tag:blogger.com,1999:blog-7609353726565000072.post363454328160539194..comments2023-06-14T02:29:40.319-07:00Comments on PSPRS Pension Watch: Inflation, COLA's, the future of PSPRS, and investment returns through December 2017Drop Zonehttp://www.blogger.com/profile/07195030344305212432noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7609353726565000072.post-81657199958553087712018-03-03T08:51:01.017-07:002018-03-03T08:51:01.017-07:00I appreciate comments like yours because they do a...I appreciate comments like yours because they do a good job of explaining how we got into the mess we are in now. Do you not understand that ASRS, by design, will only pay a PBI when excess earnings are adequate to fund one? You see they actually wait until they have some extra money then consult their actuary to determine if a PBI can be funded going forward without adverse effects on the fund. ASRS is not reactionary. They do not make serial fixes based on current conditions but rather design a system that will work to the benefit of everyone regardless of current conditions.<br /><br />ASRS has not paid a PBI because they have not had the excess earnings to afford one. ASRS is also better funded now and has maintained a much lower employee/employer contribution rate than PSPRS over that same time. PSPRS kept robbing from its fund via the PBI all while it kept raising employer contribution rates. This has forced PSPRS employers to cut wages and benefits to employees while PSPRS became more and more underfunded. If you actually design a system well from the start like ASRS, you can actually weather changing conditions. You and others don’t seem to understand that about ASRS.<br /><br />You also don’t seem to understand that just of few years of late 1970’s/early 1980’s inflation could cut the value of benefits by one-half or more. Unlike ASRS, which would have the ability to pay PBI’s in that situation, PSPRS would be limited to 2% COLA’s, unless the Arizona Legislature got involved, but this would hit Tier 3 employees in the wallet because they would have to pay for half of any increased COLA. Case in point is that in three fiscal years in the early 1980’s, ASRS had annual returns of 40%, 31%, and 32%!, and PSPRS members would have gotten 2% COLA’s under today’s scenario. ASRS does not treat the pension like a zero sum game where one group benefits at the expense of another. Excess earning should benefit all parties with retirees getting COLA’s and active workers getting more money in their paychecks, which they can use to fund non-PSPRS retirement accounts. Excess earning should not be soaked by senior active PSPRS members, like was done by those who created the DROP, at the expense of past and future PSPRS members.<br /><br />Finally, an ASRS worker knows what the future prospect of COLA is, which is that there is no guarantee. This tells the ASRS worker that other retirement savings, especially savings that can take advantage of risk-free rates, will be necessary. ASRS workers also pay into Social Security, which does pay a true COLA every year. Fire and law enforcement steadfastly refuse to participate in Social Security. While I think PSPRS’ old PBI system was foolish and shortsighted, those PSPRS retirees who were under that system had an expectation of regular benefit increases that would keep them even or ahead of inflation. Those retirees who retired under that system were shafted by the DROP-eligible Tier 1 members who negotiated the reforms and supported Proposition 124, ensuring to keep as much for themselves as possible.<br /><br />You are entitled to your opinion, but it is disheartening that those like you who cynically fixate only on what someone or something can get for you personally. There’s enough to go around for all if we have a system designed for everyone’s benefit, not just for the current generation represented in the state union leadership.Drop Zonehttps://www.blogger.com/profile/07195030344305212432noreply@blogger.comtag:blogger.com,1999:blog-7609353726565000072.post-82351016055393968962018-03-02T23:38:23.536-07:002018-03-02T23:38:23.536-07:00I love how you like to talk out both sides of your...I love how you like to talk out both sides of your mouth.<br />ASRS is so great.<br />ASRS has a retiree board member etc etc.<br />So what has that actually gotten ASRS retirees??? Hmmmm let's think.... ASRS is so great. My god that retiree board member must ensure ASRS retirees get massive cola's every year. Oh dang that's not true??? What!!! The FACT is ASRS has NOT paid over any retiree cola PBI increase, nada, squat, since 2004. That's 14 years of nothing.<br /><br />So let's put a retiree on psprs just like ASRS board and then go 14 with no cola like ASRS. Sounds like the ASRS retiree board member has really got the retirees a lot.<br /><br />Better yet bring back the old pbi and the system will take even less risk so it never hit the 9% return and you never get a pbi....Anonymousnoreply@blogger.com