List of top PERS pension earners shows Korach at No. 8
Lake Oswego School District Superintendent Bill Korach ranked No.8 out of Oregon pension earners with his $20,069-a-month state pension.
The Oregon Public Employee Retirement System (PERS) released a list of retirees and their monthly earnings on Monday after a legal settlement with the Salem Statesman Journal and The Oregonian. Attorney General John Kroger ordered the list released favoring government transparency, though public employee groups argued that making the information public was an invasion of privacy.
The data dump included only retiree names and monthly payment amounts on Oct. 1. The list did not sort names by the agency from which individuals retired.
Statewide, 105,363 people were included. Of the October payments, only 311 retirees pulled more than $10,000, while 50,716 retirees or 48 percent earned less than $2,000. The lowest monthly payment for any retiree statewide was only $1.01.
Employees of cities, school districts, counties, colleges and universities, state agencies and other government entities have been eligible for retirement investment packages since 1945. The system is administered by the Oregon PERS Board of Trustees, which resets interest rates every two years based on promised returns to retirees.
Over the system's life, it has undergone a number of changes both to raise and cap benefits to retirees. Most recently, changes have created new 'tiers' with different rules for employees hired after a certain date. The last changes were in 1996 and in 2003, with younger employees receiving less generous benefits than their older coworkers - a percentage of which will still receive benefits at or above their final salary.
In 2010, about 80 percent of retirees who had worked 30 years in the public sector receive benefits at or above their final salary, but only about 11.55 percent of retirees reached that longevity.
Here are just 10 randomly selected local retirees and their Oct. 1 payment amount:
* Bob Galante, former director of the Lake Oswego Redevelopment Agency, received $6,168;
* Jorie Ellis, former director of schools and educational programs for the Lake Oswego School District, received $6,824;
* Mary Puskas, former director of the Community School, received $2,500;
* Mike Hammons, former Lake Oswego police captain, received $4,676;
* Ricky Korach, long-time English teacher at Lake Oswego High School, received $10,367;
* Rick Tippets, former Lakeridge band teacher, received $5,285;
* Dianne Reiter, former Waluga Junior High School secretary, received $1,254;
* Dan Spiering, former Lake Oswego police lieutenant, received $3,245;
* Jan Pearce, former Palisades teacher and past president of the Lake Oswego teacher's union, received $3,098;
* John Turchi, former Lakeridge and Lake Oswego High School principal (and former city councilor for the city of Lake Oswego), received $6,743.
Superintendent Bill Korach has actually retired twice - both during odd circumstances. Most recently, Korach retired at the end of March and is working the 2011-2012 school year essentially for free.
Korach is working at a reduced salary, which provides enough savings to fund one classified employee salary. In addition, he is donating his reduced salary minus the taxes to the Lake Oswego School District Foundation to fund a teaching position.
Korach's basic salary for the 2010-2011 school year was $141,839.
Because he is retired, Korach is restricted from working more than 1,039 hours in one year - by law that year runs from December to December.
In 2002, PERS reform had prompted a number of public employees to retire and lock in at good rates. Since Korach was concerned about losing money in his retirement package, the school board agreed to compensate him in his contract for any potential losses in his PERS account if a change actually occurred.
In order for board members to make a sound decision they asked him to retire so they could know the amount of any potential loss. Korach 'retired' and received an estimate of his PERS rate at that time. He would have received $11,175 a month or $134,100 annually for retiring at age 57. He was rehired within about a month and never began collecting his PERS, said Korach.
As it turned out, the reform only affected those who were hired after 2003.
The 4-1-1 on PERS
Tier I employees hired before 1996 receive a guaranteed return rate on investments based on a historic stock market performance of 10 percent. Reforms in 2003 capped the match at eight percent for employees in this tier who had not yet retired. The rate is adjusted every year, but before the reform the PERS Board often passed earnings on to members with a higher match during good years instead of putting it in reserves.
Additionally, though PERS uses a few methods to calculate retirement benefits, most retirees have used a money match, in which an employee's account balance is matched by the employer upon retirement. The employee also receives up to a two percent cost of living adjustment. Under this calculation, some employees have received benefits in excess of their final salary.
The normal age of retirement is 58 or 30 years of service. Police and firefighters can retire at age 55 or 50 with 25 years of service. Early retirement is age 55.
Tier II employees hired between Jan. 1, 1996, and Aug. 28, 2003, are not guaranteed a return rate, unlike Tier I employees. Their accounts simply earn market returns. Employees can still retire under a money match or choose another formula in which they get 1.67 percent of their salary for every year they have worked. Police and firefighters get 2 percent.
The normal age of retirement is 60 or 30 years of service. Police and firefighters can retire at age 55 or 50 with 25 years of service. Early retirement is age 55.
Tier III or Oregon Public Service Retirement Program employees hired since 2003 cannot retire under a money match and instead have a less-generous formula than Tier II employees. Employees get 1.5 percent of their salary for every year they have worked. Police and firefighters get 1.8 percent.
The normal age of retirement is 65 or 58 with 30 years of service. Police and firefighters can retire at age 60 or at age 53 with 25 years of experience. Early retirement is age 55.
Average system benefits from January 1990 through December 2009
Age at retirement: 60
Years of service: 23
Monthly benefit: $2,120 per month or about $25,436
Monthly benefit in 2008: $2,671 or about $32,052
Public employee salary at retirement: $43,859
Public employee salary at retirement in 2009: $59,522
Percentage of salary at retirement: 55 percent
Percentage of retirees who received more than 100 percent of salary at retirement: 7.9 percent
Retirement benefit for 30 years of service: 80 percent of final salary or about $3,420 per month
Retirement benefit for 30-year members in 2000: 100 percent of final salary or about $4,200 per month
NOTE: These numbers are based on a June 2010 PERS Replacement Ratio study and cover retirees who selected comparable monthly benefit options. These numbers do not include any Social Security or Individual Account Program distributions.