December 31, 2003. This website has been ongoing for more than 15 months. Amazingly, there are nearly 2000 subscribers to the email list. On behalf of everyone who contributes to this list, have a wonderful start to 2004. May your decisions be momentous and meaningful in 2004. Happy 2004! We resume our regular programming on January 5, 2004.
December 27, 2003. Santa's mailbag is just filled with interesting tidbits. The most significant rumor I've heard from my many informants is that the Legislature has asked for a fiscal impact analysis of repealing HB 3349 (the "benefit increment adjustment" that retirees receive because Oregon cannot provide different tax treatment for PERS pensions that it does for Federal pensions (US Supreme Court - Davis v Michigan; Oregon Supreme Court - Hughes et al vs Oregon. Thus both PERS benefits and federal pensions are taxable). The rumor floating is that instead of an addition to the PERS benefit (as HB 3349 provides), the Legislature wants PERS to report to the Oregon Treasury the amount PERS recipients earned that was subject to Oregon Tax (not including the HB 3349 adjustment). From this, the rumor holds, the Treasury will allow PERS recipients who reside in Oregon who would otherwise be eligible for the HB 3349 adjustment to instead claim a credit for tax paid on the portion of income that is excludable under the terms of the HB 3349 settlement. The effect of this would be to eliminate any form of tax credit or benefit increment for retirees not residing in Oregon. This would result in a significant "hit" to retirees out of state, but there is also a significant "hit" to Oregon PERS retirees as well. In one version I've heard, the elimination of the benefit increment would take place well before the tax credit was realized - the worst case would be a 16 month delay between cessation of the increment and the tax credit. There are many details I don't know here, but repealing HB 3349 was one of the top items to appear on the Interim Legislative PERS Task Force's report issued a year ago, before the 2003 Legislature convened. It appeared in one form as HB 2404, which never received a hearing. Since there is a fair amount of money being sent outside Oregon, there is a finite possibility that the 2005 Legislature will figure out a way to either repeal or significantly modify HB 3349 (1995 Legislature) to exclude those who no longer reside in Oregon while meeting the conditions of the Hughes decision.
December 26, 2003. Just a quick note to let people know that I'll be out of town from 12/29 to 1/2/04. During that period I'll have sporadic access to email and will not be able to respond with passwords to the Lookback calculator with my usual speed. If you need a password during this time period, please use the subject "Lookback Password" when you email me. That way I can quickly identify the emails requiring attention. Otherwise, I'll get to these on 1/3/04 after I return from two very different trips - one most definitely NOT for fun and the second definitely for fun.
December 24, 2003. I haven't had any reports of problems with the Lookback Calculator. If this continues, I'll release it more publicly (unpassworded) after the first of January. I know that many are anxious to figure out what their benefits might look like, especially with PERS unable to keep up with the demand for estimates. As I understand it, they still haven't completed all the estimates for people who want to retire on January 1, 2004; I shudder at the prospect of them completing estimates for people who want to retire on 3/1/04.
If you've already downloaded, installed, and used the "lookback" calculator, I would appreciate hearing about your experiences. In particular, did you notice anything that didn't seem right? Do you have a benefit estimate from PERS that you can compare with my calculator. So far, I haven't heard much of anything back - usually a good sign - and I'm hopeful that the conversion from the old version to the current version was as seamless in fact as it was to recode.
I am going to have to be out-of-town from Saturday 12/27/03 to Tuesday 12/30/03. If you request the password for the "Lookback Calculator" during this time period, don't despair if I don't get back to you right away. This is not one of those trips where I'll have easy access to email on demand like I do right now. I'll also be out of town from 12/31/03 to 1/2/04, but I should be checking my email a bit more regularly then.
I've heard very unsubstantiated rumors that there is strong sentiment to use the 2003 Regular earnings to liquidate the deficit from 2000, 2001, 2002, and fund the reserves to as high a level as earnings permit. I've also heard (again without substantiation) that the reason there is strong sentiment is that the PERS Board is hedging its bets against losing in the Supreme Court. If this happens, the Legislature would be in a stronger position to terminate PERS in the 2005 session, fully (or mostly) fund buy outs active and inactive members to the extent of their "accrued benefit" and move forward with a less costly plan for all. (In case you didn't get the message above. Everything in this paragraph is rumor. There is (1) no decision about distributing the earnings for 2003; (2) there is NO basis for believing that the plaintiffs will win OR lose in the various PERS cases now before the Supreme Court; and (c) no one has suggested that the Legislature's "secret plan" for dealing with a negative ruling from the Courts is PERS Termination. I merely bring this to your attention because I think people should be thinking about the longer-term questions of PERS viability if the Supreme Court cases favor the plaintiffs in most claims).
For those who care about such things, you'll notice that my "hit counter" seems to be on the fritz. I'm told that the server that hosts it should be back online soon, but I have no idea whether there is some recording of "hits" taking place.
HAPPY HOLIDAYS TO ALL.
December 23, 2003. Frequently asked questions about the "Lookback" calculator. (1) How do I account for service time purchases? You can't. The program doesn't handle it. (2) What about employee contributions after 12/31/03? They go elsewhere and don't affect your Tier 1 monthly pension. See HB 2020 for more details. (3) Why is the annual pension total for an April 1 retirement so different (larger) than the total for a July 1 retirement? Simple. You get 8 pension checks in 2004 if you retire on 4/1/04; you only get 5 checks if you retire on 7/1/04. This accounts for the discrepancy seen for the 2004 totals. (4) How do I replicate the results PERS has posted in its spreadsheet? The crucial details you need aren't there. First, you need to know that the starting 2003 balance is $119,142.31 (that's how you get to $125,000 on 6/30/03). Second you need to figure out birth dates and employment start dates. Birth date for 55 is 3/1/49, for 58 is 3/1/46, for 62 is 3/1/42, and for 65 is 3/1/39. Second, there is NO BENEFICIARY ASSUMED. Third, service time is always considered exactly 30 years (3/1/74 - 2/29/04; 4/1/74 - 3/30/04; 7/1/74 - 6/30/04). Finally, you need to deal with the ORS 238.380 adjustment, which is added to my results but not to PERS. The ORS 238.380 percent is prominently displayed. For PERS' examples it will be 5.813% or something close. To match PERS' benefits simply divide the Option 1 Benefit (in green) by 1.05813 (or some other number close to that). You'll get an answer to within a dollar or so of what PERS published.
December 22, 2003. A fair number of people have downloaded the "Lookback" calculator. To those of you who have the program, make sure you see a row of buttons at the bottom of the dialog box. These buttons should say "Calculate", "Explain", "Clear", "Print", "Close". If you DON'T see this row of buttons, you'll need to MAXIMIZE the program's display. If you have a really tiny monitor (say a 12" laptop), the program may not fully display and there isn't anything I can do about it. The program displays fully on screens as small as 14" and as large as 21" - I've tested it on all those sizes. I have NOT tested it on any operating system below Windows 2000; if you're running Windows 98, Windows 98SE, or Windows ME, please let me know whether it runs OK. I *know* it won't run under Windows 95. It is NOT a MAC program although earlier versions ran on a MAC equipped with the latest (early 2003) version of Virtual PC. I have also run the program successfully on RedHat Linux 8.0 and 9.0 using the program "wine". If you have operational problems (not PERS-related problems), please send me all relevant information (computer brand, operating system, amount of RAM, hard disk size, and what else is running while you attempt to run the "Lookback" calculator). I realize that some of this is geek-speak but if you want the calculator to work properly, you need to help me out. I'm doing this as a service to you - nothing I do has any relevance or benefit to me as I'm long retired.
December 21, 2003. My original "lookback" design turned out to be more robust than I first thought. I now have a working version of the Lookback calculator that handles both pre- and post- March 1, 2004 retirements under the implementations of HB 2003, HB 2004, and HB 3020. Moreover, its results (corrected for the HB 3349 adjustment, which my program calculates) are virtually identical to those PERS posted in its example. The program is currently being tested, but if you want to try it out, email me privately. I'll tell you how to get a working copy. As I told the beta-testers, I have NO real data to test the program with. If you want to test a copy, you have to be willing to share YOUR data with me if you don't think the results look right. As always, I take NO RESPONSIBILITY FOR ERRORS. The only "correct" answers are those you get from PERS. Use and test the program at your own risk.
December 20, 2003. I have a working prototype of the stage 1 version of the calculator. It will give accurate results for retirements up to 3/1/04, including the lookback. The post-March 1, 2004 retirements add another level of complexity to the problem that I'm not quite ready to tackle. I'm optimistic that I can have a version of stage 1 available before Christmas for people to try out. It will certainly allow you to find out what your benefit would be on 3/1/04 or earlier. Note that the results posted on PERS' working example are not as detailed as they could be. For example, PERS does not tell us whether the monthly benefits reported result from the "lookback using old tables" or current balance using new tables. It is clear from an analysis of the tables themselves that the younger the employee is at retirement (especially on 3/1/04), the higher the likelihood that the "lookback" will lose. The new tables are more distinct for older retirees than for younger ones. (Note also that the PERS examples are based on OPTION 1 - the non-refund annuity - and assumes no beneficiary). Other options could change the outcome.
December 19, 2003. I've begun to "spec" out the new version of the "lookback" calculator. Given the structure it was in when I last revised it (April 2003), there are significant changes required to make it conform to the actual laws and their implementation. While I can do a quick-and-dirty job to get people estimates of the "lookback" itself, the rest of the program requires considerably more work. I can make my life considerably easier by limiting the calculations for those who wish to retire on or before March 1, 2004. If I go beyond that, the program requires significant reworking and will take considerably more time to program. My preference would be to do the program in stages: 1) stage one would be to take care of those folks on the cusp of a March 1 vs April 1 2004 decision (literally) and then 2) stage two would be implemented after we pass March 1, 2004 for those who can no longer retire under the current rule set except by way of the "lookback". Stage one will probably require about 2 weeks to program and test, but should be available shortly after the holidays. Stage two wouldn't even be started until sometime in March. If there is no significant interest in Stage 1, I probably won't waste my time. (I know there is *some* interest, but it isn't enough for me to spend the time I need to spend doing other things). So, if you're *seriously* considering retiring on or before March 1, 2004 *and* you are *seriously* interested in a new version of the "lookback" calculator, you need to email me privately and let me know. I know that many people are away for the holidays, but I have heavy demands on my time and I need to weigh demand against available time.
December 18, 2003. I've just received copies of the latest earnings spreadsheets from contacts at PERS. These summarize the Tier 1 earnings factors (through end of November), Tier 2 earnings factors (through the end of November), and the Variable (through the end of November). I consolidated these three spreadsheets into a single Excel workbook with three different, labelled tabs. You can click back and forth between the different sheets. The file is in Excel (.xls) format, which should be readable on Macs, Windows, and Linux (if you have OpenOffice or StarOffice). Download spreadsheet here. DO note that the Regular Tier 1 earnings are merely the pro-rate of the assumed interest rate, not the actual earnings. From everything I've heard, read, and written, the actual earnings for 2003 are immaterial except for applying to various deficit and reserve accounts. Members won't see any of the earnings above the assumed rate no matter what happens, and they won't see even the assumed rate for 2003 if retirements take place after March 1, 2004. (Of course, this could be altered by a Supreme Court decision, but it will be at least a year before the Court makes any decision on the extant PERS litigation).
December 17, 2003. For those interested in the final form of the Administrative Rules the PERS Board adopted at its December 12, 2003, I've archived a copy that you can download from here. Please be aware that the file is in the form of a "self-extracting" archive file (an .exe file that will only execute and unpack on a Windows based system - sorry to those of you in Mac environments. Don't have time to tar, gzip, or Stuffit). Click here to download the file. Most of these administrative rules pertain to implementation of one or another aspects of the bills enacted by the Legislature. Not all the sections of all bills have rules in final form. The ones here are now officially enacted.
December 16, 2003. The issue of the 2003 crediting for pre-April 1, 2004 retirements has now reached the level of the PERS Board. According to people who attended the 12/12/03 meeting, PERS' David Bailey and Steve Delaney were both asked (I'm not clear if they were asked in front of the Board, or whether they were button-holed before the meeting or at a break) this question. Their answer was that for pre-April 2004 retirements, accounts will be credited with a pro-rate of 8%. This means that for retirements that take place effective on 1/1/04, the 2003 prorate will be 8%, NOT actual 2003 earnings. Furthermore, for members retiring on 2/1/04 or 3/1/04, the account will be credited with the assumed interest rate (8%) for 2003 on the 12/31/03 balance, and an additional prorate of 8% (approximately 0.67% for 2/1/04 retirements; approximately 1.3% for 3/1/04 retirements) for the period after 12/31/03 up to February 29, 2004 (leap year!) depending on which of the two dates the retirement occurs. Of course, on 1/1/04, there will be no additional member contributions allowed in the member's account - this goes to the IAP. Once the Board declares the 2003 earnings at 0% during their March meeting, the 2003 crediting will be 0% for all active and inactive members (those not yet retired), and that the 2004 pro-rate will (most likely) be set at 0% for members retiring on or after 4/1/04.
In the for what its worth department, the Oregon Supreme Court's Special Master held his third hearing on the various lawsuits directed at PERS or the Legislatively enacted changes to PERS. According to news reports, there are about 500 individual plaintiffs spread over 8 different cases that the court must decide. There is still confusion over exactly how inclusive these cases are. Some members continue to worry - fueled by media speculation - that Supreme Court decisions that favor the plaintiffs would limit the remedy to the 500 plaintiffs. AFSCME and the PERS Coalition have taken great pains to explain why this isn't likely to be the case; however the PERS Coalition has taken special precautions to avoid this outcome by filing a "place-holder" class action lawsuit in Multnomah Country to insure that any remedy favorable to the plaintiffs is inclusive to all affected classes - active PERS members, inactive PERS members, retirees, beneficiaries of deceased retirees.
December 15, 2003. I've now heard back from one of my high-level PERS contacts who has clarified the question of the 2003 earnings crediting to be applied to retirements taking place on or before 3/1/2004. My source writes that at the 3-31-03 PERS Board meeting, it was moved and unanimously passed "that staff when calculating monthly Tier One crediting factors, will treat all 2003 Tier One Regular related earnings above a prorate of the assumed earnings rate as if they are to be applied to the 2001 and then the 2002 Deficit reserves respectively." (My underlining). Consequently, this means that Tier One members retiring in 2003 have only been credited at the 8 percent assumed rate and that rate will continue through March 1, 2004, unless the Board acts otherwise. After March 1, 2004, the 2003 earnings rate will be 0%, as required by HB 2003.
December 13, 2003. To underscore how confusing the issue of when to retire is, I've now heard from people who have attended various PERS-run workshops/briefings around the state in the past few weeks. Two very distinct and different (if not conflicting) messages are being conveyed by the PERS people running these workshops. Several groups have been told that the 2003 regular earnings will be 8% for retirements taking between January 1, 2004 and March 1, 2004, while the others are being told that the 2003 regular earnings will be either 8% (the assumed rate) or actual earnings, whichever is higher. Readers have reported to me that in these latter groups, the PERS representatives are quite clear in explaining the implications of the currently high rate of return on PERS Tier 1 regular accounts.
Against this background, a piece in today's Salem Statesman Journal might have some tangential relevance to this discussion/confusion. You can read Steve Law's report on yesterday's PERS Board meeting at this link.
December 11, 2003. I'm guilty of speed-reading something way too quickly. The AOF legal inquiry is NOT about "break in service" in HB 2020, although the PERS Coalition is itself pursuing that avenue. AOF's specific legal inquiry pertains to the recent letters to OUS faculty and staff about employER contributions to OUS' Optional Retirement Plan (ORP). In particular, OUS announced that Tier 1 members of the ORP would see the employer contribution drop from 11.31% to 3.71%, while Tier 2 member rates to the ORP would drop from 11.71% to 4.27%. These contribution level drops occur solely because the State of Oregon was able to refinance its outstanding obligation to PERS. However, because the ORP and PERS contribution rates are coupled in statute, this is the consequence. Sorry for any confusion my too-hasty reading might have caused.
I've also had a number of email exchanges subsequent to the postings yesterday of the retirement decision matrix and march vs april retirement document. The March/April decision document assumes that 2003 Tier 1 regular earnings will be distributed pro-rata to March 1 retirees at 8%; however, actual earnings to date for Tier 1 regular investments is 18.49% (10/31/03). PERS members inquiring of PERS customer service staff seem to be getting conflicting answers as to the precise prorata crediting for 3/1/04 retirements. One group has been told that the 2003 prorate will be either 8% (the assumed rate) or actual 2003 earnings, whichever is higher; the other group has been told that the 2003 prorate will be 8% no matter what. At 8%, it is unlikely that the "lookback" under the old actuarial tables would lose to the actual balance under the new actuarial tables. At 18%, the differences could be dramatic and would make more likely the possibility that the newer tables and the final 2003 balance would predominate over the 6/30/03 balance under the lookback. I'm trying to find out what the correct answer is to this question. At the moment, I don't know what it is.
December 10, 2003. PERS just posted two useful documents related to retirement decision-making surrounding the March 1 vs April 1, 2004 dates. These documents use three hypothetical (but realistic) examples of how benefits might differ in and around those dates. You can read them here in PDF form (march vs april retirement decision, retirement decision matrix ), or you can read them directly from PERS' website. (Note: these documents were updated evening 12/10/03. If you downloaded them earlier, please replace the ones you downloaded with these. There were some minor errors in the earlier version).
The Association of Oregon Faculty (AOF) has hired attorney Greg Hartman to explore some of the legal issues surrounding the implementation of HB 2020, especially the "break in service" language. Once Hartman finishes his research, AOF will decide whether to pursue legal action. In this regard, it is worth noting that PERS received a fair amount of testimony on the rule concerning "breaks in service" as defined in HB 2020. If you read the documentation distributed with the December 12, 2003 Board Agenda (see below December 9), note that testimony urged PERS to adopt the rule prospectively from August 29, 2003, not retroactively to include periods begun before that date, and to exclude the summer periods when teachers are not normally working. PERS has extended the period of public commentary until, I believe, December 19 before deciding what to do.
December 9, 2003. Beginning with the meeting on December 12, 2003, the PERS Board has adopted a policy of making the agendas available online with relevant handouts for some of the agenda items. The pdf files can be quite large, but are easily navigable so that individual items or pages can be printed, or the entire document can be printed. The 12/12/03 agenda and associated handouts can be obtained here. You'll need to scroll down the page for the December 12th meeting. Also note that the Board has scheduled a public meeting on December 13th for planning purposes.
December 4, 2003. I just received a copy of the preliminary agenda for the December 12, 2003 PERS Board meeting. (One of the really frustrating things about the new board is the randomness with which they meet. It makes it impossible to plan far in advance to attend. This is one of those meetings I would have liked to attend, but have a conflicting event). Normally I don't put these agendas on my website, but the PERS site doesn't have it yet. Here is the agenda. There are quite a number of significant items here.
December 2, 2003. Word of the reduction in employer contribution rates to Tier 2 members of the ORP is starting to filter out. Some of my younger PSU colleagues have gotten their notices and are plenty unhappy. At least two that I've talked to (in the last 4 days) have indicated that they will begin to shop more seriously to find new employment outside of Oregon. To them it is no longer worth a commitment to the OUS with its deadly combination of pitifully low salaries, incredible demands for ever-increasing productivity in the face of steadily declining revenue, *and* (now) significant declines in benefit levels (the last remaining hold for many people).
November 27, 2003. I've got the turkey stuffed and it's begging to climb into the oven, I'm trying to persuade the children and their boyfriends to peel some potatoes and otherwise do something useful and all they can do is complain that the Margarita pitcher is empty (Margaritas for Thanksgiving - what a concept!). I hope your Thanksgivings are as chaotic and raucous as are our annual foodfights. I hope all of you can spare a little extra for those less fortunate than we are. This year, to honor all the hard work our public employees do, we doubled our annual contribution to the Oregon Food Bank. Thanksgiving blessings to all of you. Our regularly scheduled broadcast will resume on December 1, 2003.
November 24, 2003. Nothing at all to report today. A faithful reader from Linn-Benton Community College is the 40,000th "hit" to this web page since January 5, 2003. He's already trying to extort a prize from me, but since I didn't get my July 1, 2003 COLA, the most I can afford is one trip through the salad bar at a local casino :-). Tim, check your mailbox for that gift certificate. If you can't find one, keep checking. There has to be a pony (er...gift certificate) in there somewhere <gdr>.
On a serious note, the fact that people have visited this site more than 40,000 times is gratifying in itself. Your consistent visits motivate me to keep after this hydra, which continues grows more heads every time I turn my back.
The benefit/compensation reduction that OUS staff enrolled in the ORP are taking has provoked some serious soul-searching. I've heard from dozens of affected parties. Those in a position to leave the OUS are seriously considering their options and outstanding offers. While it is too soon to see what impact this will have, I've had more angry emails over this issue than almost anything else reported here since the Legislature adjourned in August. The word is starting to percolate through the system as more Tier 1 and, eventually, Tier 2 members get notified. When the dust settles, I expect that the OUS will see some measurable flight. While the system can ill-afford to lose anyone right now, the greatest "flight risk" comes from those the system can least afford to lose.
<rant on> I also have to "weigh in" on the Governor's selection of Neil Goldschmidt as the new Chairman of the OUS Board. If you read this morning's Oregonian, you would think that Governor Kulongoski had selected the messiah himself to lead the Board. While Goldschmidt will undoubtedly "shake things up", I've been around OUS (formerly OSSHE) long enough to remember that the beginnings of the significant disinvestment in Higher Education *began* in the late 1980's during Goldschmidt's only term as Governor. I couldn't wait to vote for Goldschmidt in 1986; I couldn't wait for his term to end in 1990. All I can say is "buyer beware" and "be careful of what you wish for". The best thing Neil Goldschmidt could do for Higher Education is to convince the rest of the OUS Board that the Chancellor's office is superfluous. In more than 32 years in Higher Education, I've yet to figure out what benefits Oregonians receive from an office that employs 150+ people and doesn't teach a single class or a single student. (Actually, I can't figure out what benefits it offers to those of us who actually teach students either, but that's a different debate.) This is an office with a $24 million annual budget, of which more than $10 million comes from the general fund - an amount only slightly less than the general fund budgets of OIT, Eastern Oregon, Western Oregon, or Southern Oregon. </rant off>
November 23, 2003. I just got a brief note from Rep. Greg Macpherson, who tells me that he's preparing a bill for the 2005 Legislature that contains some "technical fixes" to HB 2020. One of the fixes relates to the "break in service" language. He doesn't share much information about the nature of the fixes, except to say that the bill will address some of the concerns expressed by many. I don't have any more details (and probably won't until 2005). I don't know and Rep. Macpherson doesn't say whether these any of these fixes would be retroactive to people ensnared by the current legal language. I guess that time will tell.
November 21, 2003. I've been in communication with some sources inside PERS. They pretty much confirm that concerns about the "break in service" language of HB 2020 are valid, but caution that rulemaking is still ongoing. The example of a faculty member taking an academic year's "leave without pay", bookended by two summers (July & August) of no pay, produces a 14 consecutive month period "break in service". Under the clear definitions and conditions of HB 2020, assuming that the original LWOP meets the exception of HB 2020 concerning "career development leaves", the faculty member still exceeds the statutory limit of 12 months. Therefore, under those conditions, upon return to paid status, the member would be placed in the OPSRP for all future service.
In fairness, the public period of comment on the proposed rule is still ongoing. The public is welcome to comment on the proposed rule, but is cautioned that any changes to the rule under review still requires strict conformance to the language of the statute. Recall that PERS' job is to implement the statute; they don't write the statutes. (Alas, if you read the relevant statutory language, you'll be hard-pressed to see how there could be much to change. In my opinion, the problem lies in the statute enacted by the Legislature, not the rule PERS proposes to implement it). I am aware that the OUS Chancellor's Office is preparing a response to the proposed PERS rule; however, as much as I appreciate all the efforts the Chancellor's Office is making, it doesn't change the plain language of the statute, which PERS has to implement. I'm not terribly optimistic that PERS will be in a position to meet OUS' needs. Incidently, a variant of this problem also occurs with seasonal employees such as wild land fire fighters.
Concerning Tier 2 members in the ORP. I've now heard from people in Human Resources at PSU who inform me that the new employer rates (3.71%) also apply to Tier 2 members who chose the OUS's Optional Retirement Plan when they first became eligible after January 1, 1996. This means that their total contribution will be 6% (employee) + 3.71% employer = 9.71% effective 11/1/03. This is down from 6% + 11.31% = 17.31%. Affected Tier 2 members will also be getting letters explaining this.
November 20, 2003. I've received numerous questions about the post-Ballot Measure 29 employer rate for State of Oregon agencies. As is noted in the letter from the Oregon University System (see below 11/19/03), Ballot Measure 29 refinanced the State's $2 billion obligation to PERS. This resulted in a recalculation of the State's employer contribution rate. According to my sources, prior to Measure 29, the State's rate was 11.31% plus the 6% employee contribution; after Measure 29 the employer rate dropped to 3.71% plus the 6% employee contribution, as is noted in the OUS memo. (Of course, the new rate excludes the cost of the debt-service on the $2 billion and the actual repayment of the debt in the future). One result of this change is now ramifying to those Tier 1 members in Higher Education who opted to stop contributing to PERS and to join the Oregon University System's "Optional Retirement Plan" in 1996. In answer to the questions not yet posed, I have no idea what the ramifications of this are for (a) Tier 2 members, or Higher Education employees who chose the ORP as initial (and only) retirement plan when they first became eligible sometime after January 1, 1996.
November 19, 2003. The Oregon University System has just sent out a letter (?email) to Tier 1 members who now belong to the OUS's Optional Retirement Plan (i.e. those Tier 1 folks who left active PERS membership to join the ORP on January 1, 1996, as a result of changes made by the 1995 Legislature). This information is intended ONLY for Tier 1 members enrolled in the ORP and is supposed to be distributed to affected individuals soon, if not already. If you haven't received this information yet, you'll no doubt be very interested in what the Chancellor's Office has done. I doubt that affected Tier 1 members will take much comfort in this information. You'll notice the effect by the end of November. You can read the Chancellor's Office memo here. (I've pasted the email into a Word document and then converted it to a PDF file so all can read. There are NO changes to the original sent to me).
November 18, 2003. More on "breaks in service". The matter of what qualifies as "career development leaves" is left to the granting employer. According to information I've received from PERS, the statute offers no guidance to PERS on defining this. Employers will be expected to use a specific code to signal PERS that an employee is on a "leave without pay" for "career development", and use another code to indicate a "return" from such a leave. The 12-month limit on "career development" leaves without pay is more burdensome to people in higher education than we think. Most faculty are 9-month employees and most (though certainly not all) receive 10 paychecks per year. When a faculty member takes an academic year leave without pay, the usual assumption is that he or she will be gone for 9 months and 10 paychecks. But this isn't exactly true. A typical faculty member receives his/her last paycheck of an academic year on June 30th. The first paycheck of an academic year arrives on September 30th. If, for example, I were to take a leave for the 2004 - 05 academic year, my last paycheck for '03/'04 would be on June 30, 2004, while my NEXT paycheck for the following academic year wouldn't be until September 30, 2005 - a 14 month period during which I'm receiving no paycheck from OUS and no contributions are being made to PERS. Bingo! When I return, I'll be in the OPSRP for the remainder of my career. So, the only *sure* way for a faculty member to avoid this problem would be to remain on the payroll for July and August (summer session teaching?) at one end of the leave, assuming the University would agree to define the leave as "career development".
On this subject, Steve Law of the Salem Statesman Journal is doing a story on the "break in service" contained in HB 2020. If you already know you've been affected, or expect to be affected, or are worried you might be affected, please email me directly (feldesmanm@pdx.edu) and I'll put you in contact with Steve.
Another note about "breaks in service". I can only speak with authority on Higher Education. I don't have any expert information on how things work in K/12. Please DO NOT confuse a "sabbatical" leave with a "break in service". During a sabbatical leave, faculty members typically remain on the payroll at reduced pay. Faculty would NOT suffer from the "break in service" language of HB 2020 while on sabbatical. As long as the faculty member continues to draw a paycheck that results in PERS contributions being made (i.e. 0.5 FTE or greater), there is no break in service. A "leave without pay" is exactly what is says. It is a period of time when the faculty member is receiving NO salary from the institution. How might this happen? Faculty member A receives an offer from NIH to serve as a Program Officer for 2 years. The faculty member moves to Bethesda, MD and works for NIH during this 2-year period. Faculty member B gets asked to be a consultant to the government of Birkina Faso on a project that involves moving people to put in a dam. The faculty member relocates to Birkina Faso and is on their payroll for 12 months. Harvard University offers Faculty member C an opportunity to work with Professor Dumbledore for a year on Professor Dumbledore's grant to discover the function of the knee in subfossil Malagasy opossums. Faculty member C moves to Boston for 18 months and is on Harvard's payroll. These are only made-up examples, but are amalgams of actual leaves without pay granted during my tenure at PSU. I'm sure many others can provide better examples.
November 15, 2003. I've dug a bit deeper into the language of HB 2020 as it pertains to the question of "service breaks". As most know, I was (and remain, although part-time) in Higher Ed, and "leaves without pay" are remarkably common when full-time faculty receive certain fellowships, or take temporary research or teaching positions elsewhere or in industry and go off the OUS payroll for extended periods of time, always with the expectation of returning. The language of HB 2020 seems to acknowledge this to some degree, although it won't be reassuring to faculty who want/need to take "leaves without pay" that last for more than 12 consecutive months. It is also the case that, in my experience, "leaves without pay" are frequently handled in a relatively loose way using "gentlemen's agreements" about duration and return dates. As a result, absent a formal written policy at the organization level, it still appears that this language could be troublesome. The relevant language is contained in Section 2(3)(a)(d) at states: "If a person leaves employment with a participating public employer for career development purposes pursuant to written authorization of the participating public employer under a written policy of the employer that applies generally to the class of employees to which the member belongs, the person has a break in service for the purpose of this subsection [of HB 2020] only if the person performs no service with a participating public employer in a qualifying position for a period of 12 consecutive months after leaving employment with the participating public employer." [bracketed expression inserted for clarity].
There are other concerns about "breaks in service" that result in a Tier 1 or Tier 2 member being shifted to the OPSRP. The OPSRP changes the way "final average salary" is calculated (e.g. individual overtime not included, no credit for sick leave). This bears on "Full Formula" benefits. In addition, the "Full Formula" multiplier itself changes from 1.67% per year of service to 1.5% per year of service (general service; P&F also have changes). Exactly how the final retirement benefit will be calculated for a member whose service includes both Tier 1 (for example) and OPSRP is not yet fully clear to me. There's probably an elementary logic to what will happen (calculate two sets of benefits - one based on the accrued benefit under ORS 238 ["old PERS"] and one based on benefits accrued during the time under the OPSRP - and add them together), but there are probably some really tricky issues that will need to be sorted out - different retirement eligibility ages, different methods for computing FAS and different FAS's for the two segments of retirement calculations, how to treat service credit pre- and post-OPSRP, the role of the "lookback", and many other gnarly details too numerous to enumerate here.
I think that most active Tier 1 and Tier 2 members pretty much ignored HB 2020 because it was always viewed as the "successor plan" for new hires, which had no bearing on current Tier 1 and Tier 2 members. It is extremely clear that no active or inactive PERS member can afford to ignore HB 2020 because there are many ways it *could* affect you. Moreover, HB 2020 also details the "Individual Account Plan", which is where your employee contribution (the "6%") will go beginning January 1, 2004.
For readers interested in reading the full text of HB 2020, here is a link to it. Here also is a link to the proposed rule for the definitions PERS proposes to use for OPSRP. On the same page (Administrative rules) you will find links to other listings of rules either under public review or in other phases of the rulemaking process that relate to elements of HB 2020.
November 14, 2003. The "break in service" language of HB 2020 continues to worry people, especially those in education. Since sending out my email earlier this week, and posting links to the AFSCME web site, I've gotten dozens of questions about how this might work. The area of chief concern for people who are corresponding with me is how the "break in service" language will apply to people whose service break began BEFORE HB 2020 was enacted and will end more than 6 months after HB 2020's effective date. The plain language of the statute and the detailed explanations offered on PERS' website (HB 2020 explanation) make the answer to these questions pretty clear. A good example might illustrate this problem. I know several faculty members who look "leaves without pay" to accept short-term teaching or research positions at other institutions. These leaves were negotiated for two years. One began in Fall 2002 and is due to end in August 2004. Fall 2002 precedes HB 2020 by a year, while August 2004 is between 9 and 12 months AFTER the effective date of HB 2020. Legitimate question: does this faculty member return under the new OPSRP or under the PERS Tier in effect at the time the leave was negotiated? If the faculty member would return under the OPSRP rather than Tier 1, can the faculty member cancel the balance of the LWOP and return before the "break" extends beyond 6 months following the enactment of HB 2020? If so, what is the institution supposed to do? The institution has taken the money released by the faculty's LWOP and applied it to a temporary replacement position whose contract would expire at the end of the normal LWOP period.
Reading the explanation makes it quite clear that the faculty member on a leave without pay that extends for more than 6 months beyond the effective date of HB 2020 is out of luck. That faculty member returns under the OPSRP and accrues service credit for and contributions to this plan, not the Tier to which the member belonged prior to taking the leave. One really thorny and potentially troublesome area would be that a Tier 1 member can retire after 30 years of service at any age, or at age 58. By contrast, an OPSRP (general service) member cannot retire before age 65 except with 30 years of service. But even with 30 years of service, the minimum retirement age under the new plan is 58. How these differences in retirement ages get reconciled remains a knotty problem. Further on in PERS' explanation is covered the question of returns to service between 8/29/03 and 12/31/03 preceded by a service break of 6 months or longer that passes 8/29/03. The implementation of the law that PERS plans to follow will have that member return to the pre-leave membership Tier until 12/31/03 and then on 1/1/04, get moved to the OPSRP.
November 13, 2003. I've heard from folks at PERS, who explained to me the changes to the one-time variable transfer recently posted on the PERS website. Basically, the amendments will let you out of "variable" regardless of how variable has performed relative to the regular. In the past, you could only get out of the variable while you were a winner; getting out in a down market was much harder and, in the past few years, nearly impossible. This was both unpopular and, for many of us, very unfair since it locked us in at the point where we most needed to get out, contrary to all investment wisdom. The old law never had any negative effect on Full Formula retirements because you could never produce a situation where your benefit was reduced as a result of participating in the variable (see Note below). Under the amendments, you risk a reduction in your "Full Formula" benefit if you take a "one time variable transfer" at a loss. As it was explained to me, the Money Match calculation is unaffected because the benefit is based on the actual account balance, which incorporates the loss directly. In practical terms, this will probably have little effect on most members for awhile yet since "Money Match" will continue to be the dominant method. (The risky downside of the "one time variable transfer" is that the "variable" is the only way you can earn any money during the period when regular earnings are capped at 0%. There is no "best" solution).
Note (added 11/15): More precision is probably needed here. As an astute reader correctly notes, this is not strictly true. If you remain in variable until you retire, your Full Formula benefit can be reduced if you actually earn less in the variable (since 1982) than you would have earned if the money had never been in variable *AND* you retire under Full Formula. The reference above was not actually talking about this particular circumstance. The discussion is solely about previous rules concerning the "one time variable transfer" that is attempted before the actual time of retirement.
November 11, 2003. Rep Tim Knopp (R, Bend) has announced his decision NOT to seek another term in the Oregon House. Knopp spearheaded the legislative interim PERS Task Force whose recommendations formed the basis of a great deal of the PERS reforms enacted last session. Rep. Knopp also served as House Majority Leader, as well as Chair of the House PERS Committee. This means that two major players in the reform efforts - Knopp and his counterpart in the Senate, Tony Corcoran - are exiting before the 2005 legislature has to clean up any potential mess from ongoing litigation, and PERS itself is without Jim Voykto, its former Executive Director, and the entire Board that existed during and before the session. This ought to make it quite interesting when the Supreme Court finally makes its decision on the PERS cases now before it.
November 10, 2003. Several of us exchanged emails over the weekend, trying to find the Rosetta Stone of PERS' recent posting on the "one time variable transfer" (see November 7, 2003 entry for link). With the help of several knowledgeable sources, I *think* I now understand what the story is. I'd prefer to wait a few days to hear from sources inside PERS for clarification and/or verification of this interpretation before posting here. The answer is mostly outlined below (November 8), but it isn't the entire story.
In the meantime, HB 2020 has posed some new challenges for PERS members. Oregon AFSCME and the PERS Coalition has raised the alarm over the "break in service" language of HB 2020. You can read about this at the AFSCME website (here).
November 8, 2003. I've been pursuing the "one time variable transfer" a bit further by following out HB 3020, enacted by the Legislature on July 29, 2003. If you read HB 3020, Section 36, Subsection 14, it spells out the revisions to the "one time variable transfer". Interestingly, unless I'm missing something, HB 3020 is agnostic to the question of which calculation method ("Full Formula", "Money Match", or "Annuity Plus") wins in the best of three computation at the time of retirement, although I've been advised that the "Lipscomb decision" specifies that this be applied to all three calculation methods. I'm not sure why PERS seems to be implementing this only for "Full Formula" retirement calculations, but the impact of the revision seems clearer now. If you want to effect a one-time variable transfer, you no longer have to pass the comparison test. If the "variable at variable" beats the "variable at regular" test, you have a positive result and your "Full Formula Benefit" will be adjusted upward at retirement. If the opposite occurs, which will probably be true for most people for another year or so, your "Full Formula Benefit" will be reduced at the time of retirement. The amount of the reduction will depend on your age at retirement, the size of the difference between "variable at variable" vs "variable at regular", and the payout option chosen.
None of the above information comes from PERS staff. It comes largely from my research into HB 3020, the various pieces of Chapter 238 in the ORS, and from communication with a number of other PERS "experts" in the community. I hope to have some clearer response from PERS soon.
In the meantime, I would encourage people who are considering the "one time variable transfer" to hold on for a few more weeks until PERS can explain more clearly the impact of this change. So long as you file the transfer request before Christmas (I never advise waiting until 12/31), the transfer will be effected beginning 1/1/04. Be aware, however, that the results of the test won't be known until the Board finalizes earnings crediting for 2003 (both regular and variable) at a meeting in March 2004. Consequently, you won't know whether your pension benefit could be negatively or positively affected by this until after March 2004 - a time long past the point that the decision is irrevocable.
November 7, 2003. PERS has posted some new information on the "one time variable transfer". You can read about it here. Unfortunately, this isn't one of PERS' clearer expositions and I don't really understand what the transfer achieves except (possibly) to reduce the volatility in your PERS account after January 1, 2004. First of all, according to PERS, the effect of the transfer is only for "Full Formula", not "Money Match" or "Annuity Plus". Since the "Full Formula" does not *directly* depend on the account balance (if it did, why would there be such a PERS flap over Tony Corcoran and John Minnis taking relatively high paying jobs with the State), I'm not sure what is being tested and how that would affect a member who ISN'T going to retire under "Money Match" - not many for awhile yet. I'm also not sure of the test's direction. Does a "negative" result (see the link) mean that the Variable at Variable is smaller than Variable at Regular, or the opposite? What exactly does "reducing the actuarial value of the difference at retirement" mean in the context of "Full Formula"? (I know that in instances when the "Full Formula" wins in the best of 3 tests, there is an "account balance" that is "booked" for accounting purposes and from which the "Full Formula" benefit is computed. This may be how the actuarial reduction takes place, but since the "Full Formula" is equal to "Years of Service" x Final Average Salary x 1.67%, it is hard to see in practical terms where a dollar reduction comes into play in computing the benefit). Hopefully someone at PERS will explain this a lot more clearly than the utterly opaque explanation on the PERS website.
November 6, 2003. I've heard back from my sources at PERS about the "minimum account balance" calculation. The short answer is that while my spreadsheet is a "reasonable" interpretation of the way it "might" be computed, in point of fact PERS has not developed the implementation of this feature of HB 2003 for reasons that will become obvious upon reviewing the example - it has no impact on current Tier 1 members in the next few years. Consequently, the implementation is not a high priority right now as other, far more pressing, issues take precedence. With that in mind, I'm posting an Acrobat version of the Excel spreadsheet. This is a 4-page document, largely because the spreadsheet grid is wider than will fit on a conventional page, and because the assumptions page is also too long to fit on one page. The assumptions are sufficient to allow anyone to reconstruct the spreadsheet by hand, but I don't plan to circulate the raw spreadsheet because it ISN'T any officially sanctioned implementation protocol and I'd rather not have people tampering with *my* formulas. BE VERY AWARE THAT THE SPREADSHEET IS BASED ON *MY* INTERPRETATION OF THE MINIMUM ACCOUNT BALANCE CALCULATION AND IS NOT OFFICIAL PERS POLICY AND HAS NOT BEEN "APPROVED" BY PERS.
To see the spreadsheet for the "minimum account balance" calculation, please click here.
Note that the "minimum account balance" calculation done on the spreadsheet is done exactly the same way that the current calculation is done. The only exception is that instead of using the actual Tier 1 Regular earnings rate in a given year, the calculation is done using that year's "assumed interest rate". This assures that over the life of the account, the "minimum account balance" is guaranteed to be no less than IF the assumed rate (but no more) had been paid every year of the individual's PERS membership. Note again that this has no bearing on existing balances; it only pertains to what happens going forward (see below for more detail).
November 5, 2003. Literally dozens of people have emailed with questions about the "minimum account balance" section of HB 2003. This section is the reinterpretation of the way the "assumed interest rate" guarantee will work in the future and is the justification given to be able to pay less than the "assumed interest rate" (currently 8%) for some period of time. The reintrepretation states that the "guarantee" does not mean that a member is entitled to no less than the "assumed interest rate" annually, but that the member is entitled to the guarantee that the rate of return taken over the entire career will be no less than IF the member had earned the "assumed interest rate" in each year of membership. While this may seem like semantic hair-splitting, it isn't. The PERS Board had previously interpreted ORS 238.255 (where the Legislature enshrined the "assumed interest rate" guarantee back in 1975) to mean that a member was guaranteed "at least" the "assumed interest rate" every year when earnings were credited. Indeed, the Board has always paid out "no less" than the "assumed rate" since 1974. However, in many years the Board authorized earnings of significantly more than the "assumed rate". HB 2003 clarifies what ORS 238.255 means, but it doesn't appear to change the law itself (I confess that I haven't read the actual new language of ORS 238.255 post HB 2003, so I don't know for sure that the section of statute wasn't changed literally).
Most emailing me haven't been concerned with the nuances of the law; their principal concern was how PERS would implement the "minimum account balance" test *and* whether this would have any ramifications for their existing balances. Up to this point, I've not seen a formal protocol for how PERS will implement the test and in the recent past I've gotten what appear to be conflicting answers on how they might do it. However, I've only recently (as in, this week) begun to review all my copious notes from the various legislative hearings, documents submitted both for and against HB 2003, the legal pleadings, and email correspondence and I now *think* I understand how PERS almost certainly has to conduct the test. In fact, I've developed an example spreadsheet that illustrates quite clearly how I *think* it will work. I'm not ready to post this spreadsheet; I've forwarded it to some well-placed sources inside PERS for their review. Hopefully they'll either find it an accurate portrayal of how they anticipate conducting the test or they will point out where I've gone astray. Once I have some sense of its accuracy, I will either post the spreadsheet example, rework it, or wait until more explanation is forthcoming. Whatever the outcome, I'll post something here when I have something informative to post.
In answer to the question of whether the "minimum account balance" will have any impact on existing account balances (i.e. those accrued to the end of 2002), the answer is NO. Nothing about this section of HB 2003 anticipates changes to benefits already accrued. It only relates to the earnings crediting policy going forward. In any event, the test as anticipated in HB 2003 would only make a comparison between actual Tier 1 Regular account balances to date of retirement and that balance that would have obtained if the earnings had only been credited with the "assumed interest rate" in each year of the employee's membership in PERS. The employee will receive the higher of the two balances as the basis for pension benefits. This means that in the event that the "minimum account balance" exceeds the "actual account balance", employers would have to pony up the difference to gross up the actual account balance before computing benefits. On the other hand, the "minimum account balance" isn't likely to exceed the actual balance for any Tier 1 member in the system since the 1980's unless the system as a whole experiences a whole bunch of years of bad earnings. Three years of 0% interest crediting followed by a few years of sub-8% earnings didn't cause the actual account balance to fall below the "minimum account balance" in the "simulations" I conducted. In fact, for an employee who began in 1981, it would have taken about 8 years of 0% crediting for the actual account balance to drop below the "minimum account balance". This shouldn't be construed as "good news". It only means that, by the new "interpretation", there are sufficient surplus earnings already in your account that it will take years before anyone would actually have to put money into your account to meet the newly redefined "guarantee". Of course, this whole matter is one element of the PERS Coalition's lawsuit against the State.
November 2, 2003. Jim Voytko, Executive Director of PERS, resigned last Thursday. His resignation was immediate and voluntary. It reflected some differences of opinion between he and the new Board over agency policy and direction. He will remain as a consultant for a few months to facilitate the transition. On Friday, the new PERS Board tapped Laurie Warner, formerly of Oregon's DAS, to serve as "Interim Director" until they search for and find a new Executive Director. As I said in an email to subscribers of PERSLIST, I will miss Jim Voytko's intelligence, honesty, candor, dry sense of humor, and his ability to explain complex ideas more clearly and articulately than nearly every administrator I've been around. Oregon would benefit from more senior administrators who possess these attributes. I wish Jim the best of luck in whatever he chooses to do. I suspect he'll have lots of choices.
October 29, 2003. There is some misinformation floating around about the fate of the Tier 1 "variable" after 12/31/03. On 1/1/04, the variable and regular will cease to be vehicles for new money contributed by employees (the employee "6%"). HB 2001 and HB 2003 work together to constrain any earnings on REGULAR accounts until the deficit is eliminated. However, the variable accounts will still continue to post earnings/losses in the same way they do now. The distinction between March 1 and April 1, discussed widely as if it were a significant milestone, is for earnings on REGULAR accounts; it has nothing to do with variable accounts. I hope this clarifies any misunderstanding people have about what will happen to the variable accounts after the end of this calendar year.
October 27, 2003. Now that Tony Corcoran and John Minnis, both key players in PERS Reform, are poised to accept relatively high-paying State jobs, the focus is back on the fact that the Legislature failed to reform PERS for legislators. Legislators earn about $15,000 per year and are eligible for PERS. If a legislator leaves the legislature to accept a PERS-covered position - as are Corcoran and Minnis - they only have to work in the new position for 3 years before they become eligible for much higher benefits. Both are in line to receive salaries in the $65 - $90K range. If they remain in those positions for 3 years, their full-formula benefit will be based on the higher salary, not their legislative salary. While this has always been the case, it is simply demonstrably problematic when key players who worked to reduce PERS benefits for everyone else, appear to be "gaming" the system to benefit themselves. As is always the case, what they're doing is perfectly permissible, but it has an unwholesome feel to it.
October 24, 2003. The PERS Board meets again in public session on October 28th. The Agenda is posted on the PERS website. I've gotten some clarification on an issue relevant to HB 2020 (the "successor plan"). This bill also applies to PERS members who have been "inactive" for more than 6 months before returning to PERS-covered employment. If they return after 1/1/04, they will come back under the provisions of the "successor plan" rather than the PERS Tier they were in before leaving service. Service time and contributions/earnings vested previously will remain under the earlier Tier, while subsequent contributions/earnings and service time will accrue under the "successor plan". Unresolved at this point is how the differences in normal retirement age (58 under Tier 1, 60 under Tier 2, and 65 under the new plan) will be reconciled.
October 18, 2003. Several newsworthy items to report. I've just learned from OPRI (Oregon Public Retirees, Inc) that they've also filed legal challenges to parts of HB 2003 that directly affect certain retirees. That case, Sartain v PERS et al, will be heard along with the PERS Coalition's legal challenges in the Oregon Supreme Court.
It has also been reported that the Oregon Supreme Court has appointed a Special Master to take evidence and consider motions in all the actions filed against PERS. This was requested by all parties in the cases. The Master is supposed to report his findings and recommendations to the Supreme Court by April 12, 2004.
October 16, 2003. Another relevant snippet from the PERS Board meeting last Tuesday. The PERS Board has retained outside counsel to represent them in the Lipscomb litigation (implementation and appeal). The Board selected the firm of Orrick Harrington, which was represented at the October 14, 2003 Board Meeting by James Baker and Townsend Hyatt. Related to this matter: there is absolutely NO information available right now about the nature of how PERS will implement Judge Lipscomb's ruling and order. To the extent that any discussions on this matter have taken place, they have been and will continue to be confidential between the PERS Board and its outside counsel. At some point the plans, whatever they may, will be made public but there is nothing "out there" to indicate that an announcement is forthcoming soon.
October 15, 2003. According to Mark Johnston, the PERS Actuary, the unfunded actuarial liability has been reduced to about $6.5 billion since the Legislature passed HB 2001, HB 2003, and HB 2004 (the liability at that point was estimated to be $8.0 billion). When the legislature convened in January, the UAL was estimated at slightly less than $16 billion. After the reforms, the liability dropped to $8 billion, and scarcely two months later the liability has been reduced by about 20%. If this pace continues, some speculate (not PERS officials) that the actual deficit (now about $2 billion) could be eliminated sooner than originally forecast, and that the period of 0% earnings crediting required by HB 2003 could, in theory at least, end next spring, instead of several years out. (Personally, I'm doubtful this will happen, as there are simply too many other variables at play here. Moreover, the Board has not made any provisions yet for implementing the Lipscomb decision. I would certainly "stay tuned".)
October 14, 2003. I don't yet have the summary of today's PERS Board meeting. The agenda was chock full of interesting items, not the least of which was the progress report on PERS' implementation of the Lipscomb decision. While I didn't attend the meeting, I do know that the progress report was postponed until (perhaps) the next Board meeting in November. I will post whatever else I get whenever I get it. The new PERS Board has changed its regular public meeting time from an 8:00 a.m. start time to (typically) a 3:00 p.m. start time. The earlier time worked perfectly for my schedule; the Tuesday at 3:00 p.m. time is just unworkable for me.
October 7, 2003. KATU reports today (and the Oregonian October 8) that Senator Tony Corcoran is resigning from the Oregon Senate to accept a position he has been appointed to by Governor Kulongoski. If approved, Corcoran will move to the Oregon Employment Appeals Board. As it is reported, Senator Corcoran burned his bridges with his employer, Oregon Public Employees Union (SEIU), for the active role he played in bringing about the PERS reforms. SEIU/OPEU denies that Corcoran's 'demotion' had anything to do with his involvement in the PERS reform, while Corcoran insists that it is precisely that. In any case, if Corcoran's appointment is approved, he will resign from the Oregon Senate.
October 1, 2003. Jim Voykto, Executive Director of PERS, gave a speech on September 15, 2003 to County Treasurers and Finance Officers. It was entitled "PERS Reform: Where we stand today" and is a very articulate and well-written summary of the current "state of PERS" in the face of all that has gone on in the past year or so. I highly recommend that you read it. You can find the full text at this link. Mr. Voytko also kindly shared a copy of a speech he gave on August 10, 2003 before the National Conference of State Social Security Administrators. You can read the text of this speech here.
September 20, 2003. A group of Oregon cities & municipalities still aren't satisfied with the PERS reform and the PERS Board's response to setting new employer rates. They have filed yet another lawsuit in Marion County to force PERS to reduce its employer rates further than they did on July 1, 2003. Attorney Bill Gary, who represented the plaintiffs in Eugene v PERS, is considering seeking "class action" status so that all PERS employers benefit from lower rates.
September 19, 2003. By now just about everyone knows that voters passed Ballot Measure 29, which allows the Oregon Treasurer to sell general obligation bonds to pay off the State's debt to PERS. The Treasurer's office announced that they plan to sell about $2.2 billion in bonds next month.
The PERS website now has a very nice summary of the changes resulting from Legislative decisions during the session that adjourned on August 27, 2003. The site also has an excellent glossary of the relevant terms associated with the Legislative changes. Many questions would be answered by reading these two pages on PERS' site fairly carefully. You can find both by going to http://www.pers.state.or.us/Legislation/2003_Legislation/oregon_legislative_summary.htm (for the summary) and to http://www.pers.state.or.us/Legislation/2003_Legislation/glossary_of_legislative_changes_to_pers.htm (for the glossary of terms).
September 15, 2003. The minutes from the September 9, 2003 PERS Board meeting are posted at the PERS Website. Executive Director Voykto reported that PERS' staff is running close to the 92 day deadline for processing first retirement checks for people who retired on July 1, 2003. PERS Staff is also trying to understand and implement all the Legislative changes, while faced with a completely new Board appointed by the Governor. PERS has also sustained significant loss of personnel from retirements and this, the massive number of public employee retirements, and the sheer complexity of legislative changes, is really straining resources and expertise. PERS has hired a large number of new people, almost all of whom will require some time to get up to speed. The deadline for implementing HB 2020 (the "successor plan" and the "defined contribution" plan for existing Tier 1 & 2 members) is coming quickly (January 1, 2004) and there appear to be a fair number of implementation questions that remain to be answered. This is going to be a busy time for everyone affiliated with PERS.
September 11, 2003. Early details of the successor plan (HB 2020 - aka OPSRP) and the post-December 31, 2003 plan for existing, active PERS members (aka IAP) now appear on the PERS website. You can read a bit more about what will happen to your PERS contributions (whether you contribute directly, or your employer makes the contributions for you) starting on January 1, 2004 here.
There are lots of news articles and letters both for and against Ballot Measure 29. If you're interested, use Google News (http://news.google.com) and search for "PERS". You'll locate about 90% of recent articles in about 3 seconds or less. If you really want to keep up with all the different PERS-related news articles, you can sign up for Google's experimental "News Alert" service. I'd suggest using "PERS, Oregon" as the two keywords. You'll get an email once every day any news articles appear with both keywords in them. Not all Oregon newspapers participate, but most of the major ones do - Oregonian, Bend Bulletin, Salem Statesman Journal, Albany Democrat Herald. One conspicuous omission is the Eugene Register Guard.
September 10, 2003. Mail-in ballots for Measure 29 are due by 8 p.m. Tuesday September 16, 2003. If you haven't mailed your ballot yet, don't wait much longer. To be sure it gets there by Tuesday, it should be in the mail by Friday (Saturday at the absolute latest).
September 8, 2003. Although I've stopped listing PERS-related news articles, three recent pieces are worth linking. The first is from the Corvallis Gazette Times http://www.gazettetimes.com/articles/2003/09/08/news/oregon/monore01.txt; the second is from the Salem Statesman Journal http://news.statesmanjournal.com/article.cfm?i=67400, and the last is also from the Statesman Journal (http://news.statesmanjournal.com/article.cfm?i=67364). All three articles appear in today's papers.