Light A Candle

And hope. In checking around I've learned that the first thing that happens in a Special Session of the Legislature is a review of all bills vetoed by the Governor in the previous regular session. This means that SB 897 - the PERS "clean up your act" bill - will get reviewed again in the special session in January/February. This makes it imperative that we contact each of our own legislators (first in the Senate, then in House) and urge them to hold firm in their original votes to pass this bill. If we can retain all the votes SB 897 got during the regular session (100% of those voting in both bodies), the Governor's veto can be overturned. As soon as Labor Day passes and the silly season begins (always the day after Labor Day), you can consider writing a letter urging continued support for SB 897. This bill is common sense. It calls for PERS to take some responsibility for its estimates and actually work to assure members and retirees that they have ACCURATE information upon which to make a life-altering decision. This bill's statutes would not take effect until 2011, which gives PERS plenty of time to develop the QA mechanisms required for accuracy. We cannot tolerate the "eets not my job mon" attitude of PERS any longer. Customer service and honest representation of your trustees should not be that big a headache.

After The Thrill is Gone

I've been writing about PERS issues since mid-2001. This started out as a private email list to my colleagues at PSU, in which the messages would be forwarded to others at UO, OSU etc. Eventually, my work evolved into a pre-blog, web-based diary. That led to the current blog, which has been running pretty continuously since late 2003. Along the way I've made thousands of friends inside of PERS, in the Legislature, in the legal community, in all aspects of public employment, and even some of journalists with whom I compete for news reporting. All of this has been richly rewarding. I've even had people offer to pay me for looking at their personal PERS situations. I've always refused to take money for my observations or advice because I've always believe that money compromises objectivity. I still believe that.

Along the way, I've actively participated in one newsgroup (OPDG), started another one as a competitor (POD), and helped to organize the incredibly valuable PERS Document Library, which contains virtually all relevant documents pertaining to PERS, the litigation, the legislation, the policy papers.

If I have one fault (I'm sure I have many) it is my abject refusal to engage with people who continually try to hijack the primary raison d'etre for all my endeavors - PERS and closely related retirement issues. I loathe political arguments. I am unapologetically left of center and have no use for the politics of the political right wing. This doesn't mean I don't have friends who come from both sides of the political aisle. We've managed to co-exist as friends so long as we agree not to discuss the one topic (along with religion) that is guaranteed to explode friendships and destroy any semblance of order - politics.

This leads me to the primary point of this entry, which isn't what some are worried about. No, my participation in this blog and my participation in POD and PERS Document Library will continue UNABATED. These are things I value and feel I continue to have information to share, sources to access, and opinions. But politics is not my metier. For the past several years, as PERS news appears to have diminished (an illusion, really), one of the groups (OPDG) where I participated actively has been hijacked by its owner and one or two other members and given over almost totally to noisome, tiresome, hostile, and irrelevant political chatter. In some ways the newsgroup reads like an online version of certain radio and television shows, which I won't dignify by naming here. I've tried to maintain my membership in the group to help out the occasional brave soul who dares post a PERS-related question. Moreover, I've periodically popped in over there to tweak the owner, in particular, to try to get off the political bandwagon and return the group to its roots. Unfortunately, my style can be abrasive, especially when the owner and two or three of his henchmen are guaranteed to jump all over anyone who disagrees with him/them for any reason. Political opponents have either shut up and merely lurk in the background, or they have been banned from the group. Apparently, the owner can dish it out, but he can't take any form of disagreement, whether it be respectful or hostile. In the end, it became a fool's errand to bother to post anything there. Finally, and to no one's surprise, least of all mine, the owner finally banned me from his group. As of today, I am no longer a member of OPDG. I have been banned.

One of the reasons POD was formed was to offset all the deficiencies of OPDG. POD has no membership requirement to read our posts. If you like to have RSS or Atom syndication, our group can be accessed by any newsreader, such as Google Reader. Membership is required to post, but unlike OPDG, you don't have to join just to read our information. A second major difference between POD is that the content is limited to PERS information, questions and answers, and closely related topics (e.g. Social Security, post-retirement health care). Any politically motivated post will be deleted by any of our three moderators. We rarely have to enforce this policy because most members quickly understand that we really mean it when we say we don't want politics to interfere with the group. So far, while we don't get the volume of posts that our ?competitor? gets, we get triple or quadruple the volume of relevant posts. We really are a PERS-related group.

So, if you are looking for up-to-date PERS discussion with interested public employees who share the desire for a NO POLITICS ZONE, please give us a visit. Take a look at the last month's worth of topics. If you belong to the ?other? group, compare the content. Do you see a difference? If so, and you like what you see at POD, please consider joining and participating.

I'm pretty sure that the thrill has gone out of the other group. Its large membership is a result of inertia. Most people don't even bother to read the posts, but don't bother to unjoin either. If you are interested in participating in a group with more than 1100 members and two active posters whose posts only marginally (at the outer 0.0001% of the margin) relate to anything relevant to PERS (I may be exaggerating; maybe it is only 0.000001%) then OPDG is the place to be. If you also want a case-study of what happens if you let politics hijack a group, OPDG is textbook. If you are truly interested in PERS-related news brought to you by members, many of whom actually attend PERS Board meetings, and can actually answer questions without going to the PERS website to look up PERS' sketchy information, please stop by and give us your eyes for a few minutes. I think you'll be quite pleasantly surprised by what you see.

We're No Here

No, there isn't a typo in the title. My mailbox runneth over with people getting estimates from PERS that contain one or more inconsistency or plain error. I've gotten emails this week (and today's only Weds) from five different readers, each of whom had requested estimates for a December 1, 2009 date (significant because that is the last retirement date before the revised method of mortality factors goes into effect on January 1, 2010). The errors I'm seeing are in erroneous entries for the 2008 ending balance, mismatches between Option 1 estimates in multiple places on the same page, variable costs for purchasing waiting time, and a new "error" of having the online calculator refuse to estimate benefits beyond two years away from retirement, even for inactive members. This kind of sclerosis is the sort of thing that drives members stark, raving, bonkers. And it is especially aggravating because PERS accepts no responsibility for these errors. What is to assure us that these kind of inept errors won't occur in one's notice of entitlement. We've already learned that from a legal point of view, the NOE isn't worth the paper it is printed on. If PERS makes a mistake and later catches it, you (the retiree) get to pay for it regardless of whether you could have identified it when you retired or not. Some people just aren't "numbers" people, and PERS doesn't do much beyond the online calculator to provide an individual with guidance. Have you ever tried to find out the method used to calculate buyback costs? Obviously it is individual, but the method of calculation should be the same for each member, especially for the 6 month waiting time. But how do you check that?

I hate to keep harping on this point, but SB 897 was supposed to force PERS to "clean up its act." Now that our feckless Governor has vetoed a unanimously passed bill, PERS' accuracy has declined dramatically in my opinion. I haven't received this many incorrect estimates (plus those from previous weeks) in all of the 6+ years I've been writing this blog. So, it leads me to wonder whether PERS even cares whether its estimates are accurate. Do they have ANY QA supervising the drones doing the estimates?

Please, please, please. If you find an error or anything that doesn't make sense to you please do the following: 1) bring it to PERS' attention and ask for a replacement estimate that isn't charged against your yearly limit; 2) send a copy of the complaint to Paul Cleary (paul.cleary@state.or.us); 3) send a copy to the Legislative leaders (I'll post email addresses in a comment to this post); 4) send a copy to your local Representative and State Senator; 5) send a copy to Governor Kulongoski. Finally, in each of the latter 4 copies, remind all of them that SB 897 was designed to make PERS accountable for these kinds of errors and that the error rate is increasing rather than decreasing since the Governor's veto. It can't hurt to remind all the Legislators as the Legislature will be in Special Session in early 2010 and we can possibly assert the need for an override of the Governor's veto. The excuse that there is pending litigation is true, but entirely irrelevant since this is the subject of a civil suit brought by a single individual with a jury trial. There is no way the outcome of that case can possibly force PERS to change its ways. Only Legislative action or an Administrative law case can do that.

TubThumping

I've been out of town for a few weeks and my posts have been sparse. Needless to say, so is PERS news these days. After our cowardly Governor vetoed SB897, the only talk I'm hearing is the "possibility" that a group of Legislators from both parties may try to mount an effort to overturn the Governor's veto of SB897. It is rare to ever have any bill passed unanimously by both House and Senate and unheard of for a Governor to veto that bill. That's just dumb, even for a lame duck. Ostensibly, the reason for the Governor's reluctance to sign SB 897 was that there is still outstanding litigation about the subject of SB 897 and the Governor felt that the litigation should be allowed to run its course before the Legislature gets involved. Besides being hypocritical (the City of Eugene case was still in litigation when the Governor proposed a complete overhaul of the PERS system to "solve" some of the problems identified by the PERS reform bills), it is also plain incorrect. The *only* litigation still ongoing is PERS' appeal of the ruling in the Kay Bell civil trial. Regardless of what happens in that case, only one person will benefit from its resolution - Kay Bell. It isn't a class action case. It isn't an administrative rule hearing. It has no application outside Kay Bell and has no possibility of inducing or requiring PERS to change its ways. In fact, SB 897 was designed to solve the problem that Kay Bell and many others found themselves in well after retirement.

I don't know how likely it is that the Legislature will take up the SB 897 veto during its winter Special Session. Typically, these sessions are scheduled in advance when pressing financial problems make it necessary for some mid-term adjustments to the State's budget or agency budgets. It may take a lot of tubthumping to get SB 897 back on the front burner. But you can write your legislators (House and Senate) and urge each to support a plan to overturn the Governor's veto. Otherwise, PERS pre-retirees will continue to go blindly into retirement without any legal assurance that the estimates as well as the final Notice of Entitlement might fall prey to another of PERS' FUBARS. No one is asking PERS to pay anyone more than they are owed. It would just be nice to know with certainty that you are not retiring on a promise compromised by fingers crossed behind PERS' back.

If I Had A Rocket Launcher

I'd use it on our Governor. In an unbelievable show of stabbing all his supporters in the back with multiple knives, Governor Kulongoski VETOED SB 897. This was one of the few significant PERS bills passed virtually unanimously in the Oregon Legislature. Among its most important elements was a section, due to take effect in 2011, that would have required PERS to "own" the final estimates and Notices of Entitlement given to PERS members just before and just after they retired. This bill was sponsored by OPRI and motivated by the Kay Bell case in which PERS denied repeatedly that there were errors in Kay's estimate and then long after she retired decided there were significant errors and reduced her benefit by a very large amount. It is very hard for me to reconcile a Democratic Governor who self-servingly solicits and gets money from the various public employee unions, gets support from those unions and then deliberately and provocatively points a loaded gun at them and vetoes a bill they strongly support. I have no idea what the Governor's reasoning was and I really don't give a damn. This was a needed bill designed to curb the reign of errors of PERS. It was supported strongly by both parties in the Legislature (passing virtually unanimously in both the House and Senate), and then vetoed by the Governor on the VERY LAST DAY he was permitted to have any impact on this bill.

This was a cowardly act by a cowardly Governor. Ted, you have earned your place in history as the most ineffective and chicken-shit Governor in Oregon history. May you rot in obscurity.

Throw A Stone

At PERB, just for fun. As reported several weeks ago, the PERS Board (PERB) agreed with Mercer to adopt a new methodology for calculating the mortality factors that make up the biennial actuarial table revisions. The Board also adjusted the timing of the various studies that make up the basis of the AEF (mortality factors) and the employer contribution rates. Not surprisingly, the Board decided to hold the assumed rate ("the guarantee") at its current 8% rate.

As is normal for this Board, whenever they issue good news (keeping the 8%) rate, they always seem to dilute the excitement by providing offsetting bad news. Today's adventure has to do with the calculation of the mortality factors. PERS has posted a general explanation of how the new method ("generational mortality") will affect members who retire on or after January 1, 2010. Basically, you can expect that your monthly benefit under Money Match will decrease by about 2%, while the Formula+Annuity retirees will see their benefit decrease by 1%. PERS suggests that if members want to retain the benefit under the current mortality tables, they can either retire before 1/1/2010 (i.e. 12/1/2009) or plan to work an additional 3 or 4 months. You can read PERS' own explanation on their web site, which you can reach via a link on the left side of this blog.

If you were planning to retire anyway I would advise you to do everything possible to make your retirement effective on 12/1/2009 (i.e. get your papers in before 12/1 and separate from your employer no later than 11/30/2009). This will have a minimal effect on your benefit and preserves your mortality factors under those currently in force. The challenge for those who want to wait to see what the actual impact will be under the new mortality tables, be aware that the new factors won't be voted on until the November 2009 meeting. You would have to act fast if you don't like what you see. Keep in mind that the older you are, the greater the effect the change in methodology will have. You can see this clearly in the illustration provided at PERS' website.

My advice is to be very careful in making your decision. If it is a no brainer to retire at the end of November; it requires some careful thought to wait longer unless you have no choice. Leave it to PERS to keep members constantly on their toes watching out for their own interests. So much for the concept of a trustee looking out for your own good.

Non Entity

That's what I think of our Governor. I had expected some action on SB 897 while I was away. I must have been on some hallucinogenic drug to think that. It has long been rumored that the Governor was unhappy with SB 897 and more rumors that he might veto it. In true cowardly form, the Governor seems to be choosing the "easy" way out. With near unanimous votes for this bill in both the House and the Senate, truly bipartisan support, the Governor would have to be crazy to veto it. It isn't that I haven't thought of him that way, but it appears more likely that the Governor will let SB 897 become law without his signature. Ted has until Thursday to sign or veto the bill. If we get through Thursday and the Gov has done nothing with SB 897, it automatically becomes law on Friday as it contains an emergency clause that makes it effective as soon as it is law.

It is truly a good thing that he is lame-ducked (dead-ducked). I could not ever imagine voting for that dolt again, regardless of who were to oppose him. The man has no backbone whatsoever, and he truly knows how to bite the hands that feed him. Can you say m-o-r-o-n.

Tie Me At The Crossroads

For those of you wondering, Yahoo Newsgroups are down for routine maintenance today. It isn't clear when they will be back up, but rather than waiting, I'm going to try and report the latest news from the Board meeting as well as elsewhere. First off, the good news: As noted in my previous, brief message, the PERB voted today to retain the 8% "assumed rate" so that the "guarantee" will not change anytime in the next two years. That ought to reassure anyone near retirement, but not quite ready for retirement that earnings on Tier 1 account balances will not go down. I wish I could just stop here. It would be time to celebrate.

Unfortunately, along with the good news comes some not-so-good news. My friends at the meeting today report that Mercer and the Board threw a real curveball at both members and employers today when they decided to change the methodology used to construct the mortality tables. To make a long story short (and hopefully simple), the Board adopted the Mercer recommendation to move from "static mortality" to "generational mortality". What this does is to create a separate table for each whole number age (e.g. 60, 62, 67), and is based on the assumption that "anticipates mortality improvements on a generational basis". In other words, the assumption is that each age cohort is expected to live slightly longer than the same age might have lived a few years ago. This is a very tricky assumption, but is used by actuaries around the country. You can read more about this type of construction here and here. Mercer predicts that this will lower Money Match benefits by about 2% (don't know whether this is across the board or tails off by age). This will also increase employer rates as full formula begins to overtake Money Match as the predominant mode of retirement.

In short, PERB seemed to be giving with one hand, and taking away with the other. I have no idea of how this will play out until I see the first set of mortality tables (due for presentation at the November meeting) constructed under this new assumption. It is doubtful that people waiting to retire after January 1, 2010 will benefit from these changes. At the same time, it isn't clear how much impact they will really have. The change in methodology obscures what used to be a fairly simple set of rules.

Finally, in a piece of offbeat news, a correspondent pointed me to a piece in this afternoon's OregonLive. Our favorite judge, Henry Kantor, is on Senator Ron Wyden's short list for two vacancies in the federal judiciary. Also on the short list is current Supreme Court Justice (and friend of PERS members/retirees) Durham. Several others were on the list. Five candidates will be interviewed next month with Senator Wyden passing on his recommendations to the President for his nominations. God help us all if Judge Kantor wins this appointment. He could singlehandedly slow down the Federal Judiciary to an utter crawl - a challenge that few before him have managed to do.

Unless there are updates or clarifications about the Board meeting, I don't anticipate any more posts until after August 1. I'm going out of the country and will have very limited access to email and to the intertubes. While I'm gone, everybody needs to behave.

Oh Happy Day

Not surprisingly the PERB voted today to keep the assumed rate at 8%. The vote was 4-1, with everyone's favorite public employee, Brenda Rocklin voting against. More when time permits.

[Posted with iBlogger from my iPhone]

High Hopes and Heartache

As luck would have it, I will be unable to attend today's PERB meeting. The primary reason for attending was to listen to the actuary (Mercer) present the second part of the economic assumptions for the 2008 experience study. Fortunately for all of us, the PERS website has already posted the study, and it contains enough information for us to catch the feel of what is recommended. The only element of interest to most actives and near retirees is what Mercer would recommend in terms of the Assumed Interest Rate. On pages 5 and 23 of the report, they make their recommendation. If the PERB sticks to the Mercer recommendation alone, the Assumed Interest Rate would decrease to 7.5%. However, Mercer presents other data from other investment managers and actuarial firms that would recommend the assumed rate at anywhere from 7.5% to 8.5%. The median, modal, and mean of assumed rates for 125 large public sector funds remains at 8%. This leads me to believe, as I did after the May meeting, that the Board will probably elect to do nothing about the assumed rate and leave it at 8%. This isn't a guarantee, of course. Today's meeting will probably seal the deal on the rate for the next two years. Whatever decision is made today will have an impact on the new actuarial equivalency factors (AEF) that will be adopted at the Board's November meeting. For anyone wanting to beat any changes, retirement would have to occur before the end of the 2009 calendar year. Of course, if the Board doesn't change the assumed rate, then there would be no compelling reason to retire before the end of the year unless you were already planning to do so. My advice, pending additional information, would be to plan for high hopes and prepare for heartache. I will update this post tonight after someone at the meeting confirms for me what the Board actually decides to do today.

Applause

Sometime between yesterday and this morning, we crossed over the 700,000 viewer mark. Thank you all for keeping this blog going with your interest and your comments. Alas, I fear its need will never end.

Clap For the Killers

OK, not killers literally, but close. We've been ranting on this blog for weeks now to get your interest in writing or calling the Governor to emphasize how important SB 897 is to all of us retirees and near retirees. Perhaps a true story, ongoing as I write, will motivate you.

Heres the story. A former municipal law enforcement member retired in 2000. At the time of his retirement, he looked into ODS as a Health Insurance Program for retirees. He was quoted a price, which seemed high at the time, but offered a good program. This retiree then signed up for the ODS program. At the time of this decision, a PERS employee entered his status wrongly and posted him as a State of Oregon retiree, eligible for the RHIPA subsidy. Unfortunately, no one in PERS bothered to tell this retiree that he was misclassified and that not enough was being withheld to cover the true cost of his health insurance. During a routine audit in 2009 (yes, this year), PERS discovered the error and - you guessed it - billed the retiree for an additional $9000 to cover the cost of benefits he already thought he was paying for. He started the appeal process and has had tons of paperwork to fill out to begin the appeals process. His case appeal is simple. This wasn't HIS error and HE shouldn't be responsible for paying it. A PERS employee made the error and PERS should cover the cost of the error from their contingency fund. This follows the old tried and true principle of "you break it, you pay for it".

This past week, PERS held a telephone conference with the retiree and offered (generously NOT) to allow the retiree a 10 year time frame to pay the $9100 IF he drops the appeal. Otherwise, failure to take the deal and subsequent loss of the appeal would result in him having to repay PERS over a two year period of time. And the member has until this coming Friday to make his decision.

It is this kind of outrage that SB 897 tries to prevent. Instead of holding a gun to a retiree's head 9 years later, it would establish a "data lock" that would prevent PERS from coming after members for errors like these.

Please, I beg you to call the Governor and ask him to support SB 897. Members like the one I'm describing, and members like Kay Bell should not have to put up with the nonsense like this. No one should have to live in perpetual fear that their benefit will be adjusted because some clutzy, incompetent, careless, or sloppy clerk entered data incorrectly.

Wait No More

On behalf of Kay Bell and others who have been really harmed by PERS misinformation, I urge you to call Governor Kulongoski's office at 503 378-4582 to urge him to sign Senate Bill 897. This bill would require PERS to be more accountable to members approaching retirement. It would require them to take various measures to insure accuracy in the final estimates given to members PRIOR to their signing over their jobs and entering the retiree category. This bill was sponsored by OPRI and was passed in the Oregon Senate and Oregon House by nearly unanimous votes. This is truly a bipartisan effort. There continue to be disturbing rumors that Governor Kulongoski may veto this bill despite the Legislative unanimity given the bill. PERS is strongly *opposed* to the bill on the grounds that it will cost them a lot of money to implement. I've called BS on this argument before and I continue to do so. Regardless of how much it costs to implement, PERS is supposed to be the trustee for OUR retirement money and OUR benefits. The least we can expect from them is an accurate estimate of our retirement benefits BEFORE we make an irrevocable decision to retire. There are far too many instances where PERS has said "oops, there was a mistake in your benefit. Your benefit will be reduced and you owe us money". This is unacceptable. I'm not talking about cases like the City of Eugene or the Legislative reforms. I'm talking about plain old data recording errors, employer errors, and errors caused by accidents and incompetence. PERS retirees and near retirees should not have to relinquish their jobs without having an ACCURATE estimate of their retirement benefits. Oregon is the only state where there seems to be no accountability for accuracy. SB 897 takes a small step in the direction of rectifying that situation. The bill is not ideal, but it is the best we've got right now. Urge the Governor to sign the bill and allow all of us to move on with our lives. Call 503 378-4582 and register your support for SB 897.

Lonesome Me

For people who don't read comments to blog posts - and you really should as they are both interesting and informative - I was properly corrected for an error I made in my previous post "The Soul of a Man". This correction has been up several days, but seems to have been lost on more a few people. Here is the correction.

Oregon's constitution does not have a pocket veto. The Governor has 30 days to either sign, veto, or ignore a legislatively passed bill. The effect of signing or vetoing is pretty obvious, especially when the Legislature is adjourned. HOWEVER, if the Governor chooses to ignore a bill, it becomes law after 30 days or on the effective legislative date of the bill. Oregon does not pattern its executive after the US President, which was my error. With that out of the way, we can return to the primary point of my previous post.

All constitutional mechanics aside, the rumors still persist that the Governor may well veto SB 897. I've heard this rumor from multiple, independent sources. They could be wrong, of course. OPRI's lobbyists and OPRI itself continue to express optimism that this bill will be enacted by the Governor. Nothing would make me happier than to see it go into law, given the devastating effect its absence has had on the lives of some PERS retirees.

So, for those of you out there gloating that I've gotten the constitutional mechamics wrong, I fully admit that this was one area in my education (which was in California) that was weak. But, being wrong about the mechanics doesn't change the central point of my message.

Please, if you have not already done so, write or email the Governor soon to indicate your desire for him to sign this very necessary bill. It contains some important safeguards for future retirees so they don't end up in the predicament Kay Bell found herself.

Soul of A Man

Our feckless Governor - Mr Ted - is demonstrating once again that he lacks soul and is answerable to no one. The issue is SB 897, the only PERS bill with any teeth to come out of this year's legislature. SB 897 has been watered down from its initial form, but passed in both houses of the Legislature by large votes. SB 897 would, in the main, require PERS to "own" the estimates provided to members when they approach retirement. This bill was inspired by the Kay Bell case and others like it where PERS changed benefits on individuals AFTER they had retired, after they had started receiving benefits, and after they'd given up their longstanding public employment. This bill attempts to remedy the problem by requiring PERS to take special measures to insure accuracy in retirement benefit estimates.

Not surprisingly, the bill is opposed by PERS, which argues against it on the basis of expense - an argument I reject as BS. The unions support it (and they effectively re-elected Gov Ted) and OPRI was one of the bill's sponsors.

It is strongly rumored that the Governor will attempt to veto the bill by ignoring it. This concept of a "pocket veto" arises when the Governor chooses to do nothing about a bill following the adjournment of the Legislature. If the Legislature adjourns before Gov Ted has 10 days to review the bill, it is vetoed automatically without the Governor having to do anything. If the Governor does nothing for 10 days and the Legislature is still in session, the bill automatically becomes law. Since the Legislature passed this bill in the days immediately before sine die it is likely that Kulongoski will let the bill die with the Legislature.

I do not understand the Governor. Why is he a Democrat? Why does he accept union money and then stab them in the back? Why do the unions continue to support him? This bill had bipartisan support and passed by large majorities.

I suppose that the Governor, not being up for reelection and term-limited, no longer gives a damn about public employees, their unions, and all the support they've given him throughout his public career. My fondest wish is for the Governor, who will retire with a PERS benefit, gets hoist on his own petard by PERS' continued penchant for "getting it wrong". That would be the only poetic justice in this case - a soulless reaction to a soulless man.

EDIT: late Tuesday afternoon. The Legislature *has* adjourned and this bill's fate rests entirely with the Governor. He must sign it for it to become law; if he wastes the next 10 days doing nothing, it will be consigned to the dustbin, all the effort to pass it wasted. Please, help us persuade the Governor to sign this bill. WRITE, CALL, EMAIL, FEDEX, UPS, Pony Express, whatever. Just push hard on this man who seems to only talk the talk, but refuses to walk the walk.

For Whom The Bell Tolls

In a surprise ruling, Judge Kantor issued his opinion in the White case on June 11. Judge Kantor ruled against the PERS Coalition on ALL counts - no breach of fiduciary duty, no improper allocation of funds to various reserves, no failure to consult Coalition before settling the City of Eugene. This comes from the OPRI website and thusfar no copies of the legal ruling have been posted anywhere.

It is clear that the PERS Coalition plans to appeal these cases to the Oregon Court of Appeals, and the delay at that level on Arken and Robinson may well be so that White can join them on appeal. I have no doubt that these three cases will become joined at some point and will be ruled on in a single swoop by the Oregon Supreme Court.

The central issue the courts will have to work out is whether there exists any longer a fiduciary duty to members, or whether the settlement of the City of Eugene case coupled with the Legislative reforms of 2003 more or less abolished that responsibility and leaves PERS members and retirees in the uneviable position of have their money held in trust by trustees who no longer owe them their undivided fiduciary responsibility. This is a truly scary consideration and I hope the higher courts will recognize this responsibility and restore the burden to PERS and its Board.

Is That All There Is?

Then I'll keep on dancing. I spent a near wasted two hours this morning in Judge Kantor's courtroom listening to "arguments" in the White case. I heard overpriced Joe Malkin dismiss every single Coalition claim as fundamentally unsound, unsupported, and basically irrelevant. Bill Gary piled on for the employers. Greg Hartman distilled the case down to the central issue: what does "fiduciary duty" mean in the context of an agency like PERS. It seemed that Judge Kantor agreed with this summary and seemed to be uncomfortable with the concept of having to divine the meaning of ORS 238.601 where we first meet "fiduciary responsibility." Hartman argued that the Judge defer to the case PGE v B.O.L.I. for inspiration, while Judge Kantor seems to think that the Uniform Law of Trusts for Oregon.

In any case, much of the argument seems to have taken place in email back and forths between the Judge and the attorneys. I can honestly say that I learned nothing new from this hearing. I still don't understand why Judge Kantor decided he needed to have all parties in the room at the same time.

In any event, I don't sense any urgency in Judge Kantor. He did promise that he would issue a ruling (when?). He then adjourned and we all (about a half dozen PERS retirees also attended) scattered to the wind, puzzled.

One oddity did surface after the hearing. I learned that the lobbying firm working for OPRI now employs none other than the anti-public employee favorite, David Reinhard. Talk about politics making strange bedfellows.

Black Tables

One of my readers just sent me a note linking to a source that reports the IRS will be issuing (or has already issued) new withholding tables to pension plans. The revised withholding tables correct for the "Making Work Pay" credit for which retirees are not entitled, but which have been getting since April 1. I will provide a link in an update to this post since I have to run off now. It isn't at all clear when PERS will adopt these - June 1 - is the obvious date, but perhaps they won't do it until the COLA adjustment is made on the check to be received on August 1. When I update, I hope to have PERS' answer by then. In the meantime, this should help retirees plan more easily for the unanticipated and undeserved (at least according to the IRS and Congress) windfall. Update: the link to the article and a link to the IRS web site can be found here. Update #2: I just heard back from PERS. The "new tables" are not new withholding tables per se but include a supplemental withholding table that helps to get retirees back to near parity. PERS is studying the various options given by the IRS and will post an announcement once they have determined whether the cost of implementing the change versus the benefits gained are actually worthwhile. It is, by no means, a certainty that PERS will adopt these supplemental tables. Stay tuned for more information as it becomes available. In the meantime, you can adjust your withholding to offset the gains from the tax break if you want by filling out a new W-4P. And here you thought retirement would be a bowl of cherries.

The Last Carnival

Begins on Friday June 5 at 9:00 a.m. in the Multnomah County Courthouse. Judge Henry (the slow) Kantor will be holding taking oral arguments (or something like that) in the case captioned "White." This case has been hanging around since mid 2004 and is the last remaining case in a long string of cases emanating from the City of Eugene litigation. White challenges the legal authority of the PERS Board to enter into a "settlement" of the City of Eugene case without notifying, involving, or engaging the PERS Coalition, which was a party in the City of Eugene litigation.

White argues that the PERS Board ignored their fiduciary responsibility to PERS members and retirees by entering into an agreement to settle the City of Eugene case on terms unfavorable to members and retirees. In particular, the Board agreed to the revised mechanism for calculating the employer variable match for Tier 1 retirees, it agreed to the recovery mechanisms that became known as the Strunk/Eugene method, and it agreed to a variety of other measures that were designed to thwart any ruling against the Legislature and PERS in the not-yet-decided Strunk et al cases stemming from the 2003 Legislative reform.

Judge Kantor has resisted any efforts to move this case along, deciding instead to rule on Arken and Robinson before deciding White. The former two cases are now before the Oregon Court of Appeals. White has the potential to undermine both the rulings in Arken and Robinson, especially in the unlikely even that Judge Kantor rules in favor of the White plaintiffs.

While I am not encouraged by Judge Kantor's speed in deciding any case, I am hopeful that we will finally see some movement in White at week's end. There is no way that any decision will be rendered in Court on Friday, but we should be able to judge from the questions and answers whether Kantor is in any way disposed towards the White group. It is yet another chance for us to see the PERS Coalition attorneys, led by Greg Hartman, go up against a very overpaid (by us) California "wideboy", and probably another highly overpaid Stoel, Rives local "wideboy."

I strongly recommend that retirees and actives in the Portland and Salem area plan to be here to see the carnival up close and personal. There is nothing quite like seeing the actors all playing their roles on the stage rather than waiting for someone else to summarize the play through an admittedly biased lens.

The activities begin at 9 a.m. in Room 560 (Kantor's Courtroom) at the Multnomah County Courthouse in downtown Portland. Plan to arrive at least 30 minutes early as security in the Courthouse resembles airport security stations. There are a variety of parking options on Fourth Avenue (the Courthouse entrance side) including Smart Parks where you ought to be able to park for under $5 for a half day. You can also take public transportation into downtown Portland and be less than two blocks from the Courthouse. Please try to make it. The more actual members and retirees present, the harder it is for the Judge to claim disinterest or to suggest that there is no impact on retirees or actives. When you show interest by attending, you send a very powerful message. Let's do that.

Shelter From The Storm

In one of the few upbeat moments of the PERB meeting Friday, there was an official announcement that the 2009 COLA would be 2%. This isn't a surprise and has been known for several months now, although I don't recall it being mentioned at any previous Board meeting. Since the CPI-U for the Portland/Salem Metro area was 3.26% for 2008, an additional 1.26% will go into the COLA bank for future use in those rare instances when the cost-of-living is less than 2%. Unlike Social Security recipients, PERS recipients will be able to draw on this bank in the future. While SS will not be giving any raises for the new two years, in all likelihood, the PERS COLA will be one of the few bright spots in our otherwise dismal economy.