January 3, 2003

The Oregonian, “PERS will let workers opt out of system”

"The American Federation of State County and Municipal Employees is urging its members to consider the double lump sum if they have a solid financial adviser, said Mary Botkin, the union’s lobbyist."

"Because PERS seems to be making a lot mistakes, the confidence level of folks has been pretty shattered," Botkin said. "I think it’s pretty scary for folks to stay in a system that seems unstable."
-Mary Botkin, lobbyist for The American Federation of State County and Municipal Employees.

April 18, 2003

The Oregonian, “Governor proposes a revamping of PERS”

Gov. Kulongoski proposed several changes expecting to:

"…save billions of dollars by slowing the growth of benefits for PERS members, including those who already have retired."

"…would do away with the guarantee of 8 percent annual growth in at least part of the PERS accounts for all members hired before 1996."

"He also would suspend retirees’ annual cost-of-living increases."

"Kulongoski’s plan would make several significant changes in the way PERS accounts grow. The biggest would be throwing out the 8 percent guarantee that Tier 1 members – those hired before 1996 – receive on at least part of their money each year."

"…Kulongoski would temporarily suspend the future increases for members retiring under Money Match between 2000 and 2004."

"Kulongoski also would end the practice of government employers putting 6 percent of employees’ pay in their PERS accounts each year."

"The Legislature already has reined in the 8 percent guarantee, making it a maximum as well as a minimum. Kulongoski signed that bill into law, and he’s expected to sign another bill that would update the life expectancy tables used to calculate PERS retirement checks."

The advice to PERS members from Mary Botkin of the American Federation of State, County and Municipal Employees is, “Get out…Get out now. Take your money and run.”

Back to Top

April 25, 2003

The Oregonian, "Reforms to PERS pass panel"

"House Bill 2003, with amendments proposed last week by Democratic Gov. Ted Kulongoski, would make several significant changes and slow the growth of Public Employees Retirement System benefits.”

“The changes include: Dealing back the 8 percent annual growth guarantee that some PERS members get. Suspending annual cost-of-living increases for some recent retirees. Putting the 6 percent contribution made on behalf of employees into non-PERS accounts.”
 

May 14, 2003

Statesman Journal, "State workers jump ship amid pension shifts"

" Behind the move are sweeping PERS reforms approved by the Legislature:

House Bill 2001 limits the kind of double-digit increases in pension accounts many PERS members enjoyed in the 1990s. That bill capped earnings growth at 8 percent per year on regular accounts of Tier 1 workers, who joined PERS before 1996. Higher earnings will occur only after PERS erases its $1.9 billion deficit and puts several billion more into reserves, which could easily take a decade or two.

House Bill 2004 forces PERS to use updated life-expectancy tables when setting pensions. That will reduce pensions from levels workers otherwise would get. Workers who retire before July won’t see any impact, which is one reason many are rushing to quit now. Other workers won’t build any increases in their PERS accounts at least for several months or maybe a couple of years or more.

House Bill 2003 will have the biggest impact, because it erodes the most lucrative features of PERS. It effectively phases out the Money Match calculation method and the 8 percent annual earnings guarantee on Tier 1 workers’ regular accounts. Workers will continue to get employee contributions equaling 6 percent of salary, but those will go into a separate 401(k)-style account.

Tier 1 workers won’t get any added contributions to their regular pension accounts until PERS pays off its $1.9 billion deficit.

That could take at least three years, said PERS actuary Mark Johnson. It would take longer if PERS earns less than average on its investments or there’s a higher than expected number of retirements, he said.

Once word filters down about the impact of HB 2003, some older workers may question remaining on the job if their PERS accounts are largely frozen for a few years.

Workers could avoid losing account earnings for this calendar year if they retire by next March 1. That could trigger yet another surge of public employee retirements early next year."

Back to Top

May 20, 2003

Statesman Journal, “Legislation allows ex-public workers
to cash out of PERS”

"Former public employees who left money sitting in the state pension system can ‘cash out’ their accounts before reaching retirement age under a bill that won final legislative approval Monday."

"The House passed Senate Bill 258 by a 52-1 vote, sending the bill to Gov. Ted Kulongoski’s desk to be signed into law."

"The bill allows so-called inactive members of the Public Employees Retirement System to withdraw their accounts between July 1, 2004, and June 30, 2006, if they were classified as inactive since Jan. 1, 2000. Recipients get 150 percent of the value of their accounts."

"Passage of House Bill 2003 by this year’s Legislature has watered down the Money Match option and guaranteed 8 percent annual investment earnings for those who joined PERS before 1996. As a result, cashing-out may prove more attractive than before."

 

June 5, 2003

The Oregonian “Official says PERS will not invest in single-nation private equity funds”

"The Oregon state pension system won’t invest in single-country private equity funds after losing at least $75 million in a fund managed by Argentina’s Exxel Group, once Latin American’s biggest buyout firm."

Back to Top

June 7, 2003

Statesman Journal, “Senate Seeks to alter lawmakers’ benefits”

"The state House and Senate are at odds over whether lawmakers should remain in the state pension system."

"House members voted in March to yank lawmakers from the embattled Public Employees Retirement System and create a special 401(k) plan for them."

"Rejecting that idea, the senate voted Friday to reduce lawmakers’ PERS benefits, by eliminating their preferred benefits package normally reserved for police and firefighters. The Senate passed House Bill 2407-C by a 16-11 margin."

" ‘It’s unjust enrichment to keep getting benefits as if lawmakers were in public safety jobs,’ said Sen. Tony Corcoran, D-Cottage Grove, whose committee reworked the earlier House bill."

"House members argued it’s a conflict of interest for lawmakers to oversee a system that pays them benefits."

"New PERS reforms signed into law will phase out the Money Match system."

 

June 12, 2003

The Oregonian, "Judge orders PERS action on Benefits”

A state appellate judge rejects requests for further delays from the Oregon pension system.

 The Public Employees Retirement System is ordered to begin to recalculate retirement benefits and employer rates.

"The order requires the PERS board to implement a lower-court ruling that soon could lead to lower benefits for some state and local retirees, as well as reduce employer rates for government agencies. The PERS board is already reexamining rates as the result of legislative action to lower pension costs."

"…Judge Rick Haselton of the Oregon Court of Appeals issued an order refusing a request from PERS and public-employee unions to stay a sweeping lower-court ruling on pension benefits and rates."

"Haselton said the PERS board ‘has not demonstrated that it is reasonably likely to prevail on appeal’ and that a stay could cause more harm to PERS recipients and employers."

Statesman Journal, “Senate’s revision of PERS bill criticized”

"Rep. Tim Knopp says the Senate version of his bill is self-serving."

"The Senate had amended House Bill 2407 to retain lawmakers in PERS under reduced benefits. However, the Senate exempted lawmakers who entered the Legislature before 1995."

"The Senate version is ‘probably the most self-serving legislation we’ve had this session,’ Knopp said on the House floor."

" ‘It’s not right that we protect legislators who were here before 1995,’ Knopp said. ‘The right thing to do is to go back to the original version of this bill, to take legislators out of PERS, to cut our pensions and lead by example.' "

Back to Top

All information is from sources believed to be accurate and reliable. Please consult your advisor before making any decisions regarding PERS.