Ah, pensions. Oregon offers a glimpse of a potential Minneapolis future: The PERS (Public Employees Retirement System) has gone from an $8 billion deficit a year ago to $14 billion. Because everyone involved is a "good" person, no one wants to come out and use words like "stupid," "liars," and "incompetent." Here is the deal: the PERS board is all PERS people (soon to be changed) who kept voting for their own retirements. When it was pointed out that they were using the wrong actuary tables, they refused to change them because it would have meant a reduction in payouts. Now before people begin to get sorry, some retirees are getting 125% of their last year's pay, plus COLAs and medical. Pretty sweet. It gets better. Where does this shortfall come from. jurisdictions which, by state law, must meet their PERS obligations. Many smaller communities have laid all off but a mayor and a secretary. What was the formula used to get here? People can rightly bash corporations for cooking the books, but the feds and states are far better at it. Check this out: Oregon mandated that it would be "unfair" for the PERS funds not to get at least 8% return, the number that was projected to yield the return they wanted which, ORIGINALLY, was to be 50% of a retiree's last year's pay. So if PERS money managers didn't get 8% return, the difference is made up by the tax payers. Makes Enron, Worldcom and Adelphia look like small potatoes. But it gets better yet: it was also decreed that it would be UNFAIR if the stock market gained 15% and PERS didn't also. SO, if PERS gets, say 8% as targeted, and the stock market gets 15% (think 90s, people), then PERS also gets 15%, with the "missing" 7% made up by the tax payers. And then the state and Portland scratch their heads asking why businesses are leaving, the tax base is getting smaller, etc. And less for police, education, housing, etc. Hence the latest Doonesbury cartoon of the college taking anyone except applicants from Oregon. It's so bad here that Intel, with a huge plant here, won't hire Oregon graduates, as they don't know enough. When a parent who worked for Intel told the Site Council we both sat on four years ago this fact the teachers were unmoved; I was simultaneously pushing for Internet use in the classroom especially for homework (brings back the tutors) and one said the Internet was a fad and will go away. Others said they weren't buying home computers unless the school district got them one, as neighboring Beaverton did and paid them to learn to use them. The older ones told me they didn't want to rock the boat, that they were nearing retirement, and that was their only goal. It is very difficult for the well intentioned to function among the ill-intentioned and/or inept. Remember, all of these are "good" people. But the system goes down anyway. Judging people is just not to be done and certainly not hurting their feelings. Ah, the New Age. And the biggest Enron-ders of all: the US Congress. Most will get $3 million in retirement, both Democrats and Republicans. Fairness is in the eye of the beholder (or is it the eye of the recipient?). At one of the hearings last year in Congress, it was shown that if the same monies paid out to SS by workers then retiring, would have averaged $6,200 each/month, $12,400 for a couple, and, if they died, could still leave it to their heirs. We need to get beyond SS and retirement talks as if there was only a Democratic side and a Republican side, and think about what will work best, regardless of party, for the citizen tax payer. Peter Jessen, Portland
David wrote 3/10/03: A few list members have asked for a link to Scott Russell's Premack Award-winning pensions story. This one should work: http://makeashorterlink.com/?A2AC121C3 [Note: there are several links at the top of the story to charts - those links may not work. Scott's story begins with: "A major reason why city taxes are going up while departments such as the police are taking personnel cuts is rising pension costs. One of every six dollars of Mayor R.T. Rybak's proposed 2003 tax increase will pay for higher-than-expected pension costs. ..."] I also noticed that we linked the pension deficit to the cost of a new library - purely illustrative at the time, but as it turns out, prescient. Enjoy! David Brauer King Field Editor, Southwest Journal and Skyway News TEMPORARY REMINDER: 1. Send all posts in plain-text format. 2. Cut as much of the post you're responding to as possible. ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls TEMPORARY REMINDER: 1. Send all posts in plain-text format. 2. Cut as much of the post you're responding to as possible. ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
