All these pensions that need reforming, don't they realize that if they don't work to get reform sooner, the later will be that much more uglier for them?

Regarding Trimet, the health care and pension amounts have changed, I do not think that the Cascade policy group has factored any of that in.
They are still working off old figures.

Furthermore Trimet continues to expand in the face of budget deficits. I was talking about that years ago.

It's kinda like the GEORGE BUSH SYNDROME, as you remember George Bush decided to have a nice little war and at the same time cut taxes!

The obvious result of that policy is obvious bankruptcy and you don't need a degree in economics to figure that out.

But one thing is interesting about Trimet, the management pensions are FULLY FUNDED!

Interesting huh? They take care of themselves and let the rest of us hang out to dry.

I say they did it intentionally.

There will be no reform. Judges, legislators, and other policy-makers are members.

There's no problem with the pension funding. The union members depending on the state pension funds deliver the vote in a solid direction, so when "too big to fail" pension funds hit the critical point, they will be bailed out...just before a major federal election. Keep on the current path. No problem.

Inflation will take care of the huge federal bailout debt. It will be repaid, slowly, in cheap dollars.

Does anyone see a problem with this scenario?

Al,
The Cascade Policy Institute is only reporting what was in TriMet's Moss-Adams annual audit that was just released.

Moss-Adams was not "working off old figures".

This is an outrageous problem which the recent changes barely make a dent in.

Cascade did calculate that since the fist of the year TriMet's unfunded liability for retirees benefits has soared to
approx. $959 million and is growing by roughly $1.6 million per Week.

Any slight variation is a hardly meaningful.

On another note, good thing the legislature allocated $250 million in Lottery Bonds (At least $400 million in lottery proceeds) to seed the Portland to Milwaukie Light Rail boondoggle. The bonds are sold, the money is spent, lottery proceeds are being diverted to pay the debt and no one will ever face any consequences for the malfeasance.

It's all a mess I know. Who knows how long the pensions will last before they go away.

As long as they keep printing money I guess all this stuff will stay afloat.

Remind me again...how exactly is this any different than how Greece got into their mess?

Dave Frohnmayer served Oregon faithfully as a Legislator, Attorney General, and UO President. We can never repay him for his years of selfless public service. But he sure as hell is going to make us try.

Guess where half the Arts tax revenues will end up if the Arts tax is passed? Most probably arts tax revenues will be transferred to meet escalating PERS costs or more generous terms at the Bargaining table next time the teacher contract comes up for renewal. The Arts measure is written such that the School District can cut Arts and music in grades 6 thru 12, but still retain the $6 million arts tax monies because the arts measure is based only on grades K through 5.

Vote NO measure 26-146, the arts tax, because it is a real Trojan Horse on Portlanders by Portland City Hall and the School District.

"Guess where half the Arts tax revenues will end up if the Arts tax is passed?"

And the $800M fed stimulus and
The tobacco settlement ($800M) before that and
The $1.1B they took out of the $15B gen fund last biennium and
The probably $1.1B+ they'll need to tak out for each of the next few bienniums.

You need to emeber govt is about serving itself first and not those it represents - Just like any greedy private business.

The primary challenge to pension plan success is the assumptive return they use (i.e. what is the average annual growth rate on the pension plan assets).

For many corporate pensions, the assumed rate of return is 6% to 8% for all plan assets over the life of the plan, down from 7% to 9.5% from a decade ago.

Additionally, the "discount rate assumption" (how much does the company have to invest this year in order to meet the projected pension obligations of all recipients in the future?) requires the corporation to plug in a percentage to discount their future obligations and determine today's net present value of that future benefit (the lower the discount rate the larger the contributions required to fund it).

The difference between the assumptive rate of return (projected growth) and the discount rate (what is that future obligation in today's dollars) is the former includes risk assets, and the latter does not. The discount rate projection provides an estimate of the investment required in today's dollars for a fixed annuity paying each retiree their entire future obligation (including projected salary increases and estimated dates of retirement) without taking risk.

The current 30 year Treasury Bond is paying 2.82%, whereas the same bond was paying over 6% in 1999. I won't bore you with the math, but it makes A HUGE DIFFERENCE on both sides of the ledger (assumptive rate of returns and the discount rate) when a conservative fixed income return is cut in half.

Nevermind the reduced returns expected from equity and alternative investments, even the "Risk-Free" rate of return has been halved in the past 12 year.

Meanwhile, the PERS Tier one folks are receiving THE GREATER of 8% or the actual performance gain. It's a head they win, tails they win proposition, courtesy of self-dealing, the power of unions, and Oregon's Democratic hegemony.

I believe the reforms undertaken by the legislature (aka Greg Macpherson) failed to address the Tier One recipients.

uomatters, I think you are being facetious, but how is Frohnmayer a "selfless public servant" when in all his public service jobs he was very well paid?

I'm tired of all the graciousness shown for these "selfless" servants when it's shown they are doing better than the private sector. And what's selfless about Frohnmayer sitting behind his desk in those three jobs? Maybe his secretaries should be included in the "selfless" title.

PERS and other pension issues wouldn't matter if the economy were booming. Why is the Fed keeping interest rates so low? Why is the stock market not rebounding?