The PERS Board meeting on January 29 was a full house with many there to see what the board would do on the issue of needing to raise employer rates in wake of the extremely poor stock market returns from investment year 2008. As anticipated the board adopted a graded approach that will "smooth" or moderate the increases over time and, as a result, on average the increase in employer contribution rates on July 1, 2011 should average around 3.5 percent. This decision was based in part to the excellent earnings by the fund in December 2009 (4 percent), and jurisdictions' average funded status will probably be around 78 percent. Remember that individual employer rates can very widely from the average and that the impact of various employer "side accounts" will also be considerable. PERS Board Chairman James Dalton made a point of emphasizing that employer contribution rates are going up substantially and everyone should be aware of that. Based solely on the projections done by the PERS actuary, Dalton is correct. However, these projections often miss reality by an enormous margin.
The best example of this may be the recently concluded investment year for 2009, which came in at 19.5 percent — way outside of any projections. Historically bad investment years have been followed by good ones, so we may have some additional catching up to do on the investment side. The bottom line is that 2008 put a big funding dent in PERS (and any other stock market-based fund) and depending on how long it takes the market to recover we could see significant increases in employer contribution rates ... or not. Only time will tell. The board also dealt with preliminary earnings distribution and the good news it that the regular account, again, earned about 19.5 percent so there are significant earnings to distribute. The board decided not to make any distribution to the contingency reserve and distributed everything on a pro rata basis. As a result the rate guarantee reserve will go from a negative $987 million to a negative $421 million — very good progress in just one year.
You can be assured that our firm monitors everything related to PERS extremely closely on behalf of all AFSCME members and all of the other member unions of the PERS Coalition.
On Jan. 12, a 7.0 magnitude earthquake devastated Port-au-Prince, Haiti, leaving an estimated 3 million Haitians homeless and without access to basic needs. The island nation was rocked with a second 6.1 aftershock on Jan. 20.
The earthquakes come on the heels of a food crisis and the country's attempt to reconstruct after four devastating hurricanes in 2008.
How to help
AFSCME International has donated an initial $25,000 in relief funds to the AFL-CIO Solidarity Center's Earthquake Relief for Haitian Workers Fund. Additionally, the Council 75 Executive Board donated $1,000 on behalf of Oregon AFSCME on Jan. 16. The Solidarity Center is coordinating emergency efforts to support unions as they provide basic necessities to their members.
At the website donation link, please type in "AFSCME" when asked for your union affiliation.
The Solidarity Center is also working with CNUS, the Confederation of United Unions in the Dominican Republic, to establish a donation center with nonperishable goods that will be shipped to union counterparts in Haiti. Donations to the Solidarity Center's Earthquake Relief for Haitian Workers Fund will be passed to partners there, and the Center will work with them to ensure that assistance reaches the neediest workers and their families.
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By GREG HARTMAN
On Jan. 12, a 7.0 magnitude earthquake devastated Port-au-Prince, Haiti, leaving an estimated 3 million Haitians homeless and without access to basic needs. The island nation was rocked with a second 6.1 aftershock on Jan. 20.
