Says "I am happy to decline PERS so that the County can save over $68,000 over a four year term that would have been paid on my behalf."
John Ludlow on Tuesday, May 8th, 2012 in a Facebook post
Will Clackamas County taxpayers save $68,000 over four years if candidate declines PERS?
In a previous item, PolitiFact Oregon ruled True a statement by John Ludlow, a candidate for Clackamas County Commission chair, that he is the only person in the four-way race who will refuse to join the Public Employees Retirement System. He faces Clackamas County Commission chairwoman Charlotte Lehan, county commissioner Paul Savas and state Rep. Dave Hunt in Tuesday’s election.
Snubbing PERS is a nice symbolic pledge for someone running on a platform of limited government. It also won’t hurt Ludlow, who is 63 years old, as much as it would someone who is further away from retirement.
But the next part of Ludlow’s claim really caught our attention. In a Facebook post dated March 30, he wrote, "I am happy to decline PERS so that the County can save over $30,000 per year that would have been paid on my behalf." (The post was changed Tuesday; we’ll explain below.)
That sounded like a lot of money saved, given that a county commissioner’s annual salary is $81,000. We checked it out. In doing so, Ludlow clarified to PolitiFact Oregon and on Facebook that by declining PERS, "the County can save over $68,000 over a four year term that would have been paid on my behalf."
We asked Ludlow why he had claimed $30,000 in savings a year, and now $68,000 over four years. He said it’s hard getting solid numbers from the Public Employees Retirement System. "I am now satisfied that the last numbers quoted by me are the correct numbers," he wrote us.
Hmmm. We don’t think politicians, aspiring or otherwise, should claim savings without evidence. That’s careless.
But let’s get back to how much county taxpayers will save should Ludlow decline retirement benefits. The county position pays $80,868 a year
This is how public retirement payments work: Every employer pays a "contribution rate," depending on the type of employer and type of employee. The rates are set in advance. In the case of Clackamas County, the employer contribution rate is 11.99 percent for general service workers for the 2011-13 budget period.
The 11.99 percent includes 6.13 percent that the employer puts in for a member’s retirement, plus 5.86 percent to cover the system’s "unfunded actuarial liability," or the money needed to pay for current and future retirees. In addition, the county pays -- or "picks up" -- the 6 percent the employee is required to contribute on his or her behalf.
That adds up to $14,500 a year. But David Crosley, a spokesman for PERS, said the actual amount of money saved -- or avoided -- should Ludlow decline is closer to $9,800 a year, or a little more than $39,000 over four years.
That’s because the county needs to kick in for unfunded actuarial liability anyway, regardless of whether Ludlow declines PERS for himself. "That amount gets spread over fewer people," Crosley said. "They’re not saving that in the long term."
But let’s look at this from the county’s perspective, which is what Ludlow relies on. Marc Gonzales, the county’s finance director, confirmed the county budgets about $17,247 a year per commissioner for retirement-related costs.
Why is it higher? In part, because the county calculates the figure with longer-term employees in mind, and they have higher retirement costs. Tim Heider, a spokesman for Clackamas County, wrote in an email that "the county would not incur any PERS cost for an employee who declines enrollment."
So we’ve gone from $30,000 a year to roughly $17,000 a year to $9,800 a year. It’s undeniable that Ludlow will save taxpayers money by declining to join PERS, should he win. But he’s off on how much, and whether it would have been paid on his behalf.
It’s certainly not the $30,000 a year he originally claimed. It may be $17,000 as he now claims, but that’s because the county has budgeted generously. (Ludlow as a new member will not cost taxpayers as much as employees who have been in the system for a long time.) The Public Employees Retirement System estimates money that would have gone to him is closer to $10,000 a year.
Ludlow’s revised statement is partially true but missing information. We rate it Half True