Fund has overpaid $3.1 million in benefits to 940 police and fire retirees

by Maxine Bernstein, The Oregonian

Wednesday August 20, 2008, 9:32 AM

For 13 years Portland's public safety pension fund has overpaid pension benefits to 940 retirees and surviving beneficiaries, costing the fund an extra $3.1 million, fund supervisors announced Tuesday.

The Portland Fire and Police Disability and Retirement Fund's board of trustees will meet next Tuesday to determine how to handle the mistake, and whether to recover the payments or eat the extra costs.

Since 1995, the fund has been miscalculating the additional pension benefits the state legislature mandated to compensate for the state's taxation of public employees' pensions. State law directed public employers in 1995 to consider two calculations, and to choose the greater of the two percentages for determining an employee's pension.

The fund, instead, has been calculating the increase as a combination of the two percentages, said Yvonne Deckard, chair of the fund's board of trustees.

The fund has overpaid 890 retirees and at least 50 beneficiaries - which marks just over half its 1800 retirees and beneficiaries, . The maximum overpayment of a pension is about 2.38 percent; the majority of the overpayments total less than $100 a month.

According to fund figures, 180 pensioners are being overpaid by more than $100 a month, 338 are being overpaid $50 to $100 a month, and 372 are overpaid less than $50 a month.

Effective immediately, the fund will calculate all new pension estimates in alignment with state statutes, Deckard said.

The miscalculated pensions include that of Mayor Tom Potter, a retired Portland police chief, and Commissioner Randy Leonard, a retired Portland firefighter. Potter has been receiving $19 a month more than it should be and Leonard's pension is $47 a month more.

Nancy Hartline, the fund's new senior business manager, spotted the error in the last month. Deckard said the discovery shows that voter-approved reforms to the fund last November are making a difference, having professional staff catch any mistakes or errors.

"This is a perfect example," Deckard said. "The reforms are working."

The fund's board of trustees will discuss the issue at its meeting next Tuesday at 1 p.m. in City Hall's council chambers.

-- Maxine Bernstein; maxinebernstein@news.oregonian.com