PERS panic

Marc Feldesman has the latest on his PERSinfo blog here. A snippet:

… Today brought the latest salvo … in the form of a 52 page amendment to Senate Bill 560, that seems to consolidate the various features of the 8 previous amendments to the bill, while adding a few new bits drawn from other bills (SB 559, SB 913, HB 3103), and sparing no one not yet retired …

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10 Responses to PERS panic

  1. Plain Interested says:

    Someone has to do this sooner or later, and I highly support it. Instead, feel badly for everyone else in the state suffering under crazy high income taxes that don’t buy them services that the state is suppose to provide but can’t due to generational blunders in giving unreasonably high platinum heath and retirement perks.

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    • Do you usually go back on your promises? says:

      And if so why does anyone choose to work with you?

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  2. honest Uncle Bernie says:

    All PERS members should pay attention, including ORP faculty, who would get royally fucked by this. (Pardon my Latin, but it’s that bad.)

    This bill would cause untold problems for the state down the line, as explained ny mr. fearless in the link.

    Most if mot all the proposals would get shot down in court, but it would be agonizing waiting.

    People in a certain position — e.g. ORP members — should consider a very quick retirement if this goes anywhere.

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    • UO Matters says:

      I don’t see how this hurts ORP members in particular. Please explain.

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      • honest Uncle Bernie says:

        I picked them as an example, one of many. Anyone retiring under money match would get hammered royally by the change in the annuity rate. Lose something like a third of their PERS pension. Money match retirees are increasingly rare, but most or all of the original 1996 ORP people would retire on money match.

        There is plenty in this to screw just anout anyone who is not yet retired.

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        • dog says:

          Yes indeed, my reading of this suggests that any retirement under Money Match now would look bad – however I don’t see that coming into play very much. I myself was initially going to retire under Money Match, but starting about 4 years ago, the full formula approach became more profitable.

          As HUB says, none of this will survive in court but that just complicates matters – hopefully clarity will once again set in, and most of this stuff will not pass.

          In any event, most changes would happen on Jan 1 2018
          so if your worried, retired before then.

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  3. mrfearless says:

    Let me offer some perspective here, as the author of the blog piece under discussion. For those who went into the ORP from the onset of their service, the issue is quite subtle and will be missed if you aren’t paying attention. I didn’t emphasize this in my blog because of the larger concern of focusing on a lot of different classes of members. Do read the actual dash-10 amendment. Focus not specifically on the changes to the ORP, but to the changes of Section 17, which relate to the alteration of the EMPLOYEE contribution to PERS. Recall that the employee contribution, regardless of who pays it, is set in statute, and under ORP, the employer match is keyed to the PERS employee contribution rate, plus a small amount required to offset certain costs associated with the ORP. For those who weren’t around in the mid-aughts, you might not recall the squabble when the State decided to sell pension obligation bonds, which had the effect of reducing employer contributions significantly. The then Oregon University System tried to reduce the employer-required contribution (not the pickup, but the employer rate) to the reduced level resulting for the POB offset. There was a rather extensive discussion that nearly led to litigation because OUS wanted to actually reduce their contribution to no more than they had to pay for those members still in PERS. That is part one of the problem, and could be a major concern for those in ORP near retirement age.

    The second relates to those faculty members who transitioned to the ORP after being in PERS (Tier 1) for however many years back in 1996. This bill would declare you officially “inactive”, which has always been a question up to now. While not necessarily a bad thing in and of itself, it probably means that if you spent any time at all in PERS, you have a Money Match benefit that is growing significantly every year. The decoupling of the assumed rate from the annuity rate for Money Match retirees has no statutory authority to argue “contract rights”. You can search forever and you will find no statute or administrative rule that requires PERS to use the actuarially assumed interest rate as the annuitization rate for Money Match retirements. Therefore, if this bill passes, I don’t see any basis for a contractual argument against it, and the Supreme Court would have to memorialize “past practice” as a contract right, and I don’t think they would go there. So, you are free to draw whatever conclusions you want from this, but I see this as a way to hammer all current ORP members who originally belonged to PERS. They offer a way out, but it is an expensive way to get out, and then my earlier comment still applies.

    In short, this is far more complex and significantly more diabolical than some commenters on this site seem to believe.

    I don’t have any specific advice, but what I’ve said above needs to be considered.

    Finally, understand that state law now requires “retire from one, retire from all”, which leaves those in ORP and PERS in a difficult position. It is a lose-lose proposition that has been constructed to force the Democrats in the Legislature to make a bad choice if they want revenue reform.

    You’ve been warned

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  4. mrfearless says:

    Actually, let me add a clarification to both points.

    (1) a change to the mandatory contribution rate by employees will affect everyone in ORP, PERS, and both, where near to retirement or not.

    (2) The coupling of the assumed rate and the annuity rate can be found nowhere in statute or administrative rules. It is for this reason that a court challenge is likely to fail. Past practice may be the necessary argument, but it isn’t a sufficient legal argument absent statutes and administrative rules that compel it. PERS has done it merely for convenience. No one has ever required it, and if you look at my blog, this has been a concern going back to at least 2005.

    I don’t see a successful court challenge of the change to the annuity rate for MM retirements going forward after passage of this bill (if it happens).

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  5. Mrfearless says:

    A new blog post “You Want It Darker (Part 2)” is now posted about yesterday’s Senate Workforce Committee public hearing on SB 560, pertaining to PERS. I doubt anyone is going to be happy about this post. http://persinfo.blogspot.com

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