Tangled Up in Blue

The wedding is over. The bride and groom looked spectacular (dad and mom didn't look so bad either); the wedding was a roaring success and the bride and groom are busy making final preparations for their honeymoon. Thanks to all who offered words of congratulations and encouragement.

Prior to the weekend's festivities, I had the opportunity to attend the first of two hearings on PERS retiree cases. These cases were heard before Judge Henry Kantor of the Multnomah County Circuit. I was able to attend the Arken case but had to miss the arguments in the Robinson case. My comments apply primarily to Arken.

From the moment the Arken hearing started, it was clear we were in a different courtroom at a different time. The reporters were gone but 30+ intretrepid PERS retirees plus assorted PERS staff attended to watch Greg Hartman and Aruna Masih square off against Joseph Malkin and Bill Gary representing the PERS Board and the non-state employers, respectively.

The Arken case appears to be deceptively simple. It relies on the language of ORS 238.715 (the collection statute), ORS 238.360 (the COLA statute) and the wording of the Supreme Court in the Strunk decision. All parties agree that its outcome will be based on a straightforward legal principle and nothing else. Basically, Hartman is arguing that the Legislature, by drawing a distinction between a "fixed" benefit to which no COLA was attached and a "revised" benefit that received a COLA, left itself no way out when the Supreme Court struck down the COLA freeze language of section 10 of HB 2003. By doing so, the court left the "fixed" account and the "revised" account intact, associated the "fixed" account with a class of retirees called "window retirees" and left PERS with no alternative but to pay COLA on the benefit the member was receiving on July 1, 2003 or the actual date of retirement - the "fixed" benefit.

Neither the state nor the non-State employers agree with Mr. Hartman's representation of the case. They've called his position preposterous, outrageous and a host of other things.

From the beginning of the hearing, the Judge focused on "big picture" issues, leaving the smaller issues to the briefs themselves. The Judge was concerned how the "class" of retirees in Arken differed from the "class" of retirees covered by Robinson. Both "classes" cover the "window" retirees, but Robinson includes a group of retirees outside the "window". The Judge posed hypotheticals to all the principal attorneys asking what their clients might do in the event that he (the judge) ruled for plaintiffs in one case and for defendants in the other. The importance of this cannot be overstated. A plaintiff victory in either case would have the effect -- at least for the time being -- of stopping PERS from implementing its current recovery plan. What is different about the cases is who would pay for the costs of implementing the Court's decision. It is clear that if the court decides for the Plaintiffs in Robinson -- using the language of Section 14b of HB 2003 -- the employers could *not* be held liable for the restoration of the COLA; section 14b expressly forbids PERS from collecting these costs from employers. On the other hand, if the plaintiffs win in Arken but not Robinson, it is anyone's guess who will pay since the PERS Coalition expressly sued the employers as a class.

I was heartened to hear Judge Kantor announce that he regarded the cases as legally separable, that he will issue separate decisions in Arken and Robinson, but he plans to issue them relatively quickly and simultaneously. The hope is that these decisions will come down before the end of the year. It is clear that the Judge is mindful of the upcoming legislative session and asked all the attorneys several times whether problems arising from these cases could be "fixed" by a subsequent legislature. All the attorneys felt that the legislature could propose a fix, although Mr. Gary claimed that Hartman would be back in court the next day if the Legislature ever did anything to "fix" the system. It was good theatre, but not much else.

My informants who stayed for the Robinson hearings said the theme didn't change, although the defendant in Robinson is PERB, not the other employers. Again, Judge Kantor's efforts focused on defining how the Robinson class differs from the Arken class and on how each party might respond to a split decision on the two cases.

I'm not prone to be a legal optimist, especially knowing that these cases won't be decided until the Supreme Court finally acts in a couple of years. That said, I was more comfortable with Judge Kantor's line of questioning than I was with Lipscomb, Judge Brewer, or any of the SC justices. Only time will tell whether my comfort with Judge Kantor was merited.

Wait for Me

Tomorrow's the big day for the hearings in the Arken and Robinson cases. Both hearings will be held in Room 528 of the Multnomah County Courthouse. The Arken case hearings begin at 1:30; the Robinson case begins at 4:00 p.m. Security is tight in the Courthouse; allow ample time to clear security before getting to the courtroom.

I plan to be in attendance for Arken, and *possibly* for the Robinson hearings. I probably won't be able to put up my summary and first impressions until early next week unless a miracle intervenes. My daughter's wedding takes priority this weekend and the relatives start appearing about the time the Robinson case begins. I *will* get the summary/impressions up but they won't be as timely as usual. Wait for me.

Gnawin' on It

I've been getting quite a bit of email lately from readers concerned that I'm giving up the ghost on PERS issues. Au contraire my friends. There have been no posts because nothing terribly significant has occurred in quite some time. That's about to change next Thursday (September 28th), when Judge Henry Kantor of the Multnomah County Circuit Court hears oral arguments in two very significant lawsuits filed against PERS. (Lest you doubt the significance of these cases, PERS has delayed its implementation of the collection efforts until October - coincidence or concern?). The Court will hear arguments in the Arken case at 1:30 and the Robinson case at 4:00. These cases are defining for "window" retirees as each challenges PERS' attempt to implement recovery of alleged 1999 overcrediting. The cases take different positions and cover the most compelling grounds for preventing PERS from going forward. Of the two cases, my opinion is that the Arken case is stronger, but the Robinson case takes up an issue that has nagged most of us since 2003. Arken involves breach of contract issues and is based on the Supreme Court's own finding in the Strunk case. It also makes the "promissory estoppel" claim (PERS notice of entitlement and all documents and counselling never told any retiree in the window that the 1999 earnings crediting were under legal challenge and that their benefit might change depending on the outcome of the City of Eugene case). Robinson alleges that PERS has deliberately ignored a mandatory element of HB 2003 that, in effect, prevents PERS from using any of the collection techniques proposed. There is considerable ambiguity in the statute under litigation and the outcome of that case will, in all likelihood, depend on a detailed determination of "legislative intent". I've been pessimistic about both cases until quite recently when I had an opportunity to review the written briefs filed in each case. The briefs clearly lay out the basis for the argument and appear to make a much stronger case than I had initially expected.

I plan to attend the oral arguments on Arken, but I'm not yet certain I can stay around for Robinson (my daughter is getting married on the 30th and lots of relatives will start arriving on Thursday afternoon). I urge people to attend these hearings - pack the courtroom - so that Judge Kantor can SEE that PERS' unwillingness to follow the law as it was written has a significant impact on real people. I hope to see lots of people at the Multnomah County Courthouse on September 28, 2006. Please leave early and get to the courthouse early. Security is quite tight (leave all firearms and knives at home :-).

Watch for further information, including directions, in a post early next week.

None of Us Are Free

It's been a long summer. We've fully moved and have completed a long, fun-filled, and exhausting vacation. We're now steeling ourselves for our daughter's wedding at the end of September and the onslaught of relatives and friends that will bring. Thankfully my daughter is organizing the entire wedding and all we've been called on to do is be the human ATM - but we love her and think her future husband is terrific.

Since my last post lots of little details about PERS-related subjects have surfaced. None of this is "new" information and many of you probably know most of it. Nevertheless, for those of you who spent the last month actually taking a vacation from PERS-related news, here is the brief 4-1-1. First, PERS has delayed for at least a month invoicing the first batch of double-lump summers until October. The speculation is that this is because hearings in two significant lawsuits are scheduled for September 28th and a negative outcome for PERS in either of those cases might delay implementation of collection efforts even further. In that regard, both the Robinson case (concerning section 14b of the PERS Reform Bill HB 2003), and the Arken case (concerning the breach of contract and promissory estoppel claims of "window retirees") will be heard in Judge Henry Kantor's Multnomah County Circuit Court on the morning and afternoon of September 28th, respectively. In the meantime, the hearings on the legal fee reimbursements have taken a rather bizarre (and unfortunate) turn. A closer reading of the Supreme Court's decision to award legal fees to the "winners" in the Strunk case has pundits suggesting that the "winning" attorneys will get to recover their fees from PERS, which will, in turn, pass these recovery charges on to the people who "won" - retirees and actives. Whether this is true or not depends on how the next conference goes on October 19th, but it is clear that the reports from the previous conference (August 15th) did not seem to provide any hope that the losers would pay much "out of pocket" for attorney fees. The costs will just be passed on to members and retirees.

That's the peanut summary so far. Just remember the title of today's post - none of us are free.

P.S. It is no longer simple to full justify these entries. So today's post is simply printed in its native format, not prettified. I know how to do it in html but I'm too lazy to edit the html code.

Money

Today, in Salem, the Special Master Henry Breithaupt, will hear fee motions filed in the Strunk/Sartain case. For those wondering what this is about, the Supreme Court did not award legal expenses to the "winners" in the Strunk Case - the PERS Coalition on the "rate guarantee" matter for Tier 1 members, and the OPRI Plaintiff Sartain in the COLA freeze matter. Now, 18 months after the court issued its ruling, the Supreme Court has directed Judge Breithaupt to collect motions and evidence and hear the appeals of the attorneys for the PERS Coalition and for OPRI present their arguments in support of recovering legal expenses in the cases. I'm not sure what amount the PERS Coalition will claim, but I know that OPRI's legal defense fund is claiming expenses in excess of $300,000. The Supreme Court finally ruled (a few months ago) that these plaintiffs are entitled to recovery of some (all?) legal fees BUT has referred the determination of the appropriate amount to a Special Master's recommendation. (THIS Supreme Court really seems to like punting to Special Masters instead of "just doing it").

This strikes me as another example of this court's lockstep politicization. Instead of providing clear and unambiguous guidance, it provides ambiguous rulings that the losers are free to ignore and the winners are forced to take additional legal action to get enforced. Even the unambiguous rulings are ignored at will or trumped by sleasy backroom deals that seem only marginally, if that, legal. To add insult to injury, even when the Court issues a clear ruling - the plaintiffs are entitled to legal fees - it makes the parties go through yet another special master and incur more legal expenses just to get some determination of *what* fees are to be awarded. I *suppose* that if the Special Master decided to award $1 to both the PERS Coalition and to OPRI, it would meet the Supreme Court's mandate. Some justice, eh?

Mamas don't let your babies grow up to be cowboys

Or Tier 1 PERS retirees either (too late, I guess). It's been pretty boring out in PERS-land lately. The only real news has come in the past week or so. PERS announced the 2006 COLA increase today (2% for everyone EXCEPT the window retirees) - so what else is new? The Supreme Court issued its way too long awaited decision in the petition for an award of attorneys' fees to the plaintiffs in the Strunk Case. The Court agreed that the plaintiffs were entitled to something, but then punted to a special master to duke it out with the plaintiffs and the defendants on how much the award should be. The Sartain (COLA freeze) piece of the Strunk case cost more than $350,000 to litigate. Wonder how much the special master will see fit to award. The legal systems continues to grind along at a snail's pace. A hearing is set for September 28th in the Arken case (Window retiree) to consider the motion of summary judgement. The Robinson case is also buzzing along at about the same speed (slowly). For those of you holding out hope for a quick resolution of any of this, I'm laying my personal odds that the current cases won't run out their legal string until about 2008, with some final resolution around 2010. More optimistic predictions focus on 2009. What's one year at this point? AFSCME is holding a Q&A session on PERS this coming Monday night (July 24th at their Portland headquarters). Call AFSCME if you're interested in attending.

Here We Go Again

A repeat title to clarify. Yesterday's post ended up as a mass of corrections and additions. My original first paragraph was the only thing that should have been published. The second paragraph is dead wrong and results from a transposition of numbers. The third paragraph tries to correct the errors of the second paragraph. It is probably easier to just repeat, in different words, the key point.

In 2005, the variable simple earned less than the regular Tier 1 or Tier 2 accounts. This is because the variable is invested in a different pool than the other accounts. The variable pool is a more aggressive mix of equities. In a good year - as last year was - the variable *usually* does better than the regular, which is why there is so much confusion. Unfortunately, while last year was a good year, it was also an unusual year. It parallels a few earlier years in the mid-1980's when the regular outperformed the variable on a pure earnings basis. PERS is not holding back any earnings from the variable. It distributes what is earned. Read PERS' financial pages carefully. You won't find a shred of evidence that the variable earned any amount other than 8.29%. But if you read the summary page, you can be misled into thinking it SHOULD have earned more. You're reading more into the page than is there. Read it carefully.

The Other Side of the Coin

Last week PERS started sending out 2005 statements to active and inactive members. Since those have gone out, I've seen a real increase in my email from Tier 1 members with variable accounts. The question is exactly the same each time. How come the regular Tier 1 earnings were 13+% (only 8% actually paid on Tier 1 Regular accounts), while the variable earnings were only 8.39%? I'm a bit perplexed why PERS has been unable to answer this question for members inquiring. The answer is simple. It is the other side of the coin of aggressive investing. The Tier 1 regular account is invested more conservatively than the Variable account, which is more aggressively managed. In really good times, the variable *should* earn more than the regular and historically this has been true. But, last year was not a "typical" year and the more conservative investment style did better than the more aggressive style. Consequently, the variable actually earned less than the regular. There isn't anything sinister happening here; PERS isn't creaming off variable earnings to stick into reserves. The variable earns what it earns and in 2005 it earned less than the regular. End of story.

Note added at 7 p.m. Not so fast is this the end of the story. Apparently the problem is a bit more complex and requires a clear statement from PERS about what is going on. According to PERS' website, the 2005 financials include the December earnings rate for the variable at 13+%. Since the December earnings are typically within a fraction of a percent of the earnings paid out after end of year accounting, it is somewhat disconcerting to see a 5% difference between the stated December penultimate earnings figure and the actual figure of 8.39%. While I'm certain there is an explanation for this huge divergence, PERS has some big explaining to do. My note above still stands - the variable earnings are supposed to be actual earnings on funds more aggressively invested than the regular Tier 1 fixed account. This year something doesn't add up. Hopefully my contacts at PERS can provide some guidance on this disparity.

Note added even later: My bad. The original statement stands. PERS shows at its variable listing that the 2005 December earnings are indeed 8.29%, not the 13+ I reported earning. I apologize for the confusion. The variable really *did* earn less in 2005 than the regular for the reasons noted above.

Don't Give Up on Me

Every once in awhile some small piece of good news comes along. It's the "don't give up on me" news. Today's good news comes in the form of a Supreme Court ruling that vacates the judgement of January 16, 2003 in the City of Eugene case ("Lipscomb"). While this doesn't undo the effect of the case, it removes the case as legal precedent and may not be cited in future PERS litigation. This is a result of the Supreme Court's ruling last August that mooted the City of Eugene appeal itself by the PERS Coalition. For those interested in reading the Court's ruling, a copy will be posted on my web site later today and an addendum made to this post providing the link.

To be a bit more precise on the effect, normally when the Supreme Court "moots" a legal case, it vacates the underlying case rendering it of no further legal significance. When the Oregon Supreme Court mooted the PERS Coalition's appeal of the City of Eugene judgement, the SC failed to vacate the underlying judgement. This was seen as a glaring omission and legally problematic as it left in force a judgement that itself had been superceded by Legislative action and a settlement agreement. However, as long as the judgement itself wasn't vacated, the case remained as a legal precedent that precluded any further litigation. As I understand it, the City of Eugene ruling simply no longer exists.

I'm Back

It was touch and go there for awhile. I didn't think we'd ever get everything moved. After nearly 17 years of living in the same house, we picked up everything we could and transported humans, cats, frogs, and multitudes of stuff and landed safely in our new digs - in a new county, a new school district, a new zip code, new phone numbers, and one hell of a lot of junk mail that seems to follow us no matter where we go. How do they find us even *before* we filed a change of address? In any case, after of week of being offline I have some of the computers running and connected to the net. My hope is that regular reporting of PERS-related happenings will resume by next week when the dust settles - literally. There isn't a whole lot going on right now. Current members and inactives have started to receive their 2005 account statements. There are many reports that the statements contain "no surprises", and the occasional "WTF is going on with my account". In short, it looks like PERS may have finally ironed out many of its IT problems. The legal front continues to baffle and confuse. By next week I hope to have a summary of the status of the major cases - Arken et al, Robinson et al, and Robertson. If you hear any good gossip or rumors, my email address remains the same.

When I'm Sixty-Four

Is about when the Arken case will be heard. The latest word is that the case has been assigned to Judge Kantor of the Multnomah County Circuit. On May 16, 2006 he scheduled the hearing for Arken et al for May 9, 2008. While one could argue that the basis of the Arken case will not finally affect all the window retirees until sometime after 2007, this insures that *all* "window retirees" will have their benefits adjusted by PERS before Arken is heard. In the meantime, we can wait for the Robinson case to be decided. Lots of speculation about that one. I'd like to be optimistic, but justice delayed is justice denied.

On The Road Again

For the next several months I will be involved in a massive move from our old house to a new house. After living in the same abode for 17 years, the amount of accumulated stuff is just staggering. The move will take place in stages over the month of June and for many periods during the move I will be without internet access until I'm able to set things up at the new house. In addition, once the move is finished, the combination of "moving in" as well as prepping our old house for sale will consume much of July. Finally, we're pretty much taking August off to recover from this ordeal and will spend much of the time at our vacation home in the Bend area. (BTW, we're only moving from Portland to a close-by suburb, not more than about 5 miles from our current location.)

The takehome message is that if you're expecting a regular monologue here, you'd be wrong. I'll try to post as often as needed, but I can't say I'm likely to be as prompt about responding to email. Don't take it personally if I don't answer you immediately.

P.S. (added 5/30). Posting will continue to this blog - I'm not taking the whole summer off from posting as some have misinterpreted. It is just that my posting will probably be limited to significant events rather than the interspersed interesting observations that have no practical bearing on the immediate PERS issues. I hope this clarifies any confusion.

Message in a Bottle

PERS has kindly sent me the "actuarial reduction factors" that will be used in the Strunk/Eugene recovery process. These apply to "window retirees" and serve to represent the repayment factors to be applied to amounts PERS deems to have "overpaid" such retirees. These are *not* mortality factors; instead they combine existing mortality expectations with an assumed 2% COLA on the money being repaid. This has the effect of spreading out the repayment over a longer period of time than mortality tables would suggest but insure that at the expected age of demise (joint or individual), the owed money would be repaid by including the lost interest. It is more complicated, but this method insures that retirees will have less money taken out monthly than they would if PERS simply took the amount owed and divided it by the number of months of single or joint life expectancy remaining. PERS still does not have "actuarial reduction factors" for members who elected "refund" options. Hopefully soon. In the meantime, check back to this post later for a link to the "actuarial recovery factors" I have. I will post them soon.

On an unrelated topic, I have, apparently, overstayed my welcome on Robert Gourley's SEIU retiree's mailing list. Although I never belonged to SEIU or any union (I was unclassified), Robert let me have "guest" status on his list. I had the temerity to suggest that Dawn Morgan did not testify before the Strunk Special Master hearings in a way that favored PERS members (either she wasn't permitted to do so, wasn't asked, or chose not to do so. The reason remains unclear.), Mr. Gourley decided that I no longer deserved "guest" status and he "unsubscribed" me from his list. Strangely, Mr. Gourley continues to cc me on emails related to things I've posted here and elsewhere and so I'm still privy to his various rants about me and other members who post on the Oregon PERS Discussion Group. I want to thank Mr. Gourley for allowing me a window into the inner workings of SEIU politics while I had the opportunity to do so. For me, however, the loss of my occasional email from Mr. Gourley's list spares me from email whose noise to signal ratio was rapidly approaching 100:1.

6:00 pm. Here are the Option 2 & 2A Actuarial Reduction Factors and the Option 3 & 3A Actuarial Reduction Factors. Finally, here are the Option 1 Actuarial Reduction Factors. To use these "factors", you need to determine what you "owe" PERS (my calculator will give you a ballpark figure, but the collection date has changed and the amount you owe will be different. It's a good start though). To use the factors, find the appropriate "factor" in the tables. Then divide what you owe to PERS by this factor and the result is your monthly reduction in benefits or your monthly payback amount. Be sure to use your age and your beneficiary's exact age (in years only) as of 8/31/07. Hope this helps.

Hands Clean

Robert Gourley, of the SEIU retirees chapter, reported that he and others met with Dawn Morgan this morning in Albany (see "Tell Me Why?"). Robert specifically asked Dawn my question about the 1999 Board and the 1999 earnings crediting decision. According to Robert, Dawn said: "I don't remember getting any specific advice about how to distribute the earnings. What we did get advice about was about putting anything into the contingency reserve account. We spent a lot of time trying to figure out whether to put money into this account, and if so, how much. In the end the attorneys advised against funding the account. The PERS statute, which had been in place since near the beginning of the fund, states that the contingency reserve could only be used if the fund was unable to pay benefits. Because the fund is now so large that it is inconceivable that it would be unable to pay benefits, the lawyers said that any money put into the reserve could not be taken out. Interestingly enough, this information was never allowed into the court record. Had it been allowed, I'm confident that Judge Lipscomb would not have found that the Board had breached its fiduciary duty. That would have meant that they couldn't ask for the 1999 earnings back from retirees. Because the new PERS Board was prevented from having any contact with the old Board, they didn't have any way of knowing that this was the case. The settlement that was struck prohibited the information entering the record at the appeal level, too. This should be of interest to anyone trying to understand the Board's actions, or anyway that's what I think. Dawn"

This is very helpful piece of the historical record that has been missing from the discussions up-to-now. Many of us suspected that the Board's actions in crediting the 20% for 1999 was completely within the Board's discretion and that they acted in accordance with legal advice given at the time. Dawn's information indicates that there was virtually no discussion of the earnings crediting rate, but instead a discussion of the need to, or not, fund the contingency reserve. This puts the Board's actions in a slightly different perspective, but also reinforce the claim that there was nothing inappropriate about their actions in 2000. It's nice to see this information out in some form. The state, the employers, and PERS have been working double-overtime to prevent this information from reaching the courts. In so doing, they've permitted a legal travesty. Hopefully, we'll eventually get what we were promised. I'm not holding my breath. Blue is not a good color for me.

Magical Mystery Tour

For PERS members, the Fall elections present some interesting conundrums. As local pundit Jack Bog noted on his blog this morning, "welcome to Neil Goldschmidt's third term as Governor." Jack was referring to the fact that either the Democrat Kulongoski or the Republican Saxton are pretty much creatures of Neil Goldschmidt, and no matter who wins it will simply be another Goldschmidt term. Whatever. What concerns me is that voting this fall will be, for me, a choice between Tweedledum and Dr. Evil. Kulongoski's position on PERS is well-known and hard-felt by any of us in the "favored" group. Saxton's animus toward PERS and PERS members has been just about as in-your-face and public as any politician's position - he is, indeed, the Lars Larson of realpolitik. People will confuse you with Saxton's "moderate" views, but I've heard nothing from Saxton that separates him from Rush Limbaugh. Of course, few PERS retirees can stomach voting for Ted. This leaves, who? Ben Westlund? Pundits are already trying to figure out who Ben Westlund really benefits and hurts. Some say that newly independent Ben is still a Republican in sheep's clothing; hence, a vote for him hurts Saxton. Others point out that union members and PERS retirees - a sizeable group of people - will be hard-pressed to support Kulongoski and so a vote for Westlund helps Saxton. For me, the gubernatorial choice comes down to which weapon I'd like to use to kill myself - a 9 mm Glock or an Uzi. No matter who I end up voting for, I'm gonna hate myself in the morning. Not a comfortable position to be to be sure. More mushrooms please. Time for that magical mystery tour.

Tell Me Why?

Dawn Morgan, former PERS Board Chair, is scheduled to speak about PERS on Thursday May 18, 2006 at 9:30 a.m. at Novak's Restaurant (across from Heritage Mall) in Albany, OR. As I've noted elsewhere, I wouldn't give Ms. Morgan the time of day, but since this is the first time I'm aware of her talking publicly about PERS since she ransacked the PERS membership during her testimony in the Strunk case, I'd be interested in hearing her side of the story. I'd go to Albany myself and ask her in person, but I have other things to do Thursday morning. If any of you go, feel free to ask her MY question: what advice did the AG's office give you in early 2000 before you credited the 20% to Tier 1 PERS member regular accounts? This has been the flash point for a number of legal motions, and the AG's office has always declined to provide this evidence on attorney-client privilege grounds. Since Ms. Morgan seems to be neither attorney nor client, she has no special obligation to keep that information private. I'd be fascinated by her answer, especially if it is what I think it is. So Dawn, tell me why????

Crossroads

I had to miss last Friday's OPRI meeting in Salem. I was partying in California with relatives as my nephew Matt got married. I was especially delighted to see my nephew Adam (Matt's brother) and his new bride. Adam just returned from an 18 month tour of duty in Iraq and a 6 month post combat deployment in Germany. He's now busy training new recruits in Kentucky. (While we're not big fans of the Iraq circus, we're damn proud of Adam's service to his country, and extremely thankful that he returned with both mind and body in tact).

On the PERS front, I'm still trying to get a summary of the OPRI meeting from one of the organizers. I do know that 150 people attended to hear Paul Cleary from PERS speak. In addition attendees heard from Greg Hartman who provided some legal updates on the Arken case (Multnomah County) and the Robertson case (federal case awaiting an en banc hearing in the US 9th Circuit), and from Gene Mechanic, who represents the PERS Coalition in the newly filed Robinson case. Currently, I have no specifics on what either Hartman or Mechanic told the crowd, but Paul Cleary generously provided the complete Powerpoint he gave to the group. It is available for viewing and download at the OPRI website. Worth noting is the very revised timeline for invoicing "window" retirees. It appears that the earliest anyone with a "normal" retirement can expect to see an invoice accompanied by a change in benefits is September 2007, at which point a large number of retirees will experience a benefit increase. The reason for this is that the "revised" benefit will have accumulated enough withheld cost-of-living increases that it will actually exceed the current benefit. Whether net benefits increase at this time depends largely on the amount PERS believes you owe and how long they expect you to live.

Funny How Time Slips Away

Ole Willie was right. Here it is May 8, 2006. At 5 p.m. tonight, the clock runs out on all those "window" retirees who wish to appeal that notice PERS sent them in early March. It only seems like yesterday that I got my "Notice of Board Action" and here I'm out of time to appeal it. Fortunately, the PERS Coalition (including OPRI and AOF - groups to which I belong and contribute) has my back with two different lawsuits filed. These cases are the Arken case (lead attorney, Greg Hartman) and the Robinson case (lead attorney, Gene Mechanic). Both cases have been filed as class actions in Multnomah County. To date, there has been no ruling on class action status. Nevertheless, if you want to help the cause, OPRI represents *all* retirees, regardless of former employer. They have a legal defense fund to which you can contribute. They are also having a general meeting of members and other interested parties on Friday May 12, 2006 in Salem. Wander over to the OPRI web site for more information about the legal defense fund and about Friday's meeting. Alas, I'll be in California attending my nephew's wedding and won't be at the OPRI meeting. But invited speakers include Greg Hartman from the PERS Coalition and Paul Cleary, Executive Director of PERS. It ought to be both informative and enlivening. I highly recommend that those who can get to Salem for this meeting attend.

Several have emailed me about my judge comments in a previous post. There are two interesting statewide judicial races and one interesting local race. The most important statewide race is for the Supreme Court. It pits Jack Roberts, Virginia Lindner, and Gene Hallman against one another for the position vacated by former Chief Justice Wallace Carson. The Oregonian has endorsed Virginia Lindner and she's rumored to be Gov Ted's favorite. Gene Hallman has been widely endorsed by the labor unions involved with the PERS Coalition. To my knowledge, Jack Roberts hasn't any significant endorsements. The second statewide races pits Court of Appeals Justice David Brewer (author of the PERS Special Master's Report used in the Strunk case) in a brutal battle against himself. The only choice there would be a write-in to send a message. Final, the local race drawing the most interest is in Marion County where Judge Paul Lipscomb (yep, that one!) is running against Ross Day. This is a tough race because, in my opinion, the opponent could be worse than the incumbent. The major issue in that race seems to be Measure 37, while PERS has received relatively little notice. Nevertheless...... Finally, keep in mind that all of the current PERS litigation has been filed in Multnomah County, so watching the Multnomah County Circuit court elections might be more than a spectator sport this year. My limited experience in/with the Multnomah County Circuit Court system hasn't given me to strong opinions about any of the judges running for re-election. If others have more information, pass it along.

Here We Go Again

In my haste to post new information on the Robinson case (see yesterday's missive), I forgot one detail of the Robinson complaint. In addition to alleging that PERS effectively has ignored the statutory "exclusive remedy" (section 14b) of HB 2003, the suit also alleges that the "Notification" sent out to "window retirees" on March 8, 2006 does not constitute proper notice under the statute ORS 238.715. I'm no lawyer - and don't pretend to be - but I'm guessing that the court won't be too persuaded by this claim. At worst, the court might find that the notice was incomplete, but PERS would be the first to acknowledge that the recovery provisions of ORS 238.715 aren't complete until the member actually is invoiced. Anyway, to me the strongest argument is the section 14b claim, especially since the Legislature passed HB 2003 with this "exclusive remedy" for the City of Eugene case. That language seems pretty clear and unambiguous to me. Guess we'll let the courts sort that out. [In that regard, let me encourage each of you reading this to think very carefully about the judicial elections on the May primary ballot. In the ongoing battle over PERS, the courts are the arbiters of our fate. Judges do make a huge difference, as we've all learned in the past three years.]

Everything Must Go

Not unexpectedly, PERS was hit with another lawsuit filed today in Multnomah County Circuit Court. This is the class action mentioned in an earlier post and is filed by the PERS Coalition. It alleges that the PERB, in adopting the Board Order of January 27, 2006 and then notifying "window retirees" of their intent to recover "overpayments" in a letter dated May 8, 2006, breached the statutes governing such issues. The suit asks the Court to order PERS to collect the overcredits via the mechanism statutorily adopted by the Oregon Legislature in HB 2003, while enjoining them from any other method. This method, known around among friends as the "14b" rule, is named after the section of House Bill 2003 enacted during the 2003 legislature to provide an "exclusive remedy" in the City of Eugene case (this was before the case was 'settled' and before the Supreme Court mooted the appeal). The attorney of record in this case is Gene Mechanic, another Portland labor lawyer with PERS litigation history. The case will be referred to as the "Robinson" case. It joins the "Arken" case as legal tests of the current PERS Board's authority to go forward with plans to recover from retirees.

This lawsuit could still be followed by several more before May 9th, the official end to the 60-day period surrounding the "official" notification "window retirees" received.

P.S. A copy of the petition is posted on the OPRI website for those interested in reading it. The OPRI site also has exerpted section 14b of the statute enacted by the legislature in 2003 to highlight the area of law addressed by this suit. The Robinson case basically asks the Court to order PERS to charge the expenses of the retirees off to administrative expenses as the court already ruled that the COLA freeze was an improper way to recover the money.

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 .