By Jesse Villarreal, Jr.
Founder — PERS Help
The purpose of getting the top Republican candidates together today was to discuss their PERS reform strategies and gain clarification and insight to an ongoing complex problem that hasn’t gone away.
Wednesday’s PERS Forum was the last time all three leading candidates had a chance to share a stage. Jason Atkinson and Kevin Mannix did a wonderful job of explaining their plans. The third candidate, Ron Saxton chose not to participate in a discussion to reform PERS.
Atkinson and Mannix were cordial towards each other and shared a few similarities regarding their PERS reform tactics. The biggest item each candidate shared, called for the implementation of a defined contribution plan, most commonly referred to as a 401(k). This plan would give members complete ownership of their savings. Unlike the current Individual Account Program (IAP), or Tier 3 as some people refer to it, the new 401(k) would consist of numerous investment options giving each member the ability to control the level of risk they assume, as well as education: which would allow each member to make an informed financial decision.
Mannix would like to offer incentives to entice current Tier One and Two members to leave their old plans for a new one. Incentives could possibly include Long-term Care insurance or the issuance of annuities. Details of the costs involved to accomplish this task were not disclosed.
Conflicts of interest issues have been an ongoing problem within PERS and the Oregon Investment Council (OIC). Mannix said, “It’s too easy to engage in improper activity” and would like to see “political accountability.” This is a crucial point for voters to understand and this is where the similarities ended.
Whereas Mannix wants to remove the wrongdoer from their position within state government, the PERS board or OIC, Atkinson plans to hold PERS board and OIC members personally liable for wrongdoing. “We need to clean house and remove dishonest and fraudulent activities and people. As Governor, I will require Board Members to carry “˜Errors and Omission’ insurance, paid for by the state, that if honest mistakes are made, insurance covers by default, however if self-dealing, Breach of Fiduciary Responsibility or fraud occurred we will go after those members personally.”
Atkinson would also like to shut down loopholes that award favored members like legislators and judges with outlandish retirement benefits at the cost of other PERS members and the public. He would also like to do away with the old practice of “Double-Dipping” and move to a “one job, one check” practice. Atkinson is the only candidate that will remove the PERS practice of paying favored PERS members two checks for one job. “Double-Dipping” was first approved by the legislators in 1959. According to Atkinson, PERS refuses to disclose how much was paid to “Double-Dippers” prior to calendar year 2004.
Atkinson would also like to break the PERS monopoly and open the administration and recordkeeping up to institutional money managers that efficiently manage other state’s retirement plans. “We drop expenses dramatically and increase efficiencies by opening up the plan to competition” says Atkinson. He would also like to see the Attorney General do a complete audit of PERS.
The most disappointing fact was the absence of Ron Saxton. It is also frustrating that Saxton has not developed a plan to reform PERS. Saxton was one of the candidates that brought up the need for PERS reforms five years ago. After five years of telling people he will reform PERS, the only comment Saxton has on his website regarding his plan is, “PERS will be reformed before it bankrupts our state.” For further detail pertaining to Saxton’s strategy to reform PERS one has to go back a year ago for Saxton’s infamous call to “terminate” all state employees and hire them back as he stated in BrainstormNW magazine. It is disturbing to know Saxton has not developed any plan to “fix”, “reform” or “improve” PERS after five years. In fact, his website give this important topic a total of nine words answer.
Saxton has offered no other details and his plan to “terminate” all employees would result in massive lawsuits costing at least tens of millions of dollars in lawyer fees and decades of court battles. The unions have vowed to fight him every inch of the way and the state would be thrown into chaos. If Saxton and Kulongoski were to face each other in the general election this fall, Saxton would face the wrath of at least 311,000 PERS members, plus one family member, plus at least one friend which would be one million people voting against a man who claimed to have a plan but simply didn’t do his homework.
Mannix’s plan (25 words … if your counting) to offer a “freshly designed” 401(k) as a fourth retirement plan may be a step in the right direction but it is an expensive one. His soft stance on simply removing violators of rules and regulations from their political office is no better than the current environment. His desire to maintain the state as the provider of administration and recordkeeping promises the same old, same old. As any PERS member that has tried to get help in deciding when to retire, how their plan works and which retirement option to choose will tell you, it’s time to bring in a professional, unbiased provider of accurate and timely information.
It is evident Atkinson has studied PERS and has developed a comprehensive plan to protect PERS members from PERS and save Oregonians from excessive fees, loopholes and self-dealing.
Specifically Atkinson’s comprehensive strategy to improve PERS would require the PERS Board and members of the OIC to carry “Errors and Omission” insurance to protect against fraudulent activities and personally penalize those that violate members and taxpayers best interest. “No more free pass to do as they please,” says Atkinson.
Atkinson said, “The elimination of “˜Double-Dipping’ is long overdue and will save taxpayers hundreds of millions of dollars in the long run. One job should equal one check.” Current and former politicians have protected the practice of “Double-Dipping” to reward themselves and favored state employees. “We should have one set of rules that apply evenly to everyone,” says Atkinson.
Atkinson’s plan to overhaul the new “IAP” with a real “401(k)” is cost efficient and utilizes existing rules and regulations. “We can finally give PERS members the ability to control the amount of risk they assume by offering a variety of investment options and we can use market forces to drive costs down.” Atkinson went on to state, “Replacing the state controlled PERS agency with professional administrators and record keepers will insure members receive timely and accurate information enabling them to make informed decisions. Members deserve to know where there money is and what the best method to receive it is.”
Like most complex issues, on the surface Atkinson and Mannix’s plans appeared similar in some regards. Like Saxton, Mannix has had five years to study PERS and formulate a strategy to improve PERS. It is only when you focus on the details can you see why Atkinson deserves to be Oregon’s next Governor. Atkinson clearly understands the many issues and problems surrounding PERS. Atkinson is the only one who has developed a comprehensive strategy to improve PERS and drop expenses dramatically. “These savings could help pay for education, healthcare and social services without taking anything away from PERS” added Atkinson.
For more information on PERS reform, please feel free to check our website or read my latest feature article in this month’s Brainstorm magazine.