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- I know there are many people out there who want ... - Harley
- Could Kiesling's "White Paper" have been the motivation behind ... - mrfearless47
- I'm just thinking out loud here, Of all the ... - BillS
2008 was a losing year for stock market investors. Among the big losers was Oregon's Public Employees Retirement System. PERS lost $17 billion, and at the end of last year was almost 30 percent underfunded.
It's a big turnaround from two years ago, when Oregon had more money than it needed (pdf) to cover all its public pension obligations and was a star among troubled pensions systems around the country.
Like any investment system, the money available to pay PERS benefits is the combination of investment earnings and how much money is put in the system. To stay solvent, when one goes down, the other has to go up.
Last year's big losses mean taxpayer bills for PERS will climb. Public agencies like police departments, school districts and city halls expect to spend more putting money in the system. How much more depends on how much PERS earns this year, and whether the board overseeing PERS changes the rules.
According to a preliminary report (pdf) by PERS actuary, Mercer, a 26 percent rate of return in 2009 would limit employer contributions to a three percent increase. If returns aren't that good, the increased contribution could double. The losses in 2008 were so big Mercer estimates that by 2014 public agencies could be spending more than one-fifth of their payroll to fund retirement, even if annual returns reach 10.5 percent and employer contributions increase by the maximum six percent. Check out this FAQ from PERS (pdf) that lays a lot of this out.
The stock market is climbing again and PERS investments are recovering. One of the major public employee unions notes Oregon PERS is still well funded compared to other places, and says the sky is not falling.
Employer contribution rates are set every other year, so any increase determined at the end of this year wouldn't actually start until July 2011. The immediate question is whether PERS will change the rules. The board is expected to take that up at its meeting later this month, and decide in early January. Other questions PERS major losses bring up include whether the system should or can be changed further after the 2003 overhaul, if these contribution hikes will lead any agencies into bankruptcy, and how public employee retirement programs compare to private companies or non-profits in the current economy.
Do you receive PERS benefits, or will you when you retire? Do you set the budget for a public agency? Were you involved in PERS reform in 2003? If you're employed in the private sector, what's the status of your pension these days?
GUESTS:
- Paul Cleary: Executive director of the Oregon Public Employees Retirement System
- Eric King: Bend city manager
- Greg Hartman: Attorney for the Oregon PERS Coalition, a group of public employee unions
- Phil Keisling: Former Secretary of State and executive vice president for business development with CorSource Technology Group
Tagged as: pers · retirement
Photo credit: EJP / Creative Commons
COMMENTS: (57 total)
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In addition to Oregon PERS Info, of which I am a contributor, one can also go to http://persinfo.blogspot.com for an up-to-date blog about PERS issues, and to http://finance.groups.yahoo.com/group/PERS_Oregon_Discussion/ for a realtime discussion of PERS issues. Both sites are run by PERS retirees and are by and for any member of the PERS system, retired or active, to ask questions about the system.
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As a 2002 retiree, I've been hit by everything PERS and the Legislature have thrown at us. When I started work for higher education in 1970, the PERS system was the ONLY retirement system offered. It was mandatory to participate and until 1979 I had to pay into the system with my own money. We were told when we were hired that the reason pay was so low was that the retirement system was so good. We asked for higher pay in lieu of better retirement benefits but weren't given any option. So, we participated in PERS because it was involuntary. Our salaries continued to lag behind private sector and most other states. When I retired in 2002, my salary was 25% lower than I would have received in other states for the identical job. So what if my retirement is better now. I'm simply collecting what I was promised and forced to accept from the beginning. Comparing public employment retirement plans with private sector plans is simply unfair. Public employees don't control their benefits and salary to the same degree as those in the private sector do. The private sector offers greater salaries but at the expense of lower benefits. The higher salaries are supposed to compensate for lower benefits. If private sector employers and employees are earning less in retirement than I earn, whose fault is that? Why blame the public employEEs for the failure to properly save for a rainy day by those in the private sector. Those of us in the public sector have these benefits because we NEVER HAD A CHOICE. The public has no right to renege on agreements made dozens of years ago just because they don't like the bill due now. The public employers and the Legislature created this mess. Let them figure out how to resolve the mess without abrogating agreements that were made unilaterally to begin with.
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Hello Mr. Fearless47
I have read some of the blog you sponsor. I see by your own description here that PERS is a mess created by the employers and legislature. Also, I read that PERS is one of the best in the country. Is it a mess or the best? Also, I interpret your comments as that a PERS retirement is the rest of the compensation you did not receive during your active employment. Is that correct? If so then would you also assert that success in PERS investing played a part in setting the amount of your pension? That is, were your earned contributions, employers contributions, and returns from PERS investments during your working years what account for the retirement pension you now receive? If so, did the legislation in 2003(?) steal from your account? Maybe I asked this in a previous question, but with the downturn in the economy or even in a good economy and market are today's taxpayers making payments to you in your retirement? Is paid medical insurance part of a PERS retirement?
Lynda
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For many years PERS members and their retirement system have been presented negatively. Family and friends of public employees, neighbors, and community have been taught to hate PERS and members. Please spend some time discussing this as part of the issue. The distorted information with the never ending drumbeat of "Unfair" has been all that citizens read or hear, and it has been destructive to members, and to citizen confidence in local government. Please present the facts regarding percent of salary and benefits most retirees receive. Please describe the changes that have been made to the system. Please present facts on what is today's PERS. Please include some discussion on why it is so popular to attack PERS and the members. These aspects regarding PERS should be part of the discussion.
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LyndaM: let me answer your questions as best I can in this format.
1. I get NO medical benefits from PERS. They are not part of the retirement package for any public employee. Some public employees are permitted to PURCHASE AT FULL COST their medical insurance through their former employers at group rates. This typically runs about $1000 per month. Hardly a subsidy. Some have to purchase insurance through PERS' PEBB plan, which is a plan that costs substantially more. To repeat, no medical benefits are part of the PERS retirement plan.
2. My retirement benefits represent a combination of my contributions, the employers match, and earnings during my career. Those elements determine my pension.
3. PERS is both a mess and the best funded in the country. It is better funded than all other public employee retirement systems both because of the success of the Oregon Investment Council taking enormous risks to meet the returns targeted by the Legislature and by the PERS actuary. The mess is created by having the Legislature make chopped liver with multiple retirement systems within PERS. There is Tier 1, Tier 2, Tier 2, as well as pre-1981 and post-1981 benefit structures. The Legislature created about the most complex system in the country. The problems the system has right now are the result of all the different masters PERS is expected to serve. There is no way to meet all the conflicting goals the Legislature has imposed on the system.
4. The 2003 Legislature did "steal" from my account. They reduced my account balance and my benefit more than 2 years AFTER I retired because it decided that PERS Board awarded more earnings in 1999 than a prudent Board would have done. When I retired, there was no warning that my benefits would change after I retired - 4 years after to be exact. It cost me about $200 per month and PERS still claims I owe them $14,500 in hard cash if the courts allow them to collect.
5. Not a dime of taxpayer money is paying my pension. When I retired, all the money required to fund my retirement from my own account, from the employer's match was moved into a sequestered account called the Benefits In Force reserve. All current retiree and beneficiary benefits are paid from the BIF reserve, not from the active employer (and taxpayer) contributions.
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My mother has breast cancer and is putting her affairs in order as the outlook is grim. She retired from State public service and has lived off her meager PERS pension and just recently began receiving Social Security. She had no savings when she retired because her salary only allowed her to meet her expenses each month. After she retired and had received her PERS pension for several years, she got a notice from PERS telling her they had decided in retrospect that they had overpaid many retirees and that she owed them thousands of dollars. She told me the other day this has been bouncing around in various courts for years and she doesn't know how it is going to turn out and that it won't be decided until after she's gone. This has her very upset and therefore I am very upset, too.
Then I read the article in the Oregonian about a week ago that made public employees look like robbers because of their retirement benefits. I remember reading another very similar article in the Oregonian not too long ago. That made me absolutely sick. I am beginning to think the paper is trying to make people hate this State's government and its public employees in general.
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The Oregonian isn't called the "Whoregonian" or the "Boregonian" for no reason. Happily their editorial policy and their news assignment suggest an utter contempt for public employees. Since public employees represent about 15% of the state's population and with their extended families even more, think about the impact PERS members/retirees/families can have on the Oregonian's bottom line by canceling subscriptions. It isn't an accident that the Oregonian's circulation has declined substantially in the past few years. It isn't just the Internet that is doing the Oregonian in.
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The Oregonian is not making public employees "look like robbers", they are simply reporting the facts. The PERS system is not sustainable.
If more taxpayers read the paper and were aware of the situation I think they would be very upset. PERS people like to keep things secret, ever though the private sector pays the bills.
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One of the underlying issues with PERS is who pays for what. As mefearless47 has said, the Oregon Investment Council has done a very good job of beating the investment odds over the life of the investment fund. Actually that has helped create some of the problem because the PERS employers came to rely on good investment returns and talked the PERS Board and management into lowering the employer contributions. Now that investments are more challenging, employers are crying about increases to their contributions and they are pointing the blame at workers!
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And of course, there is another element of PERS that people don't get. In addition to the wild success of the OIC in investing PERS (and other agency's) money, there is the fact that the "guarantee" for Tier 1 members is also the rate at which employer money is expected to grow. Employer contributions are computed based on the same assumed rate. The rate guarantee isn't 8% in law; it is 8% because that's what the actuaries for PERS and virtually all other retirement systems feel is a reasonable rate for equities over the long run. It is easy to suggest that PERS simply lower the "guarantee" to something that represents an easier target to hit, like say 3%. The problem with this is that not only does this affect the members' earnings, it also has the perverse effect of raising the employer rates significantly because the employers will be less able to leverage earnings to make their contributions.
Also the employers currently have the best of both worlds. The Benefits-in-force reserve funds are also invested with an assumption of 8% earnings. That's the basis of the income stream paid out to retirees. But since the income stream is fixed, any excess earnings in the BIF go to reduce employer contributions more. So all the accumulated excesses in the past on the BIF have been used to buy down the employer contribution rate.
The deck is entirely stacked in favor of the employers. If their rates are going up now, it is only because all the deck-stacking has finally turned against them for a short period of time.
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BillS asks for more facts. PERS produces a document each year called "PERS By the Numbers". Here is a link to the most recent copy: http://oregonpers.info/library/Download.aspx?docid=1180
It is full of information about retirees and the system. There has been considerable focus on retirees making more in retirement than they didy working. According to PERS latest report, the average PERS retiree makes 55% in retirement of their final average salary. The average for people that worked 30 years is 80%.
For retirees from 1990-2008, the average monthly retiement benefit at retirement was $2,091. A couple of other intersting facts include, "the annual benefit to Oregon from PERS retirees is $3.3 billion". The economic activity generated by PERS benefit payments sustains an estimated 30,678 jobs and add approximately $900 million in wages to the Oregon eonomy. The State of Oregon collected an estimated $110 million in income taxes on PERS retirees benefits during 2008.
The last two pages of the report show the distribution of where PERS retirees live. It is also pretty interesting.
The PERS by the numbers is 20 pages and includes a good many graphs.
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Unless I am wrong, and please wiegh in -
PERS and most retirements are a more secure way to bet that the investment vehicles they contributed to will increase at a rate higher than inflation over a given term, but this whole system hinges on the gross domestic product getting larger. In the event the investments deflate the public will pick up the difference.
So if we see a major LONG TERM economic collapse then the system will fail or burden the working class so thier retirement is spent covering currently retired people Right?
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ALL retirement plans, not just PERS, depend on investment performance. That is a bet everyone places when he/she/it chooses to invest assets in the equities market. Your point is taken only in the sense that in the event of a LONG TERM economic collapse everyone loses, not just the people who are retired. If the economic system collapses then no one's retirement system is safe. If you want to predict a doomsday scenario then we can argue that the survivalists - the ones with enough ammo in their basements and enough food to last for about 6 months - will win. But that isn't the discussion we're having here.
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"So if we see a major LONG TERM economic collapse then the system will fail or burden the working class so thier retirement is spent covering currently retired people Right?"
Wrong.
Retired PERS members do not receive "working class" tax payer dollars. When a public employee retires the members account is placed in a fund called the Benefits In Force Fund. This is not unlike the purchase of an annuity from an insurance company. In exchange for the total of their account the retiree receives a monthly benefit. Calculation of the monthly benefit uses a complicated actuarial formula, but the amount of the account and age of retiree are the key factors in determining the amount of the monthly benefit. A retiree has to live to at least the 16th of each month or the monthly benefit stops.
Couple of notes for you to consider: Public employees are also part of the "working class". They work for public agencies that provide services that the public receives. The taxes you pay are your share of the cost for these services. You drive on safe streets, breath clean air, have a school to send your kid to, receive fire and police protection, and so on. This is the way it works in a civilized society. And, public employees pay taxes too. Question: how long does a tax dollar remain public property? Public employees are paid to perform a job. They trade their skills and time for compensation. Just like others that go to work and earn a living. It is called "Earned Compensation". A portion of the public employees earned compensation is placed in the public employees retirement account. The Public Employees Retirement System manages the public employees account. One more thought to share with you: public employees are your neighbors, and members of the same community you enjoy. They are not a different kind of citizen with different rights, privileges, or responsibilities.
Hope this helps.
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I'm no expert, but I think in theory you are right. If the social security system becomes under funded, then those still working are the ones paying to keep it afloat.
I think PERS may be a little (or a lot) different than social security, however. What's different is that retired employees covered under the PERS system have their funds invested in accounts that can't be raided. I believe the U.S. Government raids (borrows from?) the social security fund on a regular basis. What's similar is that shortfalls in investment returns for the PERS system may require that public employers make up some or all of the difference for PERS members covered under the "old" system. Obviously, public employers get most of their revenue from tax payers one way or another.
The changes that the legislature implemented several years ago will have the affect of reducing future liabilities as Tier I members pass along. At that point, most of the argument about PERS will be no longer apply.
I think the things to be careful about start out with "believe half of what you see and none of what you hear". Certain politicians have made a career for themselves by portraying the PERS system in a damaging and erroneous light. Certain newspapers have also bolstered their flagging sales by doing the same thing. Scruples be damned in politics and the newspaper business, I guess. The effect has been to turn Oregonians against each other when what we need to do is support each other, especially now in these very difficult times.
PERs is not the bogeyman that some of these characters would have us believe. I think the data in the referenced PERS report demonstrates this. However, creating false enemies is an old tactic used by some in politics and the media to distract the public from their failures of courage and leadership in facing the most important issues of the day.
Gary
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The impact of the stock market crash on my own investments and that of my friends and family inspired me to create a website to help people with their portfolios. Most people have a retirement account with limited options to invest in and very little information about what they should buy. The site I created is meant to help people get a feel for how different combinations of the funds that are available to them would have performed in the past.
http://www.riskcog.com
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Though I am several decades from retirement, I've already formed a negative opinion of the PERS system. I was a substitute teacher for 2 years before I was hired by the school district. I've now been teaching for 4 years and have been frustrated by how illusive the PERS system seems. None of my co-workers have been able to speak to how the system works. It's very frustrating to have a chunk of money taken out of my salery every month without any specific explaination. To make the PERS situation even more frustrating, a few months ago I received a notice saying that I owed the system over $400 due to a paperwork error made by my employer while I was substitute teaching. Things are very tight right now, and I don't have the money at this time. No one has"hunted me down" yet, but I'm wondering what the ramifications might be.
In addition, I will most likely be leaving the state next year. What will happen to my PERS account? Will I loose everything if I do not retire in Oregon?
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call your Union for help.
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bandteacher:
You can come to the several sites mentioned in my first post, or search on CoastGuy09's collection of information site. If you email me directly, I can tell you who to email at PERS to get your answers quickly. To answer your initial question: if you leave the employ of a PERS-participating employer before you have vested (5 full years of employment participating in the PERS system) you can seek a refund of all your contributions and earnings and have them rolled into an IRA or possibly another retirement system. If you are vested in PERS you can either leave your money in the system and "retire" at the appropriate time, whether you live in Oregon or not.
As for the "error", I'd contact your employer at the time and demand that they pungle up the $400. It is their responsibility to deposit the money they take from you. If they don't they are in violation of the law. PERS has to collect from someone and so you are probably easier to track down than the employer.
Good luck.
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Thanks mrfearless for your help!
The tricky thing about the "error" is that the notice I received was from my employer (and Education Service District). It was NOT from PERS. Do you think they are trying to get me to pay it, so they don't have to? In the notice they admit that their error was brought to attention during an audit. It sounds like you think I might not be required to pay...
I do not think this is really a union issue because, as a substitute teacher, I was not yet a union member.
Feeling lost in the woods... but seeing a little light, thanks!
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The Oregonian article you mention has about a dozen letters to the editor. One asserts that PERS retirees don't pay taxes on their benefits. This is patently FALSE. PERS retirees pay both Federal and State taxes on their benefits. If they live in Oregon, they pay Oregon income taxes and Federal income taxes. If they live outside Oregon, they pay Federal taxes and the taxes of whatever state they live in. Some states don't tax pension income; others do. So, the notion that we PERS retirees aren't paying our fair share of taxes is simply wrong, wrong, wrong.
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When I retired from 30 years of public service, I made the decision to stay in Oregon, knowing full well that I’d be paying Oregon Income Tax as well as property tax on my home. I could have moved to one of several states where I could avoid state income tax on my PERS benefits, but I really love Oregon and decided that continuing to pay state income taxes and county property taxes that come to over $3000 a year is still worth the privilege of living in one of the best places on earth.
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In the intro you only give a small paragraph near the end to how the PERS fund is doing this year. While it is true that 2008 hit the PERS Fund hard what financial fund didn’t tank in 2008?) the Oregon Investment Council has worked wonders since the financial melt down. In September 2009 (the most recent figures posted by the Oregon Treasury and PERS) the PERS Fund stands at $50,556 million which is UP from September 2008 when is was $47,9115 million. This is a major recovery since the fund’s lowest point in March 2009 of $41,532 Million. Yes, the sky may have come close to falling in the past year but the PERS Fund recovery is coming faster than in other sections of the economy.
One subset of the total fund, the Variable account has shown 31.07% growth between January and September this year!All I am asking is that you be fair in reporting about the health of the PERS Fund.
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Is there any discussion about how to grow the economy? Wouldn't a rapidly growing economy fix all the problems? I have a suggestion if your interested.
Steve Bang
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What did the employers do with the savings generated by the changes in 2003 and the reductions in rates offered by the Board's smoothing policy? Didn't they save this money for the rainy day? They whine about the potential increases but they didn't bother to save anything when the rates were low. Hard to be sympathetic. When I get a raise, I save it.
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LOL!
One does not "Invest" in the Stock Market.
One "Gambles" in the Stock Market.
Of the minute part of my retirement that I "Gambled" with, I lost the gain and pulled it out of the market before I lost principal.
I have noticed that nobody is stepping up to bail me to cover my losses...
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And whose problem is that? What did you gamble in the stock market with? And what did you do with the money you pulled out? Did you actually lose money? You said you pulled out your principal before you lost any. Therefore your gains were paper and your losses were paper. You chose to lock in your losses to salvage your principal. Was this in your retirement account - a 401K or with personal savings?
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This is more of the same Pro-PERS, one-sided story.
Since when should retirees expect 100% of their salary in retirement? Retirement was originally a time you had planned for; paying off your house while working, and living simply in old age. Maybe on half your working salary.
PERS people expect to receive full salary and retirement in their early 50's. We taxpayers can't afford this. They are greedy-- stealing from our school funds and services. They know it's true.
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Not true! Public employees expect that the promise and contract are kept. The 100% you reference is not the case. Check your facts. Your information suggests you have formed an opinion from bad information. It is easier to be angry than to think.
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No one expects 100% and to say that is just wrong and just adds to the lies being told by ruthless politicians who want to starve hard workers in the public sector now that they have starved out private sector workers by stealing the pensions of millions of Americans.
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The only reason the average PERS benefit is around $2,000. a month is most people don't work the full 30 years.
It's pretty nice to get any pension if you've only worked 10, 15 etc. years in one job.
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This is a spiteful, jealous, and untrue assertion. PERS people do NOT expect to retire with a full salary and few do or have done in the past several years. The only way anyone could retire with more than 100% of salary in the past was to have gambled with real money in the variable account -- where there are no guarantees, not even in Tier 1 -- during the years when the variable (100% equities) was pulling in 20-30% returns. If you left your money entirely in the regular account and worked for 30 years, you'd have been lucky to get 90%. But that hasn't been the case since about 2005. There are almost NO Tier 1 employees who retire with 100% of their salary. There are a few, to be sure, but most of these have worked more than 30 years at retirement.
If you want the correct information, go to the PERS website and download the 'PERS BY THE NUMBERS" document. It gives just the facts and nothing else. You'd be well-served to read it instead of spouting bogus and untrue information.
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Keisling is asserting that the 6% pickup is negotiable. True enough, but he seems to forget that the 6% pickup was offered IN EXCHANGE FOR A WAGE INCREASE in 1979. Perhaps he's going to propose that actives be given the 6% increase in wages and then have the option to contribute to its own PERS plan. There isn't any other fair way. It amounts to a 6% compensation decrease otherwise.
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BillS--
It is true.
I have three friends who are recently retired school teachers, they all are in their 50's and receive from $60,000. to 72,000. yearly for retirement.... for the rest of their lives.
The younger PERS folks will not get the same, but Tier 1 is crazy generous.
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"Since when should retirees expect 100% of their salary in retirement? "
This statement is offensive! So is calling the employees greedy etc.
Your words "They are greedy"
You are making false statements.
Your three friends if what you claim is true do not represent the facts. The average retiree receives 55% of final salary.
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You don't say how recently they retired. You also don't say anything about whether they gambled with their own money by staying in the variable, where it is feast or famine and no guarantee, or by staying only in the "regular" account. There are a lot of pieces of information lacking from your assertions about the levels of benefits in retirement. You don't say what they were earning before they retired. You fail to note that they get no health benefits and are probably paying 12-15K of that money for health insurance, something people in other state retirement systems get.
In short, it isn't that I don't believe you; it's that you haven't provided enough information to bolster the inference you draw from their numbers. I have friends who recently retired in their 50's who are getting $20,000 per year from PERS and are nearly starving. Different facts for different people. Care to respond?
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mrfearless47--
You ask for details...
One teacher retired last year after 30 years teaching Jr. High. It was her first job out of college at age 22, so she retired at 52. She receives $5,200. per month ($62,400 per year). Of course she has to pay her own health insurance, until she's in her 60's and can get Medicare. She thinks the benefits are extravagant, but who can blame her for taking them? She would have worked another 10 years, but why would anyone work when you can be paid 100% of your salary for not working? Plus she can double dip by substituting.
Your friends who are "staving" on $20,000 probably didn't work for 30 years. Getting anything from your pension in your 50's is pretty nice; many private sector folks must wait until they're 62 to receive payments. Plus your friends are still able to work-- like most people in their 50's.
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For current employees, since retirement benefits differ for tier 1, tier 2, etc., there should be different salary ranges depending on which tier they are in. All other things being equal, a tier 2 employee should receive a higher salary than a tier 1.
Bob
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Interesting idea, but I think this gives in to the pressure for public employees to fight each other instead of fighting the real problems.
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We need to remember first of all that any invested money is a form of gambling. It can go bad as we all discovered in the past few years. It has been so long since this happened that in generally we are all blaming investment decisions, or in the case of pers the way the system is set up. There is no way to prevent the possibility of losing money, even putting in in your mattress. It has been difficult for everyone, and there are obviously better investments than some funds made, but Ithink that anger projected to PErs or any other retirement account is misplaced.
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But PERS investments do not really matter to the PERS retirees, since the taxpayers will make up the losses.
Maybe each retiree should have their own account which would reflect the rise and loss of the investments. Just like the rest of us.
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Not many think about saving for retirement until they are well along in their career and have raised a family etc. It not only requires that a large amount of money be set aside for later, but that it also takes a large amount of time for the money to earn returns. Public employees are not given a choice for membership in PERS. From the beginning 6 cents of every dollar earned is put in their retirement account. These accounts have been well managed and now many years later employees are eligible to draw on the accounts. The choice to take a job without a good retirement plan, and the choice to not start early saving is not the fault of a public employee. Politicians and newspapers have had a field day stirring up a pot and pouring in distortions. If you feel you want to attack the success of others at least get your story straight and accept responsibility for your own choices.
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I want to make a couple of observations. First, I do not have a PERS account nor does anyone in my family. We pay our taxes to support our public employees and get nothing but services in return. We are OK with the trade as we value the services we use every day. Like driving on the roads, drinking the water, breathing clean air and knowing that 911 will answer and send help if we need it.
I thought the moderator let Keisling run over the top of Hartman and failed to keep him in line and quiet so that Hartman could make valuable points.
Keisling failed, as did the moderator, to admit that we as taxpayers are supporting all the Non-PERS retirees who do not have an adequate pension though additional public services.
My family and I may indeed be different than the rest of the world but we prefer knowing what we are paying for up front. Instead Keisling is suggesting that we continue to allow his buds in the private sector to force their retirees to feed off the system of public services while they just take the profits and run.
The difference is one system is open to public scrutiny and the other is cloaked in secrecy and deceit. Try calling Keisling the next time your house is on fire and see how fast he and his cronies get there to put it out.
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Thank You! Your comment is greatly appreciated at our house and I am sure with others.
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Some things seldom mentioned in the PERS discussion:
1. PERS contributions are employee salaries in one for or another. Those who talk about lowering the employer contribution are talking about lowering police, fire and public employee salaries.
2. The PERS Fund is money that belongs to the employees and retirees. It is supposed to be managed as a trust fund and invested prudently for the maximum gain. It is not. Over the years it has been used by the Treasurer and the Legislature as the State "piggy bank" to provide funding for public buildings, to rescue Oregon icons in trouble like Fred Meyer and to support "socially responsible investing" at below market returns. The Oregon Legislature has stolen from the SAIF Fund and stolen from the Veterans Home Loan Fund. Should what it has done with PERS be a surprise? Any reform should plan the PERS money with a private institutional trustee, not the State.
3. Local governments have no choice, neither do public employees. PERS has over the years forced out all alternative public employee retirement plans. State law requires PERS for police and fire and PERS or equal for all others. The "or equal" formula applies only to plans already in place when PERS was adopted and is skewed in farvor of PERS. I was forced out of a very attractive Standard Insurance and into a less generous PERS plan by the State.
4. The various accounting games played by local governments were approved by the Secretary of State and known to the Legislature.
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I'm a Higher Ed state employee. I'm so grateful to have the PERS system. Something like PERS should be available to all citizens in Oregon and nationally.
Human dignity and respect should be shown to all people when they can't work or must retire. I also feel that decent health care is a human and civil right. We desperately need retirement systems for all, and a Medicare-for-All style health care system.
The wealthy and the largest corporations must begin paying their fair share of taxes to help the human village, the composite of all citizens of our nation to live a good quality of life with adequate health care and livable retirement income.
A great way to fund human rights such as health care and retirement income is to restore the tax cuts that people like GW Bush have given to the super wealthy.
That's why we need a YES vote in January on Measures 66 & 67. The tax fairness measures are a modest (some would say miniscule) tax increase on the largest corporations AND for the upper income individuals and couples. Everyone, inluding big corporations and their outrageously paid executives need to start paying their share and be thinking about helping the least among us to have a decent quality of life.
The same wealthy folks who don't even want to tolerate a tiny tax increase are usually the same people who are on Social Security when they don't need to be. So many of those wealthy and selfish voices are the same folks who have no use for public employees and continually trash and ridicule state workers.
The PERS system has been adequately managed and is the precious nest egg for tens of thousands. Politicians and anti-government critics must be met with firm resistance to any plans that will try to tinker with PERS benefits in the near or distant future.
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Everyone in Oregon gets PERS, sort of. If you work for a substandard employer and retire without adequate income you can get your "PERS" through public assistance. Not dignified, not well funded and certainly not ideal but you will get it or become homeless - then maybe the business community will help out - oh not so much! You make great points and youre right, of course everyone should have a PERS to count on - I have a 401 K that now means I work till I die.
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I think your points are well made and I appreciate your comments. I am deeply concerned that the debate gets framed as public employees against workers (we are all workers!) and some how the big corporations continue to demand and get big tax breaks so they can ‘gift’ the state with jobs. They also sit back and watch the various worker groups fighting amongst themselves while workers pay an increasing percentage of the public bills.
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JustPeg makes a VERY GOOD point in her 11:16 post. This subject warrants a series of shows. We have lots of puppets in the media to sing the corporate song. Emily and Dave, how about considering Thinking Out Loud on JustPeg's thoughts as a show subject.
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alexPortland: you claim: "One teacher retired last year after 30 years teaching Jr. High. It was her first job out of college at age 22, so she retired at 52. She receives $5,200. per month ($62,400 per year). Of course she has to pay her own health insurance, until she's in her 60's and can get Medicare. She thinks the benefits are extravagant, but who can blame her for taking them? She would have worked another 10 years, but why would anyone work when you can be paid 100% of your salary for not working? Plus she can double dip by substituting."
You make my point. You've told us nothing of interest except what your ONE friend is making after 30 years. You actually eluded my serious questions. You cite 3 friends in a previous post yet only provide information on 1 friend. I asked for details of the retirement, such as when these people retired, what their investment mix was, etc. The investment mix is crucial to understanding how the benefits are computed. If this person retired in June 2008, for example, this was well before the ferocious drop in the variable account occurred. If your friend had left money in variable after the variable was closed to new money on 1/1/2004, there would have been substantial earnings before the fall. That, coupled with regular earnings during the same years provided a substantial benefit. You also fail to point out how much of that benefit was derived from her IAP account, which replaced all contributions to the Tier 1 account after 1/1/2004. In short, you're still blowing smoke. You cite three but provide evidence of only one. You refuse or are unable to provide essential details that would frame each case. Every PERS retirement is different. For my friend who has only $2000 per month in PERS benefits, he worked for 25 years - more than average and is drawing less than the average benefit. Maybe this is because his wages were so low during his working life that the contributions on his behalf were pitifully small.
I retired after 33 years and my benefit was 90% of my FAS. I earned every penny of my retirement and at retirement was earning 25% less than my peers in other states who were getting about 70% of their salaries at retirement.
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The amount that Alex quotes for a Jr. High teacher is not typical. I wonder if the retired teacher is also adding in their 403B distributions? I know of several individuals that fit the general description Alex provided and assure you they do not receive that kind of benefit. The numbers provided by PERS are the way it really is. Members don't just get a pension or benefits equal or greater than FAS. Something is missing in the info if the numbers from Alex are true.
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One more point. There is this constant reference to taxpayers bailing out retirees in the PERS system. This is flawed reasoning. The issue right now isn't about how to pay retirees - their money is more or less already covered for the rest of their lives. The issue is primarily how to fund the retirements of all currently working public employees. The shortfall being discussed is truly a paper shortfall that has to be amortized over a 20 year period. The shortfall is the difference between what PERS has on hand right now and what it will need to pay the benefits of all members until the last beneficiary dies. Since the system is in perpetuity, there will be ebbs and flows of investment returns with periods of shortfalls and periods of plenty. The PERS Board's job is to manage the highs and lows so that the longterm average rate of return exceeds 8% by some small amount. PERS only has to have enough money on hand to pay benefits for the life of members and their beneficiaries. IF, and only IF every public employee were to retire today, there wouldn't be enough money to pay all benefits without better performance from the fund. But since only about 10% of the workforce is eligible to retire at any given time - and those are replaced with new workers with lower benefits, the doomsday scenario is unlikely to materialize.
As for the employer whinging, that's all they ever do. They got huge breaks after the 2003 reforms. Did they save the money? Apparently most of them didn't because they are whining again about the potential increases as a result not of PERS policies, but of investments gone awry. It is hard to be sympathetic to employers who squandered savings given to them out of the hides of actives and retirees in 2003. They simply can't complain now about the increases.
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As I listened to the program I felt that the whole discussion was essentially one sided. I felt that the moderators did little to promote a genuine discussion and even took a few “pot shots” at public employees. With bashing the public employees and the benefit packages that are in place please remember that there was a time that no qualified person would apply for the positions due to the lack of pay. Now that the economy has turned down people are looking for the bad guy who has more than they do. When I took a public sector job seventeen yeas ago I sacrificed pay for the benefits package. I am thankful for having a retirement package, ask TWA employees how great their package is.
One major point I want to make is that all public employees are your neighbours, friends or acquaintances. Only one person I know has the ability to create money, Obama! The rest of us just recycle the money back into the communities and the state we live in. We also pay taxes for services just like the rest of the residents of Oregon. We also support the communities we live in through local stores and businesses. We (public employees) also provide the services that are essential to running the State of Oregon the same services we all rely on.
When you are in a bind do you call emergency services like the police or fire department? Last winter when we had heavy snow a public employee gave up Christmas with his family to plough the road so we and our neibors could get out. Last winter two public employees at my employer worked 36 hours straight to keep the plant from polluting the river with sewage. Do you really want to continue bashing dedicated employees that care about the communities they serve!
I question the projections that were expressed on the program. Please correct me if I am wrong but these look at the worst case scenario and are rarely correct if ever. To threaten cuts in emergency services is just adding to the “scare” tactics that are constantly used. Please remember that (a guess) virtually all of the money paid in retirement benefits for public employees stays in Oregon keeping our economy going. It (the money) is recycled back into the state we live in.
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I'm just thinking out loud here,
Of all the guests that could have been on the program, why Phil Keisling?
Is Mr Keisling gearing up for a run at becoming Oregon's next governor?
Was there a behind the scene motive for this program?
I sincerely hope not, and, if not, I apologize for wondering.
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Could Kiesling's "White Paper" have been the motivation behind the show? No competing media types were there - only the two leaders of the loyal opposition and Kiesling pushing out all these ideas. Kiesling was arrogant and rude to the other guests as well as to callers and commenters. He just dismissed their observations with a smug laugh. I truly hope that "HE" wasn't the reason for the show. If that is so, then this suggests that OPB may be moving towards the anti-union stance. I'm a huge donor to OPB and if I find out that this show started as a result of Kiesling's "suggestions", I will be disappointed, probably not renew my Cornerstone membership and stop listening to a show that I believed had very good potential. There was no real balance on the show and definitely too little time spent. The topic deserved at least 3 shows or not done at all.
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I know there are many people out there who want to learn how to invest, but are apprehensive because they just don't have the education or the background to make informed choices.Then the question of stocks vs. bonds – which to use? A mix is best. Stocks are higher return (average 12%) though higher risk. As you approach retirement, the balance should be shifted to stable investments, like bonds or FDIC backed CDs, or gold. A sound strategy for 401(k) funds allocation payments and investments will be credit towards retirement.
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For anyone looking for information about Oregon PERS, the most complete resource of PERS documents available may be found at http://OregonPERS.info
This site is owned and operated by a small group of PERS retirees and is available to the public for free.