Oregon Supreme Court Announces Decisions Regarding PERS

 

Results:

 

• COLA freezes for members who retired between April 2000 and April 2004 rejected.
• Life expectancy tables will be updated.
• Current "Assumed Rate" rate of 8% must be paid to Tier One Regular Account members.  The guaranteed return on earnings is a cap as well as a minimum.
• New IAP will be allowed. Employee contributions will go to IAP only. Employer contributions will go into respective Tier One or Two accounts.

 Ramifications:

• If you retired in 2003 or 2004 and utilized the double lump-sum option, expect a credit of 8% interest for Tier One Regular account while your money was still at PERS.
• Expect another substantial increase in employer rates. Reforms were put into place to save in excess of $8 Billion; Supreme Court's decision eliminated $5 Billion of savings.
• Future retirees who select a monthly benefit from PERS will see their benefits reduced, since no further employee contributions are allowed in Tier One and Two Accounts (effective January 1, 2004).
• All new employee contributions are diverted into the new Individual Account Program (there is no Money Match in IAP).
• Look for "Assumed Rate" to possibly decrease from current 8% to __%.  Relief must be sought to reduce financial pressure from substantial rate increases, billions of dollars of bonds issued (to pay down deficit), pending lawsuits and potential class action lawsuits against PERS.

If you would like further explanation or help with how these changes affect your specific circumstances, please call me at 1-866-737-7435 or send your questions to jesse@pershelp.com.

 

Take care,

 

Jesse Villarreal, Jr.

Founder - PERS Help

 

All information from sources believed to be reliable and true.

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 Last Revised: May 14, 2006