Report #2 2/6/98
| "Let's Take Back Our Retirement System" |
That was the marching cry during the largest ever Council 2 Legislative Weekend. Over 140 members from across the state ascended on the Capitol to discourage lawmakers from passing PERS III bills (SB 6306/6309 and HB 2487/2488) that would make improvements in PERS II virtually impossible. Armed with letters that outlined our objections to these bills and the Retirement System, members met with their Senators and Representatives to express their frustration with a retirement system that takes our money, but shuts us out of the policy making process.
This year’s keynote speaker was State Auditor Brain Sonntag. Mr. Sonntag was greeted with a standing ovation for his efforts in supporting our Union. The focus of his speech centered around his office’s investigation of the State Actuary’s role in creating fiscal data for the Joint Committee on Pension Policy (JCPP). As reported in the last update, a whistle blower complaint has been filed against the Actuary for "cooking the books" to reflect whatever the JCPP wanted. Mr. Sonntag was instrumental in making sure the complaint wasn’t glossed over by the legislature and fought back their attempts to investigate (and exonerate) themselves. An outside actuary firm with no previous ties to the state has been retained to audit the books. The initial report is due out in early March.
But the band plays on...
Despite this investigation, the JCPP revealed last week that they won’t wait for the Auditor’s report. They bought an actuary report from a contracted accounting firm and are contending that the numbers are legitimate. That’s right, the actual target of the investigation used state money to hire their own actuary to create a retirement plan that you don’t want!
| Good Idea -- Bad Numbers |
Our Union has long advocated for a concept called "gain sharing" wherein the members are able to share in the extraordinary profits of their retirement investments. The JCPP is now implementing their own watered down version of gain sharing. Here’s their plan: If the investment earnings on the pension fund is over 10% during the previous 4 years, the excess (everything over 10%) would be divided between the member and the State. Since the fund becomes solvent with a 7 1/2% return, we believe that you should get 100% of everything over 7 1/2%.
| A Special Thanks |
A special thanks goes out to those of you who participated in our legislative weekend. As constituents and union members your lobbying is especially effective.
| Call -- Write |
Legislative Hotline 1-800-562-6000
Senator’s Name
PO Box 40482
Olympia, WA 98504-0482Representative’s Name
PO Box 40600
Olympia, WA 98504-0600
It is critical that you contact your legislators with the following message: Vote NO on: SB 6309 and HB 2488 Public Employees Retirement Plan III |
DISADVANTAGES OF PLAN III
Plan III offers no benefit improvement in the retirement age. We have offered several suggestions to reduce the retirement age, or to recognize years of service and career employees in determining the normal retirement age.
As an alternative to reducing the normal retirement age, we have proposed an option that would reduce the actuarial penalty for retiring before age 65.
The employee contribution rates are irrevocable. The teachers under TRS III can change their contribution rates each time they change school districts, but PERS III members would not be able to change their contribution rates.
The Plan III bill developed by the Joint Committee on Pension Policy includes a vague and inadequate provision for Plan II gainsharing. Plan II members contributed to the creation of the extraordinary gains that would be distributed to Plan III members.
Washington State is one of only three states that has no board of trustees with a fiduciary responsibility to the participants and beneficiaries of the retirement systems. We believe a more comprehensive approach than Plan III is required to fix the retirement systems.
The legislature will hire an outside investigator to probe allegations that benefits for retired employees have been miscalculated by the state Actuary’s Office.
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