Oh, Wow It's You Again

The PERS Board held its March meeting today, both at an unusual time and definitely an unusual day of the week. Today's meeting was scheduled to finalize the 2010 earnings' crediting to all accounts. There were a number of other items of significance, which I will talk about below.

There were no surprises in the earnings creditings. Tier 1 regular accounts earned the assumed rate of 8.00%, the Benefits-In-Force Reserve was credited with 12.44%, Tier 2 accounts 12.44%, IAP accounts 12.13%. The Contigency Reserve picked up a cool $81.3 million, bringing its total to $734.4 million, while the Tier 1 Rate Guarantee Reserve took another $230.6 million, reducing its deficit to a nominal $211.1 million. All counted, the system has about $55.5 billion in assets on the books.

The lion's share of the meeting was given over to yet another Mercer example of financial modeling gone amuck. I am not going to try to summarize this presentation. It is 41 pages long and should be read by everyone who bothers to download the agenda packet from the PERS site. The basic message of the whole analysis is that employer costs will continue to rise, at least through 2013-2015 before they stabilize at somewhere near 20% of payroll, assuming all the actuarial and economic assumptions hold true. Mercer also modeled the impact of Pension Obligation Bonds on the venues that issued them. For those who issue POBs in 2002 or 2003, the longterm wisdom of that decision appears to be that they will "win" over the long haul by about 100-120 basis points. This means that they will have saved the money expected when the bonds were issued. For venues issuing POBs later, say about 2007, the news is not so good. Because of market timing, these employers are likely to see a 100-150 basis point "loss" relative to debt service costs. None of this is news, but it was nice to have it presented in pretty graphs of multicolors and in a Powerpoint presentation.

Some of the more interesting takeaway points from this analysis were: (a) it assumed that the assumed rate would remain at 8% for the forseeable future, that payroll growth would accrete at about 3.75% per year, and that the 50th percentile of earnings of the fund would be about 8.1% using the Mercer Capital Market Performance, Asset Mix, and Earnings Assumptions. This seemed to telegraph that Mercer isn't considering recommending any changes to the assumed rate, although they didn't model specifically under different assumed rates (that may come at the May meeting, when economic assumptions are considered before the 2011 valuation begins). This point was NOT mentioned at any point during the discussion of the Mercer report and I felt like it was the Elephant in the Room of the whole discussion. Everyone sees the elephant but no one wants to discuss it --- yet.

The last part of the meeting was given over to a legislative update. The good news is that of 43 bills introduced into the Legislature, NONE have been scheduled for a hearing. The bad news is that according to Capitol scuttlebutt and rumors, April 8th will be PERS day before the House Labor and Business Committee. If this is true, then we should see the agenda for this meeting by about April 4 since there is a 72 hour requirement before a bill gets a hearing. So far, PERS will get hearings on 2113 and 2114, HB 2115 is not likely to get a hearing (this is the bill to eviscerate SB 897 from the last legislature). No one knows what other bills may get heard, but again, the PERS legislative liaison heard that the bills likely to be heard are bills pertaining to the 6% pickup, the tax subsidy for out-of-staters, and the IAP return-to-work provisions. Joe O'Leary, the new PPLAD Administrator at PERS suggests that this is the calm before the storm. He expects the joint House/Senate budget to be released tomorrow and that will guide the remainder of the session (see today's Oregonian or Statesman Journal for information on the agreement between the House and Senate negotiators on the "Legislator's Budget". Do keep in mind that Dennis Richardson was one of the three members of the Committee as co-chair of the House Revenue Committee.

After the meeting, I had a chance to talk with a couple of friends, one of whom is quite concerned about the proposals the State has laid down for the negotiations with AFSCME and, presumably, SEIU. While the big details of those negotiations have already leaked out, some other details have not. If I take this source at face value - and I have no reason not to - the state's proposal is far more egregious and punitive than most people seem to be aware of. I'm merely reporting what is rumor for now. Unless I receive confirmation from someone in the know, you should also classify the following information as rumor, but be willing to try and verify.

Everyone knows that the state offered a tiny raise and then asked for concessions on health care premiums of about 15%, continuation of 8-10 furlough days, and elimination of the 6% pickup. That has widely been reported and I have no doubt on that. What hasn't been reported, according to my source, is that the state is ALSO asking employees to cover the state's increases in costs for PERS itself, roughly 4.5% of payroll. They are also asking part-timers(those between 0.5 and 0.8 FTE) to give up their partial health care subsidy (about $332 per month). For the sake of argument, I'm going to assume that my source is correct. If so, then it appears that the state is offering a 1% raise in the first year of the contract, a 2% raise in the second year of the contract, and is then taking away 6% for the "pick-up", asking employees to contribute 4.5% of the employer costs for PERS, continue to take 8-10 furlough days, and pick up about 15% of the cost of their health care. My question is this. On what basis does the 1% raise and the 2% raise get computed? This contract offer, if true, is guaranteed to drive workers out of public employ, or to drive many to food stamps. I hope to the high heavens this rumor isn't true, but I fear there may be more truth than fiction.

Also keep in mind that if the state succeeds in passing on increased employer costs of PERS to the employees, then a change in the assumed rate no longer aligns employees and employers around the 8% figure. So long as the state had to pay the cost, there was an incentive to keep the assumption as high as possible. But, if the assumption is buried by passing on increased costs to the employees, then who cares whether they lower the assumed rate. Just remember that as the "state" goes, many other employers will follow.

Believe me, I was far more disturbed by what I heard after the meeting than I was by anything I heard at the meeting. Please, somebody in authority, tell me it isn't true.

Roaring of the Lamb

A bit of good news to report. PERS posted the COLA for 2010 today. The CPI for 2010 was 1.25%, which means that anyone who retired prior to 2008 will get a full 2% COLA this August 1. Members who retired after July 1, 2008 and before August 1, 2011 will get 1.25%. Bills to reduce, change, or eliminate elements of the COLA for retirees have made it nowhere so far in 6 weeks of the Legislature. It is reasonable to assert that if we haven't seen any action by early April that the combination of the Governor and the divided leadership in the Oregon House will have scuttled any attempt to further "reform" PERS.

Do not be seduced into complacency by this news. There are still two places where change can occur outside of the Legislature. First, collective bargaining discussions have just gotten underway. The Governor has proposed that the unions agree to having members pay up to 15% of their health insurance costs, while also contributing 6% to their PERS IAP plan. I don't think it likely that the unions will agree to exactly this, the unions understand that they will have to entertain and accept some givebacks this year to help Oregon through the current fiscal crisis. The second place is PERS itself. This is the year that the PERS Board will revisit the actuarial assumptions that underlie the PERS plans. At issue will be the "assumed interest rate". There is considerable pressure to reduce the assumed rate from 8% to something lower. Do understand that neither the employers nor the employees want this to happen. In the employers case lowering the assumed rate means that employer contributions will increase, while lowering the rate for employees means both lower guaranteed earnings for Tier 1 members and also lower pension benefits for all members. Both the negotiations and the considerations by the PERS Board will take place publicly and in full daylight. Members will have an opportunity to testify in any hearings regarding the assumed rate before PERS Board, while members will be polled extensively on terms of the Union contracts.

The good news in all of this is that we are unlikely to see a situation like exists in Wisconsin. Fortunately for Oregon and for Public Employees, the unions play an important role in developing and electing political leaders and they, in turn, don't want to alienate one of their clear bases of support. Governor Kitzhaber told the unions this to their face earlier this week

So the little lambs roar as spring comes in. Hopefully we won't see them slaughtered as Spring gives way to Summer.

Hit The Road Jack

And don't you come back no more.  Just got a note from a friend that ALL of PERS' fill-in-the-forms sessions for a March 1 retirement date and an April 1 retirement date are full.  I don't know how common this is, but the Legislature's 23 bills no doubt has some of those 60,000+ members eligible for retirement planning to kiss their employers' goodbye.  This isn't a surprise given what is going on in Wisconsin, the huge anti-PERS sentiment here in Oregon (lest you doubt this, just follow up on any PERS-related article published in any of the various newspapers around the state, and you will see the venom spewing out towards PERS members and retirees in the letters column or on the blog comments).  I have suggested since these bills were first published that March 1 or April 1 would be the optimum date to depart to avoid "most" of the legislature's more draconian actions.  The only bills that *could* affect new (and old) retirees would be one of the bills intended to meddle with the COLA provisions.  I think that these bills face an unlikely future given how carefully woven into the statutes the COLA provisions are.  The current provisions - 2% maximum COLA, banking of excess COLA, 5 years vesting to COLA, and COLA on full benefit have been in their current places since 1971.  If ever there were statutory and contractual issues, these we be at the top of any list.

In the meantime, the state and other public employers may not have to cut as much from their budgets when huge waves of eligible retirees decide that "enough is enough".    I suspect that many more may decide to "hit the road" before July 1.

Don't Think Twice

The mailbag overflows with questions from worried PERS members wanting to know how to time their retirement to miss anything the legislature might do.  There is no simple answer to this question.  If you weren't planning to retire now, thinking about it as a way to avoid what the Legislature might do is just plain silly.  If you aren't READY to retire, you shouldn't give up your job and retire just to protect some benefits you might get.  The Legislature is in its third week and not a single PERS bill has been scheduled for a hearing.  This leads another group of members to wonder whether they should worry at all.  Also the wrong answer.  Just because bills haven't been heard yet doesn't mean they won't be heard.  It is true that a fair number of the 23 PERS bills are off in the danger zone of potential contractual violations.  The House leadership has made it clear that they want NO bills on PERS to pass that will be undone by the Oregon Supreme Court.  That doesn't leave very many bills to pass that avoid that potential fate.

What to do?  Let me go back to my principle that if you weren't already planning to retire this year, then you shouldn't be thinking about retiring this year.  You aren't ready and you won't like retirement because you'll be worrying about all the money you aren't making by working.  If you were already planning to retire in 2011 anyway, then timing might be an issue.  Since a few of the bills, especially those pertaining to the retiree COLA, are presented currently as applying to both new and pre-existing retirees, you don't gain anything by retiring early.  Bills that attempt to cap the pension benefit at the Final Average Salary are potentially devastating to some actives on the verge of retiring.  If you are in that category and want to be ahead of that prospective change, then getting out before the end of March would be the best plan.  This date slips the longer the Legislature doesn't take up such legislation.  Bills to eliminate the 6% pickup have little impact on someone retiring later this year.  The 6% doesn't make much of a dent in anyone's retirement, yet.  So, if you were to lose this, you really aren't risking enough to sacrifice a few extra months of income.  But if any of the legislation worries you to the point that you can't sleep at night, AND you were planning to retire anyway, then don't think twice - get out now.  You'll be happier, your sleep will improve, and you will avoid the worst of the possible changes.  But, if you do get out now, don't come back blaming me for inciting your decision.  Remember, I don't give advice.  I give information and it is up to people to decide what to do with that information.

On an unrelated note, congratulations to Paul Cleary of PERS.  He's one of the lucky Agency Directors who gets to keep his job in the Kitzhaber administation.  Maybe I should send a sympathy card instead.  It is going to be a tough year to be in charge of PERS and spend those days after days trying to be patient and cheerful while giving good answers to nasty legislators like Dennis Richardson who'd sooner take away his mother's PERS pension than allow us to continue to survive on ours.    Good luck Paul.

 

 

Strange Overtones

The Oregon Legislature has been in session for two full weeks now.  Not one of the 23 PERS-related bills have yet been scheduled for a hearing.  Rules devised by the split leadership in the House may be contributing to the slow pace of these bills.  For a bill to be heard, both co-chairs of the House Business and Labor Committee (Mike Schauffler and Bill Kennemer) have to agree.  For a bill to leave the committee, at least two members of each party must vote for the bill's movement.  This puts a fairly high barrier to these bills and probably works to the advantage of members and retirees hanging by a thread right now waiting for the Legislature to move.  Recent reports in the media have included brief quotations from various House members that make it appear that PERS bills may be difficult to move this session.  There is nearly unanimous agreement amongst the movers and shakers of the Legislature that they do not want to pass any bills that will be struck down by the Oregon Supreme Court.  At a minimum, this takes a few of the bill categories off the table as they would run into "contract" challenges from the Court.  Adding to this is Governor Kitzhaber's desire to negotiate with the unions to "solve" some of the issues in bargaining rather than legislation.  By bargaining, there is no possibility of a legal challenge.  Legislation always carries a legal challenge.

If we put all this together, I'm beginning to think that there may be lots of work going on behind the scenes to consolidate some of the bills together, to drop the duplicate bills, and to bring forward only one or two larger bills that have excised some of the legal barriers.

This is no cause for celebration.  PERS members *will* pay for changes somehow.  I can predict what some of them will be, but it is too early to offer my comments, believe it or not.  The changes will be ones that can be made without triggering a legal challenge, are permissible without triggering heat, and will demonstrate that the Legislature is trying to solve the problem.  The bottom line is that PERS is actually nowhere near a trouble point that media makes it out to be.  There are only a few systems nationally better funded than PERS.  The latest earnings for 2010 and the fast start for 2011 PERS at nearly the 90% funded level.  Most actuaries would simply yawn at that number.

This is also no reason to take your eyes off the Legislature.  In fact, I'd be watching it closer than ever.  But I'd also be watching the union negotiations, and the Governor's decision regarding future leadership of PERS (watch the news next week to see whether Mr. Cleary remains as the Executive Director of PERS).

Street Fighting Men

The OPRI Board met on Monday to plan strategy for the upcoming Legislative session.  OPRI is the only organization that directly represents PERS retirees.  They have read through the 23 bills currently proposed and have categorized them into one of three groups:  group 1 is a "fight to the death" group - these are bills that directly affect retirees and will mean less money for them either immediately or in the future:  OPRI will fight all the bills proposing to make any changes to the retiree COLA (HB 2456 and HB 2991), as well as bills that reduce the COLA, or bills that propose to kill the income tax subsidy for out-of-state retirees (HB 2115, HB 2444, HB 2445, HB 2450, and HB 2453).

OPRI is also planning to provide support to the PERS Coalition in its effort to defeat the following bills:  HB 2161, HB 2436, HB 2447, HB 2454, HB 2455, HB 2984, HB 2985, HB 2986, HB 2990, and HB 2996.  These bills will be a level 2 priority for OPRI.  These bills do not directly affect existing retirees, but will affect members planning to retire in the very near future.  These include bills to eliminate the 6% pickup, to cap the pension to no more than 100% of FAS, and several bills that redefine how FAS is computed.

OPRI will merely watch SB 34, HB 2113, HB 2114, HB 2343, HB 2505, and HB 2814.  You can read about any of the bills mentioned above at the Oregon Legislature's web site.  The site tracks the bills as the go through the committee process and is documented carefully.  Also be aware that the Legislature offers audio for hearings that you might be interested in listening to.  The correct internet protocol will be put on the Legislature's web site after February 1, when the Legislature reconvenes.

OPRI has bitten off a great deal in this legislative session - an indication of how important these bills are to its members.  If you are not a member of OPRI, please consider joining.  Dues are inexpensive $10 per year or $75 (?$100) for a lifetime membership.  You can find out about joining at OPRI's http://opri.org.  In addition, OPRI has two funds that it welcomes contributions for.  You may contribute to the OPR PAC, a political action committee that is responsible for funding all the legislative lobbying you will see in full force this year.  Lobbying is expensive and OPRI can use any help it can get.  Donations to the PAC are tax deductible ($50 for individuals; $100 joint).  OPRI also has a legal defense fund.  While there are legal cases in which OPRI is currently participating, this session is bound to produce some clinkers that will require Legislation.

You would do yourself and all your fellow retirees a great service if you would join OPRI and help it in its fight to keep these onerous bills from passing.  You don't even need to be a retiree to join.  OPRI welcomes members from all classes of public employees - active, inactive, and retired.  You will get more than your money's worth from membership (including a newsletter), and a contribution to the PAC.

Details in the Fabric

The 3-day feeding frenzy that is the opening organizing session of the Legislature has just ended.  The boys and girls of Camp Silly will convene again on February 1 to begin the daunting task of winnowing through almost 1700 bills introduced this session.  Some might call this the "full employment act for lawyers, lobbyists, and legislative counsels".  Of the 1700 bills, twenty three (23) are related to PERS, although I think 2 of the 23 are not PERS bills at all.  The bad news is that these bills touch every category of PERS member including current retirees.  Bills affecting retirees all pertain to the COLA.  One eliminates the "COLA banking" provision, one limits the "COLA" to members with 10 years of creditable service (not applicable to current retirees), and one limits the COLA to the first $2000 per month of benefits.  There are three different bills that cover the same topic, namely to eliminate the income tax subsidy provided to retirees who do not live in the State of Oregon.  All these bills will be challenged by OPRI and, presumably, the PERS Coalition.  The remaining bills deal with active members.  Two seem to do with the OPSRP program, one renaming it officially to Tier 3, and another terminating the OPSRP for newly hired employees who become eligible for PERS on or after July 1, 2011 (a Tier 4, if you will).  For active employees, there are two classes of obnoxious bills.  The first eliminates the 6% pickup, and various forms of this bill make it either impossible for employees to contribute on their own, or impossible to contribute at all.  The second class of bills reduce significantly what is included in calculating the Final Average Salary (FAS).  One eliminates overtime in excess of the average for employment category; another eliminates the use of sick leave and vacation time.  Finally, the most obnoxious bill in this category would limit the PERS benefit to no more than 100% of this redefined FAS.   Several bills redefine who can and can't work for a PERS employer after retirement, and one bill directs PEBB to offer high deductible plans and HSA, and another changes how PEBB deals with spouses who are both public employees.  The final insult is a bill that would neuter the most important elements of SB 897, passed in 2010, and hold PERS harmless for errors made by employers in reporting service and related matters to PERS during the verification process.  This is an insult to all those who worked hard to secure passage of SB 897 over the Governor's veto.  Ironically, the revision was introduced at the request of our new Governor.

The good news (if there is any) is that the Legislature chose NOT to micromanage PERS.  This means that issues pertaining to actuarial tables, assumed rates, and the rate guarantee are nowhere to be found in this set of bills.  This doesn't mean these won't appear, but at this point it is highly unlikely.  These are functions that are assigned to the PERS Board and PERS Staff, and these considerations will be taken up in due course at PERS Board meetings and through public hearings, if they are taken up at all.

Collectively, these bills will take a lot of effort to lobby and to defeat.  For active members, the PERS Coalition and each of the unions will be working hard on your behalf.  For retirees, OPRI and its lobbyist(s) will be defending our benefits at the Legislature.  If you go to my newsgroup (see PERS OREGON DISCUSSION) at left, join the group, you can see the summary of all of these bills by number, and participate in the discussion.  It is really important to join the group, not just read the messages.  Strength comes in numbers and the more we have, the louder our voice will be.  In the meantime, OPRI will be meeting on Monday Jan 17, 2011 to discuss these bills and to decide how to prioritize their lobbying effort.  Please make your opinions known on PERS OREGON DISCUSSION before Monday so that you and have a voice in what OPRI chooses to work on.  You can also send contributions (MAY BE TAX DEDUCTIBLE) to OPRI's PAC, which pays for lobbying expenses in the Legislature.  You can find information http://opri.org.

Saving Grace

By the grace of counting posts, it dawned on me that I had hit my magic number of 1000 posts since 2003.  I'm not precisely certain when I crossed that mark, but it has been sometime since the first of 2010.  That is a lot of writing and a lot of people who have read my thoughts.  I want to thank you for making this site the preeminent source of all things PERS.  I don't know if I will make it to 2000 as my energy will wane eventually and my family will want me to travel and be away from all of this.  Nevertheless, this web site is closing in on one million unique hits and more than 1000 unique entries.  Thank you all for your support and your continued reading.  This year could be the final year of this blog as I have reached my threshhold of the things I am willing to keep track of.  I will keep it going for 2011, but once my wife retires on November 30, 2011, I am "outta here".  We will start travelling extensively, visiting our dispersed family and making connnections we've had to miss over all these years.  Keep reading this year and there is lots to report.

Wrong Side of The Street

The Oregon Legislature and our new Governor both showed up in Salem yesterday and work began today.  The Legislature has until January 23rd to get the initial draft of legislative concepts worked into bill form.  Some say no more legislation can be introduced after that date; others claim that bills can be brought anytime.  With that in mind, the first wave of bills have already been introduced and there are 15 of them that affect everything from the way final average salary is calculated, to multiple bills relating to the retiree COLA, and almost everything in between.  So far nothing concerning the assumed rate has appeared, but there are 10 days to go yet.  I expect the list will grow daily, and I will try to keep you updated as much as I can.

Note that virtually ALL of these bills have emergency clauses, which means that they will take effect the moment they are passed and signed by the Governor.  So retirement planning and trying to "beat the clock" takes on a real dicey format.  As far as I am concerned, the last day to get out and be assured that you won't be affected by these emergency bills is February 1.  That said, the COLA bills, as they are currently designed, would affect anyone already retired so that even if you miss the impacts that will serve to lower your benefit, the COLA provisions will affect your pension growth after you retire.  Even current retirees, such as myself, would be affected by the COLA modifications if they pass.

If you want to see the ugliness that will get considered in this session, please go to our PERS Document Library .  There you will find everything proposed for the 2011 session so far located under legislation, with the final item on the list representing the captioned summary of all bills introduced as of 1/11/11.  When you get there and start reading, you know you have landed on the wrong side of the street this year.

Weaver of Lies

Yesterday I attended the Supreme Court oral arguments in the Arken and Robinson cases.  These two cases, along with the White case, which still remains docketed in the Oregon Court of Appeals, represent the last of the litigation over the 2003 Legislative reform, the City of Eugene case, and the subsequent settlement agreement.

The Arken case hinges on the impact of the Strunk's decision to strike down the COLA withholding provision of HB 2003 from the 2003 legislature.  Central to this argument is the fact that with the COLA provision gone, the plaintiffs argue that this left the statute and the "window retirees" in the position they were in on July 1, 2003 - still with 20% credited to their accounts, but not receiving the COLA.  The court ordered the COLA restored in Strunk (2005) while the members were receiving their "fixed" benefit.  PERS argues that because the trial court judge in the City of Eugene case (Lipscomb) had already entered his judgement and order, that the 20% had been vacated and that the only rate in effect, although not formally adopted by the Board at this time, was 11.33%  Thus "window retirees" had no expectation of retaining the 20% when the Legislature adopted HB 2003 in May of 2003.  So far, Arken has failed at the trial court (Kantor), and the issue for the Supreme Court to decide is whether the Legislature intended that window retirees be held harmless if the COLA provision had been struck down.   Much of the questioning focused on the exact status of the Lipcomb order at the time the Legislature enacted HB 2003.  Justice Durham reminded both Bill Gary and Joe Malkin that there is a significant difference between final order, and final justice.  Clearly the final order had been entered, but the case was under appeal at the time the Legislature acted.  PERS had not been granted a stay pending appeal.

The Robinson case pertains to a slightly different portion of HB 2003 and affects a slightly larger cohort of individuals.  At the end of HB 2003, the Legislature late in the process added section 14b (around revision 10 of the bill) to provide an exclusive remedy for the City of Eugene case.  In it, it described two methods PERS could use to recover for the errors identified in the City of Eugene case.  One method was the "COLA freeze", while the other was the use of "administrative expenses".   Since the errors identified in City of Eugene had to do with improper crediting of 20% to regular accounts in 1999, failure to fund reserves, use of outdated mortality tables, and improper calculation of the Money Match benefit, PERS was ordered to correct these.  Because HB 2003 saw so many drafts before it finally fell into its final form, language was entered and removed and it has been difficult to discern either the reason for dropping things from the enrolled bill, or the reason for adding them.  One such word was "Exclusive remedy".  These words were dropped from the final preamble to Section 14b.  Jim Coon, attorney for the defendants in this case (us), argued that the Legislature intended to be done with the City of Eugene case by providing the only remedies that PERS could use to collect.  He argued that the collection statute 238.715 was superseded - in this instance - by section 14b and that PERS improperly billed retirees for monies owed by the City of Eugene errors.  PERS argued that the removal of key words from the final drafts of HB 2003 meant that the Legislature had no such intention to hamstring PERS, but instead offered 14b as *additional* tools that could be used to collect overpayments.  Moreover, Malkin argued that the City of Eugene case involved only 8 employers, not all employers and therefore could not be viewed as the overarching collection mechanism for all PERS employees.  Justice Kistler spent a fair bit of time trying to tease from Malkin why it mattered to the employers what mechanism PERS used since the employers were excluded from bearing the costs, and why also did the money issue, which related to individual retirees, matter to the employers.

The arguments were tedious in the extreme.  I wanted to shout out several times to ask why the justices weren't pursuing a particular line of questioning, but of course it doesn't matter.  No case that I've ever sat through was influenced by oral arguments.  The oral arguments are a dog and pony show where each side gets to take its best shot at the other side while also trying to show the justices why they are so smart.  Similarly, the justices try to get inside the heads of the lawyers by asking some twisted and bizarre questions.  In the meantime, the case is adjudicated entirely through the legal briefs filed on both sides, along with all the pieces of evidence cited in support of the argument.

It is hard to predict when the Court will rule.  I do believe that the court will NOT rule in time for the 2011 Legislature to do anything to fix any errors the Court identifies.  On the other hand, I do think there will be a decision available for the 2012 Legislature to work with, and so I continue to hold that 2012 will be the year of the remedy, for better or for worse.

Only five of the justices were present for the hearings.  Justice Martha Walters was absent but will participate in the ruling.  Justice Jack Landau who joined the Court only earlier in the week recused himself from the case because his son is an Attorney for the firm representing the defendants in the Arken case and consults on the Robinson case.

 

No Expectations

Happy New Year to All.  The next year promises to test our mettle and our souls.  Between the Legislature, the media, and the public, PERS members aren't expected to be treated with respect, kindness, or consideration.  We need to get past this and not take is so personally.  The Legislature is charged with the task of balancing Oregon's budget; they have limited ways to do this.  Our objective is to remind the legislature that we performed our tasks and our work in GOOD FAITH and we expect the Legislature and the State Government (and local government) to honor the agreements we made with them.  We accepted substandard pay to get above standard retirement.  That's a fact that is beyond dispute.  Honoring contracts is a good thing and states that do not honor employment contracts will find that private employee unions dislike doing business with public employers when they don't live up to their contracts.  Our objective this year should be to 1) not whine; 2) present facts clearly; 3) assert the primacy of the contract and that bilateral contracts cannot be changed unilaterally.  Contract, contract, contract, contract is the word for the day.  Keep that word front and center in your discussions with friends and legislators.  The American system of democracy is found on the Uniform Commercial Code, which holds that contracts must be upheld by both parties.  If one party does not wish to uphold its part of the contract, its only choice is to seek concessions from the other party.  The rules do not permit one party to unilaterally pick up its ball, arbitrarily change the terms of the contract, and expect all problems to disappear.  The courts are cluttered with instances where contracts have been broken and the courts have to set the parties back on the correct path.

So as we enter into the Legislative silly season, please keep the fact on contract uppermost in your mind.  You, as a public employee or retiree, did everything that was asked of you to keep your part of the employment contract.  You, in turn, expect the public employers and PERS to do everything it is required to do to uphold its part of the multilateral agreement.  Period, end of discussion.

Thanks to all my readers for using the Amazon links to the left of this blog to purchase their goodies and gifts from Amazon.com.  Those links bring a small commission from every purchase you make from Amazon and apply them to the costs of time, energy, and hosting of this blog and the associated web site.  You pay nothing extra for using these links, but I get a small referral fee for anything you purchase through Amazon.  Believe it or not, it is possible to receive enough income from Amazon to keep a website like this blog running efficiently for a full year.  Do not feel obligated to purchase the advertised items from Amazon.  You can simply use these links to get you to the Amazon site.  Once there from this site, anything you purchase will be credited to a referral from this site.  So, keep the support rolling in by purchasing goods you'd purchase anyway by going through this PERS blog.  Its the way we keep life interesting and by inspiring new posts on a semi-regular basis.  The more money I receive for referrals to Amazon, the more I feel like writing because I know that my extra words will not end up costing me more.  I thank all who have purchased Amazon goods through a referral on this site.  It really helps cut down the expenses of running this blog.

The Legislature convenes on February 1, 2011.  I expect to be posting every couple of days to keep you updated on what our friends in the land of the sillies are proposing.  Obviously I won't post on things unrelated to PERS, but things related to health care and others related to retirement will be covered.

This coming Thursday - January 6 - the Oregon Supreme Court will hold oral arguments in the Arken and Robinson cases.  These cases both apply, primarily, to window retirees and I expect to be at the Oregon Supreme Court at 1:30 to listen to testimony and arguments.  While I don't expect an instant verdict, I do expect the Court to issue their final ruling in a relatively short period of time since the Legislature is in session and they may want to Legislature to take some action that will facilitate the final ruling.  Watch this space on Friday for a possible court update.

 

 

 

 

Happiness is a Warm Gun

And a quick trigger finger.   I'm getting dozens of emails per day asking for advice about when to retire during 2011.  As we all know, the Legislature will convene on February 1, 2011.  During the first month of any legislative session, except an emergency session, the bills are introduced and assigned to committees.  During the second month, the bills start moving through the committees and eventually out on to the floors for a vote if so recommended by the committee in charge of hearing the bill.  We've already seen at least a dozen "suggestions" for ways to reduce PERS costs.  Some of these suggestions are properly in the purview of the PERS Board, not the Legislature.  Others are in the purview of the Legislature.  Still others *may* be effected by the Governor's order.  In a situation like this, it is worthwhile to examine the timing of one's retirement.  The courts have ruled that neither PERS nor the Legislature may unilaterally abrogate the PERS "contract", nor may they enact changes that apply either retroactively or retrospectively.

Armed with this information, I've been suggesting to people that IF THEY WERE ALREADY PLANNING TO RETIRE DURING 2011, that I would consider a retirement on or before March 1 to be the safest bet.  It is unlikely that the Legislature will be able to get anything out of committee, passed, joined by the other house and signed by the Governor much before March 31, at the earliest.  This means that if a bill is enacted as an emergency, it could be in effect as soon as the Governor signs the bill.  If you can possibly retire before March 1 -- and were planning to retire anyway during 2011 -- it is unlikely that waiting a few extra months is worth the potential risk.

Please bear in mind that this is not advice but merely a suggestion.  Some people aren't eligible to retire by March 1, but might be able to retire in August.  Obviously, you can't retire before you're eligible.  Similarly, some people need the income that a few extra months might bring.  What you have to do is to ask the question of whether waiting a few extra months is worth the chance that you might not get the extra income you expected because of some rule change that goes into effect between March 1 and the time you planned to retire.

To my friends at PERS, I am not advertising for anyone to retire.  I am merely advising people about the timing of certain events that are forthcoming in the new year.  The worst thing I could wish for you is a crushing caseload to fill all your spare time.  I know that you've got more than enough on your plate with the nuisance requests from the Oregonian and the Statesman Journal.  I hope you can get some extra bucks from the Legislature to hire a few more bodies.

This will probably be my last post before Xmas.  I'm leaving in the morning for a brief vacation in Minnesota (only I could go on vacation to a place where the high will be 9 degrees for the next four days.  I've got my shorts, my HawaIian shirts, my sunblock and my Maui Jim's already packed).

Merry Christmas and Happy Kwaanzaa to all my friends who celebrate those holidays.  Happy belated Hanukkah to my landsmen who celebrate that glorious 8 days.  And to all, a happy new year.

 

 

 

Deja Vu (all over again)

I spent two hours yesterday sitting through a pretty content rich but sizzleless PERB meeting. I could report on the whole meeting, but much of the meeting was pretty tedious and there wasn't much to get into a fuss over. I'm going to focus on several things that members/retirees/future retirees should be concerned about.

First, the system is in pretty good shape - indeed better than most of the other public retirement systems nationally. The earnings for 2010 are on track to meet the assumed rate, though not much more. The system needs earnings greater than 8% for quite a few years in a row to return to fully funded status and keep employer rates stable. For the system, the bad news is that there are currently 66,000 PERS members who are actually eligible to retire right now. I think that is about 1/3 of the total public employee workforce. PERS is in no way equipped to manage a sudden blast of retirements much in excess of about 6000 per year, which is normal and expected for 2010.

The bad news. PERB and PERS staff continue to fight SB 897 (the verification bill). Despite being passed in the 2010 special session, both staff and board are bothered by the word "guaranteed" in the bill's language and passed a legislative concept to amend the bill to remove the guarantee. Despite an impassioned plea from new Board member Pat West - a retiree - having the "guarantee" removed would be tantamount to gutting the bill's intent, which is to provide potential retirees of the correctness of their information up to two years before retirement. PERS is simply uncomfortable with "guaranteeing" anything. If they win on this battle, potential retirees will be no more assured of the accuracy of their retirement calculations than they are now. It is frustrating to see the number of ways that PERS and PERB is trying to thwart the intent of the law.

The big-ticket item - the laundry list of potential actions against PERS members and retirees described in "Tiny Apocalpse" - was not a subject of discussion at the Board meeting. It was information presented by Director Cleary to show the format in which all such proposals will be reported back to their proposers, the Legislature, etc. There will not be provided any legal analysis of the bills since that properly is the AG's jurisdiction. Cleary pointed out that these were just "some" of the ideas that have been gathered from the publishing ozone over the past few years and do not represent anything substantive or indicative of what might be proposed in the upcoming Legislative session. Cleary also pointed out that "some" of the items are clearly only the purview of the Board (e.g. setting the 'assumed rate'). This telegraphed to the Legislature that PERS was going to be proactive in preventing the Legislature from trying to micromanage PERS. This was good news, at least to me.

Next, Mercer presented a very brief overview of the rate setting process and explained clearly *why* employer rates would be going up in the next several biennia. It was informative and it revealed that Mercer is a bit uncomfortable with the current 8% rate assumption. Following Mercer's presentation, there was a report on the audit of Mercer by yet another firm. This is considered "best practice" to audit the actuarial work every half decade or so. This is PERS' third such audit since 2000. Again, the auditor reported an extremely "clean audit" with only several areas where Mercer should be rethinking some of the actuarial assumptions. In particular, the auditor reported that although PERS' assumed rate of 8% is at the median of public employee systems, that many are beginning to lower that assumption to figures under 8%. She suggested that Mercer and the PERB consider the possibility that 8% is too high for these times and that something along the lines of 7.5% or 7.75% might be more appropriate (see above for Cleary's stance on proper venues for consideration of certain changes). This is much better than the numbers floating around now, such as 6%, and probably represent the most likely scenario for the next actuarial valuation in July 2011.

Lastly, the Board and PERS staff had a somewhat lengthy discussion of the Oregonian's request(s) for retiree information, as well as the Statesman-Journal's request for even more. Recall that the Oregonian asked for detailed information on retirees earning more than $100,000 annually. They subsequently asked for the same details on all retirees who returned to work in some capacity during 2009. These requests are placing PERS in a difficult position, bringing into conflict two core values of the organization - transparency and privacy. The present law allows "public records requests" to be contested on an individual basis. PERS has three such general requests - all declined - hanging out in some phase of litigation. PERS staff has recommended, and the Board approved, a concept that includes writing the Judge in Marion County and asking him to appoint a special panel to review these general requests and to guide all stakeholders towards a clearer way for PERS to evaluate these requests. If litigation is the only route, it could take years before any request is ultimately ruled on. Rodeman also mentioned that the costs of these requests are not only non-trivial, they are ridiculously high. He gave the example of the Statesman Journal's request for complete information (similar to the Oregonian's) on ALL PERS retirees (110,000), not simply those making more than $100K annually. He pointed out that each individual requested requires about 20 minutes of staff time to pull together all the information from the various systems, collate the information into requested and redacted, and get it to hard copy. With 110,000 retirees, each taking 20 minutes, it would take approximately 20 man-years to collate the necessary information. He remarked that "...it hardly makes sense for someone to order us to give out the information and for us to say 'OK, come back in 20 years' and prepare for a large bill". Hartman advised the Board to be working with the AG's office since that office has stated that it wants to amend and update the open records' law in the next Legislature. He argued that it doesn't make a lot of sense to be worrying too much about the current issues since whatever the Court might decide could be undone by the Legislature in 2011 anyway.

In the meantime, you can all be assured that PERS has come down on the side of retirees' privacy in this instance, asserting that it can see no public interest to be served in releasing the names along with the other information, which is already public in many documents. The names add nothing to the public's "need to know" and that "PERS By The Numbers" provides all the detail that the public and any stakeholder needs to see exactly how and where the money is going.

Next meeting set for January just after the Legislature convenes. Happy Thanksgiving to all.

Tiny Apocalypse

This coming Friday (November 19) PERS Board meeting contains some juicy tidbits about what ideas are floating around for reforming PERS. For those who want to see them in their raw form, check the PERS website and look for the information packet posted yesterday for Friday's meeting. The item of interest is labeled D.2.c under new business. For those who don't want to see this, I summarize here.

We have speculated for some time about what *might* happen during the 2011 legislative session. Based on all the ideas floating around, PERS has assembled the most plausible ones and has analyzed them for costs (to members, retirees, employees), costs to PERS to administer, and the net savings from making the changes.

Three of the items pertain to the 6% IAP contribution. One eliminates it; one allows partial "pickup" of member contributions, and the third eliminates in statute the requirement to contribute. This is no surprise; we've seen it discussed repeatedly. In any form, this is a salary cut.

The next raft of potential cuts include those affecting already retired, and retiring members. This is, in fact, the longest list. It includes: 10% across the Board benefit reduction for all retirees (this hits everyone hard and saves a ton of money as you might expect). The second proposal establishes a maximum annual benefit cap as a percent of FAS. This would directly affect members getting ready to retire. The next would be to change the interest rate used to calculate money match benefits for new retirees. PERS estimates that going from 8% to 6% would reduce benefits for a 60 year old by 16%; for a 55 year old by 25%. Next, there is floating the idea to change the factors used to compute FAS, eliminating vacation time, sick leave, overtime, and others that inflate FAS from what the base salary rate is. Next, they have considered the impact of requiring members to have worked at least 10 years before retiring to be eligible for a COLA. Another would eliminate the tax adjustment for out of staters. Two more variants include eliminating the COLA for one biennium (2 years), or setting COLA eligibility to the first $24,000 of annual benefit. Next, we have the predictible proposal for a 4th tier for new members - yet another defined benefit plan - or a 4th Tier consisting of a defined contribution plan

Finally, there are the usual arrays of accounting tricks to benefit employers in the short or long term. One is to increase the UAL amortization period to 30 years from 20 years; next is to reduce assumed earnings rate to 7.5% (note, this is different from reducing the Money Match earnings rate from 8% to 6%), and finally, to limit net employer rate increases to 3% of payroll. Both the first and third changes would simply push the deficit further down the road, forcing future generations to deal with the problem.

Before anyone panics, these are simply analyses done because one or another or all of these ideas have been floated by someone, somewhere, and relatively recently. PERS decided to analyze these for costs and benefits without any regard to the legality of any of them. Virtually all of the cuts to existing retiree benefits (and there are surprisingly more than I thought), would be challenged immediately and probably would not stand court muster (I hope). But this doesn't mean that we can remain blithe about these and ignore what is going on. We should be ramping up to oppose any adjustment to benefits we are already receiving, including the COLA. Most of us have already given as a result of the 2003 legislation; I'm not planning on giving more.

Study these closely. Read the agenda and look at the amount of money that would be saved. Examine the amount of the budget shortfall for 2011-13 and see which of these changes would do the most to reduce that shortfall while also limiting legal exposure and potential loss in the courts.

The time to get active is NOW. The time to be conversing with your legislators is NOW. For actives, the damage potential is severe; for retirees, the impacts could be catastrophic since we're not working and have no way to make up the lost income (I suppose we could become greeters at WalMart). Also not analyzed is the loss to Oregon in tax revenue from any benefit cuts for future retirees or current ones.

I'm sure there are other ideas floating around, but this list represents the most complete elucidation of areas for potential cuts that I've seen in one place for some time. We are looking at an array of potential changes that are nothing short of apocalyptic. If this list doesn't energize you to do something, I don't know what will.

Time for all of us to get off our complacent rears and start writing letters. This stuff makes my head spin.

Cleanup Time

An email appeared in my box yesterday containing a copy of an October 18, 2010 order from the Oregon Court of Appeals directing the Arken case (and, by implication, the Robinson Case) directly to the Oregon Supreme Court.  The Arken/Robinson cases were argued before the Oregon Court of Appeals last month.  Instead of ruling on those appeals, the Oregon Court of Appeals wisely decided to fast-track them to the Supreme Court without taking a time for a ruling.  They reasoned that both cases pertain to the Supreme Court's own ruling in Strunk and the City of Eugene. Since the Oregon Legislature directed appeals of the Legislative assembly's statutory changes in HB 2003 directly to the Supreme Court, and since these two cases fall directly out of those challenges, the Oregon Court of Appeals felt that the only proper jurisdiction for these cases was the Oregon Supreme Court itself.

I regard this as good news, as it expedites (I hope) the process of litigating these cases.  While I still hold to my original prediction of 2012, I am willing to assume that the decision will come sooner in 2012 than I had expected.  I don't if there is any more to do with the Oregon Court of Appeals (the White case remains there, but it has a different set of judiciable issues), but I think it is safe to assume that nothing further will be done with Arken and Robinson until the hearings before the Supreme Court, and awaiting the Court's decision.  The parties to all the cases will now have to prepare all the appropriate briefing materials for the OSC.

If you want to see a copy of the court's ruling, it should be posted at the PERS Library soon.

Ventilator Blues

(I've edited the date so this remains on top for awhile.  It is vitally important that as many as possible read it and have an opportunity to take action preemptively.)

The definition of insanity is trying to do something over and over and hoping for a different result.  Our local whoremongers and fishmongers over at the Whoregonian are wheezing out their last breaths on their ventilator.  Nevertheless, they have the unmitigated gall (chutzpah) to demand a public records hearing with the Marion County Circuit Court to get PERS to release, to them, the names (and more) of all PERS retirees earning more than $100K per year.   In addition to the names, the Oregonian asked for retirement date, employer, years of service, job classification, final average salary, regular monthly payment, any other monthly benefit, any other benefit from PERS monthly or annually (e.g. IAP).

The Whoregonian wouldn't take no for an answer from PERS, which claimed it was exempt from the request under ORS 192.502 (the public records disclosure statutes), as well as OAR 459-060-0020.  They went to Attorney General Kroger and requested that he order PERS to comply.  On October 2, the AG's office order PERS to comply.  On October 15, 2010, PERS filed a petition in the Circuit Court of Marion County to determine whether, in fact, the records request meets the standards set by the public records law.

Although I am not affected by the outcome of this decision, I know a few people who are.  Most are physicians who worked at OHSU; a few were heads of very large agencies managing near billion dollar budgets and thousands of employees.  You would expect those people to earn more than $100,000 in retirement just because you know what they earned when they were working.  It isn't clear that the Oregonian is after those people.  It appears to me that this is a "throw it against the wall and see what sticks".  I think the Whoregonian is searching for the more "ordinary" people who retired at more than 100% of their somewhat high 5 salary and whose earnings during the period from 2002-2007 pushed them into a money match retirement of 100% of salary + more.

If this is the whores' request, then Ted Sickinger is trying to serve two ( and possibily three) objectives in this request:   1) to up the electorate's outrage prior to November 2, 2010 and influence the outcome of the election; 2) to up the ante for new and continuing Legislators and the new Governor to take further action to reform PERS during the 2011 Legislative Session; and 3) to open the door to more requests for the same information for all retirees, or for at least those possibly earning more than 100% of FAS.

I think that point number 1 is probably moot now.  I don't see how the court will issue a ruling that can compel PERS to collect and turn over that information before the outcome of the election is known.  And I expect PERS to drag its feet as long as it can, even if it is ordered to comply.  However, if it is ordered to comply, then there can be no legal reason to prevent PERS from being asked for all the rest of the information.  After all, if the public records law ORS 192.502 does not apply to the cohort whose names and other information the Whoregonian is requesting, then it doesn't apply to anyone.

This is one of those cases where everyone should hope that PERS wins and it wins big.  I do not want my information to be made public.  I do not want to be held up to harassment and other forms of actions and neither do you.  You should be afraid, very afraid of this request.   This is an invasion of privacy of the worst kind.  When we accepted a public employment job, we agreed that our names and our salaries would be a matter of public record.  But we did not agree that our retirement benefits would be made public.  I knew that during my working career, all of the pertinent salary information on all public employees was available at the PSU library for the price of the time for looking for it.  But I never believed I had a right to go to my employer and ask for salary information on anyone else.  If I wanted it I had to work for it the hard way.  The whores at the Whoregonian want it the easy way, by demanding it.  They have no right to this information.  OAR 459-060-0020 states it clearly:  the financial records of a retired PERS member are exempt:  "unless, to do so would not constitute an unreasonable invasion of privacy and if there is clear and convincing evidence that disclosure is in the public's interest..."   I submit that disclosing such information has no public interest except voyeurism and exposure to harassment, and therefore is exempt. The Whoregonian has no right to this information, period!  Let's hope that the same Marion County Circuit Court that shafted us in City of Eugene will show the same legal fortitude it used in that case to prevent the Whoregonian from making our lives more miserable than ever.

If you are concerned about this, I suggest you find legal counsel to represent your personal interests.  If you don't care, don't say you weren't warned.

 

Heartache For Everyone

Our favorite bird-cage liner, the Whoregonian is mining its readers for ideas on how to cut the budget for the 2011-13 biennium.  They posted a half-assed poll yesterday asking readers to vote for their top five choices for cuts or budget enhancements for the next Legislative session.  Among the choices were diverting some portion of the gas tax to support state police, a 5% sales tax, ending the corporate kicker.  But more significantly they had some delicious (not) ideas for state employees - across the board pay cuts of 10%, and eliminating the 6% pickup.  When I checked yesterday, about 4000 people had voted and a large percentage of voters had listed the two anti-public employee cuts among their top 5 choices.  Since the paper is not doing this for enlightened self-interest, they are undoubtedly going to hand off this poll to legislators and gubernatorial candidates to take to Salem to consider in the next legislative session.

This next legislative session promises to be brutal on public employees.  Keep that in mind when you consider who to vote for in the upcoming general election.

 

The Laws Have Changed

I now have enough information from independent sources to reconstruct pretty much both hearings last Thursday on the Arken and Robinson cases.  Because of the surprise change in length of the hearings, many were surprised and somewhat unprepared for the quadrupling of the hearing time for each case.  That is why it has been somewhat difficult to cobble together accurate notes.  I am collating the notes now and will be back later to offer a summary graciously supplied from four different people in attendance at the meetings.  Not all attendees were civilians.  At least one is a member of one of the legal teams in attendance.  The notes are fairly consistent so I feel that collectively my sources have provided accurate summaries of what turned out to be very fast moving questions and answers.

Check back here later today for more details.  I won't write a separate post.  I'll just amend this post.

 

Life has a way of interfering with my writing.  Labor Day weekend proved to busier than I expected.  I didn't have time to put together the summary of the hearings on Thursday.  Do not despair.  I *will* get them written up and posted; just not as quickly as I had expected.

I Should Have Known It

Yesterday, the Oregon Court of Appeals took oral arguments in both the Arken and Robinson cases.  As originally billed, the arguments were to be 15 minutes for each case, to be heard sequentlally.  I decided that going down to Salem for a 15 minute oral in each case was hardly worth the gas and parking and so committed to other plans for yesterday, which left me carless for most of the morning.  About 8:40 a.m., 20 minutes before the cases were scheduled to be heard, I got a voicemail from my dear friend PEG, who lives much closer than I to the court, that they had changed the oral arguments from 15 minutes to 30 minutes and then to 60 minutes for each case.  Had I known this about 45 minutes earlier, I could have managed to get to Salem in time for at least one of the cases, if not both of them.  As it turned out, I could get to neither, and PEG's schedule did not permit her to stay for the entire Robinson argument.

The upshot of this is that I have very little information to report on either hearing until one of the other sources present offers up his/her reactions and notes (if any) on the proceedings.  I do know that the questioning in Arken was very brisk, the court was fully engaged, and seemed to have managed to do its homework and had a far better grasp of the nuances and complexities of the Arken case than Judge Kantor seemed to have of the case.  That said, there are no contemporaneous notes of the hearing (at least not now).  All that exists are PEG's reactions to the judges' questioning during the hearing.  She reported that the judges directed far more of their questions at Greg Hartman than to the PERS/State attorneys.  PEG felt that the questions were designed, at least partly, at getting to the human cost of the decisions.  This seems to be the first time that the actual retirees affected by the various interpretations of the settlement agreement and the Lipscomb decision, as well as pieces of HB 2003, were actually viewed in human terms, not just legal terms.  Whether this means that the Court is leaning more towards overturning Kantor or not remains to be seen.  As PEG and I would both agree based on sitting in on dozens of these legal proceedings is that there is hardly any relationship between the questions asked, who they're asked of, and the final decision.

It actually matters little in the end anyway.  These cases will not be decided by the Oregon Court of Appeals.  They will render a verdict and whichever party loses will appeal the decision(s) to the Oregon Supreme Court.  This will not be over until the Supreme Court decides.  If retirees win, expect PERS to drag its feet until another law suit forces them into moving (as is what happened in the Hughes decision in 1991, which wasn't implemented until two legislative sessions later).  On the other hand, if the retirees lose, especially the Robinson case, you can expect PERS to proceed to collections with lightening speed.  PERS moves fast if they are getting money; they move with glacial speed if they have to return some.

As I have predicted many times before, we won't have a final set of verdicts in these cases until 2012, at the earliest.  It may take some additional time if we actually win Arken.  If we win Robinson it will merely preserve the status quo except for a very small number of people who will have a large debt wiped away and their monthly payments go up by some small or slightly larger amount to adjust for repayments they've already made.

Another small step has now been taken in the speedy (not!) process of justice.  These cases involve acts from 2003 and 2004 and 2006.  Who says justice is slow?  Isn't 8 or 9 years pretty normal for a case to run its course?

Enjoy your Labor Day weekend.  Hopefully will have a nice bout of weather for us to enjoy the outside a few more times before the rains return.

 

A Hard Rain's Gonna Fall

The usual bunch of the "sky is falling crowd" have awakened from its summer slumber to announce that PERS is in trouble. We have the Oregonian (yesterday) describing the different poisons the legislature and PERS might have to choose from to make the system less expensive, the Register-Guard whining over the conflict of interest that exists because the Legislators and the Judges are all PERS members, and Phil Keisling, new to his bully pulpit at PSU, publishing a shortened version of his PERS "white paper" in the PSU Real Estate Review (god knows, why there?).

Let's face facts. PERS is a very unpopular topic these days. Everyone from Dennis Richardson to Phil Keisling have ideas for further fixing the system. From looking over all the various suggestions, there is only one possible change that could affect a small percentage of retirees. Right now, ALL PERS retirees who worked in the system prior to October 1991 receive a "benefit increment adjustment" to offset the loss of the income tax waiver that PERS members had prior to October 1991. Some are now proposing that people who choose to live out of state should not be getting an adjustment meant to offset Oregon income taxes since they don't pay Oregon income taxes now. This is a very old topic that has been around since HB 3349 was enacted in 1995. Back then, both PERS and the Oregon Department of Revenue argued that they didn't have the resources to be the "residency police". They are worse off today than in 1995, so I'm hard-pressed to see how this bird will fly during the next session. Neither party responsible for enforcing this change wants to do it because it is a giant resource sink. The savings are comparatively small - $72 million *before* overhead. This is likely to net less than $40 million. Other grand ideas include renegotiating the 6% pickup so that employees, not employers pay the bill. This was originally negotiated in lieu of a salary increase; it is only fair then that it be renegotiated and be replaced by a salary increase. Of course, no one wants to do this; it would negate any savings that could be netted from taking away the benefit.

There are a variety of other ideas out there too. They include a forced lowering of the assumed rate. The Oregonian finally gets it that this is a money loser for the system, but it is even worse for PERS actives. This will be a very hard sell with both employers and employees initially aligned together in opposition. Another idea is to change the way PERS interprets the COLA adjustment for new retirees. Basically, what is being suggested is that new retirees not get a COLA for the first year or so after retirement. It is more complicated than this, but it relates to why so many people choose to retire on July 1. This one can be enacted by the PERS Board, but will be entangled in litigation for years if they try it.

Finally, various parties have suggested that health care benefits for actives be less generous by making active employees pay some greater share than they pay now. Again, this is a negotiation item, not a legislative action.

Between the Legislature, a new Governor, a bunch of rabble-rousers, and a hapless PERS Board that capitulates to almost anything the employers want, I can see the next year being brutal on active PERS members and new retirees. It is going to be a difficult contract negotiation for the unions, unclassified employees might find themselves with changes shoved down their throats without any option, and the Legislature could enter the act and inflict new forms of horror on actives and new retirees. A new Governor, elected on a platform of fiscal reform, could be just like our current Governor, perhaps worse, not likely better.

Get out your umbrellas. The hard rain is coming.

Apologia

Sorry for the rude invitation to engage with Yahoo.  I'm not exactly certain how that post got there except to say that it was something I did in the fog of being jet-lagged from our trip to Europe (Netherlands, Italy, Croatia, Greece, and Turkey).  In any case, I *think* I inadvertently accepted an invitation to link my PERS blog with another PERS blog.  It turns out that I had linked to an invitation to receive updates from my own blog - what a moron I was to do that.  I have deleted the offending and stupid post along with any links that may have been created inadvertently.  We now return to our regular programming.

The only news I have to report is that the Oregon Court of Appeals will hear the appeals of the Arken and Robinson cases on Thursday September 2, 2010 at the Supreme Court in Salem at 9:00 a.m.  The cases are scheduled to be heard sequentially, not simultaneously as was originally reported.  Each side in each case will get only 15 minutes to present the essence of its argument.  This clearly means that the case will be argued through the briefs, not on the basis of what anyone says during the oral hearings.  This may be one of those instances where you will expend a lot of energy to get to the hearings, only to discover that not much of value is said and that you will come away knowing just as much as you knew before you left.  Nevertheless, these judicial exercises are always entertaining so if you have some time to kill, I urge you to attend.

First Flash Of Freedom

The family and I will be leaving for Italy at the end of the week.  It has been a year since we were last in Europe, and the great exchange rate between the Euro and the Dollar inspired us to do a more protracted trip this year.  We've got housesitters, dog sitters, mail sitters, and newspaper sitters all aligned like the stars in the out nebula.  After a week or so in Northern Italy, we shall catch a Norwegian Cruise Ship and make our way to Athens, Dubrovnic, Napthlion, Ismir, and Split, finally heading back into Venice when August tips its nose at us.  Consider this your warning that PERS news is empty right now and I will have no hit tips to offer for the next three weeks or so.  I plan, jet lag willing, to be present at the Arken/Robinson hearings at the Oregon Court of Appeals on August 6.  Hopefully, my brain will be in tact enough to glean anything intelligent from those august proceedings.

Thanks to everyone for all the nice emails you've sent me about this site.  I've been writing about PERS-related issues for close to 10 years now.  The current blog has been running for close to 7 years.  Without all my sources, both within agencies big and small, and PERS members/retirees sharing their experiences, this blog would have been much impoverished.  Enjoy the sunny weather, enjoy the tease that is an Oregon summer, and most of all, stay tuned for further developments on cases that bear our our future incomes.

I will toast all of my readers at our first meal in Venice, and in each subsequent meal in all the cities that will follow.  This is the most relaxing trip we have ever planned and we expect to enjoy it to the fullest.

Au revoir, arrivederci, ciao.   I shall return.

P.S. 8 p.m. Tuesday night.  The Arken hearing has been canceled for now.  It will NOT take place on August 6th as planned.  It will obviously occur later, perhaps in September, which will give me more time to recover from my demented state following the crossing of 10 (or 11, not sure) time zones.


P.P.S. Thursday night, from airport.  The rescheduled hearing will be September 2, 2010 at 9:00 a.m. in the same location.  Same players.  See you all then.  Glad all these corrections caught up with me before the big plane take bwana to Netherlands - land of disappointment in World Cup.

Another Brick in the Wall

At long last there is a schedule for the Oregon Court of Appeals hearing of the Arken and Robinson appeals.  These two cases will be heard back to back on August 6, 2010 at 9:30 in the Supreme Court building in Salem.  These two cases both harken back to the combination of the settlement agreement between the employers and PERS in the City of Eugene case (Arken), and to PERS' invoicing window retirees for alleged overpayments on 1999 earnings (Robinson).  The Arken case challenges the validity of the settlement agreement and alleges that the PERS Board did not exercise its fiduciary responsibility to members and retirees by entering into an agreement that harmed the very people who the PERS Board is charged to represent.  The Plaintiffs (PERS Coalition) were rebuffed by Judge Kantor in the Multnomah County Circuit Court.  The Robinson case alleges that PERS did not follow the statutory requirements of HB 2003 in attempting to collect money from retirees that HB 2003 did not give them permission to collect.  It alleges that only the employers were required to subsidize the "excess payments" and that retirees should not have been invoiced at all.  This case was also heard in Judge Kantor's court.  Judge Kantor ruled in favor of the Plaintiffs in this case and enjoined PERS from collecting any further amounts from retirees.

The Court of Appeals has allowed one hour for oral arguments in each case.  The only surprise was that they didn't join the cases to hear them simultaneously.  This means that they will, again, be ruled on separately.

This is, by no means, the end of the line for these cases.  Regardless of the outcome of the cases in the Court of Appeals, both will end up in the Supreme Court, and that path confirms my earlier guess that it will be at least 2012 before window retirees and others will gain any final resolution on these cases.  Both of these cases have been in the legal system for a very long time, and we still have two long years to go before seeing the end of the tunnel and the wall completed.

Watching and Waiting

The old email bag is overflowing with questions from (mostly) Tier 1 members eligible for retirement. The theme of most of the questions is "should I retire before the Legislature convenes near the end of January 2011".

This is not an uncommon question for me and so I've given this a lot of thought. I generally don't offer advice on when people should retire as there are so many individual variables involved. That said I can share my own thought process on this matter. Before doing that I always raise a crucial question that bears on what you do. My question is this: in an ideal world when would you retire? If the answer lies beyond 2011, then you should stop reading right now. Go on with your life. Retiring earlier makes no sense and the financial risk is greater in retirement than in not retiring. The rest of this essay is for people already eligible for retirement and planning to retire during 2011.

Retiring in 2011 carries with it a lot of uncertainty. This uncertainty arises principally from the fact that this is a legislative year. There is tremendous pressure on the legislature to "fix" PERS again. This pressure is coming from the media (Oregonian, Statesman-Journal, Register-Guard, Corvallis Gazette, Bend Bulletin), from private citizens on both sides of the political spectrum (E.g. Phil Keisling, Gary Coe), from public employers frothing at the prospect of another rate increase, from hundreds of concerned citizens throughout the state who write nasty anti-PERS letters to the editors of the above-mentioned newspapers, and both legislators(e.g Dennis Richardson) and legislative candidates alike. The political environment right now is made more complex by a very unfavorable economic climate and a prolonged recession, making additional PERS reform an extremely large target. I think it is fair to speculate that PERS will be reformed yet again in 2011.

I've discussed the likelihood of reform in certain ways in previous posts, especially my public response to Gary Coe (previous post) and to Phil Keisling this past fall. While the unions will fight like hell against any changes to current benefits, they are more or less helpless to defend against changes that apply prospectively, I.e. to benefits accrued after the effective change date. Retroactive changes are risky and the Oregon Supreme Court has taken a pretty firm stand against such changes so far. But the stakes are even higher in 2011 than they were in 2003. The economic climate is much worse this time around and the legislature may be willing to take more risks than in 2003. The unions are less powerful now than they've been in the past, and many see labor unions as the cause of our economic woes rather than the haven from them. With budgets being cut right and left, with more layoffs, furloughs, and wage freezes or cuts looming, the unions coffers are not as full as before. They will have to spend their money wisely this fall and in their lobbying efforts in the legislature. All of this points to a rocky session ahead for PERS members and prospective retirees.

So the bottom line for members thinking about retiring in 2011 after the legislature convenes is this: what might you be risking by waiting the legislature out versus getting out ahead a bit and retiring sooner? It is A very tough decision, but one where an earlier decision might end up being more beneficial than gambling. It is certainly something you ought to put in your analytical engine and reflect upon carefully.

Standing Eight Count

By this time in the game, I should understand that there are many, many, many ignorant people out there when it comes to PERS, Occasionally I run across something that makes ignorance look intelligent and I thought I would share my latest experience with monumental stupidity with a vengeance.

The background story is irrelevant. How I came into possession of this speech doesn't matter. What does is that I got hold of it AFTER it was delivered, which only multiplies my frustration at how this stuff continues to perpetuate itself.

As you all know, Representative Dennis Richardson (R, Some Place in Southern Oregon), has been on a one-man crusade to introduce some new, dastardly, legislation anti-PERS legislation into the 2011 Legislative session. Richardson isn't the brightest bulb in the pack and hasn't yet learned from prior court experience what is legal and what isn't legally changeable within the context of the existing PERS contract.

Now, imagine a dim bulb like Richardson sharing a bit of quiet time with a broken bulb like Gary Coe, President of Speed's Towing in Portland. Gary may know what he needs to know about running a towing business, but when it comes to PERS, my 11 month old granddaughter knows more than he does. So imagine what comes out of the blender when dim bulb meets dimwit. You get a speech so wrong, so incoherent that those who heard the speech will be laughed out of the room if they spout any of these inaccuracies near anyone who really knows anything about PERS. To arm you, I have prepared a lengthy rebuttal to give you what you need to refute this nonsense. I'm not going to repeat Coe's speech, but I'm going to highlight all of his egregious errors for you here:

1. According to Coe, the PERS Board consists of 12 Members and a huge bureaucracy. This is just plain wrong. The PERS Board was reduced to 5 members in 2003, only one of whom is a union member. The remaining four are three citizens and one PERS agency manager. PERS has about 350 employees to service 321,000 members and retirees.
   

• "All long-term Tier 1 PERS members are paid more than 100% of salary". The average PERS retiree has served 22 years and is aged 59. The average benefit from 1990-2008 was 58% of final average salary; for 2008 alone it is 52% of final average salary. For the period from 1990-2008, 8% of ALL retirees received 100% or more of FAS; while in 2008, it was only 5%. The average length of service for the "long-term" employees was 31 years and they represent approximately 12% of all retirees. Therefore, the math alone does not support Coe's assertion that ALL "long term" employees earn 100% or more of FAS. In fact, barely half of them do and many of them have more than 35+ years of service.
• "One of the problems is the guaranteed 8% annual yield on their investments". One again a generalization not supported by the facts. ONLY Tier 1 employees are eligible for the guarantee. Tier 1 members now constitute only one-third of all active and inactive PERS members. The remaining two-thirds of PERS members are NOT eligible for any guarantee of any sort. More to the point, of the Tier 1 members still in the system, almost 90% are already age eligible to retire and most would retire if there were any effort to change the guaranteed rate. Moreover, the guaranteed rate is evaluated by PERS and its actuary every two years since it is so integral to determining employer rates. The employer rates ASSUME an 8% rate of return; what employers actually pay is dependent on that assumption. Lower the rate and the employers rates will go up, not down. There is hard math involved here, but if pressed, I would be happy to show how this is true. The PERS Board and the actuaries just visited this topic in January 2010. They concluded that there was no compelling reason to change the assumption since actuaries from all over the country representing hundreds of public employee retirement systems were still making the same assumption.
  
• "Tier 1 employees can retire as early as age 50, then because of PERS legislative loopholes, continue to work and collect their full salary on top of their retirement benefit". This is only partly true. It leaves out the part about having to have 25 (Police and Fire) or 30 years (general service) to retire this early. As for the loopholes, they are very limited to an even smaller number of members. The back to work provision applies only to areas with populations with 75,000 or fewer residents, is limited to a fixed period of time, and applies only to certain professions where there are extreme shortages of qualified professionals. PERS is already proposing to study the loopholes to reduce the number of instances where there are exceptions granted. But regardless, this doesn't apply to just any retiree; only a subset that probably numbers a few hundred of the more than 100,000 retirees out there.
  
• "Warren Buffett says that 8% is unsustainable". While Warren Buffett may be a "guru" on many things, he is not a pension actuary. State statute requires that the determination of the assumed actuarial rate be done by the PERS independent actuary and then reviewed by the Board and stakeholders. Thusfar, pension actuaries around the country have predicted that the long-term earnings rate on equities will range between 7.75% and 8.25%. The current assumed rate falls exactly at the midpoint of those estimates and provides adequate safety for all concerned. The PERS fund earned 19% in 2009 and 11% of those earnings went into reserves.
  
• "Supreme Court Judges ... are Tier 1 PERS members" [at the time Measure 8 of 1994 was passed]". This is true, but irrelevant. The Supreme Court and all other judges are PERS members, but are not eligible for the same benefits police, fire, and general service members are eligible for. Judges get only a Full Formula benefit, which doesn't depend on account balances or the guaranteed rate. I think it fair to assume that they can be impartial, especially when their decisions have no impact on their own accounts.
  
• "Ballot Measure 8 required members to pay their own 6% [instead of permitting employers to "pick up" the 6% for the employees]". A brief bit a history is required here. In 1979, with inflation running at 16%, the unions asked for a 10% across the board pay increase. The employers balked at that pay increase and offered, instead, the 6% 'pick up' of the employee portion of PERS. This is properly a subject for collective bargaining, but be aware that the employers do not have the unilateral bargaining power to force unions and their employees to accept paying their own 6% without some compensation increase elsewhere. Many agencies have already done this - given employees pay increases and bargained for them to pay their own 6%. There is nothing to prevent this from happening now, but it would have to be bargained, not unilaterally imposed.
  
• Coe's solutions are as follows: "Change the law that does not allow local governments to opt out of PERS. Replace PERS with a standard 401K, like the private sector". Well, even if this happened, what would become of the legacy structure of PERS. The IRS won't allow changes that affect accrued benefits. So, even if the employers were to opt out of PERS, the employees would be permitted to retain all their accrued benefits in PERS and the employers would be paying for both PERS and the 401K. Actually, the 2003 Legislature did this already for all employers. The PERS system, as we knew it, doesn't really exist for active employees now. Employee contributions go into an IAP account (a 401K in everything but name), while employer contributions maintain the legacy structure of PERS. Absolutely nothing would be accomplished by doing this.
  
• "Drop health coverage when PERS member reaches age 65 and qualifies for Medicare". I don't even know where to begin with this one. First, there is no health benefit for retirees. Retirees are allowed to PURCHASE health care prior to becoming Medicare eligible. This health care is paid for out of the pockets of the retirees, not from PERS or the former employers. There is a small subsidy available for certain PERS retirees, but only if the retiree purchases the [very expensive] PERS health plan for retirees. In the main, retirees, pre- and post-Medicare, get no paid health care benefits as part of their retirement packages, and so terminating health coverage when members reach Medicare age isn't likely to save any money. It isn't even relevant to any rational discussion of PERS. That PERS has a unit devoted to health care benefits for retirees is a service provided for retirees and all this service does is to negotiate with health care providers to get the best deals available for an aging pool of retirees. Eliminating all of this infrastructure wouldn't save the money it would cost to outsource this service.
  
• "Reduce the Bureaucracy governing PERS. Review the size and compensation of the PERS Board; privatize the IT functions and the auditing functions." Yoo hoo. The PERS Board has 5 members, all volunteer except for transportation expenses. Reducing their compensation would save exactly what they cost: $0. Privatizing the IT and auditing functions is rather scary. The PERS chapters of the ORS are more than 74 pages long. Having IT and Auditing in house is required to accomodate all the changes imposed on PERS from the Legislature and the Courts. Just because a few members have gotten incorrect information from PERS and PERS has been sued a dozen or so times isn't going to change if these functions were privatized. In fact, privatizing those functions would be a complete disaster. PERS manages accounts for 321,000 members and retirees. It administers a system that has been changed in almost every legislative session. It is hard enough for the in-house team to manage all of PERS' functions correctly and in a timely manner now; just imagine what would happen if this were turned over to a private firm(s) who would take years to get up to speed on all of the complexities and nuances of the system and be legally exposed the entire way. Can you imagine the indemnification required? Right now, PERS is fairly insulated from litigation because it is a state agency. The minute this was outsourced, the external agency would lose the protection of the state and would be exposed to some nasty litigation. How much, do you think, you'd actually save by outsourcing PERS' central functionality? I'm betting it would cost 4x as much as it would save. Have you bothered to look at the size of PERS' budget? It is probably less than the budget of your towing operation.
  
• "Reduce the guaranteed 8% from this day forward." As discussed earlier, this is already reviewed every two years. Until you understand how the assumed actuarial rate interplays with many elements of the PERS system, you shouldn't be discussing this. It sounds good to say it, but implementing it would be very expensive and certainly would not save anyone any money in the first 5-10 years.
  
• "Negotiate in future Union contracts that employees make their own 6% contribution to PERS." You assume that such negotiations are unilateral. How do you plan to "force" unions and their members to agree to this without exchanging this benefit for some other form of compensation. Your understanding of union/management negotiations is ignorant.
  
• "Consider a 'Nuclear Option' and lay off all public employees on December 31 and hire them back January 2 under a new and affordable retirement plan." From Dennis Richardson's mouth to God's ears. There are some not-so-small problems here. The state isn't bankrupt; neither are any other public employers. Thus, the IRS prevails in such actions. The IRS requires that ALL employees be given their "accrued benefit" to date before the new system starts. Since the "accrued benefit" includes all existing account balances, any matches due to an employee as a result of vesting, plus any other benefit that was part of the system on the day of termination, this would probably cost about $63 billion (give or take a few billion). The PERS portfolio is valued at about $52 billion right now, there aren't enough assets in the system to completely pay for all "accrued benefits" to date of termination. How do you suppose these agencies come up with an additional $10-$12 billion? Borrow it? How much of the state's credit rating depends on the assets in PERS? What happens to the credit rating if all those assets are transferred from the state to individuals? Finally, remember that there are about 60,000 PERS members (Tier 1 and Tier 2) who are already eligible to retire by age and/or service right now. Do you think that they would stay around and wait for the "nuclear option"? Then what would you save versus what would it cost. Everytime I hear this proposal I just laugh and laugh and laugh. There is almost no way to come out a winner in this scenario because so many members have the option of retiring at the first hint of something like this. Getting rid of those employees now simply removes their funds from the PERS side and puts it in the individual side where the benefits can't be touched.

Shine A Light

I feel a bit like the Monty Python "Dead Parrot" skit.  I'm not dead; I'm resting.  PERS news has been remarkably sparse these days.  Good news occurred last week when the Oregon Court of Appeals held for the plaintiff in the case of Murray v PERB.  This case has potential ramifications for PERS members who weren't retired between 2001 and 2002.  The case involved apportioning administrative expenses from the Variable Annuity Account in two years when there were negative returns.  In those two years, PERS deducted the losses from the accounts and then applied administrative expenses on top of the losses deducted from the remaining principal of the individual account balances.  The Oregon Court of Appeals held that PERS couldn't do that as losses were not legally defined as "negative earnings" from which PERS could still deduct administrative expenses.  This is a particularly complicated case and it isn't clear yet what the outcome will be for people who were still active members at that time.  If PERS doesn't appeal, and we might know after today whether that is the case, then it will have to decide how to administer the outcome.  It could, theoretically, decide to apply this as a class action case, or it could decide it applies only to the plaintiff.   Time will tell, but, in the meantime it is a victory to celebrate for a change.

 

I attended the PERB meeting today.  Meetings like this make you want to chew glass for entertainment.  Talk about a terminally boring meeting.  The tedium was exacerbated by the lengthy reading of changes to administrative rules, reports on the portfolio value (nothing new to report), and the final turgid explanation of the ETOB (equal to or better comparisons required by state law when a public agency decides to stay out of PERS) comparison methodology to be used this year.  The *only* relevant message to be taken from the ETOB comparison is really for those who want to terminate PERS.  The methodology for determining whether a plan is comparable to PERS or not has some sobering results.  It would be REALLY, REALLY, REALLY expensive to terminate PERS and meet IRS requirements for making members whole.  So those in the Legislature espousing this as a "solution" for PERS' (non)problems ought to read this analysis carefully.  Compare the risk-free rate of 4.7% to the assumed rate of 8%.  Bottom line is that to guarantee all members that they got present value of their accounts would cost billions and billions of dollars.  Not gonna happen now or anytime soon.  I am very glad that Mercer shown a light on those kinds of calculations.  The PERS Board was in shock seeing the cost and they weren't even talking about terminating PERS.  This is the take-home message from that.

 

 

With A Little Help From My Friends

One of the more interesting political races this year pits Incumbent Dennis Richardson (R, 4th District) against retired Community College President Richard (Rick) Levine (D). This district encompasses a portion of Jackson County in Southern Oregon. Since both candidates are running unopposed in May 18th's primary, they will face each other in November's election.

This race is important for PERS members and retirees because it pits a consistent anti-PERS legislator (Richardson) against a PERS retiree. While Levine wouldn't be expected always to be favorable to PERS, its members, or its retirees, it is highly likely that we would get a fairer hearing than Richardson would ever give us. Richardson first appeared as troublesome for PERS members in the 2003 Legislature when he introduced the bill known as HB 2020 which, in his form, would have created the new Tier 3 as a total 401-K plan with no employer match whatsoever. Richardson has since gone on to wail and gnash his teeth publicly over PERS' current financials and claiming that PERS would bankrupt Oregon. Richardson has consistently and repeatedly cried doom and gloom over PERS and has become the most outspoken current legislator to propose the "nuclear option" of terminating PERS.

Regardless of your political party, it would be helpful if some of us could send a few spare dollars towards Rick Levine's campaign. It makes no sense to send this money now. It would be better to wait until after the primary so Levine has some ready cash to help him campaign against Richardson.

I have no opinion on most of the other races, including the Governor's race, right now, but the 4th District presents one of the clearest choices we've seen since Greg MacPherson went down to defeat against John Kroger in 2008. The less unfavorable treatment and disrespect we get in the Legislature, the more we can begin to relax against the latest reign of terror against PERS members and retirees. I don't know about you, but I'm pretty tired of the constant doom and gloom perpetrated by ignorant legislators and bored media types.

Rick Levine can use our help. Everyone like him should get a little help from his friends.

Are We There Yet?

The Oregon Supreme Court announced this morning that the cases known as Arken and Robinson were so stupid that victory should be awarded to the plaintiffs in both cases. Speaking for the Court, Chief Justice Paul de Muniz remarked that he had never before seen such a gross miscarriage of justice and that unless he got everything coming to him in his retirement benefits, he would hold PERS and the PERS Board personally responsible for the disruptions in his life if his check didn't arrive on time, wasn't computed properly, and was off by more than one cent over his own personal estimates. The PERS offices and PERB are reeling from this judgement. They are planning to go to the legislative Emergency Board to discuss additional funding and additional personnel to assure Chief Justice de Muniz that his benefit is computed exactly correctly. Justice de Muniz grumbled that he didn't care how many new employees were required, that his benefit better damn-well be computed right.

This offers a brief glimmer of hope that others might soon start getting correct estimates.

In other news, the City of Eugene is again planning to sue the PERB, this time over any preferential treatment it may give Chief Justice de Muniz. It wants the court to order that PERS continue screwing up like is has always done.