Soon As I Get Paid

I now have permission to share with you the Special Master's Report to the Supreme Court in the matter of Attorneys' fees in the Strunk case. The report is here. I also have a copy of Stipulation 1, which pertains to OPRI's attorneys' fees. It is here. It appears from reading these reports that retirees have won their battle for attorney fees, but it unclear how they might benefit from this ruling. If OPRI keeps its promise, those of us who donated to their Legal Defense fund might expect a refund of our donations -- that was the promise Jack Sollis made to members who donated. It seems only reasonable since PERS is going to "ding" retirees for their "win". Of course, all of this is predicated on the assumption that the Supreme Court accepts Judge Breithaupt's recommendations without modification. The unfortunate news is that there is nothing in the Special Master's report that would compel the Supreme Court to clarify its Strunk ruling as it pertains to the "fixed benefit" and its computation "without error". We had hoped that in the attorney fee hearings that this issue would be forced in order for the Supreme Court to declare how retiree's had "won". Alas, nothing in the report seems to force that clarification. On the other hand, having this out of the way removes any further obstacles to getting rulings in Arken and Robinson. Many believe Judge Kantor was waiting for the Special Master to issue his report and for the Supreme Court to clarify its Strunk ruling. Since that isn't likely to happen, Judge Kantor will be forced to rule on the merits of the cases before him without any "help" from the Supreme Court. Enjoy your reading.

On a totally unrelated subject, I will be out of the country from March 23rd to March 31st on a family vacation. I will have no access to email, the internet, or phone service. Do not expect anything posted here, on my other web site, or on the PERS Discussion Group at Yahoo. I will be truly out of contact (the sound you hear is my family cheering).

Call Me

I have been selected as one of 9 retirees to participate in a PERS focus group. Its purpose is to deal with communication issues and other problems relating to PERS' interactions with PERS retirees. If you have any specific concerns you'd like to share with me to share with the group when we get organized, please feel free to drop me an email at a special email address I've set up for these communications. Send your note to me here: enochroot1947-persissues@yahoo.com Try to keep your "issue" focused and clear. I want to represent retiree issues fairly and competently. You can help me by a concise statement of the problem/issue you have. A word of caution: I doubt the group will deal with matters currently the subject of ongoing litigation. They may get into issues related to communication about these matters, but the nitty-gritty details may not be up for discussion.

Everybody Have Fun Tonight

Over on Jack Bog's site there is a lively and fun discussion of names you would give to the Portland City Council if they were a rock group. The proposed names are fun. It seems that we could have a similar good time if we poked fun at (a) the PERS Board (b) the PERS and Employers Attorneys (c) the various Media and (d) the various Judges involved, including the Supreme Court. What IF each of these were rock groups. What would you call them. To start, I'd be inclined to propose a name for the PERB, including Paul Cleary, and call them "Paul Cleary and the Raiders", or "Mike Pittman and the Mechanics". For the PERB lawyers - Joe Malkin and Bill Gary - "Stoned Temple Pilots". Use your imagination. Go to my interactive website and leave your suggestions over there. The winners will be honored by having their names used in place of the real names in some of my posts. This is good, clean fun and is a nice way to divert attention from the real problems we all are dealing with. Let your creative juices run wild. PERS can't take those away.

Hungry Heart

You'll notice a new element on the upper left of this site. I've joined Kevin Bacon's "Six Degrees" web network. The goal of "Six Degrees" is to raise money for charity. At a certain level, Kevin Bacon himself will match the donations made to Oregon Food Bank through this site on a dollar for dollar basis. Since the sight of hungry people in our affluent country really angers, bewilders, and frustrates me, I have decided that it is my "pet" cause. My wife and I give substantial amounts of money annually to the Oregon Food Bank. My daughter does volunteer work there through her school's community service program. I know that I can't single-handedly stamp out hunger in our community, but I want to do whatever I can to raise people's awareness of this significant problem in our society. I provide the news and commentary here with no expectation of financial remuneration. Many people have indicated how valuable they find the site. If you really find the site valuable, please consider making a small (or large) donation to the Oregon Food Bank through this site. Not only will you be helping people in genuine need in our own communities, you will also be indirectly showing support for the work I'm doing on your behalf. My only regret with the "Six Degrees" organization has been their inability to get the credit card companies to donate their fees and charges so that 100% of the money donated can go directly to the Oregon Food Bank. You can offset this yourself, or let "Six Degrees" deduct it from your donation. It is up to you. Regardless of how you feel about this feature, please do consider making a donation. It is the least you can do to make me feel that my efforts here are worthwhile. Thank you.

Blowin' in the Wind

The answer my friends, is blowin in the wind. My email box runneth over. The dogs have been unleashed and all those people who retired around mid-2004 are now discovering just how much of a "do over" PERS got. I've heard from about a dozen post April 1, 2004 retirees of the following scenario. You've gotten your recalculation letter. Your "at retirement" balance is higher AFTER the Strunk/Eugene adjustment than before (in one case, more than $20,000) higher. First, for the good news. The reason your balance is higher is because PERS was forced to pay you 8% for 2003 on both contributions and balance, and a pro-rate of 8% for 2004 on your beginning 2004 account balance. They also reduced your 1999 balance, but the 2003 & 2004 earnings were larger than the 1999 reduction; hence an increased account balance at retirement. Now for the really bad news. If you go back to your original Notice of Entitlement - the one you got when you originally retired, you should see that your benefit was calculated on the basis of the "Lookback" (surely you've forgotten that by now). The "lookback" was created by the Legislature to give you a "floor" under your benefits so that you could still get the benefit of the "old" actuarial factors, but at a price. The price was that your account was frozen at its balance as of June 30, 2003 - nothing else was added. If, when you retired, your frozen benefit on June 30, 2003 was higher than your benefit accounting for all additional earnings and contributions after that date using the NEW (less generous) actuarial tables, you got the higher benefit. So now, four years later, they go back and they are forced to give you additional money. The consequence is that although you left money on the table to get the higher benefit, it no longer works out that way when they add in even more money. They recalculate your benefit and lo and behold, the "lookback" doesn't "win" anymore. Now, your benefit is higher using the new (higher) account balance than it is using the "lookback" in the same comparison. Voila. You get the higher benefit. Unfortunately, the higher benefit is lower than your benefit when you had the lookback because you're under the NEW actuarial tables. Still more unfortunately, PERS is obliged to "give" you the highest benefit. And sadly, the higher benefit is still lower than your previous benefit because you're now using different actuarial tables. Remember that the lookback preserved the "old" tables (the ones usually called the 1978 tables). After the Strunk/Eugene adjustments, you end up, by pure computation, under a set of tables that went into effect on 7/1/03 and are less generous than the 1978 tables.

PERS should have explained this in the letter. It would have saved them a ton of grief. Now, the only thing I can offer is that people appeal their benefit. I'm afraid the appeal won't show much except you'll get the details of the calculation so you can see how this all worked out.

I remember this topic coming up in a PERS Board meeting and the PERS staff cautioning that a complete review of calculations could end up in situations like this. Unfortunately, they underplayed their hand. It looks like it is happening in every single case I've heard about. So far, every single example I have where the "lookback" was the winning procedure originally, it now loses and produces a smaller gross benefit. This is a sick and cruel joke. Appeal the invoice. Make PERS do the extra work to provide you with the explanation. Make sure you thank your legislator. After you've done that, consider a contribution to one of the legal defense funds to help the litigation to stop this dead in its tracks.

P.S. In an answer to an obvious followup question. Why doesn't the "lookback" still work? Because the original lookback was formed on an assumption that is no longer legally correct. PERS calculated your "at retirement" actual account balance assuming 0% earnings for 2003 and 2004. Since the "lookback" used a pro-rate of 8% to simulate the June 30, 2003 balance, the "lookback" balance upon recalculation is actually lower than it was when originally calculated. The original "lookback" continued to "freeze" the 20% for 1999 without the 0% freeze. If you reduce 1999 but not the 2003 earnings rate, the revised "lookback" balance cannot possibly be higher. However, the total account balance is likely to be significantly higher because it was originally formulated with 20% for 1999, 0% for 2003, and 0% for whatever period you worked in 2004. The 1999 adjustment is common to both balances, 2003 had already been adjusted for the "lookback" but not the final account balance, and so there is virtually no way that the actual account balance adjusted for the Strunk/Eugene matter could be anything but significantly higher. And so, the "lookback" has little chance of "winning" against a significantly higher account balance after the recalculation.

Math Sucks

Even though Jimmy Buffett sings of his despair with math (tough sell for one shrewd moneymaker), the PERS math turns out not to be as hard as people are making, although PERS certainly makes life more difficult for itself by putting in extra filips on its forms that confuse rather than help. If you want the "411" explanation of what is happening, consider the forms published yesterday- particularly the first form - as our example. We have a "Before Recalculation" benefit and an "After Recalculation Benefit". One represents what you are currently getting as a result of the 1999 overcredit. The other represents what you *should be getting* after the recalculation of the 1999 interest at 11.33%. Down at the bottom of the page is a list of the COLAS that need to be applied to the revised benefit. The final number represents what your new revised benefit will be, before actuarial reduction. For the amount labeled "Your initial actuarial reduction", subtract that to get "Your recalculated benefit starting [date, 2007] under the ARM". Consider this your NEW REVISED BENEFIT and forget everything else. Nothing more will be done to you. From that benefit forward - assuming it is computed correctly - you will get COLA adjustments on the NEW REVISED BENEFIT. You should never see another ARM reduction as they've just taken it away from you forever in "one touch". Presto, your account is in PERS harmony and PERS doesn't have to fiddle with anything related to your account again except for those annual COLAS. The ARM amount is a one-time reduction to your permanent benefit. The issue of increased ARM payments is a "red herring" as this is invisible to you. PERS is simply banking your ARM monthly and has to apply the COLA to it in the same way it applies a COLA to your benefit. Unless PERS is looking to needlessly complicate its life, there is no reason for it to do anything else. You'll be repaying for the rest of your life in the form of a permanently reduced benefit. I sincerely hope this helps people understand what is going on.

Everyone Is Going Mad

The PERS machine just rolls on, running over people with gay abandon. Yesterday I finally laid hands and eyes on a copy of the form PERS is sending out to retirees when they are "invoiced" for the 1999 "overpayment" and the implementation of the Strunk/Eugene remediation. The form looks pretty straightforward and, for the most part, doesn't seem to lack any essential information needed for a mathematically competent record keeper to verify. Here is an example of a straightforward form submitted by a recipient with ALL original numbers from PERS. (Other identifiers have been photographically removed). There is nothing unusual about this form, although some were surprised to see the way PERS phrased the matter of the actuarial recovery amount (note the asterisk and what it attaches to). As a result of this form, I concluded that the PERS forms were probably adequate and that they weren't as awful as had been alleged by a deluge of emails I had received from recent recipients. But that was before I got the next one. This is from a retiree who left the PERS system 3 months outside the "window" and therefore came under a different set of rules. His situation is bizarre, to say the least, as he had been led to expect, not unreasonably, that his benefit would rise because of the decision involving the 8% earnings to be paid on 2003 contributions and on the 2004 balance. Alas, look at this form and its second page. You get bonus points if you can explain how this person has a HIGHER total account balance AFTER the Strunk/Eugene adjustments but a LOWER monthly benefit. Needless to say, this is one extremely unhappy retiree who feels he has been led like a lamb to slaughter in the PERS "play by whatever rules we happen to think of at the moment" game. Comments welcome on my other blog here. For the record, I advised this retiree to contest his invoice as it makes no sense.

Wasted Time

An intrepid "window retiree" finally faxed me a copy of her invoice from PERS. Let me say that after looking the letter over carefully, there is very little missing. PERS has supplied what it said it would supply and a reader armed with a 1999 Member Statement and a Notice of Entitlement could easily check the numbers. The form is pretty transparent. I take back the evil things I wrote yesterday. If you can't calculate whether PERS is correct or not from what they've sent, dig out the two forms, an Excel spreadsheet and calculate. Everything you need in present on those sheets of paper. And BTW, those are the same sheets of paper you need to use my calculator.

Comfortably Numb

I've been stunned by the number of people who have emailed me with questions about how to challenge PERS on the recalculation letters. Back in September 2005, PERS presented its plan to the Board, the stakeholder attorneys, and a fairly large audience of union representatives and plain old affected citizens like me. The "Strunk/Eugene" remediation plan included a phase in which retirees would receive two letters, the first informing them of PERS' intent to adjust their benefits in accordance with the rulings in Strunk/Eugene cases and the "settlement agreement". The second of these letters would *detail* the calculations and lead the retiree to the recalculated amounts. PERS promised that the letter would contain enough information for the retiree to determine how PERS arrived at the recalculated benefit. Although I've not actually laid eyes on a single letter, I have nearly 150 emails telling me that the numbers just aren't there and there is no way for a retiree to reconstruct much of anything from the information provided with the letter. PERS assured us that this wouldn't happen. In fact it is. This borders on criminal contempt. I wrote my Lipscomb calculator to allow retirees to estimate the effect the Strunk/Eugene remediation would have on their benefits, assuming a July 1, 2007 implementation date. From reports I get, my calculator turns out to be pretty good - estimates are frequently within a few pennies of PERS' own calculation. But this is absolutely and positively no excuse for PERS to not supply members with the ability to check the calculations on their own. PERS should be supplying members with a template that walks through the calculations following the same algorithm PERS is using to compute the benefit adjustments. It is the least we can expect. Otherwise, EVERY RETIREE receiving one of these letters, should challenge the adjustment for no other reason than to force PERS to supply ALL the numbers making up the calculation. We cannot afford to be comfortably numb. If we accept PERS' numbers without independently verifying them, we might as well give PERS the gun to shoot ourselves with. They've already got a reputation as a rogue agency, interpreting Supreme Court rulings willy-nilly and making up rules as they go along. We cannot sit back idly and let them continue to shove things down our throats (and other parts of our anatomy). Don't be comfortably numb. Challenge the letter.

The Long Line of Pain

Gertrude Himmelfarb once titled a book "On Looking Into the Abyss". In it she ruminated about the culture wars and how they would play out in the future. Although I don't share any of Himmelfarb's views, nor those of her husband Irving Kristol and son William, I thought she represented the future as presciently as just about anyone else of her generation. Lately, I've been reading and partipating in discussions elsewhere and via email with PERS retirees who've begun to get very tired, irritated, and frustrated by the lack of any movement on any of the Court cases litigating all things related to the PERS Board's "do over" of the 1999 earnings crediting decision. Some people are antsy about the slowness with which PERS is moving; others are angry that the PERS Coalition doesn't show more aggressiveness in pursuing options that they believe will force PERS' hand. Others ruminate and argue over what exactly the Supreme Court meant by its reference to "fixed benefits" and "without errors" in its Strunk Decision. Others are indignant that PERS is acting like the Supreme Court never ruled and seems to be writing its own rulebook. Others (including me) point out the inherent conflict of interest that arises in some of the legal proceedings between the interests of active (or non-retired) PERS members and those who retired during the "window" or thereafter. Some adamantly cling to the quaint notion that "justice delayed is justice denied". I suppose this is all natural, especially when this melodrama has been played out in so many different courtrooms, in the legislature, and in the newspapers since early 2000. And I don't have an answer or advice to give. I can stare into the same abyss everyone else is viewing and all I see is another 2 or 3 years before all legal avenues are exhausted. The current process being used by PERS to implement what they're calling "Strunk/Eugene" remediation, was agreed to by lawyers (and presumably the client groups they represent) for ALL parties in September 2005 [note added 2/22 - it is significant to note that OPRI and plaintiff Sartain did NOT agree to the one touch, but OPRI's attorney was not present at the 9/2005 meeting, and his letter did not make it into the Board packet because of OPRI's indecisiveness about whether to seek legal input on this matter. I definitely stand corrected on this point.] PERS is moving at the pace it said it would move, perhaps a bit more quickly but not a lot faster. The calculations are turning out to be pretty much in accord with what I programmed into my calculator, unfortunately. The "one touch" approach seemed like a good idea back in 2005 when several of the current cases got launched. It still seemed like a good idea when Judge Kantor announced in both Arken and Kantor that he would make decisions relatively quickly. But that was nearly 6 months ago and most people have difficulty understanding that legal time and geological time are close cousins. In geological time, 2 million years is really fast, but humans can't grasp its speed. To lawyers, a year seems like an instant, but clients can't grasp that it is fast. I don't have any magic wand I can wave and make the judicial system move faster. I have no pull with the lawyers that would suddenly make them "see the light" and move for some sort of action that would (a) stop PERS from continuing what it is doing and (b) sequester funds currently being withheld from retirees into a safe account that will be paid out with interest if the retirees ultimately win. All I can say is that if PERS loses, "one touch", will become "two or more touch" and that is PERS' problem, not mine. Obviously PERS is confident that it will win; otherwise it wouldn't be moving the way it is. So my advice is to sit back, grouse all you want, but expect the grousing to fall on deaf ears from the legal and judicial community. They will decide when they decide, and then someone will appeal and the wait will begin anew. And from there, its possible for a final appeal to the Supreme Court, which is where we all expect this to go for "final" (good god I hope so) resolution and clarification. We have no choice but to endure this long line of pain.

Note added 9:14 pm. If you want to discuss this post openly, please go to my other blog site www.orpersinfo.com and post your comments to the entry "Waiting On the World To Change". It is the most current addition to that site.

When The Ball Drops

My last entry motivated a fair number of readers to email me about PERS' schedule for invoicing. "When will I be next?" is the common question. Folks, PERS doesn't keep me posted on their invoicing cycle. The people who've written to me have come from all over the retirement map, from 1999 to 2003, and from all different types of circumstances. As best I can tell -- and I may well be wrong -- PERS still seems to be "testing" their invoicing by sending out invoices to nearly randomly selected individuals to make sure they've gotten all the billing issues straight and all the calculations and explanations correct. There is nothing I've seen or heard that indicates that PERS has begun a regular and systematic billing of retirees. I suspect that will begin in March and continue for several years. It has also been suggested elsewhere that PERS' stringing this out over such a long period of time is deliberate, but not for the reasons they give. The usual reasons cite manpower shortages, desire to restrict the "damage" to any one retiree by waiting for the "crossover" of benefits to occur, etc. That is all plausible, but one wonders if something more deliberate isn't going on. Why is it that so few retirees - compared to the total number affected - are so vocal about the PERS "takeback"? Do you think that maybe PERS wants to bill slowly so that they never bill enough people to gain a critical mass of outrage? Imagine what would happen if 37,000 bills went out all at one time? Now imagine if only 1,000 bills go out each month? Big difference in reaction. Hard to organize opposition when only a few people at a time get notified. And believe me, relatively few people know enough to be worried about the impact. Most are completely clueless and will continue to be until they get that bill. I know because some of the folks being billed are just now becoming aware there is a problem. Favorite comment: "Why is this happening to me?" "What caused this to happen?". My only response is: "What planet have you been living on for the past 5 years?" Slow billing - PERS manpower shortage and PERS desire to "be nice" or PERS strategy for keeping groups of unhappy people small at any given time? Enough to make you wonder.

Pay The Devil

I don't know whether this is good news or bad news, but I've now heard from about half a dozen people who've gotten their invoices from PERS. First, for the good news. It appears that my Lipscomb calculator is providing people with nearly dead accurate estimates of their adjusted benefits from PERS. The bad news is that I figured it out and programmed it correctly. It is always nice for a programmer to know that his work turns out to be good and reasonably accurate. But this was one instance where I had secretly hoped that my calculator would provide worst case scenarios rather than dead accurate predictions. Any inaccuracies found in the calculator versus PERS' actual invoiced amounts are, in all likelihood, the result of the fixed date for implementation built into the calculator, which is different from the actual date of implementation by PERS. But as we get closer and closer to July 1, 2007, the size of the estimates between my calculator and PERS' invoices should decrease. Other possible sources of inaccurancies result from accounts with a variable component remaining at retirement, buy backs of waiting time, and other nuances that just aren't possible for me to program as the rules are too complex for me to distill into a single-purpose calculator. But, for 85% of the "window retirees", my calculator should give results good enough for people to depend on as a fairly reasonable portrayal of their actual tariff to the devil. For whatever that's worth.

Everybody's On the Phone

Now that everyone should have received their PERS benefit for the month of January (on February 1st) my email box and voicemail runneth over. The question: why did my benefit go down (up) on February 1? Did PERS just implement the recovery without bothering to notify me? The unequivocal answer to this question is NO. The only things that changed were the Oregon and Federal Withholding Tables. These tables are adjusted annually for inflation and employers are required to implement withholding changes effective with the first payroll for time worked in January. Since PERS checks are issued "in arrears", the deposit/check received on February 1 was for the period January 1 - January 31. Thus, this is the first payment of the new year and the first payment to which the new withholding tables were applied. So if your benefit went up or down by a few dollars (mine increased by $15.47) it isn't anything sinister up with PERS. It is just your governments changing the amount they accept as prepayment for your obligation to democracy.

P.S. This whole situation has inspired one of my regular readers to question whether or not we can trust PERS anymore or PERS has squandered members' trust along with their money. Please go to my other blog and discuss Peg's thesis there.

Broken Promises

The Boregonian carried a story today about how the Oregon Investment Council is looking for support to begin investing PERS resources into Hedge Funds. Predictibly, this has a lot of people quite rattled as Hedge Funds are considered high risk investments and seem, to me anyway, somewhat inappropriate for individual and employer contributions to a Pension fund that has prided itself on stability and on the incredible ability of the Oregon Investment Council's acumen in placing funds with investment firms that can meet the expectation of an 8% annual return. As unnerving as this is, I'm of the opinion that this is really a game of sleight of hand. I don't, for a moment, think the OIC's real objective is to get Hedge Funds into the mix of the PERS portfolio. Instead, I think this is a strategy designed to get members and employers all weirded out by the prospect of a portfolio partly invested in high risk hedge funds. In the meantime, the real objective is to scare stakeholders into accepting a lowering of the actuarially assumed rate of return - currently 8% - to something in the 5 - 6% range. A number of years ago, I was permitted to read a private report commissioned by Governor Kulongoski that explored the impact of the 8% assumed rate of return on employer rates, member earnings, and the overall health of the PERS fund. The gist of this report - written by a former member of the OIC - was that in order for the OIC to generate a consistent 8% return on investment, the fund was having to take on increasingly greater risk than is prudent for a pension fund. The conclusion was that the PERS Board should lower the rate guarantee from the current 8% to something closer to 5 or 6%. The upside of this recommendation was that PERS members in Tier 1, who are guaranteed no less than the assumed rate of return, would earn less money on their funds, the actuarial tables would require lower payouts to members at retirement, and the fund would be financially healthier and subject to far less volatility than they are now. The down side of this proposal was the fact that the employer contribution rate is tied to the assumed rate of return in an inverse way. The less money the fund is assumed to earn, the more money the employers have to contribute to ensure that sufficient funds are available to pay out benefits in the future. The author concluded that while this might not be attractive to employers in the short run, that once the Tier 1/Tier 2 member ratios reversed, in approximately 5 - 7 years, and the number of Tier 3 members increased, the long term benefits would be to lower employer contributions and that the short term pain would be offset by long term gains. This report did not see the light of day - or so I thought. But now that I see the proposal from the OIC to invest in Hedge Funds, I'm beginning to think that this "secret report" is beginning to take on a life of its own and will form the foundation for the incredible compromise that will be offered to the unions and the employers. Both will be given the option of either agreeing to let Hedge Funds into the investment mix, with their great potential for earnings coupled with the possibilities of disastrous losses, OR, both can agree to take some heat off the OIC by permitting PERS and the PERB to lower the actuarially assumed rate of return. I'd be willing to bet that if the unions and the members were actually faced with this choice, the lowered rate of return would look a lot more attractive than it does right now. This is a cynical game with the title of "Broken Promises", but looks to be the wave of the future. Since the OIC has had exactly zero difficulties earning returns far in excess of 8% without Hedge Funds in their portfolio, it is hard to see why this is suddenly so urgent now. Consider me cynical, but I think Hedge Funds are being used as a stalking horse for an entirely different agenda.

When My Love Crosses Over

PERS has finally gotten around to sending out 1099-R forms to retirees. Most have received them in the past couple of days. Already there are questions as some retirees are receiving two 1099-R forms where before they had only received one. There is a simple explanation for this. Prior to age 59 1/2, retirees are receiving benefits reported to the IRS as an "early distribution exception" signified by a number "2" in box 7 of the 1099-R. Turn the form over for an explanation of the meaning of the code "2" in box 7. The first 1099-R that you receive is for those months during 2006 that you were UNDER the age of 59 1/2. The second 1099-R will be for the months AFTER you turned 59 1/2 and will be signified by having nothing in box 7. Once you've turned 59 1/2, all subsequent 1099-R's will be issued without the early distribution exception. Congratulations. You've crossed over and now all your retirement funds (IRA, Roth, 401-K, 403-B, 457) are accessible to you without penalty for early withdrawal. That calls for a celebration of some sort.

The Sad Cafe

It has been rumored for some time that PERS staff had gotten their act together and had started invoicing COLA freeze members for the overcredits and had started to revise their benefits. I've been hearing stories for about two months now. I was, at first, puzzled since the official PERS timetable showed COLA freezers not being hit until April 2007. However, the stories I've been hearing have finally been confirmed when PERS posted a revised timetable last week showing that COLA freezer billings began in December 2006. So for those of you hoping that PERS might await the outcome of Arken and/or Robinson, the answer is now in. They aren't waiting, and we can now all join one another at the sad cafe, as more and more of us see what PERS has in store for us.

I guess that if there is any synchronicity in this, it is that I won't have to stare down the barrel at a PERS invoice about the same time the IRS extracts its annual 10,000 pounds of flesh.

I Just Wanna See His Face

Or know his or her name, or the name of the firm. There are so many different PERS-related lawsuits going on right now that it takes a program to figure out which case is which and who is representing whom in each. One high profile case, captioned Robinson, lost its attorney and law firm at the end of December. Gene Mechanic, who represented the PERS Coalition in the Robinson case, left the firm, which also dissolved, at the end of 2006. Mechanic now works as a labor attorney for the Florida branch of SEIU, while each of the other partners in Goldberg, Mechanic et al have moved on to either their own practices or to other firms in the area. When announcing the dissolution of the firm and his departure from Oregon, Gene Mechanic reported that there would be "continuity" on the extant cases, including Robinson. However, I have been unable to determine who will continue to represent the Coalition in this case. I know to a near-certainty that it won't be Greg Hartman and his firm. Hartman and the PERS Coalition filed a claim against the Legislature in Strunk that was diametrically opposed to the position staked out in the Robinson case and so, to avoid a conflict of interest, Hartman recommended that the PERS Coalition (including OPRI) find a different legal firm to represent the plaintiffs in Robinson. That's how Mechanic got involved in the first place. It would be awkward, to say the very least, for Hartman to become involved in this litigation and make the legal argument that is in exact opposition to the one he made in the Strunk case. I've emailed Gene Mechanic to see what information he can provide. He should know, but I haven't heard back from him yet, and I don't know if he will respond. In the meantime, if anyone else out there knows who the new legal eagle is on this case, I and the readers of this blog would appreciate the information.

Update 3:30 pm. Gene Mechanic just emailed me back with the relevant information. Gene continues as lead counsel in the case. He will be assisted by Jim Coon of Swanson, Thomas, and Coon. Jim will be co-counsel and will be involved with much of the appellate work (should it be necessary). My thanks to Gene for his remarkably quick reply to my message.

Title and Registration

I'm now the proud owner of the domain http://www.orpersinfo.com. Since I have a regular readership here, I plan to use my new domain to start another blog about PERS, but let it emerge more organically. The new blog uses an entirely different format and an entirely new and powerful set of tools. My plan is to use that blog to introduce a topic and let people jump in with comments and further the discussion with differing opinions and additional information. It is not intended to replace this blog or to compete with the Oregon PERS Discussion Group. I see it as complementary to all the existing vehicles for us to share PERS information. Unlike OPDG, you don't have to register to post and the engine used does nothing to check the validity of the email address you provide or the alias you use. However, to ensure that spammers don't hijack the new site, there are powerful administrative tools that will allow me to completely block offensive posts, to prevent spambots from posting at all, and to maintain order. Moreover, the way the comments are structured, you have to work very hard to top or bottom post. Every comment is independent and readers can skim the comments without having to put up with rereading the same post a dozen times as posters fail to trim out excessive text. There are still simple ways for posters to ensure that the comments are specifically directed. I've already posted two entries, unrelated to anything here, and both already have a few comments. I have another entry planned for tomorrow after I've had a chance to read the full text of Bush's State of the Union Address. It won't be about PERS specifically, but it is related enough that it will make for a useful and interesting discussion. Please stop by the new blog site and leave a comment about the site, its look, its organization, or the topics posted. All are welcome to join in the fun. I look forward to your continued readership here and at my second blog.

Soul Suckers

I've been hearing from a lot of people who've been invoiced by PERS for alleged overpayments resulting from the 1999 earnings recrediting. A number of readers have shared their invoices with me and it is fairly clear to me that PERS has to do a better job of explaining how they arrived at the numbers. If it is bewildering to me from their explanation, I can't imagine how challenging these invoices must be for people who aren't numerically inclined. Some invoices have been fairly straightforward, but for people who had a complex scenario that involved a portion of the account in variable, who left money with PERS to withdraw a lump sum settlement on the installment plan, had account balances tied up with divorce decrees, the documentation PERS provides just suck the soul out of you. To even replicate the calculations requires that you dig back through a lot of paperwork, which you hope you've saved. Then you have to tediously re-enter data into a spreadsheet and perform some magical transformations and incantations in the hopes you come up with a matching amount to PERS' calculations. These are some seriously complicated calculations when these factors are involved. I don't envy PERS having to do them, but they are absolutely paralyzing for many receiving them. They don't have a clue what to do. My mailbox is overrun with cries for help. PERS' answers to questions about these invoices is, in many cases, less than helpful or instructive. Since PERS promised that ALL numbers needed to replicate the calculations would be provided, PERS should be held to its promise with easy to follow flowcharts that take the individual through EVERY step of the calculation, filling in all the intermediate amounts along the way. Failing that, PERS should hold weekly meetings around the state where people can go and get specific questions answered about their circumstances in real time. If this is going to suck the soul out of unwitting recipients, the least it can do is suck some life out of the people who brought this disaster to you. Perhaps we can ask a few legislators, the Governor, and some attorneys to join in these Saturday sessions. Maybe then would they understand why so many people are complaining that whatever "soul" PERS once had, it left the building about 2003 and it ain't coming back.

Caring is Creepy

During last week's PERS Board meeting, PERS staff reported that the average adjustment to retiree benefits was approximately 1% after the invoicing. This figure was left unexplained and so as a public service, I will attempt to explain this for you. PERS' report is technically correct, but is distracting. The benefit adjustment (plus or minus 1%) uses the CURRENT benefit the member is receiving as the basis for the 1% figure. Once you factor in the recalculated member balance for 1999 at 11.33% earnings and compound it forward to the date of retirement, take the "correct" benefit for the option chosen, and they apply relevant cost of living adjustments (COLA) to the adjusted benefit, figure out the amount PERS believes you've been overpaid, applies the actuarial adjustment, and nets out the benefit, the final benefit is within 1% of the amount you're currently receiving. PERS conveniently ignores the actual words of the Strunk ruling in 2005 and then makes you feel good by telling you it is only a 1% change (for the better or for the worse). I figure that my current benefit has already been reduced by frozen COLA to the tune of about 7% (compounded), so I'm guessing that after the adjustment I'll either be down 8% or 6% depending on where I am in the adjusted benefit-plus-COLA cycle. This is a pretty good snow job - at least as good as the WMD-in-Saddam's-basement scare a few years ago. With friends like these ....