The big elephant in the room, PERS. (Portland: schools, college)

[KJoe11]

I am very surprised that is very little talk about PERS. The Letter to the Editor forum responses have been very informative.

For the non Oregonian PERS is the state's retirement system. It is 22 billion in debt and rising. The political elitists that have been in power for decades have created a crisis that directly affects every working adult.

I would consider this issue more pressing than some of the other complaints about the Northwest such as education, traffic, and perhaps even the indigent.

Quit blaming PERS: Letter to the editor | OregonLive.com

[jamesblazen]

PERS is a disaster in Oregon. The only way to escape paying the $22 billion deficit is to avoid living in Oregon. Otherwise, you're a cooked goose.

[Leisesturm]

Originally Posted by jamesblazen

PERS is a disaster in Oregon. The only way to escape paying the $22 billion deficit is to avoid living in Oregon. Otherwise, you're a cooked goose.

I'll risk staying. My net worth is about -$25K. If they can figure out how to get $22B out of me they can cook away.

[jamesblazen]

Doesn't matter what your net worth is. They'll be taking a higher chunk of your income. Enjoy.

[skiffrace]

They'll be taking a higher chunk of your income

Raising taxes outright is difficult. There would be a massive public outcry, even among the most bleeding heart Portlandia loonies, who never have a problem with taxation as long as it's somebody else who is paying the taxes.

What will happen is they will make the cuts elsewhere - schools, roads etc, which means Mississipi will finally have a fighting chance to elevate itself from the ****tiest state in the nation to #2 from the bottom.

[KJoe11]

Originally Posted by jamesblazen

Doesn't matter what your net worth is. They'll be taking a higher chunk of your income. Enjoy.

I don't think many Oregonians understand how big a number 22 billion (22,000,000,000) is. So, let's do some figuring.

There are roughly 4 million people in Oregon. Divide that number into 22 billion and thats is $5,500 for every man, woman, non binary, and child. Lets say that only income earning residents are required to pay. I will assume that 50% of adults actually work (national standard). That is $11,000 for each individual. This does not include the current tax impose to continue to fund PERS; this is only the 22 billion debt incurred!

There you have it Oregonians. You wanted people to stop moving here and this will definitely do it.

[Nell Plotts]

Unfortunately the new arrivals have no clue and frankly I understand that CA public retirement system has a similar problem.

I hope the new PERS contracts have more realistic actuarial assumptions. The FEDs fixed that by eliminating virtually all defined benefit pension for new hires and instituted the equivalent of a 401(k). No more Civil Service Retirement defined benefit provisions.

[Leisesturm]

The real problem with PERS is the retired football coaches with multi-million dollar salaries and the top tier administrator and college chancellor types that have been retired for the last 20 years and are going to live to 90+. No one talks about them. No, you save your outrage for the $65K/yr retired teachers getting maybe $1.5K/mo. It was their money, invested, and they are living off the interest. You didn't build that. You want to kick them all off PERS? Fine. Give them their principal back. It's theirs. They earned it. They earned interest too. But go ahead. Steal it. What else is new. Blame it on the Recession. Actually, I have no problem with reforming PERS if it targets the 800lb. gorilla fat cats. And, no, PERS won't stop people moving here. It's not like when you book your ticket to PDX on Expedia a warning pops up informing you that travel is inadvisable to Oregon due to the unfunded PERS liability in excess of $22B.

[Leisesturm]

Originally Posted by Nell Plotts

Unfortunately the new arrivals have no clue and frankly I understand that CA public retirement system has a similar problem.

Of course it does. I seriously wonder if there is any state retirement system that has no unfunded liability. Its laughable all the doom and gloom threads that imagine that Portlandia alone invented, and bears silent witness to the horrors of: homelessness, debt, rain, tattoos, piercings, sandals, light rail and a whole host of other awful and tragic examples of human folly.

[skiffrace]

The real problem with PERS is the retired football coaches with multi-million dollar salaries and the top tier administrator and college chancellor types that have been retired for the last 20 years and are going to live to 90+. No one talks about them.

There is quite a bit talk about them in the media, otherwise their outrageous (I agree) payouts would not have been known.
Also, nobody is blaming the $65K/year teachers.

However, the root cause is as follows: once upon a time the incompetent PERS administrators promised more than the PERS investments can deliver. The assumed 7.5% per annum return on PERS investment was widely optimistic.

Furthermore, as already pointed out, PERS was a defined benefit system, which, considering that is based to large extent on volatile investments income, is a foolish thing to do.

However, in defense of the PERS administrators: the far more qualified and vastly more paid Wall Street banksters got it all wrong in 2006-08 as well, and gave us the gift of the Great Recession,
Now they are busy as beavers working on another one (in their speak: "Creating great new financial instruments"), and the administration of the Orange Crackpot helping as much as it can.

What kind of financial savvy can one expect from the humble OR state civil servants, where mediocrity and conformity are the key values.