Do you have ideas or suggestions on how to "fix PERS"?
I value your opinions and advice. Please feel free to post your comments.
Thanks,
Representative Richardson
See Newsletter at: http://www.dennisrichardson.org/lu031810.htm
Thursday, March 18, 2010
Part 1--Oregon PERS & the 2011-13 Budget--The Looming Crisis (Click here to blog)
Oregon’s 2011-13 Budget must compensate for the loss of more than $2.1 Billion of one-time money ($1.5 billion), increasing PERS ($495 million), and increasing debt expenses ($120+ million), and it must fill this financial canyon with a reduced stream of state revenues resulting from on-going, high unemployment.
Do you have ideas or suggestions on how to "fix PERS"?
I value your opinions and advice. Please feel free to post your comments.
Thanks,
Representative Richardson
See Newsletter at: http://www.dennisrichardson.org/lu031810.htm
Do you have ideas or suggestions on how to "fix PERS"?
I value your opinions and advice. Please feel free to post your comments.
Thanks,
Representative Richardson
See Newsletter at: http://www.dennisrichardson.org/lu031810.htm
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Good newsletter! Exhausting, but good. Makes me thankful that I have experts that are paying attention to these things.
ReplyDeleteThe newsletter would be easier to follow if you were to include a blank line every 3 or 4 sentences. My old eyes get tired trying to keep track of my place, and I think the increased length of the page would be offset by the increase in reading ease.
Thanks.
I wish I could have shortened this newsletter, and I cut out or linked as much of the info as I felt I could. I will try to keep future newsletters much shorter,
ReplyDeleteGreat News Letter, very informative
ReplyDeleteI think we should drop the pers retirement benifits entirely.
This will free up moneys for our present funding issues.
The majority of the United States now must fund their own retirement funds, so should our Goverment employees
I am a Calif. retiree and my husband is also and our Pers or in his case STRS are no where near the amount Or retirees receive. I am also aware because of a class action law suit by Federal retirees which they won that no State Income taxes are paid by Oregon Pers recipients and also Federal retirees. I we could at least put them on the income tax rolls it would help even the playing field
ReplyDeleteI have to agree with Trude Hunter. Exempting PERS retirement benefits from Oregon taxation is a slap in the face to taxpayers. I would further suggest that PERS retirement benefits should be taxed at the new, maximum OR tax rate if their retirement benefits exceed the inflation-adjusted amount of their final salaries.
ReplyDeletePERS benefits in fact, are taxed - since 1991
DeleteAs a member in your district, I wanted to thank you for all your effort on this. It is obvious that you have a real passion for these issues. Even though I am currently a PERS member (one of the "bad" tier 1 members) I still appreciate your examining of the facts of this issue. I agree that changes need to be made by all parties involved to ensure the survival of not only PERS but the entire State of Oregon.
ReplyDeleteYou had a great analysis of the issue, but one of your points was just not accurate. Employees covered by PERS do, in fact, pay their 6% empolyee contribution. Several years ago, many employee groups gave up pay raises during that time in place of having the employer pay the employee's 6%, which all the employers agreed to do. It's still calculated as part of our total compensation package. It's still part of our wage, the employer just pays PERS instead of including it in our monthly salary. To try to represent that we don't pay any money into our own retirement is just inaccurate and misrepresents the facts on this particular point.
You also mention that during the boom times when the stock market was making huge gains, that the government agencies used PART of the dividends earned to pay part of their PERS payment...did they save away the rest of the money earned for leaner times? Why did they not use ALL of the money soley for PERS payments? Had they used all of the dividends, what would the shortfall be today? All this is to say that there are many, many reasons why PERS is in the situation it's in today, not just the benefits received by the members. As you reported in your newsletter, everyone holds part of the blame, and it will take some concessions by everyone involved to fix the problem. I appreciate your broader view of the issues and your passion for fixing the problem, while still upholding the value of our public employees.
I suspect that Justin genuinely believes he gave up a pay raise in exchange for the employer pick-up of the employee's 6% PERS contribution. This is, however, something between an outright fiction and a sleight of hand.
ReplyDeleteThe PERS pick-up was authorized by the 1979 legislature (at the prompting of then State Senator Ted Kulongoski) and sure enough in 1980 the average pay raise for a state worker (just by way of example) remained flat. No increase. It appeared to be a genuine trade.
However, the next year, 1981, the average state worker enjoyed a 15.35 percent increase in pay AND STILL GOT TO KEEP THE PERS PICK-UP FOREVER. In other words, state workers gave up a pay raise for one year in exchange for a forever PERS pick-up and then got a huge payraise the next year to more than make up for their one year "sacrifice." The taxpayers were had.
The PERS problem has been a long time coming. It was my measure that voters approved way back in 1994 to stop this debacle from occuring. That's how long ago some of us knew we were headed for a huge problem if PERS wasn't reined in and frankly I blame the Oregon Supreme Court for making the situation all but impossible to fix. Their 1995 ruling was politicall motivated legal nonsense. (You can read the dissenting opinion to confirm that.)
There are still ways to address this problem, but they require more guts than anyone (else) running for governor has exhibited thus far.
At any rate, I applaud you for shining a light on the issue. I fear that by the time enough people acknowledge the reality of the tsunami that is headed our way it will be too late to stop it. Bill Sizemore (bill@otu.org)
Have you talked to Fred Starkey?? This is what he have been saying for over 12 years and NO ONE LISTENED TO HIM....AND NOW PERS IS A MESS!!! LOSING MORE MONEY YEARLY!! He seems to be an EXPERT in this area.. Look him up...Bill Sizemore knows him..maybe you should form a PERS PANEL with men Like Bill and Fred...and get as much help as possible-HAMMER OUT A SOLUTION OR ELSE PERS bankrupts OREGON TOTALLY..and it is a LOSE - LOSE situation for EVERYONE! and NO AMOUNT OF TAX WILL SAVE PERS...If you REALLY want help....contact these men and let them help....TODAY...tomorrow is too late....Thanks for TRYING to fins a solution and Asking for Oregonian's Ideas/help/solutions ...Find the SOLUTION AND STAY WITH IT...do not give in to pressure..we need men/women LEADERSHIP WHO HAVE TESTICULAR FORTITUDE AND RIGID BACKBONES!! Hang in there ..educate the Public and Git R Done!!
ReplyDeleteThank you for bringing this critical issue to light. This is is a 500lb gorilla that can destroy Oregon but yet few people seem to notice. I realize this will be a challenge to correct because so many voters are benefiting from this overly generous give-away of taxpayers money. Let's be realistic and get the benefits in line with what's sustainable and affordable to the state and comparable to the private sector. I don't want my children to grow up and not be able to stay in Oregon because PERS has bankrupted the state and all of the income producing businesses have gone. Now is the time, let's fix this mess for all current and future Oregonians.
ReplyDeleteDittos on what Trude and John posted regarding the exemption of PERS benefits from Oregon taxation. The dollars reclaimed might only be a small portion, but it would be part of the concessions that Justin agreed might be necessary.
ReplyDeleteThanks again Dennis for your time and effort in not only representing your district and all Oregonians, but also for the excellent newsletter. Bob Baumann
Eric here...
ReplyDeleteThanks for the newsletter, Dennis. Now let me get this straight - Pers Employers made contracts with their government employees regarding PERS; These contracts MUST be honored; Funding for these contracts is ultimately the responsibility of the Tax Payers; in order to fund PERS, other programs that serve the needs of Oregonians are cut into.
I know that logic is seldom useful in matters such as this, but it seems unreasonable to me to force taxpayers to satisfy the terms of contracts made by other parties. I would argue that these PERS employers never had the authority in the first place to bind the third party tax payers in this way.
Based on the losses that everyone sustained, and the current state of the economy, funding PERS at 100% is clearly not on par with the private sector. Foisting this hardship on tax-paying citizens of any income bracket is only in the interest of the PERS recipient, and not the people. The only just solution, and the only solution with long-term sustainability is the one which involves knocking PERS down a peg to a realistic benefit level..
It's time to put the cart back behind the horses.
I'll make this easy. The Federal Government and too many states are running unsustainable deficits. Instead of cutting costs they are increasing spending and taxes. At least California and Massachusetts are seeing that when you increase taxes on businesses and "the wealthy," those people just leave and revenues actually decrease.
ReplyDeleteUnsustainable is a word with real meaning. It is going to take some crashes and bankruptcies to "fix" these messes because too few are willing to give up anything.
Next year the first of the "baby boomers" retires. After that we have 18 years of increased expenses at all levels for seniors, and tax revenues from them will decrease markedly. Although PERS is a mess, it isn't just about PERS.
This is all going down in a heap. I'll see you on the other side. Good newsletter, BTW, and thank you.
I thank you Dennis for the in-depth study and printed opinion on the PERS dilemma. This county has a major problem other than this.
ReplyDeleteMy opinion may not always address the logic some are looking for to remedy the problem, but the foundation needed is not to be overlooked as for without it, a new idea may very well ship-wreck again [Prov.14:12, 16:25; Rom.6:21]
You wrote; “Who do I blame”.
It seems apparent to me the blame not only belongs to the four mentioned distinctive parties, but to the general public and I include myself for also electing and putting such lackadaisical persons in a official positions. It is even a more offensive scandal to allow such hired employees to be nearly bullet proof from termination for performing tax-costing inferior work or endeavors. Satan has developed such a stronghold through political correctness; nearly all government entities’ (Fed. on down) are reaping the fruits of their sowing and are suffering consequences for it [Gal. 6:7; I Tim. 6:10]. Chastising and if needed, termination w/ consequence of unfaithful employees needs to be embraced by employee leaders/taxpayer/voters. Zero toleration of corruption at any level.
As Timothy spoke of greed, we too have a sinful nature to be greedy. Look at the differences in wages among fellow PERS employees. The PERS existing union employees retirements obligation appears extremely lopsided, but review the upper paid non-union employees [Mgrs-directors-DOJ attorneys-educational teachers/professors-COACHES salaries, etc….. ] wages-perks-insurances-vacation accrual. For extra disappointment; read the Nov. 13, 2009 USA Today newspaper, page 11A for a few football salaries – sad & ridiculous)!
“In short, the PERS employer invests the Side Accounts in OPERF, with the hope that OPERF investment yields will exceed the cost of the bonds. In a “bull market” the strategy works and the net gain on the Side Account investments is used to off-set part of the employer’s PERS rate. (The employer then gets to divert for other purposes, the funds it would otherwise have paid to PERS.)”
Common sense: “Don’t count the chickens before the eggs hatch”. Or as Eric said in the blogs, “Don’t put the cart before the horse” is a no brainer and solid forefathers logic.
We have to move on with the mess we have, but it can be under the guidance of godly persons. Without men listening to God, we are being stiff-necked and band aiding humanistic foolishness. I am not speaking about religious persons who pray like Pharisees, but are God-seekers as hounds of heaven [2 Chronicles 7:14]
Thank you for your honest report and will be praying for your steps to be directed by God [Ps. 37:23, 119:133]. Please feel free to contact me if may be of any assistance.
Dave Benthin
Dennis,
ReplyDeleteI appreciate your efforts to bring this to our attention. As a small business owner, employer, homeowner, husband, and father of three kids (ages 9,11,14)what can I do to help in this situation? One of the problems is that getting the real facts laid out in front of people like me is next to impossible. I would love to sit down w/ you or another legislature for an hour or so and try to identify where we can CUT, not increase spending. Yes, PERS is an issue, but so is the overall government attitude on spending. If my business runs a deficit for more than 6 months, it no longer exists. I am very frustrated that the government (state and federal) continues to increase spending and deficits despite the obvious problem- WE'RE RUNNING OUT OF MONEY!. Please tell me what I can do at the ground level.
Dave
Let's go ahead and fix the whole problem with a simple idea - instead of income taxes funding the state, let's switch primarily to sales taxes. It's a concept that most Oregonians aren't willing to consider - and it might just work. I'd support any candidate that is willing to tax the spend-happy tax free shoppers from Oregon, Idaho, and Washington in order to keep Oregon from bleeding out.
ReplyDeleteWould you provide a link to the complete newsletter please?
ReplyDelete.
While there is obviously only going to be a very complex solution to the problem of PERS, shouldn't the first step be to make an immediate cut in those portions that can be changed, and then if necessary, go so far as to do a State Constitution Amendment to redefine the plan as a defined contribution plan. The other step to funding the existing obligations is to redraw state and other PERS employee wages to be on a par with private wages, thus freeing dollars to pay the obligation without having to cut programs. Finally, reduction of the size of State government is the final solution, just as is needed in the Federal government. Pay only for what we can afford, and don't let the conflicted courts make self serving rulings to determine that we are bound forever on these financial issues. While we surely must protect forever freedom and liberty issues, financial issues must be dealt with based on the current reality.
ReplyDeleteThanks to everyone for the comments so far.
ReplyDelete*Clarifications*:
--Bill S. was right on the 6% trade for wages. Eventually, the employees got both the wage increases and the 6% to their PERS accounts, and that annual 6% gained compounded interest of 8-24% for the next 24 years.
--PERS IS Taxable in Oregon. The U.S. Sup. Ct. ruled that a state retirement plan could not be tax-free if Federal retirees were required to pay income taxes. PERS had been income tax free and ultimately PERS retirees were given 9.8% increase in benefits to cover the costs of state income taxation of PERS benefits. Many PERS retirees have since moved to Vancouver, WA. so they can collect the extra PERS retirement benefit and pay no income taxes at all. Rep. Barker and I are looking at ways to fill that loophole in the 2011 Session.
--Fred Starkey and I are in frequent contact; he has been a voice in the wilderness on the PERS crisis for years.
--The Legislature is composed of duly elected Legislators who pass laws all the time that affect taxpayers. PERS was created by the Legislature. Therefore, taxpayers are stuck with paying the costs of PERS.
--To Dave, the leaders of Oregon need all the prayers we can get. God only knows how this is all going to work out.
--The newsletter is at: http://www.dennisrichardson.org/lu031810.htm
--To Ray, PERS benefits are vested and cannot be changed. Cuts in workforce and programs to free up money to pay PERS debts are unavoidable. It is not going to be a pretty sight.
Thanks to everyone for participating in this important on-going dialogue.
DMR
As a retired 29 yr employee with the same fire department I pay state income taxes, do not receive health insurance, Money Match was not my option. Mr. Richardson, Mr. Sizemore and many others paint with a broad brush. My monthly retirement check including Social Security, which I hope to receive in Dec., is not greater than my salary was at retirement. It is greater than my take home pay. But I no longer pay SS, Medicare,retirement, workers comp. etc. In fact, WITH SS it will be closer to 85%. I am sure there are those who receive more than they were when they employed. Most likely they were with the same employer for 30 plus yrs. As for those who have been hired back many are in areas where there is a need for their training and experience, but not the funds to pay. So at a reduced salary they are working in the small towns. This is not always the case but generally so. Mr. Sizemore indicated that for some the 6% employee contribution was "given back". That may be so for State empolyees. However for members of my department that is not the case. We "traded" a 2 yr 3% in each yr. pay increase for a Pers Pick-up by the city. The Pers Pick-up cost my employer a little over 4%. This was a substantial savings to the city. What bothers me is many of the folks who are crying about this "rip off", have not spent 25 or more years with the same employer. Averaging 56 hrs a week. Many of my friends have had 2 or jobs in that period of time. Each time starting over in their new retirment system. When I left the steel industry in 1979 I was making $8.35/hr to take a job as a Firefighter that payed $6.00/hr. Sure PERS was a considering factor. Now it seems as though many want to take this away. Back in the day when others were buying new vehicles and nicer homes with their high salaries most of us were taking the cast offs and were happy. Now most of those high paying jobs aren't there, in frustration you are trying to hammer Firefighters, Police Officers and others who have made large sacrafices so you can be safe in your homes and on the highways. Next time your house is on fire, your child has been involved in an accident or your parent suffers a heart attack tell the Fire fighter who is there to help, you think they not worth it.
ReplyDeleteAs a lifelong Oregonian, small business owner and farmer I pay my share of taxes and spend my money here in Oregon.
Let's try to bring Jobs to Oregon not scare them away.
Dan P.
Central Point
I to am a retired fireman. Many years we got 0% raise or 2 or 3%. The 6% PERS pickup was the cities idea which saved them money. At that time most yearly pay increases were in the 6% range. I to pay state and federal taxes on each paycheck. I was always in the varible account which is like playing the stock market. I stayed in it when I retired and as a result I took a $500 per month reduction in pay starting in 2009. I always wondered why the the employers did not set aside an additional 6% (their contribution) in savings so they had it when the employee elected to retire? They knew when they hired that person that they would have to match his contributions when he retired.
ReplyDeleteThanks Dan P. I would like to further add that the 6% contribution was given in lieu of raises. It wasn't meant to be temporary it was in exchange for those raises during that biennium. That does not mean that you can never have a salary increase again! Doesn't a salary increase also compound over the years? I don't know where Mr. Sizemore got his information on the 15.35 raise in 1981. My husband who was in State service at the time never saw it.
ReplyDeleteAs the wife of a 30 year public employee I watched my husband, an engineer, receive dramatically less in salary the entire time he was employed, as compared to engineers in the private sector. My husband chose to remain in the public sector for the easily understood reason that while his salary was low his retiree benefits through PERS would allow us to retire with a decent income. I am so sick of our elected officials calling to reduce our benefits because Oregon cannot manage to build a rainy day fund and instead returns excess funds to taxpayers. Oregon has a contractual agreement with its retirees through PERS -please stop trying to balance the budget on the backs of PERS retirees!
ReplyDeleteTo Dan and other PERS retirees:
ReplyDelete--If you will recall, I tried to make two points clear in the newsletter.
1. I do not fault PERS members for taking full advantage of the benefits you are receiving from PERS. I expect workers to take full advantage of whatever their retirement plan allows. Nevertheless, if you will consider the numbers and graphs I provided, you will see the costs are going to have consequences, so don't quibble when state services are cut to free up enough money to pay for the PERS benefits.
2. No one is going to take away your PERS benefits. The Supreme Court has already ruled on that issue. (So take a deep breath and calm down, and "don't shoot the messenger." DMR
I don't think most of us are quibbling about the consequences. We are tax payers too and I would personally like to see the kicker repealed as well. I don't balk at paying my taxes. We would just like people to understand the history behind past actions and not have them misconstrued by those who come in after the fact. While you may not fault PERS members many people do, so thank you for expressing that.
ReplyDeleteWhat about calculating the present value of a retiree's cash flow and offering them a lump sum. This doesn't cover the incompetence but it will lesson the burden, provide cash in hand which will stimulate retail consumption and allow for taxing future dollars earned through savings, and investing.
ReplyDeleteWhen the article speaks of the employer's picking the 6%, let's face it, we are the employers. I think the next time their union comes to the table asking for raises, which comes to us as revised bond measure, we should turn them down. If they legislators are forced to fix this problem, it won't heal in an acceptable manner.
bloomberg.com : Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash
ReplyDeleteOregon State Fund
Oregon would invest in Community Bancorp LLC, a bank being formed by Sageview Capital LLC, according to the Oregon presentation. Sageview was founded by former Kohlberg Kravis Roberts & Co. executives Scott Stuart and Ned Gilhuly. Sageview is looking to raise about $1 billion from pension funds and similar investors, the presentation said.
(comment) the banksters are coming after what liquidity is left, ie pension dollars
Thanks Dan P. you hit the nail on the head. Dennis Richardson I have worked for the state for 25 yrs. and I hope I can get all the extras when I retire you seem to think I will get, I will be a happy camper. I'm a tier one employee, and I also gave up raises to keep the 6% employer pick-up without the raises that Bill is talking about. 6% also comes out of my pay through payroll deduction and it all goes to what is now known as the OPSRP IAP. (Part of the Oregon Public Service Retirement Plan (OPSRP). All active PERS Chapter 238 Program members, except judges, contribute to the OPSRP IAP.) OPSRP took the place of any money going into the PERS account. So the PERS account grows on its own untouched, PERS accounts get the 8% min. and sometimes in a good year just like the stock market if an individual ops. for the flexible account they can get more than the 8%, the IAP started at zero for a new account for all on Jan 1, 2004.(so much for compounding interest). Yes we can retire early but with a reduced rate for every year, depending on your circumstances, like any other retirement account, there are always penalties.
ReplyDeleteOregon Investment Council Feb 24, 2010
ReplyDeletehttp://www.ost.state.or.us/About/OIC/Agendas/OIC%20Public%20Book,%202010.02.24-SECURE.pdf
LOVE THE SALES TAX IDEA...Cut OUT THE STATE TAX...= FAIRER TAXES...BUT YOU CANNOT HAVE BOTH...This way EVERYONE pays..not just the WORKING FEW...
ReplyDeleteAnd thank you for LISTENING to all suggestions [it's about time someone in government LISTENS and works together with the constituents [trying to find a SOLUTION to an OVERWHELMING PROBLEM HERE IN OREGON]..if not FIXED-we will be BANKRUPT like California...We need small business incentives to create jobs here...and SCHOOLS that have a NORMAL school year, and college tuition that is affordable!
I have known about the problem with PERS for a long time. Years ago my cousin, a teacher in Salem all her career, died at 55 and left all her PERS to her newphew since she was not married and had no children of her own. I was amazed to find out that her income at retirement which she could get at 55 would be 105% of her paycheck while working. Even our military, who put their lives on the line for their careers, get only 50% or their pay at retirement. I have thought for years that this should be corrected but know that since the legislature is on PERS that it would never change!! Talk about conflict of interest! I would like to see something done to decrese the percentage back to a normal 50% immediately and retrospectively!!! Unfortunately the judges are PERS emloyees also so another conflict of interest. We should just let the voters and tax payers decide on this issue and only the ones not on PERS!!! What a government scheme!!
ReplyDeleteWow! What country are we in?? Only certain people get to vote?? Firemen and Police Officers aren't risking their lives??
ReplyDeleteAs a fifth generation Oregonian it became clear to me a few years ago that the PERS situation, along with many of Oregons other anti business inititives, for example, passage of Measure 66 and 67, will never be corrected. At that time we started moving all our business activity out of the state and within a couple years will no longer be a tax payer in the State of Oregon. As other business enities wake up and follow suit, the State of Oregon will clearly "drown" in its own debt. I wonder who's going to pay the bill when the public employees and their unions are the only ones left in the village??
ReplyDeletehttp://economicedge.blogspot.com/2010/03/most-important-chart-of-century.html
ReplyDeleteThe most important chart of your lifetime.
http://www.globalresearch.ca/index.php?context=va&aid=12522www.globalresearch.ca/index.php?context=va&aid=12522
ReplyDeleteSo Oregon sends $100,000,000 out of state to Community Bancorp of Texas - Sageview with no guarantee of return (speculation - gambling) when they could instead loan it to Oregon business and farmers etc via our own State owned bank. 1 billion dollars credit (fractional reserve at 10% X $100,000,000) would be a nice stimulus now, not waiting for some future share in Sageview's use of our money, or loss of it. North Dakota has been making this work since 1919.
In order to change PERS:
ReplyDeleteI: You have to appeal to people's interest not to their reasoning ability. See Charlie Munger.* (Partner with Warren Buffet)
II: Motivated Reasoning: Suggests that rather than search rationally for information that either confirms or disconfirms a particular
belief, people actually seek out information that confirms what they already believe. In fact, for the most part people completely ignore contrary information. Even when hard evidence turns up, (Such as your information on PERS) it can be discredited as bias, self-interest, or
a "conspiracy theory." Professor Steven Hoffman.
Fred Starkey
Suggestions to conquer PERS.
ReplyDelete1] You stated that the State cannot go bankrupt, but the State can sell State Assets. (Cities can go bankrupt)
I suggest you do that, because that will bring an outrage, and may wake people up. PERS Pensions for Oregon Natural Resources?
People will be against that. A no brainer.
Propose selling Lakes, Rivers, Streams, Old Growth Forests, other forests, and land, before raising taxes. The alternative would be to
put families and children on the street. Those are the alternatives. MAKE THOSE THE CHOICES.
The Chinese will be glad to purchase these properties. That way you can pay for the people on PERS/Tier I.
These people could be identified with the loss of their little finger, a mark on their forehead. or some kind of identification.
This will be necessary so people will know who those are that lost these resources, rather than reducing their PERS pension.
If we can force them into this situation, I believe there will be a compromise.
more suggestions -- fred starkey
ReplyDelete2] Barack Obama has stated that the USA is no longer a Christian Nation. I agree. People no longer consider how their actions will effect others before making their decision. The basic Christian doctrine is look out for others first; not your own self-interest. The USA is a "ME" society. This is the antithesis of Christianity. You do not use the Government as an agency of force against others: only in the protection of life, property, and liberty. Otherwise, people worship the state, which is what you have today: MOTIVATIONAL REASONING. As if the State can provide for everyone and that all knowledge and wisdom comes from the state: MOTIVATIONAL REASONING.
They have turned the phrase: "In God We Trust: into "In Government We Trust". Refer to Hoffman.
3] Education Is the biggest PERS cost. If you are spending 12,000 a year per child or more, we should offer the money to the parents: perhaps 80% of the total allocation to the child. They can choose their own school. The difference from the school cost from amount given will be places in a "Future Education" account, which will earn interest. Then when he completes the K-12 education he will have the money to continue his education. All the student has to do is pass a test. Otherwise back to public schools. For now, children are used to ring the Cash Register.
This way we could actually lower taxes.
This puts the responsibility on the family and the child. The money saved (the difference) will pay for their college education or their specialized education. But, they will have to work in Oregon for "X" amount of years before leaving the state. This is a huge win for poor families and motivated poor children. This will bring about competition with public schools. This will reduce the cost of PERS to all citizens while keeping the next generation out of debt.
4] EQUAL OPPORTUNITY: Government employment is not a career: it is a place where people serve. We have to limit government employment to a maximum amount of years: 5 - 6 years. If they can't find a qualified person then they hire on contract, but he is not an employee of the state.
This is sold on appealing to everyone's interest. Did you know that 70% of all Fire Departments are volunteer? What does that tell you? Who can't drive a bus? Most govt. jobs can be done by your average H.S. graduate. Appeal to the young people coming out of school and to the older people who have lots of experience and still need work. The rest can work in free enterprise.
This will bring about a strong sense of Country and responsibility to where they live. This is an automatic audit of all government work.
In short, we have to find different ways to do things that save money and get the job done with more efficiency. We have to stop confrontation and look after the interest of everyone involved. This co-operative spirit will lower taxes and free people up to do what Americans do best: create goods and services with constant improvement.
You can post this on your blog. Again, excellent job. Sincerely, Fred Starkey
Lawmakers pushing for taxes being paid in silver
ReplyDeletehttp://www.idahostatesman.com/2010/03/15/1118263/lawmakers-pushing-for-taxes-being.html
Federal Reserve Notes may drop in value more then 30% by year end.
Getting upset over the past doesn't help the future. There were benefits to the state for picking up the 6% employee contribution and some employers have moved the pick-up back to employees.
ReplyDeleteI see some misunderstanding of the information presented, which doesn't help perception. The current state employees retirement is all defined contribution (401k type). It was converted in January 2004. So, the tier 1 accounts that receive the 8% are frozen to a fixed amount and as tier 1 people retire, those funds decrease. It wasn't evident if that was calculated in.
There were some, because of their circumstances (promotions, investing in high yielding variable accounts) that did retire with more than there pay. I am more of the typical retiree in that I retired at 2/3 of my pay. It is my understanding that with the new "401k" funding that formulas will not permit retirement benefits more than 2/3 or 3/4 pay. That may be increased for remaining tier 1 employees, but it is prevented to be more than they are making.
The retirement options are the same as a private insurer would offer. In 2004 the state adopted a proactive schedule of recalculating mortality rates for retirement benefits, which reduced the amount of income you could buy with your retirement funds accumulated. The article implies that the benefit isn't based on the individual's funds. Not true any more.
Legally, the courts have protected the guarantees of prior funds in that closed block of tier 1 funds. So, if you take that out of equation, the new system has been revamped to coincide with private plans.
It is a problem when employers are allowed to rob funds without consequences. After all, it isn't their personal money that will have to repay it if their plan fails. No matter the fix, we all have to pay, whether it's new taxes, or jobs lost that will affect our economy. And yes, I do pay taxes on my PERS retirement.
To: Suggestions to conquer PERS
ReplyDeleteDon't you know the federal government owns 80% of Oregon so we don't have any natural resouces to sell. In fact, Obama wants to take more of our natural resources for federal land.
You do know that PERS retirees are helping keep this state afloat right now.
Thanks to you Mr. Richardson for addressing this "Problem with PERS"! It's obvious that "Something's got to Give". Short of putting Video Poker machines in the DMV (captive audience) , I don't know what to tell you!
ReplyDeleteKeep up the Good Work,
The Oregon Supreme Court struck down Measure 8 because it supposedly interfered with existing collective bargaining agreements. The obvious way to work around that limitation is to enact legislation that deals only with future collective bargaining agreements. Since the average public employee collective bargaining agreement expires in 2-4 years, it would take that long for a revised Measure-8-type-legislation to go fully into effect. That is the best we can do, so we should at least do that.
ReplyDeleteEssentially, compel public employers to incorporate the elements of Measure 8 in their next round of collective bargaining agreements. This avoids the flaw in Measure 8 which sought to revise existing collective bargaining agreements.
I have worked for 30 years with
ReplyDeletea local Government Employer who participates in PERS. Our Agency does not participate in Social Security and the Employees pay their 6% ontribution to PERS.
Many years ago Public Employees did not have access to Social Security for Retirement. Government's added SS by choice over the years. Having said that. I beleive that Oregon should have gone to a Defined Contribution Plan when they added ORSRP as the new Tier of PERS. Anyone hired in late 2003 is a member of this plan and it has trimmed the retirement benefit to 45% of FAS after 30 years. The problem is that the money to pay for it comes entireley from the Employer. Employees get to keep the 6% contribution in a Individual Account Program. Prior to this change of adding OPSRP and the IAP, the Employee and Employer contribution paid for a retirement under Full Formula of 50% of FAS after 30 years in PERS. Usually more under the Money Match calculation.
Now the Employer has to pay the entire amount needed to fund this defined retirement.
My suggestion is to change the retirement for new hires to a defined contribution plan. This should have been done beginning in 2004 when the
door was opened for change.
Come on now - 3 words - Rainy Day Fund. Stop attacking PERS, and deal with the obvious problem of returning money. KEEP A FUND
ReplyDeleteNo one is going to take away PERS benefits?
ReplyDeleteThe Supreme Court has already ruled on that issue?
Awesome - all we need now is Supremes to declare it against law to run out of money and problem is fixed.
It will also give me good laugh all the way to Alaska.
Rome fell.
ReplyDeleteSo did British Empire.
As will Oregon PERS when people refuse to work in state with 95% tax rate.
The only choice we have is soon or later, the easy or the hard way.
And since voters were declared having no say in the above, the choice is all theirs.
Then we already know the answer to the above, don't we?
Don't know what you complaing about people.
ReplyDeleteLegislature can only approve PERS, not repeal it, it only makes sense. I myself vividly remember sending my representative to Salem letting him know to take care of public unions first, didn't you?
And schools should definitely get more money, to put roof over our poor kids heads, after the last of us loosing his home to pay for PERS, it may be the only roof they will have that day all along learning great wisdom from teachers that can't figure out they asking for more then there is.
Now get back to work and quit being jealous just because some get rise to pay for their income tax or because between social security and PERS they can only retire at 55.
Or they will teach you lesson like they did to Bill Sizemore and his kids (no pun intended).
I applaud Representative Richardson for trying to make a difference. It's always good to openly ask for help from your constitutes and more important, to listen as well. Unfortunately, Oregon's Public Employee Retirement System, like many other public retirement plans in the country, has been allowed to morph into one of the greatest Ponzi schemes ever built.
ReplyDeletePERS in its current form, is nothing like what it started out as. Nor is it accomplishing what it was intended to do.
After spending years studying ten different state retirement plans I can appreciate where Rep. Richardson stands. During the 2005/2006 legislative session, I worked night and day on eight different House and Senate Bills that would have dramatically decreased PERS costs while simultaneously increasing benefits to members. I did all this at my own expense. It was my line in the sand. I will never forget receiving an email from Representative Richardson late in the 2006 session. It basically said, the governor has made it clear he would veto any bill I was working on. It was like Don Corleone had spoken and the rest of us didn't have a choice.
PERS exemplifies the classic David and Goliath tale. Let me clarify, Goliath is represented by those in power and those who had the opportunity to do the right thing but were blinded by self-enrichment, or simply put: greed. Judges, Legislators, the Department of Justice, PERS Board Members, Lobbyist and many of the current and past elected politicians of Oregon that clearly benefited from making the rules to a retirement plan that they participated in. David is represented by the everyday PERS participants and all other Oregonians.
It's easy to attack the lone PERS participant. They are the one's the local media chooses to spot-light drinking pina colada's in the sun while enjoying lavish retirements. The truth is, plan participants have been confused and bewildered about their own plan much longer than those outside the plan. Imagine getting ready for retirement and having no clue as to which retirement option is best, what your benefits may be, having no control over the amount of risk you are subjected to or getting a headache trying to decipher your PERS statement that arrives six months after the year ended. At the same time, PERS staff have been known to be quite evasive at best in answering even the simplest questions because they don't know the answer. Picture sitting at a desk, tired and bombarded with having to answer the same question the last hundred people just asked and it's only Monday. Hated by the public and kept in the dark by their own plan administrators. This doesn't sound like fun to me.
There is no doubt we have all heard some of the true life horrific stories and detailed examples of self-dealing, corruption, back-room deals, loop holes, kick-backs, faulty and fictitious record keeping, manipulation of information from actuaries by lobbyists and politicians, golden handshakes, key high paying jobs being created for political payoffs and the list is far too long to name them all. Worst of all, no one is arguing these facts. Business as usual at the state capitol – wow! If you or I did these things there would be a lynch mob waiting for us and the Oregonian would have us on the front page. By the way, where is the Oregonian?
While it may be currently true that plan participants (Judges, DOJ and Legislators) have told Oregonians that PERS must continue to live up to the obligations of their contract regardless of its consequences. I find it difficult to believe the good people of Oregon can not hold future decision makers involved with PERS to be held personally accountable for their actions going forward. No more free pass.
In order to improve the plan there must be Accountability and Transparency. The current information technology used by PERS is intentionally kept over from the Fred and Barney period. No one can claim timely and accurate information is being derived or delivered from this antiquated system.
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ReplyDeleteProper accountability and transparency will help deter corruption. Updated technology will decrease overhead and keep all informed in a timely and accurate manner. Everyone involved must be allowed to make informed decisions. This is clearly not the case now. We don't need more people to calculate retirement benefits, we need a computer system and software that actually works.
Contracts must be negotiated in Good Faith. I believe it can be argued that few if any of the current contracts in place now were negotiated in good faith. Both sides were participants! Oregonians were never properly represented. In addition, a serious effort needs to be made to implement a proper checks and balances system. Powerful and financially persuasive lobbyist cannot continue to game the system. Long-term consequences can not be ignored for the sake of short-term political gain.
Much of the confusion can be eliminated by having ONE set of Clear and Concise Rules that are applied equally and evenly to all participants. This will do away with much of the self-serving, abusive practices being systematically utilized now by select high ranking employees, politicians and their cronies.
Actual Costs and Fees must be all-inclusive in accounting for PERS related expenses. Documented examples of abusive PERS accounting practices have been withheld from the public view for too long. No regular plan participant in their right mind would openly agree to the system that is in place now if they knew where their money was actually going. (Attention PERS members: your current retirement balance is not truly reflective of all your money that has been withheld from your paychecks or should have been credited to your account – and you can thank your union officials and PERS board members for taking some of your money off the top and using it to offset their expenses.)
These are but a few of the many solutions and ideas that can be added to the well-known ideas Representative Richardson included in his outline. There are many more that can make a substantial difference immediately. Key questions remain however: how to get more people involved in making an informed decision regarding the management of Oregon's PERS in an open forum? And how do you hold their feet to the fire if they intentionally or without a proper knowledge base commit fraudulent acts?
There is no question that the growing burden of PERS in its current form will significantly impact all other aspects of goods and services Oregonians rely on for everyday life unless improvements are made today. This is nothing new and we have been singing this song for years. Do we as a people have the collective backbone to show up and make a difference? I believe we do. I believe most of us truly want to do the right thing. We don't want to take anything away from the regular, hardworking PERS participants: after all they didn't make up the rules. On the other hand, the decision makers that put us in this place of despair should not get a free pass. Enron executives didn't, why should these people?
While health care is certainly an important issue, retirement is just as important. We can not sit on the fence any longer. We need someone that has integrity, perseverance and the wherewithal to bring this long-standing, ever growing problem to the forefront and actually right this wrong now.
We as individuals can stand tall together. We do live in a great state that unfortunately has gone side-ways to backwards for too long. We cannot afford to lose any more good, hardworking people to other states. I realize we're all busy working and taking care of our families but we need to step up to the plate together now. We have too much at stake not to be involved.
I have no interest in politics and wouldn't wish it as a profession on anyone. I do however appreciate Rep. Richardson for shining the light on this important issue.
Rep. Richardson, please remember you are not alone.
J
by Catherine Austin Fitts
ReplyDeletehttp://solari.com/blog/?p=1949
In the summer of 2000, I asked a group of 100 people at a conference of spiritually committed people who would push a red button if it would immediately stop all narcotics trafficking in their neighborhood, city, state and country. Out of 100 people, 99 said they would not push such red button. When surveyed, they said they did not want their mutual funds to go down if the U.S. financial system suddenly stopped attracting an estimated $500 billion-$1 trillion a year in global money laundering. They did not want their government checks jeopardized or their taxes raised because of resulting problems financing the federal government deficit.
Our financial profiteering and complicity is not limited to aristocrats and the elites who do their bidding. Our financial dependency on unsustainable economics is broad, ingrained and deep.
http://www.martinarmstrong.org/
ReplyDeleteEconomic Projections from America's #1 Political Prisoner
I am a PERS police retire and native Oregonian until moving to Nevada to continue a police career. Guarantees mean things folks. When I hired on full time in 1983, PERS was promised for our service to protect the public and potentially give up our lives for doing so. Many officers and firefighters have done so to protect you and your families. I recall at least twice during my career that the payment to PERS by the employer was raised to the current 6% because the State was in budget crisis and could not afford raises for its employees. I also recall news articles praisng PERS for being the best system in the nation, but when the stock market crashed, it became the bastard child of Oregon. You state that we will make 100% of out original salary when including SSN. SSN and Medicare or both BROKE. I'm not counting on either and am still working and saving trying to prepare for the future. You should change the system with new employees so that they know what they are getting into. Going after previous Tiers with ways to get money back from them is criminal in my view and breach of contract. It will definitely spur law suits, costing the State even more to defend. Oregon continues on the path of liberal spending on Oregon Health Plan and other give away programs rampant with fraud. How about requiring all citizens to pay their fair share and get away from handouts. You will save billions just doing that. Look how the federal government is spending now. We are on a path to fiscal destruction with entitlement programs.
ReplyDeleteJ. Hagedorn
Public Pension Funding Ratios Nationwide
ReplyDeletehttp://www.businessinsider.com/check-out-this-cool-interactive-map-of-the-state-pension-crisis-2010-4
The State Bank of Virginia study proposed
ReplyDeleteHJ62: Banks; joint subcommittee to study whether to establish those to be operated by State.
* HJ62
HOUSE JOINT RESOLUTION NO. 62
Offered January 13, 2010
Prefiled January 11, 2010
Establishing a joint subcommittee to study whether to establish a bank operated by the Commonwealth. Report.
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Patron-- Marshall, R.G.
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Committee Referral Pending
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WHEREAS, the Commonwealth does not currently engage in the business of banking or own, control, or operate a bank; and
WHEREAS, the state of North Dakota currently engages in the business of banking, owns, controls, and operates a bank known as the Bank of North Dakota; and
WHEREAS, the Bank of North Dakota was established pursuant to North Dakota Century Code 6-09-01 for the purpose of encouraging and promoting agriculture, commerce, and industry; and
WHEREAS, the Bank of North Dakota is not a member of the Federal Deposit Insurance Corporation but pursuant to North Dakota Century Code 6-09-10, all deposits in the Bank of North Dakota are guaranteed by the state; and
WHEREAS, the deposit base of the Bank of North Dakota is unique in that its primary deposit base is the State of North Dakota and all state funds and funds of state institutions are deposited with the Bank of North Dakota, as required by law; and
WHEREAS, the Bank of North Dakota accepts other deposits from any source, including private citizens, businesses, and the U.S. government; and
WHEREAS, the Bank of North Dakota is overseen by the North Dakota Industrial Commission and advised by a seven-member Advisory Board appointed by the Governor that reviews the bank's operations and makes recommendations to the Industrial Commission relating to the bank's management, services, policies and procedures; and
WHEREAS, the Bank of North Dakota administers several lending programs that promote agriculture, commerce, and industry as well as providing government guaranteed loans for lenders and providing community, rural, and regional development loan funds; and
WHEREAS, the Commonwealth is expected to have a budget shortfall of between $ 1.8 billion and $ 3.6 billion in 2010 and North Dakota is expected to have an $ 800 million budget surplus by the end of 2010; and
WHREAS, the Commonwealth would benefit from loaning funds to develop agriculture, commerce and industry in lieu of granting tax revenues to newly established businesses; and
WHEREAS, by opening accounts in a bank owned, controlled, and operated by the Commonwealth, Virginians would be able to invest in the growth of agriculture, commerce and industry in the Commonwealth; and
WHEREAS, Virginians with accounts in a bank owned, controlled, and operated by the Commonwealth would benefit from a return on their investment in the form of loan interest and other revenues earned by the bank’s investments in agriculture, commerce and industry in the Commonwealth; and
WHEREAS, the purpose of a bank owned, controlled, and operated by the Commonwealth would be to invest in agriculture, commerce, and industry within the Commonwealth; and
WHEREAS, a need exists to determine if the Commonwealth would benefit from the creation and operation of a similar financial institution; now, therefore, be it
RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be established to study whether to establish a bank operated by the Commonwealth. In conducting its study, the joint subcommittee shall consider recommendations for legislation to establish a state owned, controlled, and operated bank.
Continued >>
Continued from:
ReplyDelete'The State Bank of Virginia study proposed'
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The joint subcommittee shall consist of eight legislative members. Members shall be appointed as follows: five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in accordance with the principles of proportional representation contained in the Rules of the House of Delegates and three members of the Senate to be appointed by the Senate Committee on Rules. The joint subcommittee shall elect a chairman and vice-chairman from among its membership.
Administrative staff support shall be provided by the Office of the Clerk of the House of Delegates. Legal, research, policy analysis, and other services as requested by the joint subcommittee shall be provided by the Division of Legislative Services. Technical assistance shall be provided by the Bureau of Financial Institutions of the State Corporation Commission. All agencies of the Commonwealth shall provide assistance to the joint subcommittee for this study, upon request.
The joint subcommittee shall be limited to four meetings for the 2010 interim, and the direct costs of this study shall not exceed $8,000 without approval as set out in this resolution. Approval for unbudgeted nonmember-related expenses shall require the written authorization of the chairman of the joint subcommittee and the respective Clerk. If a companion joint resolution of the other chamber is agreed to, written authorization of both Clerks shall be required.
No recommendation of the joint subcommittee shall be adopted if a majority of the House members or a majority of the Senate members appointed to the joint subcommittee (i) vote against the recommendation and (ii) vote for the recommendation to fail notwithstanding the majority vote of the joint subcommittee.
The joint subcommittee shall complete its meetings by November 30, 2010, and the chairman shall submit to the Division of Legislative Automated Systems an executive summary of its findings and recommendations no later than the first day of the 2011 Regular Session of the General Assembly. The executive summary shall state whether the joint subcommittee intends to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document. The executive summary and the report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports and shall be posted on the General Assembly's website.
Implementation of this resolution is subject to subsequent approval and certification by the Joint Rules Committee. The Committee may approve or disapprove expenditures for this study, extend or delay the period for the conduct of the study, or authorize additional meetings during the 2010 interim.
In my opinion, it boils down to how the 8% returns were established. Did the public vote and agree to this rate of return? 8% has literally nothing to do with the actual rate at which the economy has grown since the FED took over money creation in 1913. There should never have been guaranteed money at any rate - such a concept is a myth. So if the tax payers did not sanction this rate of return then the fair thing seems to be to prorate all public employee retirement contributions by the rate at which the economy has ACTUALLY grown since then. Below that rate, the public can pay for with taxes. Above that rate, the PERS employees will have to fund with their own contributions. Sorry, there is no free lunch in life.
ReplyDeleteHey Dennis, there is no hope for PERS, 'we' have done the math. Store food folks. enough said
ReplyDeletehttp://www.huffingtonpost.com/2010/07/27/state-local-governments-t_n_661170.html
ReplyDeleteThe cuts are deep: 63 percent of cities and 39 percent of counties reported cutting public safety personnel like firefighters and police officers. Fresno, Calif., submitted a 2010 budget with 220 layoffs, according to the report. Flint, Mich. laid off 23 of 88 firefighters. In Brevard County, Fla., 38 Sheriff's deputy positions are on the chopping block. The city of Dallas, Texas is set to fire 500, mostly people in the library system. And Portland, Ore. is firing 120 teachers.
The demonization of state workers continues. A contract is a contract. I took a job as a state worker years ago and understood the pay was lousy but also understood "the retirement system was a good one". I was aware of the trade-off. Reneging on those contracts will make it impossible for state government to function (which is, I realize,what many people want).
ReplyDeleteThose railing against the system should understand the reforms instituted by the legislature in 2004. It is a defined contribution plan.
Representative Richardson, this is a very educational forum and thank you for helping us understand the magnitude of the problem. My rambling observations are as follows:
ReplyDelete1. No one on PERS today will have retirement taken away so PERS retirees can relax and help us figure out a solution.
2. The current system still has about 60% of the active PERS members as Tier I. We just do not have enough money to pay the future requirements.
3. Many PERS retirees say they have state tax taken from their PERS check. They are right. But, in 1993 state laws were passed that gives PERS retirees an extra bump in retirement to make up for the state tax paid so, in effect, the people of Oregon are paying their state tax. I am always amazed that PERS retirees seem to miss that point.
4. We all know that education should be our priority because a well educated work force is the key to the future success of Oregon and the United States.
5. Every dollar we pay in benefits is another dollar taken away from education.
6. No major company today offers a full pension benefit because they realize that future liability will ruin the business. So, why doesn’t the state see the same fact?
7. Friends of mine who work for PERS public employers always tell me that they could make more money working somewhere else so out of the goodness of their heart they stay here. Right! My friends make very good money, and their retirement is one that any non-public employee would die for. So, please don’t tell me you make lousy money. Go on – move off to that better paying job in the private sector. Right!
8. The Oregon legislators and judges should be removed from PERS and placed on a 401K type system.
9. While us normal Oregonians suffer a 12% unemployment rate, tell me again how many public employees were laid off in this recession?
10. Some of the best teachers are in their mid 50’s and then they get to retire In Japan, teaches cannot retire until age 60. Why do we allow retirement at such an early age, and while a teacher may be at their best?
11.I keep coming back to education and its importance to our future. We have an education system designed in the 1950’s. The system needs to be updated and revitalized. We need to use technology to help us improve our educational system. We need to be able to measure teacher performance and I am confident that it can be measured. We need to recognize excellent teachers with bonus pay, and remove those teachers who are ineffective and cannot be brought up to standards by training. We need to get rid of tenure for K-12 teachers. I just do not understand why a K-12 teacher needs tenure. We need to be able to release teachers for performance issues, not based on longevity. If a general layoff occurs some of the best teachers are the first to go. That just does not make sense.
With all DUE respect, representative Richardson's attitude toward PERS is belied by the April 8 testimony before the House Business and Labor Committee. PERS demands the least from taxpayers of any pension system in any western state and this is evidenced by the recent upgrade in its rating by Standard and Poors. Sir you are so full of shit it spouts out your ears.
ReplyDelete