1. He fails to consider the fact that a huge portion (likely more than half) of Oregon employers’ unfunded OPEB liabilities is due to the implicit subsidy that results from the grouping of active and retired employees in establishing premiums rather than actually pre-funding expected retiree health benefits

The intent of HB 3605 regarding the implicit rate subsidy is unclear. Item 2 of the Bill states that OPEBs “other than the payments required or provided for in statutes governing retirement benefits for retired public employees” must be pre-funded. The implicit subsidy is a byproduct of ORS 243.303, which requires employers to allow pre-Medicare retirees to remain on the active health plan and pay no more than the COBRA premium. Therefore, it would appear that the implicit subsidy should not be subject to the pre-funding proposed in the Bill.

However, Item 3(b) of the Bill explicitly states that the implicit subsidy be prefunded. This contradiction is a significant flaw in the Bill.

In any respect, pre-funding an implicit subsidy would a ridiculous exercise, since there is no actual money changing hands with this benefit. Pre-funding would simply amount to the employer depositing money into the Trust each year, and withdrawing a different amount each year to help pay for active health premiums, a totally unproductive exercise.

2. As Mr. Charles states in his testimony, the TriMet situation is “an outlier so extreme that it begs some form of explanation”. Hopefully, the legislature will not develop a sweeping public policy based on one extreme outlier. In military terms, a tactical strike is what’s needed in this situation, rather than the carpet bombing approach of HB 3605 that would result in so much collateral damage.

I like your description of your field. Plus I didn’t realize how much of your job involved teaching and getting to know your clients, but it makes perfect sense.

Thanks for explaining!