PERS retirees to cost half a trillion dollars for next 100 years

Oregon Transformation thb PERS retirees to cost half a trillion dollars for next 100 years

Oregon Transformation

Flash Fact: Oregon’s retired PERS members to cost over half a trillion dollars for the next 100 years

Between 2010 and 2109, Oregon’s Public Employee Retirement System (PERS) will pay out almost $600 billion to government employees who have retired as of 2010.

Even if all pension and retirement benefits were removed for non-retired Oregon government employees, Oregonians would still be on the hook for $600 billion to previously retired PERS members.

The payments are currently accelerating in size and will not begin to level out for almost 50 years.

To put this liability into perspective, $600 billion is equal to the entire private gross domestic product (GDP) of Oregon for 2007, 2008, 2009 and 2010.

In other words, Oregonians would need to work for four years and give up the entire value they create to pay for Oregon’s retired PERS members!

Screen Shot 2012 05 11 at 9.10.16 AM PERS retirees to cost half a trillion dollars for next 100 years

Sources: 
http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1
http://www.oregontransformation.com/wp-content/uploads/2012/05/2012-05-03-Treasury-Cash-Flow-Projections-2010-008-06-07-10-1.pdf

visit Oregon Transformation Project

 

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Posted by at 05:00 | Posted in PERS, Public Employees Retirement System | 97 Comments |Email This Post Email This Post |Print This Post Print This Post
  • 3H


    Between 2010 and 2109, Oregon’s Public Employee Retirement System (PERS) will pay out almost $600 billion to government employees who have retired as of 2010.

    This makes absolutely no sense at all.  How many public employees, who retired as of 2010, are going to live 100 years?  While you’re at it, why don’t you plot out how much will be paid out if they live 200 hundred years until 2209?  I’m sure the amount would be even more astronomical.

    • Bob Clark

      Maybe it’s because the state is projected to borrow and re-borrow several times to fund these PERS benefits, eventually only getting these PERS obligations off the books over a 100 year time horizon.  But conceptually the basis of 100 years should be explained.

      • 3H

        Except.. Oregon Transformation said,  will “pay out”; not, “cost the taxpayers.”      

  • Bob Clark

    Another way of looking at it, too, is $6 billion per year which is (what) about 3-8ths of Oregon state’s general fund budget.  That’s a staggering amount of burden on state government services.  Maybe the folks screaming for more education funding should be screaming for PERS reform.  You should think, rather than hitting the state’s economy with elevated taxation.

    • 3H

      PERS has been reformed.  That just never seems to get mentioned. 
      I’m sorry to see you have already bought into the 600 billion dollar number despite there being some obvious problems with this posting. 

      • http://pulse.yahoo.com/_XJOAFWWZP7ZYRIUAL2LQFE5KAM David

        No it hasn’t been reformed. That’s what you union pals are telling you – and like a gullible schmuck you “buy” it all.

        • 3H

          Yes, it has.. it is now a defined benefit.  The name calling certainly gives you a certain gravitas.  Are you 12?  In your mother’s basement?

  • COLAs cost too much, too

    In the early 90’s, Bob Tiernan, en.wikipedia.org/wiki/Bob_Tiernan foresaw the flood of trouble that is today but was excoriated by PAC’s of organized public foxes and their keepers – all bent on acquiring ‘ample’ if not generous retirements provided from a silk PERS, albeit  one with a dilating loophole in it, d’oh!

    In retrospect, credit Bob for attempting to stem a potential di$aster – yet all he was fingered for turned out to be single digit hand salutes. 

    Today, another Vanport-in-progress, vis a vis, private sector economic reality getting swamped by a t$unami of unfathomable impracticality.

    All tiers of PERS must be brought into alignment with private sector parameters immediately if not sooner to keep Oregon from morphing into dust bowl of bankruptcy wrought by governmentium supplicants.

    Even the national Congress must be taken into account and redressed with commoner sense. 

    The unbridled in$anity must be halted.

    • Rupert in Springfield

       It’s interesting – Whenever union abuses are brought up we are all Norma Rae’d into submission by recounting of tales of abuse of workers by robber barons of old.

      Yet that is long past, and has not existed in most peoples lifetime.

      However union abuses of the taxpayers are fresh, numerous and egregious.

      Why is it we are compelled to feel guilt about the abuses by the past, and called insensitive and hateful by those who insist on it. Yet when we ask them for the same guilt, the same accountability of the abuses in the present, those champions of union abuse feel no such compunction to abide by their own prescription?

      • 3H

        Specifically, what sort of abuses are you referring to?  Some examples would be great.  

        I’m guessing by “abuse” you don’t mean illegal activity?  

          

        • Rupert in Springfield

          Seriously?

          Most of us learn this stuff in high school.

          OK – The Triangle Shirtwaist fire. Norma Rae the movie might give you some examples. I mean really? I have to go into this rather than you just looking it up? Or learning it in high school?

          • 3H

            I meant what do you mean by union abuses. 

            My, we’re feeling especially condescending today, aren’t we?  Have a bad night?

            Perhaps we can bring it forward 80 years, to the Hamlet chicken processing plant fire.    

            Or, the Sago Mine disaster (2006). 

            The constant drumbeat for a rollback on regulations, and the constant attack on unionization will, in my opinion, certainly lead to more tragedies.   

          • David Appell

            It’s a fair question — what “abuse” are you referring to, specifically? 

          • David Appell

            Rupert sure bailed out quickly on this one…

          • valley person

             Its a well tested strategy. Then he can make exactly the same arguments next week and hope no one remembers that they were refuted.

            And if that doesn’t work he can call you names and stuff.

        • Oregongrown

          Here’s a list of abuses or perversions that has morphed PERS Tier 1 retirees pensions from what started out as fair,into the most corrupt pension plans in the country:

          1) 8% guarantee, no matter what.  Has anyone looked at their rate of return in the market?  On CD’s?  Who came up with this?
           
          2) Double Your Money Match- Sounds like a casino game and that’s just the jackpot return these people get.  Who came up with this?
           
          3) Basing pension payouts on only the last three years of salary- the three highest paid years.  Instead of over the total number of years worked.
           
          4) Able to bank all the sick they want and make it into a residual that just keeps paying as long as they live.  Hard to tell how much this adds to the payout but based on one retiree, he is getting 13% more, for decades.  Who came up with this?
           
          5) Able to load up overtime, even when it’s not needed, and taxpayers not only pay bloody more than they should for the actual time, but then get blasted with another huge residual that will be owed for decades.  Who came up with this?
           
          6) Able to add thousands more per annual payouts doing the same thing done with sick pay and overtime, with vacation time.
           
          7) Allowing PERS members to bail out in a high stock market year and leave the downside for taxpayers to make up.  Who came up with this?
           
          8) PERS members retire 10 years before the private sector.  And why is that?  Except for police and firefighters, which require physical activity, why are government employees across the board able to do this, when life spans have increased? 
           
          9) How many PERS retirees pay no Oregon income tax?
           
          10)  PERS COLA- 2% every single year

          11)   Add in Double Dipping by thousands, and we see the most abused, corrupted retirement system that could ever be perpetrated on citizens.
           
           
          Right now, 86% of the 117,005 retirees are PERS Tier 1.  There is still an additional 74,000 Tier 1 members that have yet to retire.  And they will.  Very Soon.  The horizon for record breaking retirements is now.  These numbers are staggering. 
           
          If we add them in 101,000 + 74,000 = 175,000; so if there are 117,005 retirees now then, very soon there will be 191,005, and 91% will be Tier 1.  So, not only will the pool of retirees grow by a gargantuan 63%, of that new total, 91% will be Tier 1, rather than the 86% currently.  This means IT WILL GET WORSE BEFORE IT GETS BETTER. 
           

          • David Appell

            How are these “abuse” if they were negotiated between the workers and state officials elected by voters?

            And does that mean all contracts negotiated between any two parties are “abuse?” What about, say, Intel’s negotiation of tax breaks from Oregon? 

          • guest

            role out the barrel –   http://www.davidappell.com
            insurgent climaxtologist and blue kool aid stander in fermentation.

          • 3H

            Huh.. he must have hit the issue dead on target. Don’t have substantive counterpoint to argue?  No, not at all.  Just a mindless, childish, tantrum.

          • Cola’s cost too much, too

            Hmm, 3H seems to have ‘passed over’ the door with 11 cogent theses posted by Oregongrown.  Pity!

          • 3H

            LOL.. that’s your excuse for being childish?

          • http://pulse.yahoo.com/_R74YAD552O5YJFNFXIBE56FGXQ zanzara

             Hmmm,…could it be that the “state officials elected by the voters” were PERS participants?

            Could it be that the PERS recipients also wrote the rules & regs that helped suffocate the economy that was supposed to support the PERS recipients?

            Could it be that the “negotiated” goodness was not based on what was good and fair to and for the state, but based upon what the recipients wanted?

            Haven’t heard/read any news about the PERS union stepping up and saying anything about the changes that could be made to reduce the load on the state’s economy by taking personal pay cuts and revisiting the reason’s why businesses aren’t hiring. 

            Let’s see, I heard a tale on the radio the other day about a government employee who was fired, for missing work too much without calling in among other things, getting their job back because the union stepped in and backed a bad employee just because they were in the union. If you can’t see the abuse, then you must be involved in creating it.

          • David Appell

            Of course the workers negotiated in their own best interest and not that of their employer — everyone does that. Why is that so difficult to understand?

            I haven’t heard/read any news about Intel stepping up and saying anything about the changes that could be made to reduce the load on the state’s economy by giving back tax breaks and revisiting the reasons why consumer demand is low.

            From OCPP:
            “Of the 265 corporations studied, 68 paid no net state income taxes in at least one of the years from 2008 to 2010 — even as these companies together reported making almost $117 billion in pre-tax profits in the years when they paid no taxes.

            “That group included Intel and 19 other Fortune 500 corporations which, when adding up the past three years, paid no net state income taxes. Although Intel paid state income taxes in one of the three years, it had a negative tax rate in the other two years, according to the report. The company, which has large manufacturing facilities in Hillsboro, reported to shareholders $23.3 billion in profits during the three-year period.”
            — Oregon Center for Public Policy, 12/6/11

          • Geraldbking

            1) 8% guarantee, no matter what. Has anyone looked at their rate of return in the market? On CD’s? Who came up with this?***
            Less than 20,000 Tier 1s who started before ~1988 will receive this 8%.  2) Double Your Money Match- Sounds like a casino game and that’s just the jackpot return these people get. Who came up with this?***Again only the last 20,000 workers with more than 24 years of service will qualify for Money Match> This is a rare occurance now. 3) Basing pension payouts on only the last three years of salary- the three highest paid years. Instead of over the total number of years worked.*** Agreed, they should do a longer lookback, maybe 5 years. 4) Able to bank all the sick they want and make it into a residual that just keeps paying as long as they live. Hard to tell how much this adds to the payout but based on one retiree, he is getting 13% more, for decades. Who came up with this?***Not all employers allow this; mine limits it to 1050 hours. There is no benefit from sick leave if you reitre under Money Match! 5) Able to load up overtime, even when it’s not needed, and taxpayers not only pay bloody more than they should for the actual time, but then get blasted with another huge residual that will be owed for decades. Who came up with this?***Agreed 6) Able to add thousands more per annual payouts doing the same thing done with sick pay and overtime, with vacation time.***Pretty minor issue, as most employers limit vacation time accumulation to about 400 hours. 7) Allowing PERS members to bail out in a high stock market year and leave the downside for taxpayers to make up. Who came up with this?***No one can time the market to their retirement date. Its an annuity built to pay out over decades of stock market volatility. 8) PERS members retire 10 years before the private sector. And why is that? Except for police and firefighters, which require physical activity, why are government employees across the board able to do this, when life spans have increased?***Average PERS member retires at age 61, average American at 64; a 3 year difference. Be careful with your FACTS OregonGrown.   9) How many PERS retirees pay no Oregon income tax?***Only the ones who do not live in Oregon or make less than $10,800 per year. Same answer for all citizens, no difference if you were self-employed or worked for Fred Meyer. 10) PERS COLA- 2% every single year***This is how the annuity is set up and funded.

            11) Add in Double Dipping by thousands, and we see the most abused, corrupted retirement system that could ever be perpetrated on citizens.*** Most double dippers are limited to 1/2 time. And it is often the least expensive way to get the job done. No insurance, no vacation pay, no sick leave; all with an experienced worker.

            So there is my reply OregonGrown.

          • David Appell

            Re: 8% rate of return…. The historical rate of return of the stock market is 9-10% (appreciation+dividends). So 8% might be low…. 

  • Rupert in Springfield

    The problem here is the concept of the article itself. It’s really a little silly. I’m not sure saying the GDP of Oregon for an entire four years is needed to pay off PERS for 100 years has much meaning to anyone.

    What is the point of that comparison?

    Look – Oregonians don’t need to be told that we got sold down the river a long time ago by politicians who acceded to union abuse. We got that. Most Oregonians are aware that on some level they got snookered by the public employee unions and are paying the price for it now. Most resent their taxes going up, their schools closing down, because PERS funding is by law the main priority of government. Got it? You don’t need to sell people on that.

    What is needed is not a groundswell of awareness, people are already aware. What is needed is a groundswell of what do we do about it.

    The courts have pretty much said Oregonians are out of luck as far as current retirees.

    But that doesn’t mean there cant be real reforms with current workers to end the kind of abuse that got us in this rat hole years ago. Preventing this from ever happening again, and lessening the extent to which we are harmed by it now is the goal.

    For one, end this idiocy of state pick ups, step raises and cola’s for public employees. Get rid of those and if the union doesn’t like it, replace them. We have millions out of work hungry for those jobs.
     
    Lastly end the careerization of non career jobs. If you get a job at a machine shop there is a distinction between the job sweeping floors and the guy running the lathe. One is a job one is a career. Yet in government, every job is treated like a career. Its time to end that. Janitor at a public school is perfectly honest work, however moping floors and the like is not a career. There is a limit to how great a person can mop a floor, you do not need to pay ever increasing salaries to perform that task.

    • David Appell

      “Union abuse” is otherwise known as “looking out for one’s own best interest” — all of us do it all the time. Indeed, it’s supposed to be the basis of successful capitalism. 

      The workers banded together and negotiated well. Oregonians should have paid attention and elected better negotiators. 

      • Rupert in Springfield

        >”Union abuse” is otherwise known as “looking out for one’s own best interest” — all of us do it all the time.

        You do realize that in making this argument you are invalidating any argument you might make against employer workplace abuse right?

        Not sure if you thought it through that far but figured Id point it out to you if you hadn’t.

        >The workers banded together and negotiated well.

        Quite true, although lets be real, its not exactly a level playing field.

        >Oregonians should have paid attention and elected better negotiators.

        Wont get any argument from me on that one. Oregonians got sold down the river. On that you and I can agree.

        • David Appell

          > you are invalidating any > argument you might make 
          > against employer workplace 
          > abuse right?

          Employers look out for their own best interest too. If it’s not illegal, it’s not “abuse” — though it may be unfair, untoward, unethical, etc.

          • Rupert in Springfield

            So since you are defending it, then we can assume you are now perfectly OK with you medical insurance situation, and will defend the employment practices of Wal Mart et. al. in the future?

            I’m surprised at you David, this is an entirely new turn.

          • David Appell

            What Walmart is doing isn’t illegal, and neither are OR government unions, therefore the word “abuse” is seriously misapplied. Like everyone else they are looking after their own best interests. You seem OK with that if it’s an employer, but not if it’s an employee. 

        • 3H

          “…
          employer workplace abuse right?”  

          Which, if we are talking about activities that are legal, already occur.  Especially in non-union workplaces.  

          Abuse in this sense is a subjective term. To the employer they may feel it is something they need to do to remain competitive.  To the employee it may mean that they are paid too little for the value they add to the company. 

          I think your term “abuse” is too vague and ill-defined to be of any use.  Exactly what do you mean by abuse?  

          • Rupert in Springfield

            I would say bankrupting the state to pay for lining your pockets is abuse.

            Obviously you feel differently.

            My guess is if a company or individual did this, you would be all up in arms, and rightly so. If a union does it, its okie dokie.

            That’s the difference, I would be upset with both.

          • David Appell

            Is Oregon bankrupt? No. It has several options for meeting its contractual obligations.

            Again, lining one’s pockets” is called “looking out for one’s best interests.” All of us do it all the time.

            If you were buying a house from someone in a difficult financial position, would you offer to pay more to save them from the possibility of bankruptcy? Or would you negotiate for the best price?

          • Rupert in Springfield

            >Again, lining one’s pockets” is called “looking out for one’s best interests.”

            Not past a certain point.

            Your house example is a good one. If you are buying a house from a destitute family no one would champion the man who bargains them down even lower in price.

            I would condemn that, obviously, by your defense of it, you wouldn’t.

            I think its just a basic moral difference. You think its ok for unions to soak the state for every dime it has. I don’t.

            There really isn’t much to argue on a basic difference in morality.

          • 3H

            Except the unions haven’t soaked the state for every dime it has.  Your willingness to engage in hyperbole seems pretty desperate.

            To try and reduce this to a question of  morality is ludicrous.  But pretty par for the course for your penchant for excessive exaggeration.  

            I think you’re done here.

            Cheers!

          • David Appell

            > past a certain point.

            Where is this certain point?

          • valley person

             “Not past a certain point.”

            So you are in favor of a wealth tax? And you think Bain Capital was too greedy?

            Welcome to my world.

          • 3H

            Nice assumption, but wrong. Again. You need to give up the notion that you know what liberals are thinking simply based on the fact that they are liberals.  Keep in mind how you feel when people assume they know your position on any particular issue simply because you’re conservative.  Since you are not that special, nor unique, you should keep in mind that liberals also have disagreements within their own community, and that one liberal cannot be substituted for another.  
            When companies or individuals “line their pockets” and are “bankrupting the state” in the process, I get mad at the public figures who let them do it; the ones who made bad deals. 

      • Rupert in Springfield

         >Indeed, it’s supposed to be the basis of successful capitalism.

        In terms of individual negotiation, yes sure, you are exactly correct. In terms of union negotiation, as it exists now, few would maintain that is anything other than the antithesis of capitalism.

        In capitalism an individual negotiates with an employer for wages etc.

        In capitalism you can have unions, but they must exist as private entities. The employer can negotiate with the union, but is under no compunction to do so. Government is not a party to the negotiations.

        In degraded capitalism you have unions, but the employer is forced to negotiate with them, has limited ability to fire them and has strong incentive to accede to union demands due to their quasi government backing.

        The last case is what we have today. Companies do not have free ability to fire unions at will, but rather are forced to negotiate with them. Unions have quasi governmental status as they have an entire branch of government, Dept of Labour, that exists in part to enforce union needs over the employer. We saw this most recently in the BOEING case.

        Non Capitalism – Unions negotiations with a government agency, which has no interest in constraining costs, and vested interest in agreeing to union demands on the implicit basis of delivering votes. No element of capitalism remains and the system becomes impossible to sustain. An example of this would be what we are seeing in Greece right now. 

        • David Appell

          Since capital can band together in pursuit of its best interests — and form a “corporation,” which gets favorable treatment from the government in the form of limited liability, etc. — why can’t labor?

        • David Appell

          Government, which is run by elected officials, has an interest in restraining costs if the electorate does. 

          The problems of Greece have much more to do with its inability to utilize monetary policy than anything to do with government spending or union demands. Indeed, some of the European governments with the highest government spending have some of the soundest economies (notably Sweden).

          • Rupert in Springfield

             >has an interest in restraining costs if the electorate does.

            Not true. Few of these negotiations happen with the public being aware until they are a done deal.

            The politician has tremendous incentive to team up with the unions against the public. The public is taxed to support all of this.

            >The problems of Greece have much more to do with its inability to
            utilize monetary policy than anything to do with government spending or
            union demands.

            They got bailed out twice and you are seriously arguing this?

            Greece simply had way too many people in government who relied on people to work to support it. It became unsustainable.

            > Indeed, some of the European governments with the highest government
            spending have some of the soundest economies (notably Sweden).

            Who ever argued that a high amount of government spending meant anything. I certainly didn’t. What matters is the amount of government spending versus its ability to sustain it via revenue.

            If a country spends $2B per capita it can have a perfectly vibrant economy provided it has some means to pay for that.

            Greece didn’t. Like Greece, Oregon doesn’t have the money pay for it either.

          • David Appell

            The public has many options to gain as as much transparency as they desire. The frank truth is that most of them can’t be bothered. 

            And Oregon has lots of ways to gain revenue to meet its contractual obligations. Its state and local tax burden is in the middle of the pack (9.8%, which is the national average). 

          • http://pulse.yahoo.com/_R74YAD552O5YJFNFXIBE56FGXQ zanzara

             Sweden is a socialist hell hole.

          • David Appell

            Facts?

          • valley person

             Well for one it very hot. Oh wait…

          • 3H

            Two it’s below sea level..  isn’t it?

          • valley person

             Three, they have to seal their borders to keep people in. OK, not exactly….

          • 3H

            However… their  ancestors did run with horns on their heads.

          • David Appell

            Four: Their famine. (Right?)

      • Oregongrown

        One party rule for almost the last thity years has prevented that.  Look at the string of governors bought by the unions:  Barbara Roberts, Kitzhaber, Kitzhaber, Kulongoski, Kulongoski, and and now Kitzhaber again.

        One party ruled has hammered Oregon.  And we will pay for decades if nothing is done to reform PERS.

        Let’s look at at Rhode Island: Time magazine
        _______________________
        Rhode Island
        __________
        Population 1.05 million
        Median Household Income – $53,243
        Gov retirees- 21,634
         
        10% of this year’s state revenues went to cover the shortfall just for the pensions in Rhode Island:
        Central Falls, Rhode Island (Pop 18,716) – went bankrupt, the pensions drained all of the money out of the operating budget. “In Rhode Island in 1960,  a retire could retire at age 60 with a pension equal to about half of working salary”… life expectancy was 70 years.  ” By 1990, life spans were five years longer, yet the RETIREMENT AGE HAD DROPPED TO 50.  The maximum initial pension had jumped to 80% of salary”… with math like that on your side, retiring from a government job in Rhode Island, quickly became more lucrative than working at one.” the report noted…”retired public employees can routinely earn retirement benefits that exceed 100% of their final average earnings.” Rhode Island Treasurer, a newby, Gina Raimondo, A DEMOCRAT, is showing leadership; basically asking everyone if they wanted to follow in the bankruptcy footsteps, or make change that will keep the state solvent.    “Boldest of all, the changes applied to current retirees, not just future ones.”This is just the same pension creep that unions and politicians that are bought by unions have done to Oregon, but it is much worse:Population- 3.4 millionMedian Household Income- $48,325Gov retirees-117,000- apparently that’s as close a estimate as we can get; Now tell me how Oregon is any different from Rhode Island.  Rhode Island says it will go bankrupt without these changes.  OREGON has only three times the population of Rhode Island, but HAS 5 TIMES AS MANY RETIREES AS RHODE ISLAND.  And that number will shoot up to 175,000 very soon all PERS Tier 1!

        • David Appell

          One-party rule has been the choice of the Oregon electorate. Choices have consequences… but how does that mean the workers are guilty of “abuse?”

        • valley person

           Republicans controlled the House and Senate in Oregon from 1994-2002. PERs was reformed by a democratic governor and a democratic legislature.

    • David Appell

      Sweeping the floor may be a career for some. 

      For example, in any population about 2.3% of people have an IQ less than 70. In the current US labor force, that’s over 3.5 million people. 

      These people may not be suited for a job above that of a sweeper. But they may still wish to live independently and (as Romney would say) have the dignity of work. They are still subject to inflation, and so, yes, they do need an ever-increasing salary to do that task.

      • Rupert in Springfield

        So because retarded people exist in a society every job needs to be a career?

        Right, ok, moving right along……..

        • David Appell

          It’s a career if it’s a career to them. But no matter what you label it, those workers are subject to the same inflationary pressures as everyone else, hence their wages need to keep up or their standard of living declines. And, just as much as everyone else, they get pleasure from knowing their work is valued and rewarded. They aren’t just animals to be exploited. 

          • Rupert in Springfield

            >It’s a career if it’s a career to them.

            So the determination of whether a job is a career is solely up to the employee? If he decides it is a career then he is entitled to remain in that job and be paid an ever increasing salary because of it?

            That makes no sense at all.

            Im not exactly sure a kid who mows my lawn for $10 is entitled to start getting retirement benefits, health insurance and a company car just because he quits high school in order to make mowing my lawn his career.

          • 3H

            “If he decides it is a career then he is entitled to remain in that job and be paid an ever increasing salary because of it?”
            Are you arguing that if someone has a career (by your definition) that they are entitled  to remain in that career?  That they are entitled to ever increasing salary? 

            You do realize that we aren’t talking about kids making a little extra spending money, right? 

            Would you consider someone who starts their own janitorial service as having a career?  I mean, if it’s a one person operation, they’re still mopping floors, so I guess they can’t really call it one.  Right?

          • valley person

             Ruperts arguments get more confused by the day. But I love that he is now making moral arguments about people, workers, trying to get as much as they can for their time irrespective of their impact on the larger community (taxpayers).

            I want to see him apply that moral argument to Bain capital.  Should they have accepted less profit in order to keep communities whole? Should all capitalists do so?

          • David Appell

            Yes, the determination of what is a “career” is up to the individual.

            No, in our current system, no one — whether they call their job a “career” or whether they don’t — is “entitled” to remain in that job and to be paid an ever increasing salary because of it. Not the janitor, and not the machinist, and not the company owner.

            I’m surprised you would believe otherwise.

  • David Appell

    Are these numbers in real dollars? If not, they will be very different.

    With just 2% inflation, a dollar in 2050 will worth less than half what it is today. 

  • HBguy

    In reforming Oregon government spending and revenue, everything needs to be on the table. If anyone says otherwise, they are not serious.

    Past negotiations and contracts need to be honored, but that doesn’t mean they need to be static. Changes can be negotiated within the law. PERS renegotiation has to be on the table. Simple as that.

    • 3H

      PERS has already been reformed.  It is different from what it used to be, and no new monies are being paid into Tier 1 and Tier 2 accounts – they only accrue interest.  

      • HBguy

        There are still changes that can be made unilaterally by the state that don’t violate law or contracts. And the State and unions can still negotiate changes.

        Don’t get stuck on the word reform. Use the word change then.  Changes to PERS have to be on the table. 

        Better?

        • 3H

          Well, what changes do you think the state can make unilaterally with respect to PERS? 

          Let me rephrase.   PERS has already been changed.  What additional changes do you want to see?  

        • David Appell

          If the state can make unilateral changes, then why isn’t it making them?

          • HBguy

            To both 3H and DA: The Portland City club did a pretty good review of PERS and recommendations. The State Legislature had a bill last session that would have made changes in PERS. It didn’t go anywhere. There are things that can be done unilaterally by the state to reduce PERS cost, according to some very smart pension lawyers.

            I’m not saying the unilateral changes wouldn’t be challenged in court by the way.

            The reason the unilateral changes haven’t occurred? You’re kidding right. The reason is, the Democrat party is pretty much directed on this issue by public employee unions. If you want to have a political career in Oregon as a democrat (Which is the only way you can apparently have a political career in Oregon), PERS changes are the third rail.

            I am not a member of PERS. I just happen to run a business with 20 employees, am pretty progressive (according to Joel, I’m probably a Marxist), and am very disheartened that public employees prefer fewer school days, more mentally ill on the street, and laying off newer public employees to changing retirement benefits to be more in line with what every other state pays. Because of that resolute refusal to agree to modest changes it gives conservatives the ammunition they need to oppose tax reform. Which is the one thing that could help Oregon right now.

            So, my personal belief is that the public employee unions are some of the most anti-progressive organizations in the state right now. They are more interested in their own self interest than they are in the public good. And fighting for PERS changes is the most progressive thing someone can do right now.

          • David Appell

            Yes, there are a lot of special interests in politics. But I don’t think for an instant that they all come from one direction. Do you?

          • HBguy

            No. That’s why EVERYTHING has to be on the table.

          • David Appell

            Then let’s talk about raising corporate taxes, removing the regressivity in the Oregon tax code, removing the home mortgage interest deduction, and renegotiating Intel’s tax breaks (last year their profit was $12.9 B).

          • HBguy

            OK. I’m with you. are you with me in talking about PERS?

          • David Appell

            Yes, but I am dubious.(Also, this reply box is now microscopic.)

        • GretaN

          (Maybe they prefer the word “evolve”)

  • Hayslinger

    Oh come on, why not make it 1,000 years. Even if you used numbers and a realistic approach you can’t pretend to predict anything that far off unless you are desperate to make a sensational claim. It is next to impossible to predict more than five years! A claim like this is ridiculous. What a bunch of crap!

  • GeraldBKing

    It’s too bad the writer of this column didn’t do so well in high school math class.
    He prefaces his comment with those “who have retired as of 2010″. And then says, “payments are currently accelerating in size and will not begin to level out for almost 50 years.”
    Totally impossible considering that COLAs are limited to 2% annually, while approximately 6% of these retirees are dying each year. Trust me total payments to these 110,000 people who were retired as of 2010 are dropping consistently, NOT increasing!

    • Oregongrown

      Gerald:
      Re: “Trust me total payments to these 110,000 people who were retired as of 2010 are dropping consistently, NOT increasing!”

      I don’t trust you.  Prove it.  Give me facts.

      Here are some facts with numbers:

      Right now, 86% of the 117,005 retirees are PERS Tier 1.  There is still an additional 74,000 Tier 1 members that have yet to retire.  And they will.  Very Soon.  The horizon for record breaking retirements is now.   

      If we add them in 101,000 + 74,000 = 175,000; so if there are 117,005 retirees now then, very soon there will be 191,005, and 91% will be Tier 1.  So, not only will the pool of retirees grow by a gargantuan 63%, of that new total, 91% will be Tier 1, rather than the 86% currently.

      • 3H

        Did you factor in the ones that will die? Each and every year?  

      • GeraldBKing

        OregonGrown:
        Copy & Paste from original article above:”Between 2010 and 2109, Oregon’s Public Employee Retirement System (PERS) will pay out almost $600 billion to government employees who have retired as of 2010.”

        117,005 retirees x $2620 monthly average pers x 12 months per year x 14 year average life expectancy=$51,500,00,000
        Even if you allow for 2% annual COLAs it brings it to only: $67.95 billion

        The author is mixing apples & oranges. I suspect the $600 billion figure must be looking at all past & FUTURE retirees.

      • GeraldBKing

        OregonGrown, let’s continue to look at the numbers.
        On December 31, 2011 there were 101,144 retired Tier 1 people (we agree on this).
        Also on December 31, 2011 there were only 67,252 Active and Inactive Tier 1 members who will retire during the next 25 years (your numbers are 1 year old).
        The 101,144 members are dying at about 6% per year (about 6100 this year). And the current 67,252 members are retiring at a rate of about 9% per year (also about 6100). Thus the rolling number of Tier 1 retirees is remarkably stable presently and should begin to drop in about 5 years.
        In order for your prediction of 191,005 Tier 1 members to come true, all current retirees would have to stay alive for the next 25 years…ain’t happin’.

      • Geraldbking

        Oregon Grown: I gave you the facts (see below) and you’ve been silent now for nearly 24 hours. Guess I proved my point!

        • valley person

           Yes but since you only proved your point with facts, you don’t have a chance of convincing anyone around here on Catalyst. They know what they know, even when it is proven wrong.

  • GeraldBKing

    Totally concocted / falsified document was used to produce these numbers. Come on Oregon Tranformation Project, who created this garbage: http://www.oregontransformation.com/wp-content/uploads/2012/05/2012-05-03-Treasury-Cash-Flow-Projections-2010-008-06-07-10-1.pdf

  • Keeko

    Relax people. We are far better off than California. We will get through this if we all work together to get more revenue to the state. These people earned what they have and must now get it. A living wage in retirement is not too much to ask in this great nation of wealth.

  • JoelinPDX

    Why bother arguing. Butt buddies 3H, Valley Person and David Appell will just keep gnawing away with the same BS, not bothering to pay attention to real information. They will just ignore whatever is said to refute their crap or flat out lie and make up their so-called “facts.”

    Don’t abuse yourself by offering the facts. Read through this shite. You’ll just see the same crapola over and over and no real reasoned discourse.

    • David Appell

      Joel, please return to the children’s table so the adults can finish their conversation. Thank you.

    • 3H

      You mean like “facts” that show how much people who retired in 2010 will continue to cost the state 100 years from now?  Those kind of facts? 

      It must be sad being you.  

    • Ardbeg

      Joelena-your the last person to throw out a gay slur like ‘Butt buddies”. Again your likes on youtube include:

      http://www.youtube.com/watch?v=65eohDB_UR4

      and

      they are right there for everyone to see as a Joelinpdx “likes” video. Save the gay slurs for your bedroom.

  • http://pulse.yahoo.com/_BFD7G5JBJ6XNMIM56X7SEXOVJQ CecilS

    So what are PERS retirees supposed to do, give up their retirement? They were not responsible for the conditions put into place by legislative fiat, so picking on the retirees is misplaced and not fair

    • HBguy

      No one is talked about getting rid of your retirement. Just making adjustments to current formulas and requirements that reduces what most everyone (except PERS recipients) consider overly generous payouts,  and some tougher future negotiations. 

      And, the problem wasn’t legislative fiat, it was the fact that PERS recipients in the 1980’s and 1990’s adopted and lobbied for the rules and extraordinary payouts. It was legislative fiat only in the sense the that the Legislature and governors (All of whom are also PERS recipients and who benefited greatly from the rule making) allowed the PERS boards to make outragrous decisions to the detriment of future taxpayers, schools, and the needy who depend on government services.

    • Cola’s cost too much, too

      How about settling out to being just like Mike, the private sector retiree who lives on half the annual wage at his time of retirement – and, does NOT have any sugary COLA to float his boat – or, yacht as the klassik ripoff may be?  

  • http://www.facebook.com/people/Larry-Sparks/100000792793213 Larry Sparks

    Why do Oregon Democrats refuse to deal with the PERS obligation?
    Why do Oregon Democrats refuse to pass legislation for Oregon State employess to pay for at least 50% of their health insurance? Why is education always short of money?

    • 3H

      I dunno.  Why do Oregon Republicans hate the poor?  Why do Oregon Republicans want to make it more difficult for workers to unionize?  Why do Oregon Republicans hate the environment and always put money ahead of health and safety?  Why do Oregon Republicans favor a particular religious view, and want to deny gay people the opportunity to legally get married?

      • GretaN

        WTH??? At least Larry is asking a question BASED IN REALITY. Oh wait – there’s the difference between conservatism and liberalism in a nutshell! Liberalism is based on a FALSE SENSE OF REALITY; meanwhile, conservatism’s objective is to UPHOLD THE CONSTITUTION and preserve this great republic.

        • 3H

          Uh huh.  And to yell, because that way they don’t have to listen.

          Which parts of what I wrote don’t deal with the reality that is much of the Republican Party, and much of the Conservative movement today?

          But, if we’re going back to founding ideals, you’ll join them in their distrust of corporations, and you’ll be willing to work to restrict their activities, yes?

    • David Appell

      Why is education always short of money? Why are hugely profitable corporations given property tax breaks? Intel has negotiated a series of property tax exemptions for its Oregon equipment that is worth $579 million to the company over 15 years. 

      Intel 2011 profits: $12.9 billion.

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