Offering Independent Advice for Comprehensive Long-Term Financial Solutions
A Second Opinion is Good for your Financial Health
Matt Andresen
I am a financial advisor specializing in money management and retirement income stream planning, with an emphasis in the Public Employee Retirement System (PERS).
After this article, Valley Parent Magazine asked me to write a story aimed at children and families. I could write whatever I wanted, so I decided to write a story on my business partner's son, Max Turman, and his lesson on debt.
I hope you enjoy it as much as I did writing it (with help of Maria Kirkpatrick).
Click the article for a larger view.
For more information on Valley Parent Magazine go to:
I have had many questions from retired and pre-retired PERS employees that can be answered with the help of PERS' Quarterly newsletter called Perspectives.
The most common questions I get from folks are about how to prepare for retirement and what are my health care options (of course the most popular is what option should I choose, but I can't tell you that in a blog post, you would have to come see me).
PERS produces two types of newsletters; one for retirees and one for active employees.
For those of you active or retired employees and don't want to read through the newsletter, here is the gist (click on the articles for larger view):
To read both newsletters in their entirety, click below:
I have been following a gentleman from Portland, Bill Parish, who is very knowledgeable with PERS. As a money manager in Portland, he runs his business the same way I run mine, as an independent advisor focused on fundamentals and logic.
In the video Bill discusses the retirement plan at OHSU, which is very similar to the one at OSU. Within OHSU there are two options: going with the UPP plan (self-directed plan) and defaulting with PERS. His advice is to go with the PERS plan first and then if you so desire switch to the UPP plan because it doesn't work vice-versa. Within the UPP plan there are three options and he only gives praise to the fidelity plan because they have better options and cheaper funds.
Bill always gives words of caution to investing all your assets into equities. He urges you to build a firm foundation first and be aware there is a reason investment firms want people to invest more aggressively in the market: they get more money. At OSU the UPP plan translates into the Optional Retirement Plan (ORP), where you have the same options Bill talks about. If you choose this option remember you can't go back with PERS. Within the ORP plan choose fidelity and be on the look out for Spartan Funds. These are cheaper and better diversified than the more popular options.
Bill is very accurate with his advice. It is the same advice I have been giving to OSU employees for years. ORP is a great program if you want to invest for yourself or have someone helping you invest. The PERS plan is not a bad one, but it does take away any control you might have over you assets.
I can't find many flaws with Bill's talk, but I will say he can't warn PERS employees enough about investment firms and investment advisors. The majority of people are paying too much for funds, retirement plans and advice. The average investor spends 5% a year in fees. Bill and I both charge around 1%.
I find too that many people still have not learned their lesson from the current economy. Many want to put most of their cash back in the market, when that is what got them in trouble in the first place. Being conservative doesn't make you boring; it just makes you more hesitant to invest everything in equities. That is a good thing.
So when you think about what retirement plan to choose at OSU, simply decide if you want control or not, but remember if you choose the ORP plan you can't go back to the PERS plan, but you can go from PERS to ORP. This advice may seem simple, but sometimes simple advice saves you from complicated problems down the road.
The article below is my professional resolution for 2009:
"A ruthless appraisal of what I am doing right and what I am doing wrong. Being a lot more intentional about everything I am doing, from volunteering to conducting business."
Well, the meltdown on Wall Street has continued to have its impact on the second most complicated retirement plan in America (Oregon PERS) as seen in the Statesman Journal article.
With a declining market and a large amount of uncertainty, further strain will be put on PERS' original guarantee.
The Stateman Journal stated the following in the September 16th (2008) article regarding PERS:
"The Oregon public-pension fund has experienced losses in only three of its 37 years. In 15 of those years, however, it has earned less than 8 percent, which is how much it credits most members' accounts each year. Falling significantly behind that benchmark for an extended period could lead to underfunding the system, although Oregon's fund has bounced back from losses earlier in the decade."
Things are beginning to get more uncomfortably concerning and hopefully the PERS system won't become another Titanic.
There was an article yesterday in Salem's Statesman Journal regarding how PERS is being affected by the current state of the market.
I invite you to click on the link below and read the article. I also invite you to look at my previous post in July with Paul Cleary, Executive Director of Oregon’s Public Employee Retirement System (PERS) and Greg Hartman, Portland attorney representing retirees on PERS matters, as the discuss the "Current and Future Legal and Financial Status of PERS."
I did find that some things said then and now have changed. Several times during the meeting with Paul Cleary it was suggested that the PERS system really couldn't take another hit like 2001 and 2002, yet now they say PERS is okay and will continue to be okay. What has changed? This does not mean you need to strengthen your market fears and believe in the PERS sysmtem less, but it does mean you should define your healthy and unhealthy fears while the "sky seems to be falling." Beware what different experts tell you, whether it is me as a financial advisor or PERS itself.
Paul Cleary, Executive Director of Oregon’s Public Employee Retirement System (PERS) and Greg Hartman, Portland attorney representing retirees on PERS matters, discuss the "Current and Future Legal and Financial Status of PERS."
I have referenced the website, http://oregonpers.info, on several occasions as a resource for PERS information. For many of those wanting a written explanation of what happen with PERS to cause for concern please refer to the following article from PERS document library site (http://oregonpers.info):
I thought I would do a short series on what is happening with Oregon PERS. Soon I will include a video from a workshop put on at OSU by the OSU Retirement Association, featuring Paul Cleary, executive director of PERS, and Greg Hartman, a Portland Attorney heavily involved with PERS over the years.
Many of my posts will feature articles from different sources.
The first is from a January 26th 2008 article by Ted Sickinger from the Oregonian. An excerpt is below:
"It's been a bad month at the office for the folks who manage the state's public pension fund.
By close of business Tuesday, after the subprime meltdown and resulting credit crunch had set off another tsunami of selling in world financial markets, the value of the Oregon Public Employees Retirement Fund had shrunk by nearly $6 billion since the beginning of the year.
That's billion, with a "b."
Think of it as 40 percent of Oregon's state budget for the next two years. Or a $270 million loss per day."
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