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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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?
posted 2 years, 6 months ago
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on Recovering PERS
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?
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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on Recovering PERS
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.
posted 2 years, 6 months ago
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