January 1,
2004
Assets and Earnings are FROZEN for Tier
One Member’s Regular Accounts.
New “Break in Service” rules implemented under
House Bill 2020.
Since January 1, 2003 retiring Oregon PERS
members are allowed to utilize the Double-Lump Sum
Option. PERS Officers, Management and Staff follow
PERS regulations and Oregon Revised Statute by
allowing members to retire, return to work in a PERS
covered position, and work less than 1,039 hours
within the first six months of reemployment without
risk to benefits or exposure to penalties. Members
continue to follow rules and roll all their money
from PERS throughout 2003 and up to February 26th,
2004.
January 19, 2004
Statesman Journal, “Early state
retirement cautioned”
“Oregon public employees continue retiring in
droves this year, but the rush to the exits might
prove to be a financial mistake for many.”
“More than
700 public employees have filed to retire by March
1, and thousands more are researching whether to
retire by then, said David Bailey, deputy director
of the Oregon Public Employees Retirement System.”
“‘I would say that a retirement spike in March is
likely,’ Bailey said. ‘Frankly, I don’t think there
should be a spike if people are looking at what’s
the best thing to do.’”
“‘Veteran public employees are enticed by a
provision in a 2003 PERS reform allowing them to
escape a freeze on their regular pension accounts if
they retire by March 1. But if they wait until April
or later to retire, they avoid a separate freeze in
their cost-of-living adjustments upon retirement.
The freeze on 2 percent annual cost-of-living
adjustments could prove to be more costly,’ Bailey
said.”
“‘Most people are better off waiting until after
the changeover. The reason is that the COLA catches
you up pretty quick,’ he said.” (David Bailey
abruptly resigned on February 26, 2004. His last day
was February 27, 2004.)
“PERS won’t provide any financial advice, and
everybody’s situation is different.”
Back to Top
January 22, 2004
The Oregonian, “Damages owed PERS fund
reduced by appeals court”
Retirement Board found Negligent in monitoring
its investments.
February
24, 2004
Steve Rodeman, Oregon PERS’ Manager of Policy
Analyst Group, confirmed Double-Lump Sum Option
availability for returning to work with less than
1,039 hours during the first six months. Oregon
PERS’ Deputy Director David Bailey and Steve
Delaney, PERS Legislative Liaison, have also
recently confirmed the Double-Lump Sum Option for
returning PERS retiree’s under the 1,039 hour method
within the first six months.
“Before the legislative changes, PERS was
projecting that the costs being charged to state and
local governments would exceed 25 percent of payroll
and remain there until 2027 – more than the double
the typical rate in the past.”*
*The
Oregonian,
“State, workers’ attorney debate PERS”
(Note: National average is 2-4% of payroll.)
Back to Top
February 26,
2004
PERS members choosing Double-Lump Sum Option &
wanting to return to work under existing rules are
singled out.
PERS Board asks Oregon’s Attorney General’s
office to issue a legal opinion on PERS members
choosing Double-Lump Sum Option and returning to
work. (Note: After many delays, Oregon’s Attorney
General’s office eventually issues verbal opinion to
PERS Board – Leaving no paper trail.)
PERS announces an “abrupt” change to its policy
regarding the Double-Lump Sum Option and returning
to work.
David Bailey, Oregon PERS’ Deputy Director,
suddenly resigns. His last day is tomorrow.
The Oregon School Board Association begins to
circulate an email announcing “PERS previously
provided incomplete information…” regarding the
Double-Lump Sum Option and returning to work.
PERS immediately began calling members retiring
as of March 1 to tell them that if they were
planning to return to work after taking the
“double-lump sum” retirement option, then they can’t
work at all for 6 calendar months. If they do, they
would have to pay all of the money back.
If PERS were to find out that a member took the
double-lump sum option and then returned to work,
and did not change their retirement option within 60
days of the first paid benefit, PERS would send the
member an invoice, and potentially send it to
collections if it were not repaid.
Members that had chosen the Double-Lump Sum
Option and planned to return to work under the 1,039
hour method begin to be notified that they must
repay all benefits received. However, members who
retire under any option other than the total
lump-sum option can return to work for a
PERS-covered employer within the first six months
under the 1,039 rule without having to repay
benefits.
PERS announces that the Attorney General’s (AG)
office will issue a ruling by the March 1st, 2003
deadline regarding the abrupt change to the
Double-Lump Sum Option and returning to work. Many
members that were set to retire, collect interest
for 2003 and pro-rata through the date of their
check in 2004 in the Regular Account, and return to
work under the "1,039" hour rule, are unable to make
an informed decision. Members are forced to put
their plans on hold until AG’s office advises PERS
Board.
Back to Top
February 27,
2004
Last day to turn in your PERS forms if you’re
planning on retiring by March 1, 2004 to collect
interest in Tier One Regular Account for 2003 and
pro-rata for 2004.
March 1, 2004
Deadline for receiving interest in the Tier One
Regular Account for 2003 and pro-rata through 2004
until check arrives.
AG’s office to issue opinion on reemployment of
retired members that chose double-lump sum option
utilizing 1,039 hour rule - Postponed.
Members unable to make an informed decision
regarding retirement by March 1st deadline without
possible risk to career, benefits and/or penalties.
Testimony from
Hearings in front of Judge Brewer:
“The actuary also presented a study indicating that
during the period from 1978 - 2002 (25 years), the
PERS Board credited a compound 11.95% to Tier 1
member accounts, while the fund itself earned a
compound 11.59%. In other words, he claims that the
PERS Board actually paid out more in earnings to
Tier 1 Regular Account members than it actually
earned. When asked why they might have done this,
his answer was revealing: "they didn't know what
they were doing". (The discrepancy is explained
by the years in which the fund earned less than 8%,
but paid out 8% anyway. The small amount 'reserved'
only prevented the two numbers from diverging even
more than they did). The actuary also did a
"Sharpe analysis" comparing the variable account
risk/return ratio to the regular account risk/return
ratio. He concluded that the variable account
was 2.5 times as risky as the regular for the 1%
improvement in returns. He concluded that the
variable was a "terrible" deal for employees,
since they assumed enormous risks for only a
tiny incremental benefit in return.”*
*As per Mark Feldesman’s website.
Back to Top
March 5, 2004
The Oregonian, “PGE’s buyers seizes
initiative"
“Texas
Pacific partners confirm they relish the
out-of-favor.”
“Often
the targeted companies are in financial trouble,
even bankruptcy. ‘Distressed,’ say Texas Pacific
partners, is synonymous with ‘opportunity.’”
“All the while, cheap is cherished.”
March 8, 2004
AG’s office to issue opinion on reemployment of
retired members that chose double-lump sum option
utilizing 1,039 hour rule - Postponed.
March 11, 2004
AG’s office to issue opinion on reemployment of
retired members that chose double-lump sum option
utilizing 1,039 hour rule - Postponed.
March 19, 2004
AG’s office to issue opinion on reemployment of
retired members that chose double-lump sum option
utilizing 1,039 hour rule - Postponed.
Back to Top
March 24, 2004
www.oregoned.org, “PERS Board Reinterprets
‘Double Lump Sum’ Policy”
AG’s office to issue opinion on reemployment of
retired members that chose double-lump sum option
utilizing 1,039 hour rule - Postponed.
March 28, 2004
Statesman Journal, “Retirement fund will
invest in Oregon”
“Managers of the Oregon Public Employees
Retirement Fund have to find a home for $100 million
by 2008, a requirement of House Bill 3613, generated
by the 2003 Oregon Legislature. The money will be
targeted at emerging industries in the Northwest.”
“Venture-capital investments are by definition
high risk.” Scott Gibson, founder of high-tech
Sequent Computer Systems in Beaverton, who helped
draft HB 3613. State Treasurer Randall Edwards,
“originally opposed HB 3613, calling it a mandate to
invest retiree funds without regard to fiduciary
principals. He later supported a modified form of
the bill, which specified the investments would only
be made if they were prudent.”
“Ralph Shaw, of Shaw Venture Partners, is
skeptical of the state’s initiative.”
“It will do one thing: It will give
venture-capital firms more fees.”
“It’s an example of what happens when investors
have more cash than business sense.”
Back to Top
All information is from sources believed to be accurate and reliable. Please consult your advisor before making any decisions regarding PERS.
