffic jam that would rival a normal mid-day on any of Portland's freeways. I can't figure out how they've managed that feat of incredible traffic engineering. I do know that CalTrans - the agency responsible for building and maintaining freeways - can lay 5 miles of driveable concrete freeway in a day, once all the preparations are done. In Oregon, we have Highway 26 (the Sunset Highway), which has been under construction since about 1974 and shows no sign of completion. Were it in California, the Sunset would have been widened, repaved, widened again, and repaved multiple times and would be 8 lines by now.

Oh well, in the absense of any significant PERS news this week, I thought I'd share these thoughts on how things are elsewhere in the concrete jungle of California. The PERS Board meets today, but I'm not in any condition to go -- too much unpacking and bill paying to escape. Hopefully, one of my friends will send me a shout out about what happened so I can post it here over the weekend.

Nobody's Home

That's gonna be my story for the next week. We're gonna spend a week in the sun (we hope) and get away from the insanity that has overtaken Oregon. I'm not expecting to update this blog until I return on March 30.

The Ghost of Tom Joad

May be visiting a lot more than just "window retirees". I've had a peek at some of the "actuarial reduction factors" that Mercer developed for PERS to implement the Strunk/Eugene decisions. Recall that under these decisions, PERS alleges that the benefit "window retirees" have been receiving (heretofore, the "fixed" benefit) has been too high since they retired. The reason, according to PERS, is that the 1999 earnings crediting decision of 20% was challenged by employers and vacated by Judge Lipscomb. As a result of PERS "settlement agreement", the PERS Board changed the 1999 earnings rate to 11.33% and agreed to recover the excess payments from "window retirees". HB 2003 (2003 legislature) contained a provision that would have recovered these payments from "window retirees" by withholding the COLA on the "fixed" benefit, until such time as the "revised benefit" (which included a COLA) overtook the "fixed" benefit. The Supreme Court, in its Strunk decision, ruled that neither the legislature nor PERS had the authority to violate a contract by paying a retirement benefit (the "fixed") to which no COLA attached. The "settlement" anticipated this and basically ordered PERS to recover the "overpayment" by regular mechanisms spelled out in ORS 238.715. PERS, realizing the financial hardship this could cause many "window retirees", came up with a "kinder and gentler" way to recover from "window retirees" and has offered this method (the "actuarial reduction" method) as a way to minimize the hurt on "window retirees" while still recovering the money owed over the remainder of a retiree (and beneficiary) life expectancy. This was spelled out in the "Notice of Board Order" that PERS sent to "window retirees" about a week and a half ago (see previous entries for more discussion).

Without getting into a discussion about "actuarial recovery", I do want to talk about the "factors" that PERS plans on using to compute the monthly reduction of benefits due to this "actuarial recovery". For me, these tables are more than an academic interest. I've been preparing a "calculator" that will help retirees figure more closely what their net benefits will be after such a reduction scheme. The calculator works in two stages - first it figures out what the "revised" benefit would be as of a date certain (now 9/1/07) and how that benefit is smaller than or greater than the current "fixed" benefit. This stage also determines the extent to which the member has been allegedly overpaid and computes the invoice amount due PERS. The second stage is to determine how the invoiced amount will be repaid over one's actuarial lifetime according to the retirement Option (i.e. 0, 1, 2, 2A, 3, 3A, 4) selected at retirement. Here is where the TABLES come in handy. Without them, there is no way to determine with any precision, how much any specific PERS window retiree will be affected by the actuarial reduction method.

At my request, PERS has provided me with the Actuarial Recovery Factors for the Strunk/Eugene implementation. I now have the tables for Option 1, Option 2, and Option 3 retirements, but do not yet have the tables for Option 0, Option 2A, Option 3A, or Option 4. In perusing these tables, I was struck by the expected mortality implied by the recovery "factors". In one instance, for example, an Option 1 benefit for a 15 year old (not sure how that works, but the factor is there) translates into a life expectancy of 147 additional years - to age 162!!!!! In another case - my own - my wife's and my joint life expectancy work out to be that PERS thinks that it will be paying us a revenue stream until the last of us reaches about 103 years old. As I considered this, I began to have all sorts of good and evil thoughts. The good thoughts were that for "window retirees" the repayment schedule is considerably longer than any of us had imagined and that, for most "window retirees", the worry about overpaying beyond actuarial life expectancy is probably a moot point. But then my mind began to wander to not-yet-retired PERS members (Tier 1 & Tier 2). If this was Mercer's first salvo into the mortality factor arena, could this be a harbinger of more evil deeds to come as the actuarial tables are revised every two years. Could this portend a lowering of benefits for future retirees by using much more "generous" life expectancy tables? To be fair, I wrote of my concerns to Paul Cleary and to David Crosley, Executive Director and Communications Director, respectively, of PERS. David wrote back to assure me that the "actuarial reduction factors" were nothing more than the 2003 (Milliman) mortality tables adjusted (by Mercer) to reflect the 2% cola over the retiree's life expectancy. This results in a longer repayment period. He also disabused me of any suggestion that Mercer uses any different methodology for mortality factors than did Milliman, and while the 2007 mortality tables may change, the change will be based on experience data as they have in the past.

So, at this point I'm satisfied with the explanations offered. There appears to be nothing sinister going on and current (non-retired) PERS members don't have anything NEW to worry about. I truly had visions of the ghost of Tom Joad when I first encountered these factors. Now all I'm stuck with is trying to figure out whether Audrey Raines is just another example of poor personnel screening by the US Government or whether she turned bad after she was hired. (hint: if you don't watch '24', you won't have a clue what I'm talking about here. If you don't, what's wrong with you?).

Private Investigations

In yesterday's post "Purple Haze" I gave examples of PERS retirees who got (or didn't get) the "letter" when, according to PERS' own listed criteria, they shouldn't have received them. Oregon AFSCME is particularly interested in hearing directly from retirees who retired BEFORE April 1, 2000, did NOT receive a lump sum settlement, and who received a "Notice of Board Action" late last week or early next week. If you meet all these criteria, please send an email to Mary Botkin (botkin@oregonafscme.com) or Don Loving (dloving@oregonafscme.com) detailing your receipt of this letter. If you received the same "letter" *and* you retired after 4/1/05, you should also notify either Mary or Don.

By the time most read this post, the "hit counter" will have crossed the 300,000 mark -- an amazing feat for a blog in existence for 11 months. Thank you again for your faithful readership, and for your continued communication of your stories to me. While I occasionally get access to public information before it is made public, the most interesting stories right now are those that come from readers.

Purple Haze

Man. I feel like I'm back in the 1960's listening to Jimi Hendrix. My email box is hopping with stories from PERS retirees who received "the letter" late last week or early this week. Besides the usual assortment of people who expected to get this notice, are the ever-increasing numbers of people who have absolutely no idea why they've received them because they meet none of the criteria to have received one. I have emails from four people who retired during 1999 who simply receive a monthly benefit, never had a lump sum settlement of any kind, never had a divorce decree, and simply should not be included in the group of notice receipients. Each of these correspondents describes a similar interaction with PERS. "We have no idea why you received one of these notices. If you wish to appeal the notice, the appeal process is described in the notice and our web site. Thanks for calling PERS". What should we advise these people to do? Hire a lawyer to appeal a notice they shouldn't have received? Get a judge to rule that they aren't included? When PERS loses, do they compensate for legal expenses? Or should these people just "hang loose" and gamble that the next three years will come and go without any further notice? If these people weren't bad enough, then we have the group who've gotten the notices and who've retired after 3/1/05. According to PERS information, these people had their benefits adjusted for both the Strunk and City of Eugene cases before they received their first benefit check. Why in heaven's name would they receive a notice? They seem to get the same canned answer from the PERS Customer Service drones. I've also heard from members who retired under Full Formula and who got one of these notices.

If I were charitable, I'd say this was a computer screw up? Or, in one of my less charitable thoughts, PERS simply picked arbitrary beginning and end dates and had the computer spew out as many of these notices as there were retirees in that particular time frame. Let's do a perp-sweep. Computers make this easy. Of course, computers also make it easy to exclude people, but that would require that the programming be done in something other than a purple haze.

P.S. And speaking of purple hazes, I just got a notice from another retiree whose husband received his "Notice of Board Order" last week (a pure "window retiree") while the spouse, also a retiree from the "window" but under Formula + Annuity did not get a notice as of today's mail delivery.

The Rockafeller Skank

The sleaze just keeps oozing. On Friday, PERS put up new information about the Strunk/City of Eugene process. This was supposed to enlighten us about the significance of the "letter" that some of us received Friday or Saturday (or maybe today or not at all). If you follow all the links on the PERS website carefully they lead you to some interesting information. First, you will learn about *what* you can appeal within the next 60 days as a result of "the letter". According to PERS, the only judicial review you can petition for is one that reviews the "method" of repayment. Excuse me? It strikes me as more than a bit transparent that if you choose to appeal the "method" of repayment outlined in "the letter", that whether you "win" or "lose" will be immaterial (except, perhaps, to your wallet). Because, IF you appeal, it would seem to me that you are acknowledging to PERS that you accept the more fundamental fact that you "owe" something. Why would I appeal the "method" of repayment if I didn't think I owed anything? So, in making a decision whether or not to appeal this letter, be certain that you check with your legal adviser (and believe me you'll need one) to see whether this little "GOTCHA!!" is lurking in the shadows behind your actions. The second interesting "factoid" to be gleaned from the PERS posting is the more detailed timeline for benefit adjustments. If you're like me, when you retired, you transferred whatever variable balance you had to fixed and were done with it. Well, if that's the case, sayonara to any COLA on any benefit before summer 2007. That looks to me like the point at which the "window" retirees would see any changes to their current benefit.

In related news, many have reported to me that PERS customer service was without a clue on how to handle the myriad of questions that landed on them today. My favorite question: "when does the 60-day appeal period begin" Answer: when you get your "invoice". At least a dozen people reported that one to me. Push the fool button and dump those Customer Service reps and the people who trained right into the dunk tank. No mercy here.

I'm sure there'll be more entertaining news as the week moves on. PERS seems to thrive on ways to infuriate, anger, and plain piss-off the people whose money they are supposed to be managing "in trust". Smell something unwholesome? Don't worry, it's just the skank emanating out of Tigard and Salem.

P.S. And true to my prediction on Friday, at least 4 people emailed me to tell me that they had not recognized the "mail" sent to them by PERS as anything meaningful, and so recycled the letters. Several successfully extracted the "letter" from the trash. At least two report that their recycling had been picked up and the letters were gone. Very small sample, but not a really good scorecard for PERS' method of making the letter scream "OPEN ME NOW".

The Letter

I guess I won't be able to argue that I never received the "letter" from PERS. You can see what the whole shebang looks like here. After you've had a chance to look it over (in case you're feeling left out 'cause you didn't get your own today), please note several things: 1) the envelope. I can't say I was overwhelmed by the "notification" on the envelope. For all I knew, it could have been a notice for a Board meeting and simply tossed. The name printed on the envelope is not the same as the way my PERS benefit checks are made out (missing my middle initial). The postage rate smacks of bulk rate and might have led me to toss it out on that basis itself. 2) the letter. It isn't personally addressed to anyone. It's truly a form letter without any salutation at all. The text is boilerplate and contains no surprises.

I'm completely baffled that PERS would choose such a half-assed, cheap, and sleazy way to notify recipients of an impending legal action that could cost recipients, in toto, about $800 million in lifetime losses of benefits. This is just so shabby and impersonal. I wanted them to go to the trouble to actual mail ME a letter, addressed to ME, which then could have had the boilerplate. I'd be hard-pressed to understand how a court could consider this an "official", "legal" notification that is required to satisfy a provision of the Oregon Revised Statutes. This has all the earmarks of the slimy marketing tactics used by vendors processing rebates for products. Offer a rebate, require a zillion forms to be filled out, and then send the rebate on a miniature postcard that they hope will get thrown out without reading/cashing. I wonder how many of these "notices" will simply get tossed by the unsuspecting PERS retirees? Ah, PERS - the trustees of MY retirement benefits - not! I do have to give PERS extra-credit points for their "emulate the White House" (*any White House, not necessarily the current one*) approach. Drop the bad news on a Friday and then run like hell for the hills of the weekend. That's high class! They didn't have the organizational backbone to send the letters out on Monday and then brace for the storm that hits for the rest of the week. Well, what you reap, you sow. I hope PERS is prepared to have its phones, its email system, and its offices overwhelmed by 10 a.m. on Monday morning and for at least the rest of the week.

P.S. Legal question of the day: how does sending a form letter (unaddressed on the inside) via bulk mail and a not-very-clearly marked envelope constitute "service" for purposes of ORS 183.484? And, what is the date of "service" - date of the order (Jan 27), date of letter (March 8), date of postmark (March 9), date of receipt (March 10)? And, for extra credit: how can PERS prove that it sent a letter TO ME and that I received it? (Yes, I know that the actual postage meter reads "Presorted First Class" but that misses my larger point above).

P.P.S. Due to overwhelming email responses to "The Letter", no doubt triggered by the receipt of somewhere in the neighborhood of 37,000 of these ?notices? today, I will probably not be able to respond personally to many of your questions and comments. Please continue to send them and I will try to answer them as best I can in future blogs. And for the record, I don't have a clue what I'm going to do, if anything, about this notice. I promise to continue to use this forum as a "bully pulpit" to rage against the machine, but when it comes to enlightened self-interest, I'm just as bewildered as the next person.

Candle in the Wind

AFSCME has some information apropos to my earlier post today "Burn Down the Mission." Mr. Hartman responded to my inquiries, noting that he is not in a position to offer advice to individual members, but suggests that should any recipient of this letter want to appeal it, they would be very wise to consult an attorney of their choosing. At the same time, finding an attorney knowledgeable enough with the intricacies of PERS and the particular laws governing this process will be difficult indeed. Mr. Hartman assures me that while he sees no likelihood of the Arken case NOT being certified as a class action, he also notes that even if it weren't, all window retirees will benefit from the legal outcome of the case.

Burn Down the Mission

The posts of the last several days have provoked many more questions than they seem to have answered. The paramount concern seems to be how "window" retirees should respond to the notification letter they are about to receive sometime this month. For those just tuning in, the notification letter is the official start of PERS' efforts to "recover" the earnings allegedly overcredited by the PERS Board in 2000 for the 1999 earnings year. This letter will notify "window" retirees of the overpayment and provide retirees with a copy of the Board order authorizing PERS to begin recovery proceedings. The letter will not contain any individual details, but is a generic letter describing the process and the timetable. Members will have 60 days to file an appeal to this notice in either Marion County Circuit Court or in the Circuit Court of the County in which they reside. On the face of things, it seems straightfoward -- somewhere between 23,000 and 37,000 "window" retirees flooding the legal system with appeals to their local circuit court. While that may seem to be the logical thing to do, most of us would like some advice on what we ought to do in the face of a pending class action lawsuit challenging PERS' actions in this very matter. At the present time, the lawsuit has been filed and served and is awaiting certification as a class-action. Without class-action certification, it is difficult to see how the Arken case can do anyone except the specific plaintiffs in that case any good. So, in digesting all this information, my readers and I have come up with the following list of possible options/questions. I am attempting to get some guidance from PERS Coalition members and attorneys on these, and will post redacted versions of any responses I get:

• When does the 60-day "clock" begin? January 27th (the date of the PERS Board order authorizing the process to move forward)? The date of the PERS letter? The postmark date of the PERS letter? The receipt date of the letter? And, how come PERS is sending these letters by ordinary first class mail? Shouldn't they be sent via certified mail since the matter is quite time sensitive?
• Should all recipients of the letter automatically appeal to preserve their appeal rights under the law? If so, is there some boilerplate language that could be recommended since few of us are lawyers?
• Should all recipients hang back and wait to see whether the Multnomah County Circuit Court certifies Arken et al v. City of Portland et al as a class action suit before the 60-day window expires? If it does, should we not file separate appeals? If it doesn't, should we file separate appeals?
• Should recipients bombard the PERS Board and PERS senior staff with protests and appeals directly? The OPRI website has a list of the email addresses and phone numbers of all PERS Board members and senior staff for those recipients who'd like to use this approach. Is this a good idea? A practical idea? A prudent idea? What do recipients actually expect to accomplish by this other than to disrupt PERS' day-to-day operations significantly?

There are lots of other questions unrelated to the specifics of the Arken case. Non-window retirees want to know how Mr. Hartman's claims that the revised 1999 earnings is a fait accompli affects their situation. It is clear that the natives are growing very restless and it would be really helpful if potential recipients of this letter contact their representatives on the PERS Coalition (AFSCME, AEEO, OPRI, SEIU, OEA, AOF, AAUP, AFT and others) to start getting some helpful answers. Once that letter arrives, all of us are playing beat the 60-day clock. If we want to avoid everyone trying to burn down the mission at the same time, answers would be most welcomed and helpful.

Have Mercy on the Criminal

Greg Hartman's email, posted yesterday on the AAEO website (and linked to here in yesterday's entry), contains some interesting language, especially pertaining to deployment of the reserves and, more importantly, to the treatment of the "window" retirees in the Arken class action case (note: Hartman incorrectly refers to that case as the 'Akers' case; that is a typo in the email). First, the good news is that the actual deployment of the reserves, while benefitting employers in a positive way, also benefits all other groups of PERS members equally. Initially, the PERS Board was intending to deploy the reserves so as to benefit the employers over the members. The final distribution of the reserves - as shown in the Board's own plan, and reaffirmed by Mr. Hartman - is entirely consistent with the past actions of the Board and follows an equal distribution model. Thus, while the apparent "winners" were the employers, the fact is there are no "losers". The Board has plowed no new ground in this reallocation. Hence, the improper distribution of the reserves - a subject of the White case - is no longer an issue as the Board is no longer attempting to blaze a new financial trail.

The second area is a bit more confusing. In the email, Hartman suggests that the attempt to challenge the PERS Board's revised distribution of 1999 earnings from 20% to 11.33% is, itself, probably a dead legal issue since the Supreme Court in Strunk did not preclude the Board from doing that, nor did they intervene in the appeal of the Lipscomb ruling. But, the Arken case is making a different and more subtle legal argument, which requires careful reading of the actual revised complaint (see later in this entry for the link). The Arken case does not take issue with the recalculation of the 1999 rate order to 11.33%. Instead, it makes the argument that PERS retirees relied on the representations of PERS when they calculated their original benefits (which used the 20% for 1999), and that the members played no part in whatever errors may have been made. Moreover, Hartman argues that the Supreme Court, in its Strunk opinion, clearly ruled that the Legislature trumped the PERS Board in legislating that the statutes clearly define a "fixed benefit" that cannot be said to transfer to retirees with errors (i.e. there is no basis to argue that PERS made an error in calculating the original benefit). The Strunk court also concluded that the Legislature had no statutory or legal authority to define a retirement benefit to which no COLA attached. As a result, the class action argues that PERS violates wage and hour laws in trying to lower a wage (the benefit) because of an error the Supreme Court denies exists, and that PERS violates the Supreme Court ruling in withholding the COLA for 2003, 2004, 2005, and 2006. The class action therefore asks the court for 3 things: 1) award window retirees damages equivalent to the amount of the difference between the revised benefit and the fixed benefit (which we've already been receiving), 2) restore the COLA on the fixed benefit from 2003 forward, and 3) to invalidate the January 27, 2006 PERS Board order that authorizes the PERS staff to begin collection efforts for the "overpaid" benefits (as there are none). There is no question that Hartman believes that the recrediting of 1999 earnings from 20% to 11.33% is a "done deal", but the important point is the "breach of contract" and "promissory estoppel" claims that simply argue that while the Board may have the authority to change the earnings retroactively, they nevertheless made a promise that the Supreme Court says they must honor. So even if they don't "restore" the 20%, they will have to pay "damages" that make up the difference between the 11.33% and 20%. So, a rose by any other name is still a rose.

There are some other tricky details buried in between the lines of the email, particularly when they're viewed in the context of the actual revised complaint. I strongly suggest reading the memo very carefully, but only in the context of the revised complaint.

I doubt that all will agree with my assessment. Some have already seen nothing but bad news in the Hartman email. I confess that I wasn't as enthusiastic about the email as I thought I should be. Nevertheless, with some helpful pointers and useful background chatter, I've come to the conclusion that for "window retirees", there is more good news than bad in the email.

Something Real

Note: 4 pm. Several emailed me to note that the link below was broken. It was then, but now it is fixed. I miscopied the information sent to me. Nothing sinister is going on. Everything should be fine now.

A friend passed on this link to an email from Greg Hartman to one of the member groups in the PERS Coalition. I'm sure it went to other members, but it has not been posted elsewhere yet. This offers, for the first time, the PERS Coalition's more formal views on the deployment of the PERS reserves and attempt to put to rest the employers "poor pitiful pearl, we are in a crisis" argument. The third item should be read and studied carefully as it pertains to all of the "window retirees" who are about to receive the PERS notification of error letter. After I've had a chance to think about this and chat with others "in the know", I *may* post back here with some thoughts. In the meantime, this is the first "real" information I've gotten for awhile. Thanks to the AEEO for posting this.

Know Your Rights

OPRI has some new information/advice for "window retirees" posted on its web site. If you fall into the group of PERS retirees who retired between 4/1/2000 and 4/1/2004, you are a "window retiree" and actions taken by the PERS Board at its January meeting will have a significant impact on you. Spend a few minutes perusing this latest information.

The Harlem Shuffle

I'm writing this post from my new MacBook Pro, the first Apple computer developed from an Intel chip. My first impressions are positive. The machine screams, the display is awesome, and the notion that I might someday have a computer that runs Unix, OS X, and Windows natively is positively intoxicating. Don't have a clue what this has to do with PERS, but I felt like posting it anyway.

Shakedown Street

OK. I know it is a recycled title, but it is appropriate for today's entry. The PERS Board is locked and loaded. It will be sending out the first (of two) letters to "window retirees" sometime in March. This letter will notify the window retiree of the "error" in the 1999 earnings, the correction, and PERS' intent to collect the money allegedly overpaid to window retirees. This letter, which will not have details on what PERS alleges the recipient owes, will be accompanied by a notice that gives a 60-day time limit for appealing the notice. Note here that the appeal will be over the process, whether PERS has a claimable error, and whether they have any right to collect. The second letter -- the detailed calculation letter involving the specifics of the recipient's benefits - will be sent starting in the beginning of the summer. PERS expects that these letters ("invoices") will take nearly 3 years to get out. They will start with the earliest window retirees and move forward in time with later window retirees. Thus, it may be several years before the first notice goes out, and the actual invoice letter gets set. PERS assured all stakeholders that the invoice letter WILL contain appeal language that will allow window retirees 60 days to challenge the specifics of the computations.

In other action, the Board authorized drawing down the capital preservation reserve to $0, and the contingency reserve to $250 million (up from $100 million at the last meeting). The rate guarantee reserve will end up with a surplus of approximately $1 billion.

The PERS Coalition and OPRI will be posting updated information on their web sites next week. In particular, there may be some suggestions on how individual members should respond to the PERS notification letter coming next month. In the meantime, the legal actions continue apace with the White case, the Arken case, and the Robertson case all starting to cause stirs in various halls of justice.

Many thanks to friends and colleagues at OPDG for posting the information about yesterday's Board meeting so quickly. Unfortunately, I was unable to go myself.

In The Rough

The propaganda machines are heating up again. First we have the filing of an amended complaint in the class action suit (Arken et al vs City of Portland et al) on January 30, 2006. In the complaint, the PERS Coalition alleges additional wrongdoing by the PERS Board and the employers in its plan, finalized at the January 27, 2006 Board Meeting, to begin the "recovery" process from "window retirees". You can read a copy of the amended complaint on the OPRI website. Next, we have the PERS Board considering a proposal by PERS staff to "redeploy" nearly $2 billion dollars in reserves, taking the contingency reserve from its current $1.9 billion balance to something around $100 million, to liquidate the capital preservation reserve (about $0.5 billion) and bulk up the "rate guarantee reserve" to nearly $1.0 billion. The purpose of this reallocation of resources appears to be to move funds that aren't currently part of the system valuation into places where the assets would be counted. The system valuation affects many things, not the least of which is the unfunded actuarial liability, the employer liability for the UAL, and the employer normal contribution rate. For employers, the upside is that this will have, as a result, the effect of lowering contribution rates. At the same time, lawyers for the PERS Board and lawyers for the employers have been attacking on two fronts: the first is to feign concern that the reserves might be taken down a little too much, while warning active members that if the PERS Coalition "wins" the class action suit on behalf of "window retirees", the estimated $800 million bill will have to come out of potential earnings of active members -- a clear attempt to foment FUD among active PERS members. What the PERB and employer lawyers forget to mention is that the Strunk decision guaranteed Tier 1 actives "no less than the assumed rate" (currently 8%) on Tier 1 regular account balances, and that the end result of the financial reshuffling will also result in a fully funded Tier 1 rate guarantee reserve, and that by statute Tier 2 members are guaranteed "market returns" less administrative expenses. Unless the lawyers are suggesting that the cost of losing the class action suit would be charged off to administrative expenses and then deducted from Tier 2 earnings, there is no way that active members could be affected by the outcome of the class action suit. What the employers and PERB lawyers also fail to discuss is why they ought to adamantly opposed to draining the contingency reserve, when a previous PERB Board was found to "abuse its discretion" for failing to fund the same reserve. So why did the same bunch of lawyers sue the previous PERS Board for its "abuse of discretion" for not funding the contingency reserve, while celebrating draining the very same fund after the current PERS Board fully funded it in compliance with a court order and a settlement agreement. I guess I'm a bit confused. It seems to me that it is one thing for these "wide boys" to be worrying to the point of blustering about the effects on members of the class action lawsuit, while simultaneously laughing all the way to the bank as the PERB prepares to plunder the very reserves that might be needed to pay for the loss. I don't get it. I'm playing golf and my ball keeps landing into the rough. The lawyers seem to have a problem with getting their stories straight - an example of what Jimmy Buffett used to worry about when he remarked that "indecision may or may not be my problem."

P.S. Thanks to all who called and emailed their best wishes for my wife's successful surgery and speedy recovery. The surgery went well and we were home quickly. I'm happy to report that my wife's recovery appears to be right on schedule. She's starting to feel well again and is anxious to return to all her pre-surgery activities plus more.

Stories We Could Tell

Oh the stories we could tell.... Attended the PERS Board meeting today. No fireworks at all, despite my predictions earlier this week. The meeting was sparsely attended and was actually pretty boring. The Board unanimously adopted the "Final Order" concerning the repayment methods in the Strunk/Eugene cases. There were no questions and no discussion. The Board also unanimously adopted OAR 459-005-0610, which relates to recovery of overpayments. PERS Staff took two items off the table for discussion today. The first was its recommendation to NOT recalculate the "one time variable transfer" for members who failed the test in 2000, 2001, 2002, and 2003. PERS determined that 313 members would be affected by the decision. Staff asked that stakeholders be permitted until the next Board meeting to comment on the recommended course of action. PERS staff also took the question of lump sum rollovers back to PERS off the table for the same reason. While PERS staff could find no legal or IRS support for making this transfer possible (to facilitate repayment for the alleged 1999 overcredit), staff was willing to allow stakeholders a chance to help PERS find a way to achieve this. Staff is not fundamentally opposed to this; in fact, it would make life easier for everyone, but absent any statutory or IRS authority to do this, PERS feels its hands are tied.

Concerning the notification of overpayments, the Board and staff both took pains to emphasize that there will be two different notifications. The first concerns the fact of an overpayment situation and the methods of recovery PERS will allow. This notice will contain appeal information and it is PERS' intent to seek a single unified legal ruling that establishes whether or not their approach is legal and to provide a consistent way of handling all future claims arising from such notices. While individuals will be permitted to appeal the notice, there will probably NOT be individual contested cases over this element of the recovery plan. PERS plans to send out a SECOND notice -- a detailed invoice -- that will contain all the information an individual would need to check PERS' calculation of revised account balances, revised pension benefits, and application of appropriate COLA increases. That notice will also have appeal rights and it is THIS notice that individuals will be allowed to appeal as individuals.

Other issues of note. Tier 1 regular fund earned 13.19% in 2005 (8% will be credited, pending preliminary approval by the Board in February and the legislative eBoard), while the variable account earned 7.49%. For the first time, there was an explanation offered for the significant discrepancy in the earnings between the regular account and the variable. The regular fund is widely diversified and includes domestic equities, foreign and international equities, alternative equities, and real estate. The variable is solely invested in domestic equities. Domestic equity returns were very close in both regular and variable accounts; however, the returns on alternative equities, international equities, and real estate were 44%, 39%, and 28% respectively, dramatically increasing the return on the regular side of the ledger. This is an unusual circumstance, but 2005 turned out to be an unusual year.

Finally, in a pre-meeting conversation, I learned that the PERS Coalition has amended its class action lawsuit (Arken et al v. City of Portland et al) to include actions taken by the PERS Board at today's meeting. The amended complaint will be filed on Monday January 30, 2006.

This will be my last post for the next week. I'm off to San Francisco to accompany my wife through another surgery (her last). We hope to return to a semi-normal life by the end of next week. Stay tuned for more PERS news.

Put Ya Hands Up

OK. My hands are on my head and I'm facin' the wall. I think the mugging is about to begin. Friday (tomorrow), the PERS Board will consider a final draft of the order "Final Order on Strunk/Eugene Repayment Recovery Method". In spite of all testimony and questions about the legality of certain aspects of PERS recovery method", PERS staff is recommending a final package that includes some very questionable passages. First, in the explanatory memo justifying the final order is a passage "If the Board adopts the Final Order, each recipient of an overpayment would be served a copy of the Order by regular US mail. Serving this Order on the recipient (with added information like appeal rights to constitute notice under ORS 238.715) most likely stops the six-year statute of limitations on collecting the overpayment." COMMENT: Clearly PERS *thinks* that the mere serving of the notice stops the statutory clock from ticking, but there is no statutory citation or case law backing up PERS blatant attempt to make an end-run around what is clearly spelled out in the ORS. PERS' position may be defensible, but they offer the Board no legal justification for the position and, if fact, as much as admit that they don't really know if this is true or not - "most likely" is not a comforting phrase.

The second issue pertains to the first. The memo goes on to state: "The notice would include the recipient's appeal rights to challenge the matters covered by the Order. Specifically, the recipient would be informed that they are entitled to seek judicial review of this Order pursuant to ORS 183.484 by filing a petition for review within 60 days from service in the Circuit Court for Marion County or the Circuit Court in the county in which the recipient resides." (emphasis added). This is, of course, the issue that triggered a pretty strongly worded letter from OPRI when the whole question of notification arose back in November. The issue is that ORS 238.715 anticipates that an invoice is to be included (so that the member actually has the necessary information to make an informed decision about whether and what to appeal!). During discussion, PERS assured the Board that the invoice was part of the notice, but that the invoice would be sent separately. The wording of the final order makes absolutely no mention of the invoice, leaving me with the very uncomfortable feeling that we will be forced to appeal on the basis of PERS merely asserting that we owe money, but without knowing how much we owe. If I were a cynical person, I'd think that PERS was just trying to drop this turkey from a high altitude and daring us to shoot it down. This brings to mind that indelible episode from the old TV sitcom "WKRP in Cincinnati" where Mr. Carlson is promoting his station by throwing live turkeys out of an airplane. When the turkeys all splatter to the ground, Mr. Carlson wanders away mumbling: "...as god is my witness, I thought turkeys could fly".

Jailhouse Rock

For those of you who like to be "jailhouse lawyers", I've posted a copy of the class action lawsuit on my website here. The case is officially captioned as "Arken et al v City of Portland et al". The complaint is relatively short (15 pages) and succinct. This is the case described in my posting yesterday. You can also find a copy of the same document at the OPRI website.

Stackin' Paper

As predicted, the PERS Coalition filed its class action lawsuit in Multnomah County on behalf of "window" retirees on Tuesday, January 17. Rather than summarize information that is already out there, let me simply quote from an AFSCME e-lert from Don Loving:

"On Jan. 17, the PERS Coalition filed a class action complaint in Multnomah County Circuit Court on behalf of Tier 1 PERS members who retired between April 1, 2000 and April 1, 2004, commonly referred to as the "window period."

The class action complaint alleges that the withholding of cost-of-living adjustments for the years 2003 to 2006 from these Tier 1 PERS members constitutes both a breach of their PERS contract and a violation of the Oregon wage and hour laws, in light of the Oregon Supreme Court's decision in the Strunk case," said Aruna Masih, the top assistant counsel to PERS Coalition attorney Greg Hartman.

In addition, Masih says the complaint alleges that the PERS Board's intent to pursue collection actions against such retirees for alleged overpayment of 1999 earnings would also constitute a breach of their PERS contract, would be without probable cause and would cause irreparable harm.

Hartman's firm is optimistic this case can be resolved by summary judgment. It is, says Masih, a simple factual case that gives Hartman the opportunity to request that the judge grant an injunction through summary judgment, which is akin to taking a shortcut through the legal system's lengthy timelines.

"We can request summary judgment anytime 20 days after the suit has been filed, which means we could enter that request in early February," says Masih. "Once the request is made, we can expect a decision on the request within three months -- which is not long for the legal system, as we've come to understand with our PERS cases. Our request for summary judgment would specifically ask the trial judge to halt the process that PERS has commenced to collect alleged overpayments by retirees. Again, we believe Strunk made clear they cannot do that."

The judge could refuse to grant summary judgment and allow the case to take its full course; that, of course, would add several months to the process."

Two Ways to Play

Rumors I've been hearing for the past two months have finally been publicly confirmed. On Friday, a small blog entry on the Bennett, Hartman, Morris, and Kaplan web site reports that the PERS Coalition has served notice that a class action lawsuit will be filed against the PERS Board on behalf of "window retirees" (those who retired between 4/1/00 and 4/1/04) for violations of Oregon Wage and Hour laws. While I've never seen or heard the details or basis for the claim, this novel approach was used successfully by BHMK representing the Association of Oregon Faculties against the Oregon University System when they attempted to alter the contribution levels for Tier 1 and Tier 2 members who were participating in the OUS "Optional Retirement Plan" (an alternative to PERS). More details on this case will be forthcoming as soon as the case is formally filed. It isn't filed yet because there are certain notification details that the plaintiffs must meet and other legal requirements before the case can be certified as a "class action" and served on the defendants. To the best of my knowledge, the case is fully ready to go. You can read the blog entry that describes the case at the BHMK blogsite .

Hurricane

This is my last post of 2005 - a year of hurricanes of epic proportions. This post is about a different type of "hurricane" - the type Bob Dylan sang about in his 1976 song of the same title. While the object of the song is "Hurricane" Carter - a black boxer accused of a crime he allegedly did not commit - the subject of the song is broader - racism and injustice. It has some strident lyrics that lash out in not-very-subtle ways against a system that puts legal and judicial convenience ahead of justice and equality. I would be the last to suggest that what PERS members have been subjected to qualifies as the "hurricane" about which Dylan sings. Nevertheless, what PERS members - active, inactive, and retired - have experienced over the past several years is a new "ism" - PERSism, which I describe simply as discrimination against Oregon public employees merely for being public employees - a "hurricane" of different proportions. The general public neither knows nor cares what public employees do. The general public has no interest in the facts except when the facts support their already low opinion of public employees (about whom they neither know anything or care?). I could go on, but for regular readers, I'm preaching to the choir. If you want to see what's inspiring this "dark" post, listen to Dylan's "Hurricane" (http://bobdylan.com/songs/hurricane.html).

Shine it all around

I definitely feel "shined on" dealing with PERS and the PERS Board trying to get some clarity and some resolution of all the Strunk/Lipscomb implementation issues. Before we go there, you might notice that the IAP remediation discussion has completely vanished from the "forward-looking calendar". This means that this issue, so important to any still-active or recently-retired member, is now being put on the back-burner until the more profitable "recovery" effort takes place. Instead of having this matter resolved before the 2005 member statements come out, it appears that the Board and staff will delay this ............ perhaps indefinitely. (In fairness, there has been no discussion of a delay; just the fact that the item is plain gone from the forward-looking calendar and suggests it won't be addressed at any of the next 3 Board meetings).

In other news, the discussion of the question of recomputing the "one time variable transfer" for retirees and other eligible members has also vanished from December's agenda. For more information on this, please see the previous two blog entries. Instead, PERS Staff issued a report on the "staging" of the Lipscomb/Strunk adjustments. This report is included in the Board Agenda packet for Friday's (Dec 16) meeting. PERS Staff is asking for Board approval to prioritize the processing so that retirees to whom PERS OWES money will be processed ahead of retirees to whom PERS is OWED money. Moreover, the timing of the recovery will be staged over a several year period and is expected to coincide more closely with the restoration of the COLA. Within the group of retirees who owe money, those who owe a lot will be hit first, while those who owe less will drop in priority. In practical terms, no one knows what this really means except that the actual determination of amounts owed may not occur until very close to the point when COLAs are again due. Finally, in response to a great deal of confusion and contest, PERS has modified the proposed rule concerning the recovery and makes clearer the fact that the "notice", which will come in late March/early April does NOT start the contested case clock; the actual invoice, which may not come until some months, or possibly a year, later is what triggers the clock. It still isn't clear how PERS is in compliance with the 6-year statute of limitations on notification of the error, except that it obviously believes it has the legal upper hand in this matter. The PERS timeline lowers the priority recovery for lump sum recipients not receiving any form of monthly payment -- they still intend to collect, just not immediately -- and also lowers the priority for those cases where research and analysis must be done before determining amounts owed. I presume this means people who retired under the "lookback" and who might now be eligible to retire under a different method after the simultaneous lowering of 1999 and the increases for 2003 and, possibly, 2004.

It appears to me that PERS will continue to shake the tree for every nickel it can find, but seems to be shining everyone on as it uses the "throw it against the wall to see what sticks" method for sorting everything out.

I'll be out of town all next week and I don't expect to post more than once more before Christmas.

Autour de Rocher

At its next meeting (date TBA), the PERS Board will take up the question of whether to authorize (recommend, order) PERS Staff to recalculate the "one time variable transfer" test for retirees (and members) who were unable to get out of the variable before retiring (or within the past few years). PERS staff knows there will be winners, but also believes there will be losers. The question staff was asked to answer was if the staff recalculated the variable test, would they only increase the benefits for the winners, but ignore the losers, or would they also have to concurrently reduce the losers too?

I've been playing around with numbers and have formed some opinions about who the winners and losers are likely to be. At issue is the 1999 regular earnings crediting. Prior to the "settlement", 1999 had been credited at 20%, while the variable for that year was credited at 28.83% (an 8.83% spread between variable and regular). The variable "test" requires that PERS compare the contributions and earnings on the variable account as if they had been invested solely in the regular account the whole time. If the variable contributions at regular earnings was greater than the variable at variable earnings, the test fails and PERS didn't let you effect the "one-time variable transfer". People who applied in 1999 for 1/1/2000 typically passed the test; people who waited until 2000 for 1/1/2001 *may* have passed the test or not; I haven't encountered many people who successfully got out effective 1/1/2002 or 1/1/2003. My back of the envelope calculations show that no one who already got out of the variable at any time prior to 1/1/2003 could possibly end up with a reversal of fortune under the revised regular calculation. In fact, the people already out would only be further out. For those who failed the test, there is a chance that a recalculation would produce a *winning* result and an increased benefit. At worst, those who failed before might still fail again. The tricky area - where a winner might turn into a loser comes from those people who retired after 4/1/04, when the regular was credited at 0%. Recall that between the settlement and the Strunk ruling, PERS will have to recredit 1999 at 11.33 (down from 20%) and recredit 2003 (and 2004) at 8% (UP from 0%). Both 2003 and 2004 were winning years in the variable and the spread between the actual variable and what PERS credited to regular (0%) was significant. If all of sudden 2003 and 2004 are credited with 8%, there is a measurable probability that the variable at regular will suddenly overtake variable at variable and a "winner" is converted to a "loser". I've run examples here as well and the likelihood isn't as high as it might seem (it reduces the variable - regular spread in 2003 from 34.68% to 26.68%, and the variable - regular spread in 2004 from 13% to 5%). There is a tangible risk of a small number of reversals of fortune, but a higher prospect of more than a few significant winners.

Given this, it is anybody's guess what the PERS Board will do. I can see real litigation risk if the PERS Board doesn't do it since there is real money involved and a statutory requirement and appeal process for challenging the "one time variable transfer test" results (I know this from personal experience). On the other hand, I can't possibly see how PERS could only adjust the benefits of the "winners" while ignoring the "losers". But, since the reform legislation and the settlement are rife with examples of inequitable treatment of different classes of retirees, this places PERS and retirees (and some still-active Tier 1 members) between the proverbial rock and a hard place.

Get on the Natch - Part V (Catch 22)

In my continuing effort to expose the many ways PERS tries to shoot itself in the foot by pointing the gun at its head and watching the bullet travel through its entire body, I offer yet another real story from yet another real PERS retiree. All the changes PERS and the Legislature have made are bad enough, but stupid, inept, and timewasting mistakes are unconscionable. PERS should be stoned for this one.

=================================================

"If anyone has seen the movie "Brazil", about a society evolved to the point where it becomes locked in immobility due to excessive and inflexible bureaucratic paperwork, one can easily appreciate how Brazil-like PERS has become.

For example: My request to withdraw my IAP was rejected for improperly completing the Effective Retirement Date field. The form says: "I am applying for an effective date of retirement the [bold] FIRST DAY OF_____________(month)_____________(year). So I put "August" and "2005) in the two blanks. WRONG!! My application was returned and the form stamped "INVALID". Confused, as I retired effective August 1st. 2005, I called PERS to ask what I should have put in the two blanks to complete it correctly. The answer: "August 1st 2005". Yup, Even though there is NO blank for the DAY, and even though the blank is proceeded with the words "..the first day of" in bold, no less, you apparently STILL have to put in the Month and the DAY in the "month" blank.

So I must complete an entirely new application packet because I didn't know that the words "first day of" on the PERS form are actually meaningless to them unless you actually write in that the first day of August is August 1st. After all, possible in the PERS world, the first day of August may indeed be August 3rd.

I will probably need to include a form 47/b and send the whole thing back to "Central Services" attention "Information Retrieval" department, which as we all know, does not give out information (That's, of course, "Information Disbursal").

Hmmm, I can't imagine why their workload is so high??"

Cannonball

For those of you who don't follow every sinuous move of the PERS Board, here is an update on the "plan" to recover overpayments from retirees in the "window". As you probably know, the PERS Board instructed the PERS Staff to take suggestions and questions from stakeholders about implementing their plan. PERS opened the comment period via a link on their website and both retirees and others asked implementation questions and for consideration of alternatives to the recovery mechanism. It appears that the PERS Staff and PERS Board have disposed of all but three issues, which will be taken up at the December Board meeting. For now, we know that PERS is NOT going to allow any repayment schedule other than the options initially presented - one lump sum payment, or the actuarial reduction method over the retiree and (if applicable) beneficiary lifetime. We also know that PERS will NOT stop repayment once the member or beneficiary has repaid the amount owed. Moreover, PERS will NOT offer tax advice or even assistance to members who choose to repay in a lump sum. For those with lump sum bills in excess of $3,000, the tax ramifications are quite significant and non-trivial. Unless you're really skilled at doing your own taxes, a repayment of a lump sum in excess of $3,000 will send you on your merry way recomputing your taxes for EVERY YEAR since you retired. PERS will NOT permit a retiree already receiving "correct" benefits (i.e. not *estimated* benefits) to change the payment option once the repayment is triggered. There will be NO revised Notice of Entitlement for members who've already received their initial NOE. Furthermore, there will be no option for retirees to purchase additional service credit that may have been declined at initial retirement.

What remains to be answered are several fairly significant -- to many anyway -- issues. The first is the question of whether PERS will recompute the "test" for the "one-time variable transfer" for retirees who attempted this before retirement and "failed" the test. It is quite likely that many people who failed when 1999 was figured at 20%, would "pass" the test once 1999 is refigured at 11.33%. For many people, like me for example, being stuck in variable for a year longer than I wanted to be cost me significant money. If that action could be reversed, my repayment amount would be significantly reduced by the earlier transfer of my variable account balance to my regular account. The second important matter affects a smaller, but still significant, number of people who took a lump sum settlement of some sort and rolled the money into some tax-advantaged investment (e.g. an IRA). The question is whether PERS will *facilitate* (with the member's permission, of course) the direct recovery of the overpayment from the IRA-holding company so that no taxable event is triggered.

Given the cannonballs dropping from the sky lately, I'm not real optimistic that PERS will do anything that might actually benefit retirees, but the recalculation of the variable test is probably one area where they'll have to tread carefully. This has significant litigation potential. I doubt they'll do much else to make life easier, cheaper, or better for the people whose money they hold in TRUST.

Chinese Arithmetic

Those folks over at PERS are on some of that funny stuff again, doing their best to sow a little FUD. Seems they've discovered that the current wording of ORS 238.715 needs to be revised a bit to accomodate their little shell game for recovering money from retirees. But before they can even begin to recover the money, they've got that small matter of notification of retirees that there's been an "error". By law, PERS has 6 years from the date of the error to notify a member; otherwise, they lose the right to collect. Well, with all PERS' computer problems and with all the multiple court rulings to implement, the 6 year limit is approaching fast - April 1, 2006 is the best guess. So PERS is busy promulgating a new administrative rule that has more than a few folks in a lather. The OPRI people www.opri.org have written PERS a letter outlining their concerns with the proposed rule. In short, what PERS is proposing to do is to comply with the law by simply NOTIFYING a retiree of their intent to change the benefit, without including the invoice explaining the error and how PERS is proposing to fix it. In other words, PERS wants to separate the notice from the invoice. However, the current ORS 238.715 triggers the contest period with the receipt of the NOTICE and never contemplates a separate invoice sent months or even years later. So, if this rule change were allowed to go unchallenged, members would have to file a contested benefit notice in the absence of knowing what they were contesting. This has all the hallmarks of Chinese arithmetic. If you want to protest, go to the PERS site and follow the links to proposed rulemaking. You can send an email to the rules coordinator right from the PERS site.

I've been a bit slowed the last week or so by multiple attacks of bad karma (an emergency root canal, a nasty case of hip bursitis, and a badly cut index finger). Hopefully the old axiom that bad luck comes in threes has already applied and I can soon look forward to a dose of some good karma. In the meantime, don't be on the road at the same time I'm out there. :-)

Old Habits Die Hard

And the harder PERS tries to change, the worse the muddle they seem to create. Several weeks ago I shared an email I received from an irate active PERS member who was trying to get an accurate estimate on which to base a retirement decision. This letter was the most articulate of those flooding my mailbox, so I posted the letter. I also forwarded copies to the PERB, Mr. Cleary, and others in positions of PERS management. On November 1, PERS posted an announcement on their website that they would henceforth be producing retirement estimates using the Strunk/City of Eugene implementation (I take no credit for the announcement, but the timing wasn't lost on me). Members were concerned that previous estimates (1) did NOT reflect any of the crediting/recrediting adjustments for 1999, 2003, and 2004 and so the estimates were based on very outdated and wrong account balances, and (2) that the variable "match" was still being computed in the "old" (pre-settlement) way also resulting in highly inaccurate variable match estimates. Both of these conspired to seriously mislead (too high, too low, rarely 'just right') members about benefits at retirement.

So, it was with some relief that I read PERS' posting on November 1. Hopefully, PERS would supply reasonably accurate estimates so members could start making INFORMED retirement decisions. Alas, my relief was premature. I'm starting to get the first reports from people who've availed themselves of PERS' new estimates. While PERS seems to have solved the crediting issue, the variable match still remains unsolved and members are still getting estimates with their employee variable balance DOUBLED. From some of the communications that members have shared, this doesn't seem to be problem that PERS either intends to fix. PERS' recommended solution is for members to wait until after they submit their retirement application and get their "Notice of Entitlement", which will then have the variable match correctly calculated. You have got to be kidding!!!!! PERS is asking members to separate from service (because, they can't calculate actual retirement benefits until the separation papers are received from one's employer), and then trust their fate to PERS getting an accurate estimate in a timely fashion. Gee, I think I'll quit my job on the promise that PERS hasn't screwed up my estimate too much and my benefits will be within 80% of what PERS' new, customer-friendly, estimates are. Fat chance! Apparently, PERS is now making administrative policy decisions at the Joseph Heller Catch-22 school of business.

Boom Like That

Just a brief note to thank the thousands of readers who have made this blog so popular. It is hard to believe that in just a few days, this site will have recorded its 250,000th visitor - a quarter of million page views. I want to thank all the various people, named and unnamed, who continue to provide me with the information to post, the answers to all my (and your) questions, and who feel that this is a worthwhile place to recommend for people interested in PERS. There doesn't seem to be any end of the PERS assault in sight; I expect to be reporting on PERS issues for several more years, at least. Stay tuned.

Your Mother Should Know

The answer to the following question. I've been asked fairly frequently why PERS members and retirees can't sue the old PERS Board for damages arising from their actions in 2000 that are causing so much pain today. The answer to this question is actually pretty straightforward. The City of Eugene case was filed under the Administrative Procedures Act (APA); it was not a simple civil case where issues of tort and negligence apply. The PERS Board's actions are governed by the APA and for that reason the members of the Board are insulated from personal responsibility for their acts so long as the acts are within the scope of their administrative mandate. The Board perpetrated no fraud, did not embezzle funds, and made their decisions in open meetings. Their only "crime", according to Judge Lipscomb was an "abuse of discretion" (bad judgement). (The APA also protects the current PERS Board from personal liability for their decision to enter into the settlement agreement with the City of Eugene plaintiffs. The Board can be charged under the APA with breach of fiduciary responsibility -- see the White case -- but individual members are held harmless).

Changing Times

PERS distributed a document at Friday's Board meeting entitled "PERS By the Numbers". This is essential FACTUAL information about membership, members, and retirees that should quiet some of the criticism (or not) about benefits received and the system's financial health. I've scanned in a copy and have posted it on my website. You can download it here (note added 10/24. This link is now to the PERS official copy posted on their website).

Get on the Natch - Part IV

For newcomers, I periodically use this blog to run copies of letters I've received from readers. A few days ago I got this email from a member nearing retirement. It expresses the frustrations of those trying to get accurate information from PERS before making this momentous decision. I've forwarded this to the management and Board of PERS, but wanted to share it more widely. I've removed the sender's name as I always do. If your experiences match this reader's, please let me know. The only way PERS is likely to do anything about it is if the matter gets bigger publicity and more pressure is put on PERS staff to figure out how to address this problem. (And by the way, current retirements have been treated as IF the City of Eugene Settlement and Strunk were already in effect, so it is absolutely not true that PERS doesn't know how this will play out. It has been this way since 4/1/05.)

Hello Marc,

Thanks for all your efforts on your blog. Have been avidly reading it for months now, ever since the Oregonian bit on your blog.

Here's my gripe: No one seems to be dealing with the question of accurate estimates for people soon to retire. My husband plans to retire the end of this year, and in an effort to understand what we're dealing with, we've recalculated his account from 1982 forward to:

1. take into account what his account would have earned had it all been in regular,
2. 11.33% interest for 1999 rather than 20%,
3. 8% interest for the whole account in 2003, 2004 and 2005 (he switched over from 75% variable to 100% regular at the end of 2000), and
4. that his contributions for 2004 and 2005 went into IAP and not into PERS.

We then created a little table that figured out what the variable discount was (difference between the account all being regular and part being variable), multiplied Item 1 above by 2 and added to that the variable discount. Upshot of all this blather is that we think we actually have a fairly good idea of the amount of money that should be in his account by the end of 2005 and how much PERS will have total counting the money match to base a retirement figure on. BUT!! Because apparently the PERS Board hasn't authorized PERS to do all this stuff, we are still stuck with an online Benefit calculator that is basically useless. When we requested another estimate, we were told that our limit was reached and that we had to pay $60 for a new estimate, which, by the way will be figured out USING THE ONLINE BENEFIT CALCULATOR! As I pointed out to the PERS folks, is it right to limit us if our previous estimates were useless?

When I mentioned to a woman at PERS that it seemed like the only thing we could do is put in the retirement papers and if we didn't like the results, stop the retirement process, she seemed upset at the idea of that workaround, then said it would still only be an estimate based on the fact that changes have not yet been made to how they are making their calculations. Aaaaaggghhhhh!!!!!!! How is anyone supposed to be making a cogent decision with inadequate information? At one point, she mentioned that there should have been a prompt on the benefit calculator that would have asked for a dollar amount (to be obtained from PERS and which we had already gotten) that would be the Variable Discount. I told her that I had seen no prompt. She went out and checked and came back and said that apparently someone had taken it off and made no reference to its removal on the site. Why would someone take it off and NOT TELL THE PEOPLE ANSWERING THE PHONES????!!! Ridiculous!!!

We are willing to accept 11.33% interest on 1999, we are willing to accept the IAPs, we are willing to accept the variable discount when it comes to Money Match, so why can't we get a good number, even if someone there has to hand-calculate it? While I can understand them not wanting to hand-calculate for everyone wanting an estimate for the next two years, why not at least accommodate the people looking to retire SOON, like within six months?

I've emailed Customer Service and gotten zero response. I emailed the Suggestion line and a nice man from there has played telephone tag with me for a few days, saying he would help me use the Benefit Calculator (we finally both gave up trying to reach each other), and I talked to a woman yesterday who wasn't anywhere near as helpful as I would have liked, who basically said "this is the way it is, we can't change it."

Can someone PLEASE give this issue some visibility? The window retirees are NOT the only ones who need answers.

The Squid Jigging Ground

I attended part of today's PERS Board meeting. (I confess that it was getting so tedious and boring that I left after about 105 minutes when it was apparent that there was still one long and boring report to go). There weren't too many surprises to report. Paul Cleary handed out a new document called "PERS by the numbers", which was intended to pull together all the disparate statistics PERS has given out over the years. It is a really useful document that PERS intends to post on its web site after the State finishes its maintenance early next week. Many of the facts will surprise people and will, hopefully, disabuse some of the system critics of ideas they have that retirees are getting fat and rich. The statistics simply don't bear that conclusion out. (I have asked for my own electronic copy, but haven't received one yet).

It is clear that the Strunk/Eugene implementation project will take a long time. The first order of business is to get 2004 Member Statements completed for still-active and inactive members. That will involve recrediting for 1999, adjusting 2003 and then crediting 2004. The goal is to have those statements out by the end of January 2006. To follow will be the 2005 member annual statements at close to the usual time in 2006 (mid May). The retiree piece is expected to consume the lion's share of time and resources. While the short-term deadline is April 1, 2006, it is obvious from comments and observations that this is expected to be a multi-YEAR project (it might have been Paul Cleary who remarked, somewhat off-the-cuff, that it would probably be 2008 before they'd be able to 'close the books' on the Strunk/Eugene implementation). One new fact emerged today. In terms of the actuarial reduction method, Craig Stroud confirmed that if the member took an option that involved joint survivorship (2, 2A, 3, 3A), the actuarial reduction *would* be based on joint life expectancies IF both parties were still alive. Otherwise, the reduction would be based on single life expectancy of the surviving recipient. The planning group and the Board are still open to alternative payment options and heard again today from someone advocating that PERS agree to an installment plan that allowed the member to repay the exact amount owed in something other than a lump sum. The Board was receptive to the idea, but there was no committment made to implementing such a method. The Strunk/Eugene implementation plan is still short on many details and it is expected that it will continue to evolve for 3 more months (and 3 more meetings) before a final plan emerges.

There was a lengthy and tedious discussion over the 2004 crediting order, which has never been finalized. PERS Staff asked for finality today so that the Strunk/Eugene implementation could proceed. As I was leaving, virtually everything about 2004 had been settled except for the matter of whether or not to fund the Capital Preservation Reserve (henceforth CPR). The Board struggled with the concept of taking money from Tier 2 members to put into the CPR. Staff had recommended that the CPR be funded at 0% for 2004; the Board wanted something more than 0% and something less than 7.5%. The discussion centered on 0.75%, but the real debate was whether Tier 2 members should have their earnings diverted to the CPR when there was no clear plan to repay Tier 2 members in down markets. Greg Hartman argued against putting money in the CPR, PERS Staff discouraged putting 2004 money into the CPR, Tom Grimsley wanted 0% to go into the CPR, while other Board members wanted something more than 0% to go in. Since this discussion seemed to be going nowhere quickly, I decided to leave. The main message is that Tier 2 members have been losing earnings to the CPR since 2003, even though they're supposed to "earn what they earn". That's another discussion for another time.

One other final note. Marsha Chapman, one of the two local Mercer actuaries assigned to PERS, has already resigned to "pursue other opportunities".

If I get a copy of the "PERS By the Numbers" presentation in electronic form, I'll post it here. Have a good weekend.

Mix up, Mix up

In yesterday's entry "Clampdown", I misrepresented an important piece of the proposed OAR pertaining to the recovery of overpayments. I remarked that PERS used the term "payee" in a very restrictive sense, which I interpreted as being only the retiree. Mea culpa. I should have taken the time to read the "definitions", which form the preamble to the rule. Had I done so, I would have discovered that PERS is defining - for the purpose of this rule - "payee" to mean anyone who could possibly be receiving (or have received) a benefit from PERS that included (includes) the 1999 earnings distribution of 20%. This means, among others, retirees, their beneficiaries, a divorced spouse and, presumably, the humane society. This significantly broadens the scope of recovery efforts and continues to impinge on the question of whether PERS intends to use "joint life expectancy" tables to determine the actuarial recovery period. So far, PERS has not answered that question, which I've now asked multiple times. Hopefully they'll give me an answer soon since it bears on the calculator output. [Note added at 11:30. Just heard back from PERS. While they "think" they know the answer to my question, they're waiting for more direction from the actuary before making their answer public. The actuary has to report on which table(s) to use, whether there are any "holes" in the tables, and what the policy implications are for the actuary's recommendation. So, it may be awhile longer before I can finalize the calculator or answer the question about "joint mortality"].

Clampdown

The PERS Board packet for the October 21, 2005 meeting is now posted on the PERS web site. As expected, the Board will be asked to take up issues pertaining to the implementation of the Strunk ruling and the City of Eugene "settlement". The packet contains a 15 page memo from Craig Stroud, head of the Benefits Processing Division, describing the basic method and timetable for implementing the ruling. For "window" retirees who've been using my calculator, the method should come as no surprise. Within the memo is a reasonably well-documented illustration of how the method would be implemented. The benefit recalculation method, application of COLAs, and the actuarial reduction method follow nearly identically to what I had worked out from their previous documents. In short, if you want to figure out how all of this will affect you, get hold of my latest calculator (left link) and enter the appropriate data.

There is a second document in the packet that describes and details a proposed administrative rule that covers "recovery of overpayments". This is a worthwhile read as it explains the lengths to which PERS is going to go to recover 100% of the overpayments. A couple of things to note. First, the proposed OAR refers exclusively to "payees" (and doesn't not, unless I missed it, refer to "beneficiaries" or "alternate payees"). This implies that PERS does not intend to hold beneficiaries or alternate payees responsible for overpayments made to the primary retiree. Don't quote me on this yet because the OAR doesn't say it. It is an inference by omission. Second - a minor piece of good news in an otherwise dismal post. The "actuarial reduction" in monthly benefits will NOT affect the COLA base. In other words, when a COLA is due, it is applied to the actual benefit, not the benefit diminished by the actuarial recovery amount.

The Board doesn't appear to be poised to "adopt" anything at this meeting; that probably awaits even more detail at the November meeting. The longer the Board delays adopting its methodology, the longer it is before any potential litigation will be triggered. It is clear that recovery efforts - initiated by a notice of an overpayment and a description of its computation - MUST begin before April 1, 2006. The statute of limitations for errors and overpayments is set in statute to be 6 years from the date of the error. This means that PERS must initiate the process AT THE INDIVIDUAL LEVEL not later than 6 years from the date the 1999 earnings were credited - approximately on April 1, 2000. The clampdown will start soon.

Fixing a Hole

I posted a new version of the Lipscomb Calculator over the weekend. This version fixes a "hole" in the previous iterations by adding the "actuarial" reduction calculation for "window" retirees. I based the reduction on the most current PERS tables (2001, effective 7/1/03) for life-expectancy of retirees. The new actuarial firm - Mercer & Co - has undertaken a newer study, but it is hard for me to imagine that the results will be too significantly different from the tables now used. In any case, the results should be a close approximation to final implementation. I've simultaneously released the Windows and the Mac OS X versions. It is labelled 1.0.2. You can obtain either version by following the link to the left of this blog labelled "Lipscomb Alpha Software".

Please keep in mind that the question of "joint mortality" has not yet been addressed by PERS Staff. At the moment, the Calculator assumes that the payback is over the RETIREE's life expectancy and does not carry forward to a beneficiary with joint survivor benefits. This may prove to be wrong, but joint mortality figures are not currently available and PERS has given no indication that it would extend the repayment period over a beneficiary's life expectancy too. So, until I have reasons to change the calculator, I'm not inviting trouble by making assumptions I can't currently justify.

The PERS Board meets this coming Friday (October 21) to take up further details of implementing the settlement and the Strunk case. I have no indication of whether the Board will finalize implementation details at this meeting, or wait until the November meeting. There will again be an opportunity for some public testimony, and members who are interested/affected should attend. It is again at the PERS Headquarters at 1:00 p.m.

Holla If Ya Hear Me

OK. So this is a shameless plug. The RAPS (Retiree Association of Portland State) has asked me to give a PERS Update at its Fall kickoff meeting. I've agreed and, in keeping with my musical themes, will be sharing my thoughts in a presentation entitled "The Long Arm of the Law." If you are in the Portland area and are interested, you can catch my lounge act on Thursday October 20 at 1:00 p.m. at PSU in room 338 Smith Memorial Center. If you regularly read this blog, I doubt you'll hear anything new, although with the strange way information finds its way to me, you never know.

P.S. To Chris. iTunes has the song title spelled incorrectly. I've changed it per your suggestion.

Less is More

I had a couple of interesting email exchanges in the past week. One began with the puzzled question: "What's all this talk about 20% earnings in 1999? I only got 18.5%". This led to an exchange of emails and some postings over on OPDG about this. To make a long story short, some unknown number of PERS members received "1999 Member Annual Statements" captioned with "1999 Regular Earnings Rate: 18.5%", while most of us got 1999 statements that reported the 1999 Regular Earnings Rate of 20%. When you do the math on these odd statements, it turns out that the actual earnings crediting WAS 20%, not 18.5%. While I always checked the math on my PERS statements, not everyone does. This was one of those cases where less really is more. It also means that those who hold those statements who were counting on a smaller "hit" when the PERS Board finally implements the settlement can fuggetaboutit.

Valley of Pain

Just when I thought that things couldn't get worse than yesterday's email fiasco, along comes PERS with an explanation of how they expect to implement the COLA offset ordered in the Strunk decision in relation to the recalculation of 1999 earnings required by the "settlement". As I feared, the "worst case" scenario computed by my calculator is what PERS' reality is - a valley of pain for you deeper than I had hoped for. PERS is NOT going to apply COLAs to the "fixed benefit" - a benefit they claim was computed in error. Instead PERS will: 1) add up the total amount you've been paid in monthly retirement benefits from date of retirement to implementation date; and 2) recalculate your benefits as though you had earned 11.33% in 1999, not the 20% they paid you (to get the revised benefit, they revisit 1999 and re-do the crediting on the regular account at 11.33% and compound the balance forward to the date of retirement - including contributions to accounts in 2000 - whenever you retired or 12/31/03, whichever is earlier). They will then add the appropriate COLAs to the revised benefit and get you to the implementation date. They will add up the monthly amount you should have been receiving from retirement to implementation date. They will then subtract the second balance from the first. If the result is positive, PERS owes you money. If the result is negative, that's the amount you owe PERS.

For those of you using my calculator, it has been calculating this "worst case" scenario since the beginning. It is the first large number flagged by the "<==". The second large number (smaller than the first) was the amount we'd hoped to owe PERS (actually, we hoped PERS simply owed us money, but that isn't going to happen to any "window" retiree). You might as well ignore everything in the section of the calculator labelled "COLA offset". There will be a COLA offset, but it is prefigured in the first set of calculations. Yet another revised calculator will be released shortly to reflect this sad reality. You might NOW seriously want to contribute (again or for the first time) to OPRI's Legal Defense Fund. We cannot allow this perversion of the justice system stand. Contributions to the OPRLF (Oregon PERS Retirees Legal Fund):

OPRLF
P.O. Box 7325
Salem, OR 97303-0065


P.S. Lipscomb Calculator (see link at left) has now been updated to reflect PERS' final implementation method. Actuarial recovery has not been programmed yet. Check back in a few weeks for that update.

Trapped

After 3 months of quiescence, the old PERSLIST and PERSLIST-DIGEST have suddenly been resurrected from the dead (I thought they were dead) and have begun to generate tons of messages. These lists were discontinued in June; no messages should be coming from them at all. Suddenly, spam and the predictible cries to UNSUBSCRIBE and REMOVE ME FROM THIS LIST have sprouted like mushrooms after a spring rain. I've contacted the PSU Unix Team and have asked that this problem be rectified immediately. The lists are no longer used, period! They're working as fast as they can. In the meantime, please don't make the situation worse. I KNOW ABOUT THE PROBLEM. Emailing to tell me contributes nothing but clutter to my mailbox. WORSE, emailing the list asking to unsubscribe only makes the problem MUCH WORSE. Not only doesn't it work, it sends all those emails to all the others on the list, including me. Please bear with me. I didn't create this problem. I don't need this problem. I'm working as fast as I can to get rid of this problem.

Getting Better

As a result of a very organized effort involving volunteers, the OPRI website has been updated, modernized, and is ready to receive visitors. The new site hasn't been fully propagated to the old space yet, but you can still get to it by going here. By the end of this coming week, the new site will have completed its move to the old domain and will be fully accessible as before. The organization of the web committee makes it possible to update the site quickly, get out documents that the OPRI Board feels are timely and relevant, and make more highly visible its efforts to raise funds for litigation or for lobbying. Those of us involved with the revised website hope that it won't be too much longer before it will possible to join OPRI online, to renew memberships online, and to contribute to the legal defense fund online.

Please take a few minutes to visit the new site (you'll be redirected at first, but this is short-lived) and let us know what you think. There is a link on the new site that will direct comments to the OPRI Board Member on the Web Design Committee.