Page 1 - PETITION FOR DIRECT REVIEW–LEGISLATION (AMENDED) IN THE SUPREME COURT OF THE STATE OF OREGON EVERICE MORO, TERRI DOMENIGONI, CHARLES CUSTER, JOHN HAWKINS, MICHAEL ARKEN, EUGENE DITTERJOHN O’KIEF, MICHAEL SMITH, LANE JOHNSON, GREG CLOUSER, BRANDON SILENCE, ALISON VICKERY, and JIN VOEK, Petitioners, v.STATE OF OREGON, STATE OF OREGON by and through the DEPARTMENT OF CORRECTIONS, LINN COUNTY, CITY OF PORTLAND, CITY OF SALEM, TUALATIN VALLEY FIRE & RESCUE, ESTACADA SCHOOL DISTRICT, OREGON CITY SCHOOL DISTRICT, ONTARIO SCHOOL DISTRICT, BEAVERTON SCHOOL DISTRICT, WEST LINN SCHOOL DISTRICT, BEND SCHOOL DISTRICT, and PUBLIC EMPLOYEES RETIREMENT BOARD, Respondents. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Supreme Court Case No. S061452 PETITION FOR DIRECT REVIEW–LEGISLATION (AMENDED) SENATE BILL 822 (2013) COMMON ALLEGATIONS 1.Petitioners are public employee active or retired members of the Public Employees Retirement System (“PERS”). Some active member petitioners are also members of the Oregon Public Service Retirement Plan (“OPSRP”) of PERS. 2.The provisions of ORS Chapter 238 (2011) and ORS Chapter 238A (2011) create contracts between the public employers and their public employees (“the PERS contracts”). Pursua nt to
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Page 1 - PETITION FOR DIRECT REVIEW – LEGISLATION (AMENDED)
IN THE SUPREME COURT OF THE STATE OF OREGON
EVERICE MORO, TERRI DOMENIGONI,CHARLES CUSTER, JOHN HAWKINS,
MICHAEL ARKEN, EUGENE DITTER JOHN O’KIEF, MICHAEL SMITH, LANEJOHNSON, GREG CLOUSER, BRANDONSILENCE, ALISON VICKERY, and JINVOEK,
Petitioners,
v.
STATE OF OREGON, STATE OF
OREGON by and through theDEPARTMENT OF CORRECTIONS, LINNCOUNTY, CITY OF PORTLAND, CITY OFSALEM, TUALATIN VALLEY FIRE &RESCUE, ESTACADA SCHOOLDISTRICT, OREGON CITY SCHOOLDISTRICT, ONTARIO SCHOOLDISTRICT, BEAVERTON SCHOOLDISTRICT, WEST LINN SCHOOLDISTRICT, BEND SCHOOL DISTRICT,and PUBLIC EMPLOYEES RETIREMENTBOARD,
Respondents.
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Supreme Court Case No. S061452
PETITION FOR DIRECT REVIEW – LEGISLATION (AMENDED)
SENATE BILL 822 (2013)
COMMON ALLEGATIONS
1. Petitioners are public employee active or retired members of the Public Employees
Retirement System (“PERS”). Some active member petitioners are also members of the Oregon
Public Service Retirement Plan (“OPSRP”) of PERS.
2. The provisions of ORS Chapter 238 (2011) and ORS Chapter 238A (2011) create contracts
between the public employers and their public employees (“the PERS contracts”). Pursuant to
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Everice Moro — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member
Everice Moro and her beneficiary will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon Everice Moro’s life expectancycombined with her survivor beneficiary’s life expectancy. The sum of the expected future benefit payments under both SB 822 and prior law is determined assuming the dates of death correspond with their life expectancies, and the difference is the estimated average benefit loss for PERSMembers with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
A summary of the year by year loss is provided in the attached report. The results of my calculations
are shown below:
Everice Moro’s estimated benefit loss attributable to SB 822: $8,101
Calculation Data
Everice Moro:
Birth Date: .
Benefit Amount: $1,539.44 per month as of August 1, 2012.
Greg HartmanJune 27, 2013Page 2 of 2Re: Everice Moro — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).Everice Moro: white collar (female) with 24-month setback.David Moro: 25% blue collar (male), with 12-month setback.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related
actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Terri Domenigoni — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member
Terri Domenigoni and her beneficiary will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon Terri Domenigoni’s life expectancycombined with her survivor beneficiary’s life expectancy. The sum of the expected future benefit payments under both SB 822 and prior law is determined assuming the dates of death correspond with their life expectancies, and the difference is the estimated average benefit loss for PERSMembers with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
A summary of the year by year loss is provided in the attached report. The results of my calculations
are shown below:
Terri Domenigoni’s estimated benefit loss attributable to SB 822: $28,797
Calculation Data
Terri Domenigoni:
Birth Date: .
Benefit Amount: $2,174.45 per month as of August 1, 2012.
Greg HartmanJune 27, 2013Page 2 of 2Re: Terri Domenigoni — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).Terri Domenigoni: white collar (female) with 24-month setback.Daniel Domenigoni: 25% blue collar (male), with 12-monthsetback.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Charles Custer — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member
Charles Custer and his beneficiaries will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon Charles Custer’s life expectancycombined with his survivor beneficiary’s life expectancy. The sum of the expected future benefit payments under both SB 822 and prior law is determined assuming the dates of death correspond with their life expectancies, and the difference is the estimated average benefit loss for PERSMembers with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
A summary of the year by year loss is provided in the attached report. The results of my calculations
are shown below:
Charles Custer’s estimated benefit loss attributable to SB 822: $47,996
Calculation Data
Charles Custer:
Birth Date:
Benefit Amount: $4,192.45 per month as of August 1, 2012.
Greg HartmanJune 27, 2013Page 2 of 2Re: Charles Custer — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).Charles Custer: 33% blue collar (male) with no setback.Kathryn Custer: white collar (female), no set-back.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related
actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: John Hawkins — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member JohnHawkins and his beneficiaries will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon John Hawkin’s life expectancycombined with his survivor beneficiary’s life expectancy. The sum of the expected future benefit payments under both SB 822 and prior law is determined assuming the dates of death correspond with their life expectancies, and the difference is the estimated average benefit loss for PERSMembers with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
A summary of the year by year loss is provided in the attached report. The results of my calculations
are shown below:
John Hawkins’ estimated benefit loss attributable to SB 822: $32,752
Calculation Data
John Hawkins:
Birth Date: .
Benefit Amount: $2,618.11 per month as of August 1, 2012.
Greg HartmanJune 24, 2013Page 2 of 2Re: John Hawkins — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).John Hawkins: 25% blue collar (male) with 12-month setback.Ann Hawkins: white collar (female), no set-back.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related
actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Michael Arken — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member
Michael Arken and his beneficiary will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon Michael Arken’s life expectancycombined with his survivor beneficiary’s life expectancy. The sum of the expected future benefit payments under both SB 822 and prior law is determined assuming the dates of death correspond with their life expectancies, and the difference is the estimated average benefit loss for PERSMembers with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
A summary of the year by year loss is provided in the attached report. The results of my calculations
are shown below:
Michael Arken’s estimated benefit loss attributable to SB 822: $59,767
Calculation Data
Michael Arken:
Birth Date: .
Benefit Amount: $2,778.01 per month as of August 1, 2012.
Greg HartmanJune 24, 2013Page 2 of 2Re: Michael Arken — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).Michael Arken: 25% blue collar (male) with 12-month setback.Penny Arken: white collar (female), no set-back.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related
actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanJune 27, 2013Page 2 of 2Re: Eugene Ditter — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).Eugene Ditter: 33% blue collar (male) with no setback.Carol Ditter: white collar (female), no set-back.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related
actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: John Okief — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member JohnOkief and his beneficiary will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon John Okief’s life expectancy combined with his survivor beneficiary’s life expectancy. The sum of the expected future benefit paymentsunder both SB 822 and prior law is determined assuming the dates of death correspond with their lifeexpectancies, and the difference is the estimated average benefit loss for PERS Members with similar ages and benefit levels. Actuarial present values are not used – only expected benefit payment totalsare employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
John Okief is currently an out-of-state resident. His tax adjustment increase percentage under SB 656 was 3.0%. The resultant reduction in his benefit under SB 822 due to the repeal of theSB 656 tax adjustment would therefore be the inverse of one plus 3.0%, or 2.91%. It was assumed this reduction would be effective January 1, 2014 under the provisions of SB 822. The elimination of the HB 3349 tax adjustment increase was not considered in the loss calculation.
A summary of the year by year benefit loss is provided in the attached report. The results of mycalculations are shown below:
John Okief’s estimated benefit loss attributable to SB 822 (COLA): $200,560
John Okief’s estimated benefit loss attributable to SB 822 (Tax Adj.): $53,513
John Okief’s estimated benefit loss attributable to SB 822 (Total): $254,073
Calculation Data
John Okief:
Birth Date: .
Benefit Amount: $3,803.19 per month as of January 1, 2013.
Employment Classification: School employee.Oregon Residency: Out-of-state.
Mary Okief:
Birth Date: .
Survivorship Benefit: 100% of John Okief’s benefit.
Source of Information: Office of Greg Hartman, PERS Notice of Entitlement dated July 10, 2002,PERS retiree internet database.
Actuarial Assumptions
Valuation Date: August 1, 2013.
Mortality: RP-2000 (generational mortality projection using scale AA).John Okief: white collar (male) with 18-month setback.Mary Okief: white collar (female), no set-back.
Interest: Not applicable.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conference
of Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Michael Smith — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits retired Member
Michael Smith will experience due to the enactment of Senate Bill 822.
The method used to compute the estimated loss is based upon Michael Smith’s life expectancy. Thesum of the expected future benefit payments under both SB 822 and prior law is determined assuming the date of death corresponds with his life expectancy, and the difference is the estimated average benefit loss for PERS Members with similar ages and benefit levels. Actuarial presentvalues are not used – only expected benefit payment totals are employed.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available).
Michael Smith is currently an out-of-state resident. His tax adjustment increase percentage under SB 656 was 4.0%. The resultant reduction in his benefit under SB 822 due to the repeal of the
SB 656 tax adjustment would therefore be the inverse of one plus 4.0%, or 3.85%. It was assumed this reduction would be effective January 1, 2014 under the provisions of SB 822. The elimination of the HB 3349 tax adjustment increase was not considered in the loss calculation.
A summary of the year by year benefit loss is provided in the attached report. The results of mycalculations are shown below:
Michael Smith’s estimated benefit loss attributable to SB 822 (COLA): $60,191
Michael Smith’s estimated benefit loss attributable to SB 822 (Tax Adj.): $10,060
Michael Smith’s estimated benefit loss attributable to SB 822 (Total): $70,251
Calculation Data
Michael Smith:
Birth Date: .
Benefit Amount: $6,049.32 per month as of January 1, 2013.
Benefit Form: PERS Option 4 – 15-year certain and life annuity(certain period expired).
Lane Johnson: white collar (male) with 18-month setback.Beneficiary: white collar (female), no set-back.
Interest: Not Applicable.
Salary Scale: 3.75% (2.75% inflation + 1.00% real salary growth).
Retirement Age: 58.
PERS Account BalanceProjection Rate:
8.00% on Regular Account balance.8.25% on Variable Account balance.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Retirement Payment Option: Option 2.
Beneficiary Age: Same as Member.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Gregory Clouser — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits Gregory Clouser
will experience due to the enactment of Senate Bill 822.
Gregory Clouser’s benefit at retirement was estimated assuming a 3.75% salary increase assumption,the same assumption used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available). It was also assumed that he will survive to, and retire at, thenormal retirement age of 55 and elect that his benefits be paid under Option 2, a joint and 100%survivor annuity.
The method used to compute the estimated loss is based upon Gregory Clouser’s life expectancy atretirement combined with his survivor beneficiary’s life expectancy. The sum of the expected benefits under both SB 822 and prior law is determined assuming the dates of death correspond withtheir life expectancies, and the difference is the estimated average benefit loss for PERS Members
with similar ages and benefit levels. It is important to note that the computed figures are not actuarial present values – they are expected benefit payment totals.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report.
The results of my calculations are shown below:
Gregory Clouser’s estimated benefit at retirement (age 55): $3,330/month
Gregory Clouser’s estimated benefit loss attributable to SB 822: $144,754
Calculation Data
Gregory Clouser:
Birth Date: .
PERS Membership Date: March 1, 2001.
Credited Service: 12 years 3 months as of May 31, 2013.
Regular Account Balance: $7,018.21 as of December 31, 2012.
Gregory Clouser: 33% blue collar (male) with no setback.Beneficiary: white collar (female), no set-back.
Interest: Not Applicable.
Salary Scale: 3.75% (2.75% inflation + 1.00% real salary growth).
Retirement Age: 55.
PERS Account BalanceProjection Rate:
8.00% on Regular Account balance.8.25% on Variable Account balance.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Retirement Payment Option: Option 2.
Beneficiary Age: Same as Member.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Re: Brandon Silence — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions and Methods
Valuation Date: August 1, 2013.
Mortality: Pre-retirement mortality: None.Post-retirement mortality:RP-2000 (generational mortality projection using scale AA).Brandon Silence: 33% blue collar (male) with no setback.Beneficiary: white collar (female), no set-back.
Interest: Not Applicable.
Salary Scale: 3.75% (2.75% inflation + 1.00% real salary growth).
Retirement Age: 53.
PERS Account BalanceProjection Rate:
8.00% on Regular Account balance.8.25% on Variable Account balance.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Retirement Payment Option: Option 2.
Beneficiary Age: Same as Member.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conference
of Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interest
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Alison Vickery — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of PERS pension benefits Alison Vickery will
experience due to the enactment of Senate Bill 822.
Alison Vickery’s benefit at retirement was estimated assuming a 3.75% salary increase assumption,the same assumption used to compute PERS system costs in the December 31, 2011 actuarial report(the most recent report available). It was also assumed that she will survive to, and retire at, thenormal retirement age of 60 and elect that his benefits be paid under Option 2, a joint and 100%survivor annuity.
The method used to compute the estimated loss is based upon Alison Vickery’s life expectancy atretirement combined with her survivor beneficiary’s life expectancy. The sum of the expected benefits under both SB 822 and prior law is determined assuming the dates of death correspond withtheir life expectancies, and the difference is the estimated average benefit loss for PERS Members
with similar ages and benefit levels. It is important to note that the computed figures are not actuarial present values – they are expected benefit payment totals.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report.
The results of my calculations are shown below:
Alison Vickery’s estimated benefit at retirement (age 60 ): $2,167/month
Alison Vickery’s estimated benefit loss attributable to SB 822: $32,859
Calculation Data
Alison Vickery:
Birth Date: .
PERS Membership Date: March 1, 2001.
Credited Service: 12 years 3 months as of May 31, 2013.
Regular Account Balance: $12,245.89 as of December 31, 2012.
Re: Alison Vickery — Estimated PERS benefit loss attributable to Senate Bill 822
PERS Classification: School employee.
Oregon Residency: In-state.
Source of Information: Office of Greg Hartman, 2012 PERS Member Annual Statement.
Actuarial Assumptions and Methods
Valuation Date: August 1, 2013.
Mortality: Pre-retirement mortality: None.Post-retirement mortality:RP-2000 (generational mortality projection using scale AA).Alison Vickery: white collar (female) with 24-month setback.
Beneficiary: 25% blue collar (male), with 12-month setback.Interest: Not Applicable.
Salary Scale: 3.75% (2.75% inflation + 1.00% real salary growth).
Retirement Age: 60.
PERS Account BalanceProjection Rate:
8.00% on Regular Account balance.8.25% on Variable Account balance.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Retirement Payment Option: Option 2.
Beneficiary Age: Same as Member.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conferenceof Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interestthat would impair my objectivity.
Greg HartmanBennett, Hartman, Morris & Kaplan LLP210 SW Morrison St Ste 500Portland OR 97204
Re: Jin Voeks — Estimated PERS benefit loss attributable to Senate Bill 822
Dear Greg:
At your request, I have determined the estimated loss of OPSRP pension benefits Jin Voeks willexperience due to the enactment of Senate Bill 822.
Jin Voeks’s benefit at retirement was estimated assuming a 3.75% salary increase assumption, thesame assumption used to compute PERS system costs in the December 31, 2011 actuarial report (themost recent report available). It was also assumed that he will survive to, and retire at, the normalretirement age of 53 and elect that his benefits be paid under Option 2, a joint and 100% survivor annuity.
The method used to compute the estimated loss is based upon Jin Voeks’s life expectancy atretirement combined with his survivor beneficiary’s life expectancy. The sum of the expected benefits under both SB 822 and prior law is determined assuming the dates of death correspond withtheir life expectancies, and the difference is the estimated average benefit loss for PERS Memberswith similar ages and benefit levels. It is important to note that the computed figures are not actuarial present values – they are expected benefit payment totals.
The mortality assumptions used in computing life expectancy, and the old-law COLA assumption,are identical to those used to compute PERS system costs in the December 31, 2011 actuarial report.
The results of my calculations are shown below:
Jin Voeks’s estimated benefit at retirement (age 53): $4,334/month
Jin Voeks’s estimated benefit loss attributable to SB 822: $316,436
Calculation Data
Jin Voeks:
Birth Date: .
PERS Membership Date: January 1, 2011.Credited Service: 2 years as of December 31, 2012.
2012 Salary: $51,568.40.
PERS Classification: Police and Fire.
Oregon Residency: In-state.
Source of Information: Office of Greg Hartman, PERS Online Member Services screen shots,2011 PERS Member Annual Statement.
Re: Jin Voeks — Estimated PERS benefit loss attributable to Senate Bill 822
Actuarial Assumptions and Methods
Valuation Date: August 1, 2013.
Mortality: Pre-retirement mortality: None.Post-retirement mortality:RP-2000 (generational mortality projection using scale AA).Jin Voeks: 33% blue collar (male) with no setback.Beneficiary: white collar (female), no set-back.
Interest: Not Applicable.
Salary Scale: 3.75% (2.75% inflation + 1.00% real salary growth).
Retirement Age: 53.
PERS Account BalanceProjection Rate:
8.00% on Regular Account balance.8.25% on Variable Account balance.
Old-law COLA:(Cost-of-Living Adjustment) 2% per year.
Retirement Payment Option: Option 2.
Beneficiary Age: Same as Member.
Statement of Qualifications: I am a consulting actuary who has been employed in pension-related actuarial work since 1984. I am an Associate of the Society of Actuaries, a Fellow of the Conference
of Consulting Actuaries, a Member of the ASPPA College of Pension Actuaries, and an Enrolled Actuary. I satisfy the Qualification Standards of the American Academy of Actuaries to render theactuarial opinion contained in this letter. I am not aware of any actual or potential conflict of interest