The reality of this "reform", no matter how you slice it or dress it up, is the deliberate intention of paying smaller pensions to government employees.

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PERS was set up as a defined benefit program based on last paychecks. It is not closely tied to contributions, just time served. As a non-government person, thru my taxes, I am expected to make up the diff in what the pub employee gets and what is actually in the fund.

I don't expect anyone from AFSCME will make any contribution to my retirement in the near future and return my favor.

A more accurate statement is that we are taking an overly generous retirement program and aligning it with actual funds allocated for that retirement rather than taking it out of taxpayers and school budgets.

Frank . . . since when did the law allow one trustee to reach into other people's pockets while another trustee cannot; to cover for investment loss or to cover for inherently unsound plan design?

Typically, when a public official starts cutting checks for which there is no money to pay and then absconds with those funds it is called misappropriation, or worse. The pre-dating of checks, as is the function of the recharacterization of such checks as pensions, is a device of deception.

When my cousin died last year from the lack of funds and the refusal of proper agencies to perform their duty I do not blame the poor public for not increasing taxes upon themselves; I blame the folks running away with unlawful gifts.

Your position is that graft is lawful if you can get away with it. The criminal mind does the same calculation, measuring the probability of getting caught and the severity of the punishment if caught. Tossing out the mantra of a deal is a deal rings as hollow, and is as cheap, as a prohibition era Chicago mobster chatting with a judge or politician, who has been in on the take, about how to maximize the future revenue. Without the benefit of little more history and analysis you are unwittingly supporting graft as a proper public purpose. With whom did you make your deal, and were they not also a beneficiary?

I would like nothing more than to be able measure today the dollars that current workers claim is owed to them for their past work but is not payable until a future date? If PERS was terminated entirely today what is the dollar amount today that must be transferred so as to start tomorrow with an entirely clean slate? If the fund itself is not adequate, all by itself, then the plan design is either unsound or the participants are transferring the risk of private investment loss to the general public. This is not a deal, this is bad policy in need of repair because it is unsustainable.

Two Justices with a rather long current record on the bench have taken a longer term perspective and assured that a future legislature can correct the mistakes going forward. The lead opinion was joined by dissent from the OSPSA case. They did not change their minds. Rather they did what they could to save the judiciary from the domination of the court by political forces focused on fleeting gains over that of sound legal reasoning consistent with the proper role of a court.

The overturned sections pertained to past pay for past work. The court almost fully cleaned the slate to enable new legislation regarding public employee pay that is sustainable, sound and unencumbered the judicial obstacle of a lock-in of past unsound, unsustainable pension plan design. Whether the legislature chooses to avail itself of this wide open door is quite another matter. The decision was not incompatible with the future legislative exercise of ORS 238.600(2) allowing termination and confinement of general public liability to the fund (PERF) itself; irrespective of past and present unsound design and investment losses.

The final average salary game is dieing from its inherent unsoundness in the UK. You might as well consider that dead too, here, soon, not because of some mystical evil republican but because it is inherently unsound.

I'm wondering where the multi-billion dollar deficit went. Did it just work it self out in the market?

Is there nothing to talk about in this regard?

Seems that is the bigger story. Is it not?

I find it curious and worthy of fully discussing in hopes of duplicating whatever generated such a come back.

Dena,

Has the value of your house have had an annual 8% increase guarantee compounded over the length of the exsistence of PERS? Or has your rent? Or has your utilities? Or has your food?

If the state was smart, they will cruxify those newbies coming in to PERS with real world economics in thier contracts. As well, let those older timers and newbies in the union fight it out for fairness of these contracts. Let the unions pay the difference of the new system and the old system.

I am pro-equality for all workers, I am not for a "racket" that hurts the public view on government and the services it provides. For all those individuals that are paying the price for the old schema of PERS--i.e.: the students, the poor elderly, the uninsured families, and for the lack state police; because of PERS eating more out of the annual budget is wrong.

I am a fairly compensated employee. Not too much and not too little.

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Based on PERS, I think including PERS makes them more than fairly compensated when compared to the average private sector employee. As I stated above, when PERS beneficiaries claim more than is in the fund or has been paid in or earned, then someone has to make up for it.

As a private sector person, I can only take out what I put into my retirement and what it actually earns. When I see my PDX prop tax bill and see 10% going not to fire or police, but the disability/retirement fund alone for police and fire, something is way wrong. If there is a shortfall in PERS, the beneficiaries won't make up for it, the taxpayers will.

Will someone clarify where the multi-billion dollar PERS deficit went?

The PERS board recently raised the payroll contribution and will do it again in 2007. Making the increase a whopping 81%. Did this have anything to do with the deficit disappearing? If so then it hasn't gone anywhere but over to payroll where it will do tremendous damage to schools and other basic services if new revenue is not found immediately. I can't figure out why this has not been clarified by our newspapers. Or here on the Blue? We can take turns dumping on public employees or the taxpayers but if the problem is now just in hiding what's the point?

A lot of people here are complaining about the fact that PERS, like most pensions, is a definied benefit retirement arrangement.

Well, it should be. It is an accrued wage for past service.

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Jenson - Pace - I have no issue with PERS employees getting as much money as possible for retirement, my issue is there no plan whatsoever to meet this obligation with either employee contributions or real market returns.

We cannot gin up numbers and then go to court and say even thought the State agreed to a bad/stupid/poorly-thought-out (your choice) deal - a deal is a deal and we must pay.

What this means is that PERS is a topline bill and gets paid before health/schools/police, so to meet PERS obligations those services pay. Or we raise taxes.

Now there is an idea, how about a special tax (employee-paid so it doesn't come out of educational funds) for PERS beneficiaries. We can use this money to erase the $17B, er, $1.7B (who really knows beyond big) shortfall.

ron writes>>>Frank . . . since when did the law allow one trustee to reach into other people's pockets while another trustee cannot; to cover for investment loss or to cover for inherently unsound plan design?<<<

It's called the Pension Benefit Guaranty Corporation. It's how you and me and everyone on Blue Oregon are paying for the pensions of oh, United Airlines Workers, for just one of many private company employees whose services we paid for, when they were of working age, via our purchases of their services and products, but whose company's stole the portion that was to be deferred for their retirement. Private company employees whose company's did not, illegally did not, actuarially improperly did not, fully fund their pension funds, purposefully, with knowledge and intent, before they went broke (though they were careful to fund the "special" often off-the-books plans of the senior execs, fully, oh yes, fully...Wasn't someone talking Ferrari's a while ago?) Oh yes, knowledge and intent.

It's gotten so bad there are now serious concerns about the capacity of the Fund to continue. And that would be a tragedy for all those millions of private sector employees for whom it is now their only recourse.

To Anne - Your statement on PBGC is not entirely accurate.

The PBGC collects insurance premiums from defined benefit pension plans protected by them. So the beneficiaries and plan sponsors do pay for the insurance for their particular plan.

In my 401k I would not be paying for United. United would only pay premiums for their pension plan. So the beneficiaries ultimately bear the load on this.

Several people have raised the question as to where did the PERS "crises" go. I'd argue this is simple, the issue was always more about rabble-politics than anything else. (I do agree that the actuarial tables needed to be revised. But voiding those contracts, no, it was never nessesary, and was always clearly a violation of contract law.)

That aside, tell me why the push wasn't made to fix the Police & Fire fund, long before PERS? After all, the Police and Fire system has bulges that threaten basic city services, in ways PERS never could.

Actually, you don't need to tell me. It's because enough people either hate, or resent, bureaucrats, and so they made a handy target. No one wants to take such a strong line against the cops and firefighters.

Here's another question. Why do we want to shift the costs of health care off employers onto workers? By doing that we increase the total health care costs of the USA as a percentage of our GNP, already a crushing burden far exceeding that paid by other industrialized nations. Why does it increase costs? Well, for one thing, we workers don't get tax breaks for our portion of medical expenses (outside very rare circumstances) so we pay anywhere from a 15 to a 30 percent premium for our "premiums". This adds up quickly across just a city, not to mention a state not to mention, a nation.

And, those of us forced off our company plans because of increased costs now have to pay full-bore to see a doctor or dentist. And, they usually want it all, up front..(often 2 or even 4 times as much as paid for the exact same service by those covered by insurance.)

Folks buying private family plans lose the buying power of a group plan, more money out of pocket, again.

And, so it goes. It is sort of a macro version of what happens when a school stops buying school supplies because it's out of money, and asks the parents to buy them, instead. And, everyone trots off to Rite-Aid or Office Depot for their 2 boxes of crayons and 5 boxes of tissue paper and 2 pairs of scissors (blunt tip) and the total cost of school supplies to run the school that year takes a huge leap. For we've now lost the ability to save by buying in bulk.

There are no long-term winners in this scenario, and those who think that pushing further in this direction will result in lower costs for poor folks or the uninsured just haven't done the math.

The PBGC has been running further and further in the red every year. Talk about an "unfunded liability" -- (this one makes PERS' look like play money) And, who do we think are the "guarantors" of this "guarantee" anyway? It's a federal program, and as always, we tax payers are the guarantors of its payouts.

I agree about the P&F Fund, but when you say shift the cost from employer to employee, you actually mean shifting from taxpayer to beneficiary if we are talking government.

I don't mind helping, but sticking the taxpayer for the shortfall when they receive no benefits is not fair either. Unfortunately, there are not a lot of financial geniuses in government at the decision-making level and everybody gets stuck for their lack of knowledge.

The statistics about eight years ago, the last time the state did a wage and benfit comp study, the compensation of public employees was, on average, about 90% of that in the private sector. That is including benefits. Including PERS.

I'm not a public employee, never have been. But I really hate how much people go after the public employees.

Want to talk about things with guaranteed cost increases? How about the guarantee of 15-30% healthcare premiums for no good reason (as anne mentioned). Want Ferrari's, look at hospital execs and insurance company execs and drug company execs. Oh, and are those people economic geniuses? Not if affordabity, access and quality are the measure.

Steve complains about taxes, but we're paying more for healthcare than any other industrialized nation, as a portion of GDP, for crappy quality. Oh, and don't we have a lower tax rate than many of those other countries? Yeah, we do.

So I guess Steve's just complaining about the wrong stuff, IMHO.

The Oregon constitution (and federal constitution)is fairly explicit on prohibiting laws which impair contracts. It is what it is-if you dont like it then change the constitution, otherwise quit whining!!

Oregon Constitution, Section 21 (excerpt) Section 21. No ex-post facto law, or law impairing the obligation of contracts shall ever be passed, nor shall any law be passed, the taking effect of which shall be made to depend upon any authority, except as provided in this Constitution;

Rorovitz - I am sure there are countless studies available. If benefits are so much worse in the public sector, then why is there not a mass migration to private sector jobs? I cannot recall the last time someone left a government job.

Anyways, that is beside the point, I am not complaining about the quality of government workers or bureaucrats as easy targets. The structure is what it is.

My issue is not PBGC, what a boondoggle the Police/Fire Ret&Dis fund is (contrary to Mr Leonard's assurances of no problems) and how private retirement plans are ripoffs since these are all true.

However, this post is about PERS and my issue is still the self-serving types that set up PERS with an unrealistic funding plan. Unless we are all going to fund each other's 401k, then these plans need to stand on their own.

<h2>Right now, from what is being told to us, PERS has a shortfall not covered by beneficiary contributions or real rates of return. Non-beneficiary taxpayers are on the hook for this deficit thru increased taxes or decreased services like schools and that is not right.</h2>