Lawyers, Guns, and Money

It has been awhile since I used this particular title, but it seems appropriate again.

There has been considerable conversation both back channel and in the two newsgroups that cover Oregon PERS about the deductions for attorney fees on August 1, 2008. From the postings, it appears that the size of the deductions bear only a slight relationship to the size of the benefit. Obviously there is a fixed amount of money needed, and there is *some* (unknown) basis for apportioning that amount over the 21,000 retirees required to chip in. But, the relationship between the attorney fees, the ostensible 8/1/04 COLA and the 8/1/2008 COLA are highly variable. It has taken me a bit of time to figure out what is going on. I haven't determined precisely what influences the amounts, but these are facts I do know:

For retirees who retired prior to 8/1/2002, the 8/1/2004 COLA was 2% and the 8/1/2008 COLA will be 2% (This is slightly incorrect. Retirees between 7/1/00 and 7/1/01 get 2%; those between 8/1/01 and 7/1/02 get 1.73%. An alert reader brought this to my attention. Thanks Jim.)

For retirees who retired between 8/1/2002 and 3/1/2004, the 8/1/04 COLA was 1.36% and the 8/1/08 COLA will be 2%.

Some retirees have been "adjusted" due to the Strunk/Eugene remediation. This adjustment means that the 1999 earnings have been reduced downward to 11.33%, the final account balance duly adjusted, and the base benefit refigured. These people also have had all COLAs applied from first eligible date through to 2007 and will be getting the 2% on 8/1/08.

Some retirees have not been adjusted and are still receiving the fixed benefit, although they got a COLA on 8/1/07 and will, presumably, receive one on 8/1/08.

Taken together, these facts produce some disparities in the relationship between the attorney fee reduction amount, the 8/1/04 COLA, and the 8/1/08 COLA. The bottom line is that I've seen examples of retirees whose attorney fee reduction exceeds the 8/1/08 COLA (which means that on 8/1/08, their actual benefit will be reduced for that one month), retirees whose attorney fee reduction is only slightly less than the 8/1/08 COLA (which means that the August check will be almost the same as the 7/1/08 check), and finally, there are cases like mine, in which the 8/1/08 COLA is almost double the amount of the attorney fee reduction and will receive an 8/1/08 check larger than the 7/1/08 check. In all cases, the attorney fee reduction is ONLY FOR THE MONTH OF AUGUST. Normal checks resume again on September 1, 2008.

One thing is obvious. PERS explanation of how the attorney fee reductions affect individuals is both simplistic and suspect. It isn't the simple relationship explained in the reduction letter. All sorts of variables come into play. Rather than spell this out for the Supreme Court or for us, we are left to PERS' machinations to trust the calculations. They cannot be replicated without further information. So far, PERS hasn't offered a clear explanation of how these reductions were calculated, and we're again left wondering just exactly what PERS is doing. I suppose this de rigeur for those folks. Although PERS' motto is "transparency", this latest actions clearly fails the test for even remote clarity. Opaque would be too kind.

Make It Go Away

At Friday's PERB meeting, staff admitted there had been a "computer glitch" (there is generally no such thing; human "glitches" yes, computer "glitch" no) that delayed sending out all the notification letters to retirees eligible to participate in the big giveaway back to PERS, for attorney fees in Strunk. In any case, all letters were resent and most retirees affected by this should have received the letters in yesterday's mail, or will receive them early next week. The letter tells you what your share of the attorney fees will be for the COLA freeze win in Strunk. From what I can figure, the attorney fees pretty much consume the entire 2004 COLA on the "fixed benefit" - a COLA we never received. While I don't agree that the winners should have to pay for their own win, Oregon law provides that in beneficiary/trust law, the "winners" should have to pay in proportion to what their share of the "victory" is.

Before screaming bloody murder, remember a couple of things: 1) the PERS Coalition signed off on this fee arrangement - our own attorneys and the organization representing us agreed to the payment system; 2) this is a ONE-TIME reduction, payable only on August 1, 2008 when the benefit naturally rises from the new COLA applied to the benefit. We get 2% on August 1; we will lose about 1/2 of that due to the one-time payment, but the full benefit resumes on September 1, 2008; 3) I do not know whether the reduction will come pre-tax or post-tax; I'd prefer it be pre-tax, but fear it will be post-tax.

I hope to have more information tomorrow. Stay tuned for the next installment of "As PERS Turns (on us)".

Stop The Bus

New information available. At yesterday's PERB meeting, there were two announcements of interest. The first was the announcement that the October 2008 Board meeting would be cancelled because of its conflict with the "rescheduled" White Case hearings. Apparently, though not yet confirmed, the White case just continues to drag on, with the August 4-5 hearings postponed until sometime in October. This would hardly be a shock since the White case has been "in limbo" for nearly 4 years now. More confirmation and clarification to follow early next week when official offices are open. The second, less exciting, piece of news is the availability (soon) of a new PERS By the Numbers. It was handed out at the meeting, but not yet posted electronically. A copy will be available at the PERS Document Library as soon as it is available electronically. It is way too long to scan.

Belief

Is what will be required for the Kay Bell verdict to have any long term benefits for PERS members. The following email was sent out to a general distribution list of SEIU members.

"On July 16, 2008, a Marion County Circuit Court jury unanimously found the PERS Board liable for $200,707.04 in damages for negligent misrepresentations made to a PERS member in the case of Kay Bell v. Public Employees Retirement Board (Marion County Case No. 07C11097). PERS Coalition attorney, Aruna Masih, represented the PERS member at trial.

Prior to trial, Marion County Circuit Court Judge Claudia Burton found that the PERS Board owes a “special duty” of care to PERS members to protect them from economic loss caused by false information or other material misrepresentation made by PERS. Trial evidence established that, in this case, PERS had provided the PERS member, a school teacher and counselor, incorrect information on annual statements and estimates over a period of many years. The PERS member resigned her position and retired in reliance on that incorrect information. Only months after the PERS member retired did PERS reveal that the information it had provided her was inaccurate by over $1,100 per month. Of course, by this point, the PERS member’s former position had already been filled, and she had lost the seniority she had accrued. The PERS member testified that had PERS provided her accurate information in a timely manner, she would never have resigned her position and would have continued working until age 62.

The jury unanimously found that the PERS member reasonably relied on the false information provided by PERS and that she suffered loss of salary and benefits of $200,707.04 as a result of giving up her job in reliance on the false information provided by PERS. The PERS Board has already notified the trial court of its intent to challenge the $200,707.04 jury verdict as exceeding the caps set by the Oregon Tort Claims Act. Once the tort claims caps issue is decided by the trial judge and a judgment is entered, the case will likely also be appealed by the PERS Board.

The appeal will give the Oregon appellate courts not only the opportunity to set precedent on whether the PERS Board owes a special duty of care to PERS members to provide them accurate information but also whether the Tort Claims Act should limit damages between a fiduciary and beneficiary like the PERS Board and PERS members. The jury verdict can also be used to support legislative and administrative reform of the PERS retirement audit process, requiring PERS to perform such an audit before a member retires to allow both the member and PERS sufficient time to challenge the accuracy of the information before retirement. Possible reform proposals at the next PERS Coalition meeting."

Of particular interest are the last two sentences of this email (forwarded from Hartman's office to Coalition members). Also is the question of the applicability of the "tort cap" in an instance where the tortious act arises from a fiduciary trustees' actions against a beneficiary. This is quite a different circumstance than a case of medical malpractice. PERS was screwing with Kay Bell's retirement account and denies any responsibility for accurate information. If you can't trust PERS to give you accurate information before you retire, who can you trust? The answer is that no one else has the information to enable you to audit their figures and insure they are correct before you irrevocably give up your job. It seems to me we've heard this claim before, but no Judge has felt quite the same way as a group of outraged jurors. Let's hope that this case finally pushes PERS into accountability. It is probably too late for those of us already ensnared in the web of lies fed us when *we* retired, but hopefully future retirees will be insulated against such arbitrary and capricious acts.

Viva Las Vegas

As promised, here are a few of my pictures from our helicopter flight into the western part of the Grand Canyon. Several pictures were shot from the canyon floor; several were shot from the air as we cruised over the canyon; finally, there is a single shot of Hoover Dam and the Colorado River (Lake Mead is in the foreground, cropped out for size uniformity) taken at dusk from about 3 miles away inside the backseat of the moving helicopter. The combination of speed and low light made the photo challenging. Nevertheless, it didn't turn out too badly.





On an unrelated topic, there is an excellent set of PERS-related discussions on our newsgroup - PERS Oregon Discussion. This group, hosted on Yahoo Groups, is easy to join. You can read messages there and post there. See the link on the left to get to the group's membership page. We're pushing to have about 25 new members this week. Read PERS and retirement news there; our motto is "Politik Kills". No political discussions will be found there.

Long Road Out Of Eden

We are finally back from our long drive to Southern Nevada. We managed a great trip without gambling a cent (OK, I did play a few slot machines and won a few bucks, but that was to pass a few minutes of idle time waiting for my daughter). We saw some spectacular scenery flying into the Grand Canyon and landing. I'll be posting some pictures soon. We also saw a bunch of great shows (Cirque De Soleil - Mystere, Blue Man Group, Jersey Boys, the Titanic Exhibit), had a great visit with my sister and her family, and my wife and daughter got a lot of shopping in.

While I was gone, Kay Bell won the first stage in her battle against PERS in open court. Kay was victorious on a claim that PERS gave her faulty information before she retired and at her retirement. The jury sided with Kay on a 12-0 verdict. PERS plans to appeal both the verdict and the fact that the case was allowed to get to trial in the first place. Many retirees have asked the obvious question: does Kay's victory have any benefits for others of us who also got "faulty" information from PERS prior and at retirement (and since)? The immediate answer is unknown since Kay's verdict has not been viewed by the Appelate Courts. More significantly, however, is the fact that Kay's victory was individual. It was filed using a completely different route than other class-oriented retiree cases. It also followed after Kay had exhausted all internal PERS mechanisms to appeal their decisions along the way. The gist of Kay's case follows loosely the lines of the "promissory estoppel" claims filed in Arken (which we lost), and in Strunk. Thus, while I'd like to believe that Kay's verdict will have positive implications for other retirees, I'm not entirely sold on the notion that it will. Kay's circumstances were quite different (see Peg's reports on PERS_Oregon_Discussion for the details), and the verdict quite individual. Moreover, what Kay was asking for was altogether different than what the PERS Coalition asked for in the Arken case, and what was posed in Strunk. In the meantime, all we can do is hope that Kay's verdict will be upheld in the higher courts. Kay's victory gives me hope, but I don't for a moment think that we will see any long term benefit from her case. I hope I'm wrong, but I'm having an extremely difficult time generalizing her case to those of us victimized by PERS' perfidy.

Ring Them Bells

Thanks to my friend Peg for her excellent reports on the civil trial of Kay Bell v PERS. You can read Peg's reports on the PERS_Oregon_Discussion Group (see left for link). To make a long story short, Kay Bell sued PERS for their faulty advice. She went through all the PERS hoops and lost at every stage. Finally, fed up with a system stacked against appellants, Kay decided to fight PERS in civil court. She received a jury trial and the jury ruled AGAINST PERS and in favor of Kay Bell (unanimously). The jury awarded Kay $200,000 in total. Of course, PERS will appeal the verdict, but unless the judge has made some egregious error, her 12-0 verdict may well stand. I could not be more pleased for Kay Bell. She fought the system on its own terms, and she beat PERS at its own game. Good for her.

I continue to be on vacation and do not expect to post much of anything until after I return next week. I'll try to post some of the spectacular Grand Canyon photos when I'm through running them through Photoshop. It is always spectacular to see, but my pictures were taken from a helicopter flying directly INTO the Canyon.

In Praise of the Vulnerable Man

And woman. The Kay Bell hearings begin next Tuesday in Marion County Circuit Court. The White case will be heard on August 4-5 in the Multnomah County Circuit Court (Judge Kantor again). The Bell case tests a novel theory of whether an individual can recover damages from PERS for being given incorrect information prior to retirement. This seems to me to be a reformulation of the same legal question of "promissory estoppel," which was raised in the Strunk case (and ignored) and directly in the Arken case (and overruled).

The White case challenges the settlement agreement between the City of Eugene Plaintiffs and PERS and the State of Oregon. In particular, it tests whether the PERS Board breached its fiduciary duty to PERS members and retirees by entering into an agreement that violated the rights of those members and retirees.

I will not be around to sit through these hearings. I trust others will do so and share information with me. I'll be out of town for both cases.

Vegas

Just a quick note - an experiment really with Google's new Blogger editor - to remind readers that I'll be out of town quite a bit over the next 6 weeks.  I'll be in Southern Nevada, Utah, and Arizona from July 12 to July 21, and then at our house in Central Oregon again August 1 to August 8th.  During these getaways I don't take as much time to monitor the newsgroup or post new things to this blog.  Of course, if anything really significant comes up, I will post something.  And, you do know that there are two PERS-related legal cases scheduled for hearings during the periods I'm gone.  One case - the "Best" case is scheduled for the second week in July in Marion County Circuit Court, while the "White" case is finally on tap before the inestimable and painfully slow Judge Henry Kantor of the Multnomah County Circuit.  I'm pretty sure there will be spies at both hearings and so I expect to have something useful to post here during those vacation interludes.



Supposedly, this new editor gives me better controls and access to pictures so I'm going to try a few just for fun.  You'll get to see our dog "Emma", possible a cat or two ("Pot" and "Minh"), and perhaps the Mini.  This won't be a regular feature, but as a beta tester, I'm supposed to try this kind of stuff.  So here goes:

Ok.  So the cats aren't here this time.  And you got the old picture of me with the giraffe.  I like giraffes and this one was particularly fun.  I'll get the hang of the picture posting as I go along.  Bear with me.

Kill To Get Crimson

Last night, my wife and I attended our third Mark Knopfler concert. To say we are fans would be an understatement. The founder and lead guitarist and singer of the group "Dire Straits" has been on his own (in a manner of speaking) for about 16 years now. He's done 6 solo records and has scored at least a half dozen sound tracks for films. He puts on a fantastic show that highlights his guitar virtuosity and makes him, in my opinion, one of the three or four best guitarists in the world. The set last night was wide-ranging, covering tracks from all his solo albums as well as digging deep into the "Dire Straits" catalog for crowd favorites. All in all we had a great time.

Mark Knopfler is an artist whose fame doesn't seem to extend so much to the younger set. Last night's crowd was mostly baby boomers. I ran into at least a dozen PERS retirees who recognized me from my pictures posted hither and yon on the net. It was really fun to chat up these fellow music fans and retirees. Judging from the crowd, I'd hazard a guess that I met only the tip of the iceberg at the show. I'd imagine that there were lots more PERS members/retirees there. We all have good taste, except for the few idiots so drunk that they could barely speak, much less walk or follow instructions.

If you were at the show, leave a comment. PERS retirees have a life, just like everyone else. I like concerts and evidently quite a few of you do too. Incidently, if you were at the show, you may have been as perplexed by the same two things I was: the opening act was positively awful, something typically unheard of at a Mark Knopfler show, and second, the absence of the title track from the new CD and name of the tour. That hasn't been on the set list for any part of the US tour.

Letters Home From the Garden of Stone

Sometime back last year, OPRI and the PERS Coalition began to consider whether to push for an ad hoc increase in retiree benefits to make up for the effects of inflation. In January 2008, the OPRI Board heard a report from the Coalition that it intended to make ad hoc benefit increases an issue in the 2009 legislature. The crucial factor in ad hoc benefit increases is whether purchasing power of retirees has fallen significantly (to, say, less than 90%) from its current value. Apparently, the PERS Board also was concerned about this and so they requested that their actuarial firm, Mercer, study purchasing power of retirees for the entire retiree cohort. On Friday (last week) PERS posted the results of that study, which you can read here. The upshot is that the retiree cohorts going back into the early 1990's are still within the acceptable window for purchasing power and would not be candidates for any ad hoc benefit increases. Mercer considered the original benefits as well as all applicable COLA increases to figure where retirees are with respect to purchasing power. While this does not bode well for recent retirees, it is possible that when the figures for 2008 are totted up, the situation might change. It is unlikely that retirees within the current decade would benefit, but earlier retirees might qualify. The problem is that unless there is a heavier weighting for transportation costs, food costs, and insurance costs (especially medical), the actual CPI will not go up anywhere near the rates of inflation most of us are experiencing.

It would be nice to get something more than we're getting right now, but consider this just another letter home from those folks who run the garden of stone.

Big Man With A Gun

Marion County's big man, Paul Lipscomb, is retiring at the end of this month. I told you that yesterday. But here's the irony. Lipscomb is retiring so that he can maximize his PERS benefit. While I can't begrudge Lipscomb his opportunity to game PERS to the max, I can't resist observing that for those of us who did the same thing, we've earned the public's undying enmity and wrath. But when the big man does it, he's a great public servant who deserves the benefit he's getting. So, Judge Lipscomb. Enjoy your "maxed out" PERS benefit. Laugh all the way to the bank. In the meantime, try not to think about all of those who who have used your ruling in the City of Eugene case to excoriate us "window retirees" for being "losers", "pigs at the trough", "lazy, undeserving public employees", and other such unpleasant epithets. We hope you enjoy your new life as a private mediator helping out august bodies who will pay you the big bucks to go along with your PERS monthly check. Like Greg Macpherson, we won't miss you either.

Giggling Again For No Reason

It might be the great weather. It might be enjoying my Mini's gas mileage. Or it just might be the news that Judge Paul Lipscomb, Marion County Circuit Court Judge, has decided to retire at the end of this month. Judge Lipscomb is the originator of most recent retirees' angst. It was his ruling in the City of Eugene v PERS case that set the stage for the ream job done on PERS retirees and actives over the 1999 earnings crediting decision. We owe Judge Lipscomb credit for the 11.33% refiguring of 1999 (instead of 20%); we can thank Judge Lipscomb for forcing on us his own unique way of calculating the variable match so that most retirees lose a significant amount from the employers at retirement. We can thank him for looking out for retirees in his feeble caution to the Legislature and to the Supreme Court to not do anything that would harm retirees. I'm sure Judge Lipscomb deserves thanks for many other elements of our current state of despair.

The good news is that he is off the court in about one week. He will become a PERS retiree and then will go out and draw a private sector salary and will do a variety of other things to enrich his retirement life. I recently returned from a week in Sunriver. While there, I read about a complex lawsuit involving the Sunriver Home Owners Association (SROA) and a developer who wants to redo the Sunriver Mall provided the SROA gives him permission to build about 400 condominiums above all the retail stores in the Mall. This has reached a critical stage and Judge Lipscomb has come to the rescue as a mediator. I don't think the SROA has a chance in this. With friends like Judge Lipscomb, neither SROA nor PERS members/retirees need any enemies.

If you wish to leave Judge Lipscomb your best wishes in his retirement, please feel free to leave your comments here. I'll make sure they are forwarded his way.

Citizen of the Planet

It is always fascinating to determine the readership of this blog. Now that I have tools installed, I can see where every visitor comes from. Below I hope you can see where the visitors to this blog come from. The flags do not represent (necessarily) a single viewer, but simply details where each IP address comes from entering the blog. One flag might represent 500 different visitors (if you have Comcast, for example), or it might represent a single visitor, if you're the only person checking in from Mexico, for example. Our readers cover the US, although there is a notorious absence of visitors from the plains states, and the deep south. On the other hand, we have Canadian visitors, Mexican visitors, UK visitors and at least one from the Scandinavian countries. Here is a map to show the story.

Mr Alice Doesn't Live Here Anymore

He's on vacation as of today. He will respond to comments but will probably not generate any new posts unless something truly offensive happens in the next week. Please feel free to leave your comments and I will comment on your comments unless you simply speak truth to power. I expect that many will start getting the PERS letter about attorney fees. If they don't understand it, send them here. They may not understand it any better after coming here, but I'm sure they'll be madder than hell after reading my doublespeak (or is that PERS' doublespeak). Think of it this way. PERS will not give you the benefit of any doubt anywhere, anytime. They compute amounts owed to them based on your highest (and least likely) benefit, and compute what they owe you on the lowest benefit to which you are entitled. I like to think of this as being screwed at both ends simultaneously. Those folks at PERS have truly gone to the dark side. They reply ONLY to employers and to the Governor, both of whom have already told the retirees and members to "kiss off." Be grateful for what you have. It ain't gonna get any better.

Boogie Oogie Oogie

My 15 seconds of fame appeared in yesterday's USA Today. There is even a picture, although it probably wouldn't have been my first choice of all the one's taken. But, as I've said elsewhere, I don't look like I'm insane, which is quite a relief to my family. I was busy having dental surgery yesterday, which probably accounts for how I missed the article in the first place.

If you are even slightly interested, you can find the article here.

March Of The Pigs

Actually it's June, but no matter. Those sleazers over at PERS just keep getting bolder and bolder with their collection efforts. In yesterday's post, I described the attorney fee reduction charged to window retirees for their "victory" on the COLA freeze in the Strunk (Sartain) case. I mentioned that PERS was charging me about 90% of my 7/1/04 COLA. What I didn't mention, probably because I was distracted by the more obvious aspects of this, is the base benefit PERS chose to use for computing my share of the attorney fees.

Remember that PERS has claimed all along that I (you too) was never entitled to the benefit paid me when I retired. This is because, as they claim, the 1999 earnings were not final when I retired. Thus, I was (and have been) recalculated to a new base benefit on the effective date of my retirement and all COLA adjustments applied to the revised base benefit. So, let me pose a rhetorical question. If PERS believed that my base benefit was calculated wrongly and that I was not entitled to that base benefit, and that PERS was entitled to recompute my base benefit to reflect an 11.33% credit for 1999 instead of 20%, just why do they have the right to use the WRONG (in their opinion), illegal, incorrect benefit as the base for computing (a) my July 1, 2004 COLA and (b) my share of attorney fees. PERS claims "In accordance with the Court's decision [in Strunk], PERS calculated the COLA amounts each recipient would have received July 1, 2004." Wait, wait, wait, wait. How can PERS do this? How can PERS speak out of both sides of its mouth at the same time. How can PERS claim it is following the Strunk court's order, when they spent the whole of the Arken case INTERPRETING the Strunk Court's order in a completely different way? Maybe I'm stupid, or maybe a little naive, but I'm not dumb. PERS cannot have it both ways. It cannot claim my COLA amount is one thing based on a benefit they claim I'm not entitled to, and then turn around and claim the benefit I'm not entitled to is the basis of their computing an amount I owe them to pay for their f**kup. I don't get it. Perhaps someone smarter than I am can explain this to me. Perhaps Greg Hartman, or Judge DeMuniz, or Judge Kantor, or Paul Cleary. How is it legally possible to remain on both sides of the street at the same time?

It Ain't Right

It is always nice to get those June communiques from PERS. Today's mail brought me the news that my July 1 benefit would be reduced by a significant amount - once only of course - to pay for my victory (?#!!!!) in the Strunk case. My share of attorney's fees in the Strunk case reduced my July 1, 2004 COLA by about 98%. I'm always thrilled to pay my fair share of a victory that could be best described as pryrrhic. Let's see. PERS loses in court and the court tells PERS "you can't withhold COLA from retirees. It is part of their contract." So PERS, in compliance, figures out a dodgy way to "give me" my COLA on some bogus benefit and then turn around and charge ME for the victory that retirees won in Strunk. Retirees got their revenge on Greg Macpherson. Now, if we can only figure out a way to exact similar revenge on Bill Gary, Paul Cleary, Mike Pittman, Eva Kripilani, Brenda Rocklin, Jim Dalton, and Tom Grimsley. May their souls rot in hell.

Both Sides Now

Democratic Attorney General Candidate and nominee John Kroger appears to have won the Republican primary for Attorney General as well. The republicans had no nominee and primary voters had the choice of not voting or writing in a candidate. The major worry was that Ron Saxton would end up being the Republican nominee by virtue of an effort to get citizens to write his name in. Apparently, this was bogus as no credible effort was made to get Saxton's name on the ballot. In the end, there were something like 13,000 write-in votes in the Republican primary. When all votes were sorted and counted, Kroger had the highest write-in total of any candidate on the Republican side. So, by June 19th, when the votes are certified, Kroger should have the nominations of both parties and will be the undisputed winner of the Attorney General's mantle. Those of her at PERS Info headquarters give John our best wishes for a successful occupancy of the Oregon Attorney General's Office.

Waking Up

Every morning exploring USA Today for the big story I was interviewed for (yeah, I know about that dangling preposition). Still can't find it. Some editor must be sitting on it, waiting for a large enough space in which to fit it and all the great pictures. I'll keep looking and when (if?) I find it, I'll be happy to post a link.

In the meantime, another PERS-related case is scheduled for its first hearing in the Marion County Circuit Court. This is the case captioned "Kay Bell" in the Hartman archives. This lawsuit tests the proposition that PERS should be held accountable for its information as employees relied on PERS' representations to make retirement decisions. The case is scheduled for July 15th. While it would be nice to get a definitive ruling on this, it seems to me that both the Strunk hearings and the Arken hearings touched on this issue. Each time it gets brought up, some judge or Justices swat it down. I'd like to think that Kay Bell will get a fairer view, but I'm not encouraged by the previous rulings. What those rulings say to me is that if you depend on PERS, you do so at your own peril. PERS can lie to you either explicitly (Notice of Entitlement) or implicitly (by failing to tell you some crucial piece of information, such as that the earnings for one critical year in your retirement account may not be the same as what you've been led to believe). This has always seemed to me to be the Achilles heel of the PERS system, and the courts haven't been very sympathetic to retirees on this one. We exchange our jobs for a promised retirement benefit. Our jobs are filled and no longer available even if we wanted them back. Then PERS gets to turn around and say, "whoopsie. We boo booed and you get to suffer the consequences." This has never struck me as fair. The analogy is always drawn to a bank error, but the difference to me is that banks don't wait four or five years or more to tell you and then go to great lengths to recover the money. There, at least, ought to be some statute of limitations at play here. Six years is way too long in a retirement setting. The banks usually find the error in a matter of days, if not weeks. I know of no example where a bank has come back on an error years after it occurs.

What do you think about this? Fair or unfair?

The Story

Is not in today's USA Today. The website is a fairly accurate reflection of what is in the dead tree version. Checked both and the PERS article is definitely not in either of today's editions. Will, no doubt, be in one of next week's papers. I'll keep my eyes and ears open and let people know.

Nothing else new to report. The week's still been weird and it is probably time for it to end. Maybe with some sunshine and not rain. As an Oregonian for 38 years now, I have to confess to being really, really, really tired of the rain this year. My backyard is a giant mud pit, which the Lab loves, but our yardcare person is growing to loathe. Big, deep footprints and lawnmower treads dig in everywhere in the back. I can see the repaired drainage plan coming soon.

Waiting On The World To Change

Many of my readers are early baby boomers and "window retirees." It was sobering today to realize that 40 years ago today, Robert F. Kennedy was assassinated following a victory party celebrating his win in the California Primary, held at the Ambassador Hotel in Los Angeles. I was attending UCLA and had just finished my junior year. A bunch of us had been in Santa Monica (not too far away from the Ambassador Hotel) hanging out with McCarthy (Eugene) supporters. We had decided to cruise over to the Ambassador and see how the Kennedy celebration was going. We never made it. By the time we had cruised down Wilshire Blvd in the awful LA traffic and navigating through all the various roadblocks that were set up, we had heard that Kennedy had been assassinated. We somberly went home, not knowing what else to do. We weren't going to get to the Ambassador to share our grief with that of all the others who were there stunned by yet another senseless political assassination. I was in high school when President Kennedy was assassinated. I hadn't yet come around to RFK's camp, but would have supported him for President had he lived and been nominated. Instead, we got Hubert Humphrey, the Chicago 7, Mayor Daley and ultimately Richard Nixon. We'd gotten Ronald Reagan as California Governor in 1966, and I still refuse to show my undergraduate diploma because it has that scoundrel, Reagan's signature on it. (You had to be in California to understand why the UC students hated him so much. He was a much better President than he was California governor). In the meantime, here we are 40 years later and we are still waiting on the world to change. Those of us around during both Kennedy assassinations, not to mention the assassinations of MLK and Malcolm X, have been disillusioned for a long time. I'm still waiting for all this to change. I'm beginning to feel that the old axiom - the more things change, the more they stay the same - holds true for many of us. I'm not especially disillusioned right now, but I was hoping for two more elevating candidates for the US Presidency. I can't say I'm terribly pleased with either of the choices. We have one who is young and inexperienced, and another who is old and isn't enough different from the current President to make him a viable choice for me. My choice is clear, although I'm not excited about it.

So, where were you on June 5, 1968? What do you remember about that time? I remember plenty, and there are many times I'd rather forget.

I Got the News

Dennis Cauchon, the USA Today reporter who interviewed me, tells me that the PERS article will probably appear in tomorrow's (Friday June 6, 2008) edition. It will probably appear as a "news" item - front section - rather than in the Money section. I'll confirm tomorrow by checking the USA Today web site. If it is there, I'll probably go out and buy a few copies to share with friends and family who don't follow this issue in other states.

In other news, the PERS Oregon Discussion group now has crested the 200 member number. Remember, we're trying for 250 members by June 13th (Friday the 13th). If you haven't joined, and are interested in following more real-time discussion of PERS news, you can click the Yahoo! button on the left side of this blog. Joining is easy and free.

Just My Imagination

This has been a bizarre week. Today is the 1800th day that, in my opinion, PERS has been breaking the law towards "Window retirees." I'm still waiting for them to implement the Strunk opinion literally, not in their own interesting and twisted interpretation. July 1, 2003 was exactly 1800 days ago today. FYI.

The USA Today photographer stopped to shoot off 40 or 50 shots of yours truly. God knows which of the pictures and which of the quotes will show up in the article. The photographer was a very amiable young man whose day job is with the Salem Statesman Journal, but who does contract work with other papers. We talked cameras and lenses; he and I share the same passion for Canon products. I don't know when this PERS article and photographs will appear, but I promise to let you know when I do. I suspect this will be a more focused article about Oregon PERS than I originally thought. The reporter told me that he had talked to Paul Cleary and to Randall Edwards, State Treasurer, earlier. Today I found out that he also interviewed Randall Pozdena, former head of the Oregon Investment Council, who was concerned about the PERS funding situation back in 1999. This suggests an article that is more focused on PERS, or that covers the various "success" stories in public employee pensions than I originally suspected. Of course, one man's success usually means another's failure or loss. Voila, our loss! Liars all of them.

The dog got her stitches out yesterday and can run free again. That was a two-week ordeal that left us about $1000 poorer. Yellow labs are high maintenance. At least she's loveable and fun. All her injuries are self-inflicted and result from an unquenchable curiosity and uncontained enthusiasm. Not to mention, her ability to reduce anything breakable into microscopic particles in mere seconds.

I took a nasty spill on Sunday and have hematomas (doctor-speak for nasty bruises) on my arm and elbow, coupled with the most incredibly nasty and triangular bruise on my tailbone. It is practically the shape of my tailbone, which shockingly enough, is more-or-less triangular in shape. I'm OK, but my dignity is diminished, my personal trainer laughed at me, and I discovered that the pain medication I take for my hip and knee won't touch the pain from this kind of trauma. I think the pharmacy and I have finally reached some truce about refills about the pain medication. I was having to call them in 4 weeks in advance just to insure that I got them on time. I got pissed and started on a rampage through pharmacy supervisors, membership services, and anyone else in a position of power. What rattled me was that I could see electronically that my doctor had approved the refills weeks before the pharmacy filled them and none of us could figure out why it was taking so long. We still don't know, but the chief cook and bottle washer of pharmacy services assures me that things are now straightened out. I'll believe it when I see it, but for now, it provided a way to relieve some of the anger built up over Judge Kantor's decision late last week (or was it the week before?).

My daughter's belated birthday present was a set of concert tickets to a concert held last night at the Rose Garden. As promised, I escorted my daughter and her friend to the concert, dropped them off, and then went off to my PSU office to hang out until the concert was over. Around 11 pm, I booked over to the Rose Garden, parked the car illegally and waited, and waited, and waited. While waiting, I listened to the BBC news. Interesting to hear about US politics from a British perspective. In any case, about 11:45 I spot my daughter and her friend coming towards me and I go to start the car. Uh oh. No start. I just then discovered the peril of parking a car for a week at a time before getting it out to drive. Dead battery. Not enough driving time to charge the OEM battery on a 4 year old car. So, I called AAA. At midnight. The battery guy showed up at 1:15 a.m. He jump started my car, tested the battery, assured me the battery itself was OK, and so I drove it home to Lake Oswego. I finally got to sleep about 2:30 this morning. Fortunately, the car started fine this morning. I think it is getting time to think about replacing that battery. Don't think I can be inconvenienced at that time of night again in someplace like the Rose Quarter.

So you tell me. Is it just my imagination, or has my week been more bizarre than normal?

Semi-Interesting Week

Not long after I wrote yesterday's post, the phone rang. The caller ID said "USA Today". I figured they weren't trying to sell me a subscription; it must be the reporter I'd exchanged emails with earlier in the day. Indeed, it was. I'm not sure what he was looking for when he found me, but it was clear that he had been looking for someone who didn't believe that the rosy outlook for Oregon PERS was the result of the 2003 reforms. The interview started out with Tier 3 (the OPSRP) and I had to redirect the interview to make certain he understood that Tier 3 was about the least controversial element of the 2003 reforms. There were no lawsuits involving the OPSRP, there had been no howls from the unions about it and that had nothing else happened, there probably would have been no litigation. Then I tried to explain to him what happened in 2003, raising along the way some of the disparities between what PERS has said, and what the PEW report claims. We spent some time trying to dissect the 2002 numbers, which suggested that PERS was either in poor shape or in better than average shape, depending on the source. He had a copy of the PEW report and could tell me a bit about their sources, and it began to occur to me that there might be a story there as well. But, I recounted the story of all the little twists and turns of the knife that occurred to shaft "window retirees", active employees, post-"window" retirees. I'm sure lots of that will be left out of the story. The interview lasted about an hour. I was pleased with the quality of the questions and the semi-free ranging attitude of the interviewer. I gave him my take on just how much I think the reform legislation contributed to PERS' current success, and much more I thought the stock market and the Oregon Investment Council contributed to the rest. In short, I told him that I didn't think that more than about 20% of the improvement in PERS' financial condition could be attributed to reform legislation, and that of that, about 75% is currently in dispute under litigation.

He's interviewing State Treasurer Randal Edwards today. Tomorrow, one of his Portland-based photographers will come by at 9:30 a.m. to take a picture of me. How so very exciting. I get 15 minutes more of fame, and a picture to boot. I have no idea when the story will come out. I'm sure that Google News will carry it when it does. All-in-all, not a bad start to a semi-interesting week.

Second Hand News

Andy Warhol once said that every person is entitled to 15 minutes of fame. I've probably had at least 45, so I'm not due any more famousness yet. But, every once in awhile, an opportunity comes along that I might not be able to refuse. I got an email today from a reporter for USA Today, that bastion of national reporting run by Al Neuharth. The article he is writing is about, among other things, the 2003 Oregon PERS reforms. Apparently, he's been talking to those behind the changes and possibly the PERS senior leadership (I don't actually know, really), but he's discovered that they're pretty happy with all the changes (as the French would say, quel surprise!). He wanted to know whether he could interview me to get another take on the reforms, or suggest someone else he could talk to. Lawyers are never good people to include in your story, because, frankly, no one trusts anything a lawyer says. So, like the dutiful soldier I am, I volunteered to be interviewed. I even gave the fellow my phone number so he could call me and, if this follows all my other interview experiences, misquote me directly.

I will report back here if the phone call comes in. I'm not holding my breath, but I was pleasantly surprised that someone gave him my name. Or maybe he just knows how to use Google effectively and found my name showing up with frequent criticisms of Oregon PERS. We'll see.

Frail Grasp On the Big Picture

Several different interpretations of the Kantor rulings have surfaced. The first, which I reprint here, was sent by Aruna Masih, one of Hartman's partners, to all of the plaintiffs in the Arken case. In it, she gives her take on what happened and what the next steps will be. She writes:

" As you will recall, in last year's decision, Judge Kantor found in favor of you and Robinson petitioners, but on grounds we did not raise. Therefore, we asked Judge Kantor to clarify this decision, asking him to rule specifically on the main claim we did raise on your behalf, which was that you have a contractual right to keep the 20 percent earnings because in the Strunk case, the Oregon Supreme Court held that the 2003 Legislation created a new entitlement to a fixed retirement benefit based on the 20 percent earnings plus COLA. Also, we alleged that even if you did not have a contractual right to keep the 20 percent earnings, you retired in reliance on the fact that your retirement benefit would be based on the 20 percent earnings plus COLA and that reliance was reasonable.

In yesterday's decision, Judge Kantor ruled against us on that breach of contract and reliance (promissory estoppel) theory. Therefore, the contract claim will have to be decided by the appellate courts. While we are disappointed by the decision, we want to remind you all that we have always expected this case to be decided ultimately by the Oregon Supreme Court. We are busy researching ways to petition the Court of Appeals to certify the appeal directly to the Supreme Court so that you do not have to wait even longer for a final decision on this issue.

In the meantime, Judge Kantor's initial decision protecting all window retirees under the Section 14b reasoning still stands. We are certain Judge Kantor will be asked in the Robinson case to enter some judgment regarding that ruling within the next few months. We will keep you updated on the trial court's progress in the Robinson case as well as the appellate progress in this case. " (My thanks to Michael Arken for sharing this communication with me and for permitting me to post it here.)

In contrast, the PERS website has its interpretation of what went down in Tuesday's ruling. You can read it here. The document can be found in a link at the upper right corner of the blog under current news.

After reading both, you get to decide which of the two sides has the firmest grasp on the big picture, and which doesn't.

For more discussion and news on the Arken case, please stop by the PERS Oregon Discussion group (POD), which you can join by clicking on the Yahoo link on the left.

March of the Pigs

Yesterday's ruling by Multnomah Country Circuit Court Judge Henry Kantor, has left many PERS retirees in despair. While the ruling was hardly uplifting, it wasn't a surprise (at least not to me). If Judge Kantor had wanted to gobsmack PERS for what they admitted they were doing last August 16, I suspect he would have done it right then and there. That he didn't, and that he needed more time to study it, suggested that we wouldn't get a favorable ruling. This, even though I sat through that entire hearing and watched Judge Kantor's facial expressions that suggested he wasn't happy with the wide boys working for PERS. But if there is anything I've learned in my years of sitting in the back benches of courtrooms is that it is impossible to read anything into Judge's expressions, body language, or even their questions.

What exactly did Judge Kantor do to help the pigs out even more than they've already been helped by the actions of a couple of really slimy lawyers? First, and foremost, Judge Kantor ruled unequivocally that PERS could NOT collect the overpayments PERS was wanting to collect in their Strunk/Eugene remediation project. This was the essence of the Robinson case. Judge Kantor ruled that PERS' January 2007 order and its March 2007 "collection notice" were illegal on their face. Period, end of story. PERS cannot collect that large chunk of money by any means. To be clear here, this is only Judge Kantor's ruling. Before this story is over, this ruling will be reviewed by the Oregon Court of Appeals (possibly) and the Oregon Supreme Court (for sure).

The second ruling Judge Kantor made was that the 20% earnings credit for 1999 had never been finalized because it had been appealed in a timely manner, according to the law. Therefore, neither retirees nor members had any right to expect earnings that high, especially following the ruling in the City of Eugene case and its subsequent codification in statute (HB 2003). Thus, while retirement benefits had been calculated on the 20% in some cases, and notices of entitlement went out with that figured into the resulting benefit, PERS had no obligation to continue paying an erroneous benefit. Judge Kantor ruled that "promissory estoppel" did not apply in cases like this; therefore, retirees had no claim against PERS for supplying faulty advice, incorrect information etc. This, to me, was the most disappointing part of the ruling. PERS does not have to give people correct information and they can't be held responsible if what they give is faulty advice. (This has bearing on another case in the pipeline.)

Finally, Judge Kantor ruled that it was perfectly permissible for PERS to adjust retiree benefits, as PERS has been doing, when there has been an error made in the calculation (i.e. the 1999 20% crediting, versus the "correct" amount of 11.33%).

At this point, both Arken and Robinson head to the Oregon Court of Appeals. There has been considerable talk about petitioning the Court of Appeals for a "pass" and moving the entire show onto the Oregon Supreme Court. I'm ambivalent about this. As much as I'd like this whole thing to be over, I'm not sure I'm ready for this to move before the White case has had its day in Court. If Arken/Robinson get their pass to the OSC, I'll be OK with it, but I'd like a ruling on White before the Court hears any more cases.

P.S. Press the Yahoo! button to join our new newsgroup where we can discuss this ruling in as much detail as people want, in near real-time. We're growing by leaps and bounds and the discussion has been really good so far. And it is all about PERS.

Slow Train Turning

Greg Hartman just sent me the news that Judge Kantor has issued his ruling in the Arken/Robinson cases this morning. I cannot tell you what the news is, or even read the opinion yet as it is nowhere to be found on the net yet. But have no fear. I will have it by this evening come hell or high water. In the meantime, consider Hartman's final line in his email to me. "On to the Court of Appeals...." I could draw all sorts of inferences from that, but I'd simply prefer to read the opinion. I will have it up as soon as I can get my hands on it.

Here's the ruling. Try to enjoy even though we didn't win anything we didn't already have.

Come Together

The new PERS Oregon Discussion group (affectionately known as POD) is coming together nicely. Over the holiday weekend when it went live, we picked up 98 new members and have over 80 posted messages. Not bad given the limited amount of publicity we've gone for. The questions, so far, have almost ALL been about PERS, and clearly there has been a pent-up demand for a place to ask and to get these questions answered. I suspect that the other PERS newsgroup became fairly intimidating for some our new members as the political volume rose. Just an hypothesis, but I can't believe our new members wouldn't have asked them there (OPDG) if the invective and political level had been eliminated or the volume turned way down. Nevertheless, POD welcomes ALL questions of a PERS and retirement nature. And we promise to answer any questions you have, and we promise to direct you to relevant PERS employees if we can't answer your questions. I also promise to answer any question of a more personal level about PERS back channel by email if I don't think it appropriate to be revealing the specifics of your case in a public forum. I am really excited by the success so far, and anticipate that we will have a really useful forum for years to come.

If you are reading about the new group for the first time, and you want to join, there is a Yahoo! button in the left column. You can click the button and you will be taken directly to the "join" page for the new group. If you are already a member of other Yahoo groups (including OPDG) the "joining" process is quite simple. Even if you aren't a Yahoo member, the process is quite simple. I encourage you and all your PERS friends to join. The more members we have, the more diversity in the types of questions we'll get. And, this ISN"T JUST FOR RETIREES. We welcome membership from all active PERS members, OPSRP members, and inactive, but not retired, members. In short, there is nothing from the PERS membership we aren't interested in. Even questions about the OUS optional retirement plan, the Oregon 457 deferred compensation program, and the higher education 403B plan are welcomed. We may not always have the expertise to answer questions about those latter programs, but we do know who to recommend that you contact for deeper answers.

So come on in, enjoy the water, the fresh air, and the stimulating discussion. I've been astonished by the quality of the questions so far, and the overall enthusiasm of the members. We're shooting for 250 members by June 13. Think of this like an OPB pledge drive, except it won't cost you any money.

Start Me Up

I am happy to announce that my new PERS discussion group has gone live. The group has a restricted focus - PERS and issues related to retirement. Stop by and you can read more about the group. If you are interested in joining this new group, go to the left margin of this blog, scroll down until you see the Yahoo! logo, and click on the logo. It will take you to the page on Yahoo where you can join this specific newsgroup. If you already participate in OPDG, the joining is quite simple. If you aren't a participant in any Yahoo groups and don't have a Yahoo mail account, the process is only slightly less simple. The process should take no more than a minute for anyone. Be assured that although you will need an email address to join the new group, the email address is shielded from everyone, including me. You will *not* get any spam as a result of joining the new group.

I will have two moderators on the group to help make certain that the new group stays on focus. We will rule with a very light hand, except when the discussions stray too far away from the group's primary purpose. If you like to use RSS syndication readers, the new group will support this - a contrast from OPDG.

I hope you find the new group useful. I hope we can have some spirited discussion about retirement, about PERS, about Social Security, Medicare, and all elements of healthcare for retirees. Already the membership includes some pretty helpful people. If you have any question about our primary areas, please post it. We can all learn from your questions and the answer(s) to them. C'mon down. Take the group for a spin. Let us know what you think. The group's framing is up, but there will still be some work to be done on the roofing, the siding, and the interior. Come join us and pitch in with your ideas. We're still in search of some photos for our group picture(s). I'd like to put together some sort of revolving "slide show". I'm open to any and all suggestions for interior design.

Digital Ghost

Is what I plan to be around OPDG for awhile. The group no longer meets my and many others' needs. As a result, many people have pleaded with me to leave and take them with me. While I don't plan to leave OPDG, I am in the process of creating a new newsgroup and recruiting two moderators to help me. I've already gotten agreement from one, and I'm awaiting a response from the second.

I'm pretty certain the new newsgroup will be on Yahoo, site of the current OPDG. I'm not doing it to be malicious. I'm doing it because Yahoo offers some management tools that I can't get on Google. Moreover, by remaining at Yahoo, any member of OPDG can join the new group by simply pressing "join". There will be no new handle to create, no new system to get used to. The ability to have both OPDG and the new, as yet unnamed, group available on the same server is a bonus.

Why a new group? For those who have been around OPDG for the past five or six months, the answer should be obvious. I've stated more than once that I hate political discussions, except on a group specializing in them. The comments on OPDG have deviated into politics to the point that almost any PERS-related discussion gets lost in the morass of politics. The new group will be restricted to PERS and PERS-related discussion. This includes anything pertinent to retirement in general, retirement specifically, Social Security, Medicare, and the myriad of other facets of retirement. Politics qua politics will be expressly verboten and overtly political posts will be deleted without any warning. Members who repeatedly violate *this* rule will be banned from the group. We will also open up the group to drive-by readers so that we can use the wonderful tools available in RSS/Atom reader/feeders. If you don't know about these, no problem. But for those of us who depend on RSS tools as a way to organize our busy lives, this alone justifies a new group. Yes, I do realize that anyone will be able to *read* postings, but only members will be able to post. But that is the small price to pay for the access to these other useful tools.

Once the moderators are in place, the new newsgroup will open. I will publicize it widely on this blog and, indeed, on OPDG as well. It is not intended to replace OPDG, but is to provide an oasis for people who (like me) just don't agree with the direction OPDG has taken in the past six months. I'm sure this will provoke some grousing and controversy, but I didn't make this decision lightly. Taking on another project isn't something I was seeking. My ego is solid and I don't need the ego gratification of having things run exactly my way. But, when something begins to deviate so widely from its original conception, it is time to chart another course. Since I have the technical skills to multitask a series of web-related projects, and I expect to have equally technically competent moderators.

The beauty of a second newsgroup more laser focused on issues relevant to retirees, especially PERS retirees, is to give members both a choice and some diversity. I encourage participation in both groups. People will probably choose one over the other. While that isn't my intent, I fully expect it to happen. And if it does, so be it. I'm not leaving OPDG myself, nor do I think either of the moderators will either. We're all attracted to diversity but we're also quite fed up with the crap coming down on a regular basis from OPDG.

Look for a follow-up posting before the end of the Memorial Day weekend (I hope) announcing the name and location of the new newsgroup.

P.S. I've sneaked in a Yahoo! button on the left side. If you go to it and click in the "Join" area, you will be taken to a page where you can easily join the new newsgroup. While it is not fully active yet, we are accepting new members.

HAVE A SAFE MEMORIAL DAY WEEKEND!

All Along the Watchtower

There are some really interesting rumors floating around this day after the election. One involves the now defeated and out of work politician Greg Macpherson. Question: how do you keep a politician in the news for two years when said politician has no political position to occupy? Reasonable question. Question 2: What if the politician is a close friend of the Governor and acted as the Governor's "go to" guy during the 2003 Legislature and managed to get much of the PERS reform passed. Corollary: Your guy doesn't have any political cache anymore, but he wants to be your successor (as Governor) in the worst way? How do you keep him in the news and how do you get in the face of the very people you blame for his defeat. Bingo: how about if we appoint Greg Macpherson to the PERS Board to replace one or more of the members who'd like to move on. That's the rumor I'm hearing right now. Its source isn't strong compared to others I have, but this source has earned creds with me. So, those of you right now celebrating Kroger's stunning victory might want to give some thought to what a PERS Board with Greg Macpherson might look like.

Another rumor that has been running around in various forms for about a month now is beginning to gain some traction as I hear it from more and more disconnected sources. This rumor has Judge Kantor effectively delaying issuing his rulings in the Arken and Robinson cases until after he's at least heard the White Case, also scheduled with Judge Kantor for August 4-5, 2008. While this remains in the rumor state, the sources are becoming more and more credible with each repeating. The central element of all three cases is the "settlement agreement" between PERS and the employers. This agreement, signed in early 2004, preceded the Court's Strunk opinion, and effectively applied a "nuclear option" to permit PERS to more-or-less ignore whatever the Supreme Court ruled. And PERS has indeed pretty much ignored the Supreme Court. Arken gets to the question of the COLA freeze on which the Strunk ruled on 3/8/05, while Robinson gets to the section 14b "exclusively remedy" for the Lipscomb (City of Eugene Case) mooted by the Supreme Court in late 2005 and vacated in 2006. The key to all these cases is the "settlement", which the White Case attacks directly. Current thinking is that all roads lead through White and that it would be best to have all three cases end up before the Supreme Court simultaneously. If Kantor delays his Arken/Robinson ruling until after he's ready to issue a ruling in White, he may be able to take care of all three cases together. My own opinion is that if he rules in favor of the PERS Coalition in White, Arken is moot, and the issue settled law; Robinson is somewhat of an anomaly; nevertheless its effect is directly tied to the settlement agreement and it is my non-legal intepretation that a favorable ruling in White, puts Robinson back in play and the defendants on the hook to explain why they didn't apply the legislature's prescribed remedy to deal with the issues arising for retirees as a result of the legislation. I don't envy the wait for anyone, but these cases are moving into their 5 year; I can't get worked up by the possibility of another few month delay.

What do you think of these rumors? True? False? Implausible? Why? Why not?

Ring Them Bells

It truly was a good night for an election. I stayed up well past 11 p.m. (late for me) to watch the election returns on TV. I got to see Bojack blogging live on KGW. I watch as candidate after candidate I voted for was projected as the winner. Of course, there was no overcoming the pure exuberance of watching John Kroger coast to an easy victory over the late, but not lamented, Greg Macpherson. He may be out, but he won't be gone. Expect to see him in a run for Governor in 2010. We'll still be here opposing him in the primary if he does so. We shall never forget what a great friend of labor he was - not! I've gotten lots of "thanks" for my help in electing Kroger. I'll take compliments whenever they come, but I personally think that the thanks go to SEIU and OEA for providing serious financial help to fund John's campaign. Without their money, John wouldn't have been able to get his message out to voters. Even with nearly $400,000 in union money, John was still outspent in the primary by at least $50,000. Even more delicious was John's margin of victory - 58 - 42 according to the latest figures. Macpherson wasn't even close. I'd like to think we helped in a small way, but not enough to account for a margin of victory that great. It was the unions' victory to savor. I just get to gloat.

On another election result, Judge Henry Kantor was reelected (unopposed) to the Multnomah County Circuit Court. This was hardly a shocking development. Incumbent judges rarely lose and it is unimaginable to have an unopposed incumbent judge losing. But more significantly, now that Judge Kantor cannot claim the distraction of his reelection it is time to get moving on finalizing and issuing the PERS rulings in Arken and Robinson before White shows up on August 4 - 5. There are no longer ANY excuses for delaying. It might be time for some POLITE phone calls to Judge Kantor's offices expressing CONCERN at how long things are taking. For god's sake, don't do anything that would piss off Judge Kantor's office manager, or Judge Kantor. I think it perfectly reasonable to express concern that the decision is taking so long and that PERS continues to withhold benefits that we feel are rightly ours. But, DO NOT in any way criticize Judge Kantor or his slowness. Judges are human and they don't like to be criticized by angry citizen phone calls any more than we like them. So, be on your best behavior if you do decide to call. And, to make you think a bit more about this, I'm not going to do the research for you and post the phone number. There are way too many cranks in this world. This way, if you want to call, you can look up the phone number and make the call. Robocranks and other loons won't bother to do that. Think of it as my way of saving us from the actions of others.

Well, I'm going back to savor the victories, lick my wounds over a few defeats (like passing 3 more expensive and unnececessary Kevin Mannix, Measure 11, constitutional amendments). Enjoy the victories you experienced and lets get ready to move on to the November elections. Happy politics. Happy Wednesday.

Pocketful of Sunshine

I am delighted to report that our efforts on behalf of John Kroger were successful. Unless there is a credible Republican writein, Professor Kroger will become Oregon's new Attorney General. We PERS members and retires want to express our thanks to SEIU and OEA for providing John with the resources to take on Greg Macpherson and his well-funded cronies. I'm carrying around a pocketful of sunshine to enjoy everytime I think about Macpherson's ignominous return to Stoel-Rives. Losing 55% to 45% must be a particularly bitter pill for Mac to swallow. Perhaps future politicians will be more circumspect in passing legislation so fraught with legal peril and affecting so many traditional supporters. Bad decision Greg. Kinda like the old song: "bad dog, no biscuit".

I'm disappointed that Hillary didn't do better, and that Kate Brown trounced her opponents including Vicki Walker. I'm also sorry to see Jeff Merkley get the nod over Steve Novick. I had higher hopes that Novick would be a better challenger for Gordon Smith; now I'm a bit pessimistic about Merkeley's chances in November. I'm not a Republican, but I was sure happy to see Mike Erickson put a crimp in Kevin Mannix's attempts to win in House District 5. I think Mannix is now about 0 - 7 in statewide offices. Loren Parks' ROI for those donations to Mannix's endless campaigns is now beyond 0%; it is major negative territory.

Despite those few disappoints, tonight is a night for PERS members and retirees to be very happy. We have punished the worst offender still eligible for other public offices by eliminating him from politics for at least the next two years. It is hard to get any traction for higher office when you don't have a guaranteed bully pulpit to speak from. Goodbye Greg. We'll miss you -- NOT!

Tennessee Waltz

This in from a faithful reader. You all might like to send the Governor
of Oregon, Tennessee's retiree buyout plan. To get some of the
heavyweights to retire early, they are offering 2 years of paid college
tuition (presumably at Tennessee colleges and universities). Early
retirees also get $500.00 per year of service as a cash bonus (for 30
year employees that works out to $15,000). They also get two and half
years of paid health insurance. And more incentives are coming.

Obviously, Tennessee's Governor and Legislature think a bit more highly of public employees
than Oregon's unprogressive litigators (oops, meant legislators. Must
be freudian or something like that). Perhaps Greg Macpherson can come
up with some more clever ideas if, by dumb luck, he ends up as Oregon's
new AG. (I sure as hell hope he doesn't and I'm doing my level best to
inform people about his history as a legislator and his "friendship"
with organized labor. I think SEIU wants to send him a really strong
message. They have contributed slightly less than $400,000 to John Kroger.

Run For The Roses

Or the post office in this case. Time is getting extremely short. Tuesday at 8 p.m. the latest round in Oregon's silly season comes to an end. If you want to express your voice, you have two days to get your ballot in to your local county election headquarters. The deadline is for RECEIPT of your ballot. Postmarks don't matter in vote-by-mail. If you haven't already mailed your ballot, I would strongly urge you to drop it off at one of the many county ballot drop off points. Most libraries and most public offices have drop off containers. Please do not rely on the post office at this late date. Vote soon. Vote often (no, not really. This isn't Chicago). Vote for our PERS friends - John Kroger for AG, Vicki Walker for Secretary of State. If you are a Republican, please do NOT write in Ron Saxton for AG. The Republicans have no declared candidate for Attorney General. I'm just as happy that way, but we will all be very unhappy if we are faced with our worst nightmare - a Greg Macpherson v. Ron Saxton race. That combination couldn't possibly be worse for PERS members and retirees.

Rock The Vote

Opinion Polls & Market Research

If you need suggestions, please vote for John Kroger, Oregon Attorney General; Vicki Walker, Oregon Secretary of State. Other suggestions gladly given via email back channel. Those are the two statewide races I care most about. These are the races where PERS members/retirees can thank supporters and punish opponents.

Shorty Wanna Be a Thug

I'm a bit rasty after watching several of Greg Macpherson's TV advertisements. These aren't ads for Macpherson as much as they are attempts to bitch-slap John Kroger. The one I find the most offensive is below:



Not only is this ad factually wrong (Kroger has practiced in Oregon), it is demeaning and offensive to John Kroger. While I have no idea whether Macpherson is shorter or taller than Kroger, Macpherson has amply demonstrated to me why he is an undeserving thug. Besides orchestrating the pillaging of PERS member and retiree benefits, he is following the same playbook as those who "swift boated" John Kerry. We don't need any more of this in Oregon politics. We don't need Greg Macpherson as Oregon Attorney General. I hope you'll join me in marking your ballots for John Kroger as Oregon's next Attorney General. With friends like Greg Macpherson, we don't need any more enemies.

Thug Passion

Just when you thought things couldn't be worse for Oregon PERS members, the news is floating around that Ron Saxton is encouraging his supporters to write him in as a Republican for Oregon Attorney General. The Republicans couldn't find any candidate to run in this month's primary for the AG position. Candidate-for-Life Kevin Mannix decided to run for the Oregon 5th District Congressional seat vacated by Darlene Hooley. As a result, the R's didn't have anyone credible to float for AG. They had all but decided to concede the race to either John Kroger or Greg Macpherson. Now, I'm reading in several different places that Saxton supporters have decided to write him in as the Republican nominee on their, otherwise, blank ballot for AG. He doesn't have to get very many write-in votes to make it to the November general election. My worst nightmare would be Ron Saxton vs Greg Macpherson. Talk about a race between two thugs. Yikes!

Longshot

Oregon's mail-in ballots are starting to arrive in mailboxes around the state. Mine came today. While I'm still pondering some major decisions (e.g. for whom should I vote in the presidential lottery), I've definitely settled on a candidate for Oregon's Attorney General and for Oregon Secretary of State. In the former race, it's a no brainer. John Kroger is the man of the hour. He's public employee friendly and definitely has no exposure to the PERS legislation in the 2003 legislature. His opponent, the smooth and over-confident Greg Macpherson, wears the millstone of the PERS reform in 2003, having authored or sponsored much of the legislation that came back to haunt PERS members and retirees. I want Macpherson out of politics for awhile, and I want this to be a lesson in political payback. Kroger is a strong candidate on his own merits, which makes the decision to oppose Macpherson quite easy. Send pretty boy Greg back to Stoel Rives. In the Secretary of State race there are a number of strong candidates, but the standout, in my opinion, is Vicki Walker. She opposed the PERS reforms in 2003 and has had the courage to take on a number of establishment figures since then. I'm not as optimistic about Vicki's chances of winning in the primary, but if she can make it to the November ballot, she stands a decent chance. Kroger can win outright this month; the Republicans were unable to field a candidate for Attorney General, so whoever wins in the primary will be the next Oregon AG.

Frail Grasp On the Big Picture

In the past several days two somewhat different views of the Kantor decision in the Arken/Robinson cases have come down. The first, from Aruna Masih, counsel for Bennett, Hartman, Morris and Kaplan sent the following note out to the Arken plaintiffs:

"As you will recall, in last year's decision, Judge Kantor found in favor of you and Robinson petitioners, but on grounds we did not raise. Therefore, we asked Judge Kantor to clarify this decision,asking him to rule specifically on the main claim we did raise on your behalf, which was that you have a contractual right to keep the 20 percent earnings because in the Strunk case, the Oregon Supreme Court held that the 2003 Legislation created a new entitlement to a fixed retirement benefit based on the 20 percent earnings plus COLA. Also, we alleged that even if you did not have a contractual right to keep the 20 percent earnings, you retired in reliance on the fact that your retirement benefit would be based on the 20 percent earnings plus COLA and that reliance was reasonable.

In yesterday's decision, Judge Kantor ruled against us on that breach of contract and reliance (promissory estoppel) theory. Therefore, the contract claim will have to be decided by the appellate courts. While we are disappointed by the decision, we want to remind you all that we have always expected this case to be decided ultimately by the Oregon Supreme Court. We are busy researching ways to petition the Court of Appeals to certify the appeal directly to the Supreme Court so that you do not have to wait even longer for a final decision on this issue.

In the meantime, Judge Kantor's initial decision protecting all window retirees under the Section 14b reasoning still stands. We are certain Judge Kantor will be asked in the Robinson case to enter some judgment regarding that ruling within the next few months. We will keep you updated on the trial court's progress in the Robinson case as well as the appellate progress in this case."

And then later the same day, PERS posted its take on the Kantor ruling. It is longer and can be read at the PERS Website

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Casino Nation

We all know that gambling in Las Vegas or elsewhere always favors the "house". Traditionally, gambling establishments make their lucre by setting the odds in such a way that the "house" wins only slightly more than half of the time so that people won't get discouraged and stop throwing their money at this ultimately lost cause (for the gamblers). The house never loses because it has an infinite amount of money to play with and it can eventually bankrupt any player and recoup its losses relatively quickly. If I were inclined, the true moneymakers on the stock market would be the companies that run/own gambling establishments.

What does this have to do with PERS? Nothing, except for the fact that PERS has things set up so that the "house" always wins, 100% of the time. I have been tallying the results of emails I've received from my many faithful readers who appealed their "brown envelope" from PERS detailing the outcome of their recalculation of benefits based on the Strunk/Eugene "remediation." The results would make a Las Vegas oddsmaker blush with embarrassment. I have actually gotten email or read reports elsewhere of 987 people who have appealed so far. The results are clear - *no one* has gotten an appeal passed past PERS. We are 0/987 as of this morning. No successes in 987 reports. PERS is taking no prisoners with these appeals. People report that the appeal responses are as generic as their appeals are specific. It looks as if PERS isn't spending any time at all with the appeals. It just sends out a near form letter with some canned responses to the standard appeal bases. I don't post this to discourage you from appealing; I post because I find the outcome to be so preposterous. It doesn't matter what the courts say. It doesn't matter what attorneys say. It doesn't matter that this defies all rational expectation. PERS isn't going to let anyone win for any reason except for a bonafide arithmetic mistake. And you have to have some awfully good information to figure out whether PERS made a mistake or not. The numbers don't jump off the page. The computational algorithms aren't obvious and PERS doesn't make a habit of sending you an explanation of how they obtained the results. You can get this information, but you have to request it specifically.

Judge Kantor: if you read these kinds of things, you might want to know that most of us out here in PERS land are getting pretty fed up with your lame non-excuses for a non-ruling. PERS is running amok and they're doing it claiming you gave them permission. If we have any hope of restoring our benefits before many of us die off, you are going to get off your behind and issue a ruling - soon. Our patience is wearing thin.

The Downward Spiral

I just sent in my resignation email as a moderator of the Oregon PERS Discussion Group (OPDG). I've been a moderator there for nearly the entire duration of the newsgroup - nearly four years now. In an earlier post, I commented on how nasty the political invective had gotten over there and that the site seemed to be in the thrall of some rather conservative and libertarian individuals. Nothing that has happened since my observation last week has convinced me that I was wrong to make that comment. The conversation - such as it is - has taken on a rather ugly and nasty tone. Some members seem hellbent on posting deliberately provocative political commentary unrelated to the group's charter. While I have no problem with political commentary, there is a time and a place for it. The Oregon PERS Discussion Group is *not*, in my opinion, the place for this kind of discussion. When I agreed to be a moderator, the group's focus was on PERS and retirement issues. So long as the discussion remained approximately around those broad topics, I had no difficulty. But now, with PERS news spare, the economy generally in the tank, and the seemingly endless foot-dragging by Judge Kantor and PERS, the participants in OPDG, of whom there are actually few, seem content to trade insults and abuse over presidential politics. As I noted over there, if I want to read that kind of commentary, I have plenty of places I can go for it. More to the point, there are far more intelligent discussions of politics on other newsgroups, and far better blogs around than mine for such discussion. I will continue to contribute PERS commentary to OPDG, but I will not be associated with its administration any longer. I think the group is making a gigantic mistake to go down the path it has chosen to go. I've been participating in newsgroups for about 20 years now and I've seen far too many destroyed by deviating radically from the original intent. The moment you open the door to way off topic discussion, the downward spiral begins.

Changing of the Guards

Ah, 'tis the silly season. Today, various candidates and their mouthpieces stopped by my house to offer themselves as my salvation in Salem. My current state representative - Greg Macpherson - has chosen to run for Attorney General and is taking himself out of the race for his seat in the Oregon House - House District 38. Amongst my visitors today was a representative for Linda Brown, running as a Democrat, for the Legislature in House District 38. Her opponent in the Democratic primary is Chris Garrett. I'm not a shrinking violet as you might guess and I'm pretty focused on giving legislative candidates my opinions on what should and should not be done in Salem. Candidates and their spokespeople are always pretty surprised when I come down so hard on Macpherson and am emphatic that I will *not* support a candidate who maligns public employees or PERS. I have a very short fuse these days and all someone has to do is to suggest that public employees might be getting "too much" of something for me to drop that candidate *off* my radar. I don't know who I'll support yet in the HD 38 race, but both candidates in the democratic primary know my opinions about public employees and PERS. Let's see who is the first to make it clear that public employees don't deserve to be demonized and that PERS isn't some gigantic slush fund that can be used to save the public from its own perfidy. I'm glad to be getting a new representative in Salem. I just hope whoever it is will be better than the current one.

Love Is Free

Politics costs money. SEIU just ponied up $120,000 to help out John Kroger in his campaign against PERS public enemy number 2, Greg Macpherson. Clearly SEIU feels pretty strongly that Macpherson sold out his labor supporters in authoring and backing much of the legislation that we all now feel heftily in our pocketbooks. As far as I can tell, this is the largest amount of money any of the unions have given for any statewide campaign and underscores how important the AG race is and how badly SEIU wants Macpherson off the public stage for the next few years. Now if AFSCME decides to pony up an equal amount, Kroger might be able to put Macpherson away permanently. I don't have much hope that AFSCME will do so, however, as they are the union representing the attorneys in the Department of Justice. That unit endorsed Macpherson. Apparently, their pensions are no so important. All I can say is that my money went to Kroger and I'm hoping he'll have staying power to get to 50% + 1 on May 20th. Go John.

Back To Black

One of the most important Oregon positions is the Treasurer. The state treasurer is nominally the head of the Oregon Investment Council, which directs the investments of the PERS fund and all of the other state agencies. The State Treasurer, currently Randall Edwards, has done an excellent job in the face of some extraordinary forces at work in the US and World stock markets. The main candidates for this years opening are Ben Westlund (formerly a Republican, now an Independent) and Allen Alley, whose ads seem to appear quite regularly in the Google ad box above. Just about all the major unions and most major Dems and Republicans have endorsed Westlund for the position. Westlund has had a lot of legislative experience and has had some business experience. I suppose he'll do a good job as State Treasurer. He would have a strong, professional staff to work with and the Oregon Investment Council is about the best any state has these days. Whoever wins the election will be managing the PERS fund for the next four years. I think it quite incumbent upon us to research the candidates and vote for the one who can make our money work the hardest. What we don't need is a Treasurer who thinks that PERS can be a slush fund for some other derelict agency. That happened in the 80's with SAIF. We don't need a rerun of that. Fortunately, I think the law prevents that from happening, but then again, we all thought that PERS had to obey the law too. Boy were we wrong!

Keep It Simple

I just had a brief message from Greg Hartman expressing his frustration to join ours with the lack of news from Judge Kantor's courtroom. He doesn't have any more idea when things will start moving than I do.

Back to our regularly scheduled rant.

Shake Those Windows

My post yesterday and the comments thereon seem to rattle some windows over at OPDG. I didn't expect the comments to be reprinted there - it is a breach of netiquette to do so without permission - but that's life. There is no question in my mind that the venom level seems to be rising and that the worst offenders seem to have a very conservative, libertarian bent. To reiterate my thoughts from yesterday, I really, really, really dislike politics as a basis for discourse, especially in a forum dedicated to PERS discussion. Ordinarily civil people become animals when advocating political positions, especially when it comes to Presidential politics. You will not see any political endorsements of Presidential candidates here, although I may take a stand on local politicians who had some influence on the PERS decisions of the past few years. I think it fair to target those who made decisions affecting our livelihoods so directly. And I'm especially upset at those politicians who professed their loyalty to public employees all the while stabbing them in the back. And, I want to reward those politicians who made a point of opposing efforts to disrupt the benefit flow to retirees and to active PERS members. By and large, this is a blog about PERS and to the extent that it is possible, I want to keep it about PERS. If I want to discuss something else, I'll start another blog. Maybe I'll call it - Ramblings from Chairman Marc. Don't be looking for it anytime soon, however. It'll be a cold day.....

Judge Kantor still has not ruled and Francisco Franco is still dead.

Don't Bottle It Up

Another wave of recalculation letters must have gone out. The PERS discussion group has a bunch of new members who've just discovered the group. They got their letters last week and are wondering what hit them and what to do. Many are just plain pissed. It is nice to get new readers. In addition to getting some useful advice, new members of OPDG are getting a serious dose of the politics of the PERS discussion group. If you are a liberal, you'll find yourself outnumbered and outgunned on OPDG. The conservative viewpoint seems to dominate all political discourse (I use that term loosely), and any attempt to interject a liberal opinion or point of view gets strangled by the chorus of conservative, libertarian views espoused there. It is somewhat surprising to find a group of mostly retired public employees so anti-liberal as one finds at OPDG. I guess it is true that as one gets older, one gets more conservative. I certainly haven't found my "conservative voice" yet, although I confess to be a bit more intolerant as I get older. I guess it is that "cranky curmudgeon" in me that comes out every now and then. I tune out most of the rhetoric and just participate in the PERS discussion. My life is too short to become enmeshed in the animosity expressed by the head-bangers there. They just don't bottle it up, which is healthy, I suppose. God help you if you are an Obama supporter, or even worse, a Hillary defender. I haven't decided yet who I will vote for in May. I have decided that I won't be voting for McSame.

In the meantime, we still don't have any progress on the PERS front. Judge Kantor seems to be spinning his wheels and there are no extant rumors that suggest or even hint at the timing of a ruling. Perhaps Judge Kantor feels that if he never rules, we'll all just go away. We may not go away voluntarily, but we may all die and our estates may not want to pursue this any further. I hope it doesn't go that far. I hope that Greg Hartman is right that a decision may be made by June. I'm sure getting tired of writing all these blog posts that report no news. I'm getting mighty tired of reading all the political rants everywhere. I hate election years.

Walk On

Just a quick note here to let my readers know that I will be voting for Vicki Walker for Oregon's Secretary of State. Vicki strongly supported PERS members and retirees during the 2003 legislative session, and will do an outstanding job as Secretary of State. That makes two endorsements for me in this upcoming May 20, 2008 primary. I have not made my decision on who to vote for in the US Senate race (Merkley or Novick), for President (Clinton or Obama), or in the Oregon 5th Congressional District (Darlene Hooley's seat). Similarly, in House District 38, there are several outstanding candidates and I have no particular favorite amongst them. I don't get to vote in the Portland races and so have no preferences there either, except that Sam Adams has not been a friend of public employees. I *may* make some other recommendations as we get closer to May 20th, but for now, the only races that interest me are those for Secretary of State and for Oregon Attorney General. In that latter race, John Kroger is the man.

Pimping My Ride

The old spin-meister, Greg MacPherson, is still pimping his record on the basis of his performance in reforming PERS. He's also fabricating a tale about "open government", which sits awfully well with those of us who were victimized by the open-government initiative inside PERS. Those cretins, along with our upstanding employers, conspired together to come up with a "fix" for the PERS problems that didn't happen to consider the impact on a primary stakeholder, PERS members and retirees. If this is the kind of "open government" Greg wants, I want no part of it. This blog is proud to go on record as endorsing John Kroger in the upcoming May primary for Oregon Attorney General. We need an honest Attorney General, not one who talks out of both sides of his mouth at the same time.

I Will Survive

This is dedicated to all PERS members and retirees and is our collective "finger" to PERS.

Run, Run, Run

Attorney General candidate John Kroger picked up AFSCME's endorsement on Tuesday. Previously, SEIU and the OEA endorsed him over his opponent Greg Macpherson. This means that Kroger now has the endorsement of the three largest public employee unions. Since there is no Republican running in the May primary, whoever wins in May will run unopposed in November and will be the next Oregon Attorney General. This is an important race. Some previous AGs have gone on to run for Governor, including Oregon's current Governor, Ted Kulongoski. To help you sort this race out, I need only remind readers that the 2003 PERS reform legislation was authored principally by Macpherson, who continues to defend his actions in the face of widespread opposition from public employees. We need to work together to show Mr. Macpherson the door back to his law firm. If Macpherson loses in the May primary, he will have given up his seat in the Legislature as well. This would take him out of politics for the next two years, at least, and probably deny him the name recognition he would need to run successfully for the Governor's office. If there is any politician who needs to go, it is Greg Macpherson. Support John Kroger. Tell your friends to support John Kroger. Now is a good time to send a really strong message to Macpherson that we didn't (and still don't) appreciate his tampering with our PERS benefits retroactively or prospectively. Help send Greg back to Stoel, Rives. They need him far worse than we do.

Dirty City

I just heard that Judge Kantor has resigned from the bench and has turned the Arken/Robinson cases over to Judge Judith Scheindlin, better known to some of her fans as "Judge Judy". She has promised to whack those PERS moles the next time they pop out of their holes.

Money

PERS posted the final earnings for 2007 yesterday. Tier 1 regular accounts were credited at 7.97% on actual earnings of 10.10%. Tier 2 (and presumably IAP) members received 9.47%. The variable account earnings were a measly 1.75%. Tier 1 members may be puzzled why the credited earnings rate is less than 8%, the Tier 1 rate guarantee. Recall that the PERS Board and the PERS Coalition agreed that legal expenses attributable to the Strunk case would be apportioned over actives, inactives, and retirees in proportion to the actual benefits received as a result of the Strunk litigation. Tier 1 active accounts were assessed 0.03%, which explains the discrepancy (8.00% - 0.03% = 7.97%). The riskier variable account took a beating in the last quarter of 2007 and the final crediting reflects that. Retirees will see their 2008 COLA reduced by a similar amount to the Tier 1 reduction in July 2008.