From: "Carson, Mina" (mcarson@oregonstate.edu)
To: "Peter B Gilkey" (gilkey@darkwing.uoregon.edu)
Cc: (turnerr@wou.edu), (denise.yunker@ous.edu)

Hi Peter:

Here is our promised summary of the outcomes of the ORP stakeholders meeting on Friday in Salem. Present were the usual participants: for IFS, IFS president-elect Robert Turner and adhoc ORP committee chair Mina Carson; for AOF, Bill Linden and Mark Nelson; for OUS, Denise Yunker and Lisa Zavala; and from among the vendors, VALIC representative John Powell.

The amiable conclusion of the meeting was that these chief ORP stakeholders continue to be in disagreement about the best legislative course to pursue, particularly concerning the current legislated rate-setting linkage to PERS. In addition, it became clear that there is a more extended window of opportunity for persistent uncertainty- without-consequence than we had imagined previously. It is possible that the stakeholders have the luxury of waiting to put forward definitive legislation on the PERS/ORP relationship for another two years, long enough to see the PERS lawsuits through at least the first phase of resolution in the courts. It seems likely that PERS will not enter another round of rate-setting until 2007.

OUS benefits managers, and in particular Denise Yunker who is plan manager for ORP, believes that decoupling ORP from PERS, and finding a more reliable method for setting employer contribution rates, is rational investment policy in creating a retirement alternative (to PERS and OPSRP) that is competitive, stable, and sustainable.

AOF continues to favor the following outcomes: NO decoupling of PERS and ORP; NO ceiling on ORP employer contribution rates; a clear floor below which employer contribution rates cannot sink. Bill Linden and Mark Nelson maintain that if ORP contribution rates sank below PERS contribution rates, that would be a hard sell to members.

IFS reports that based on campus meetings in the spring of 2004, we heard no clear consensus for decoupling ORP from PERS employer contribution rates. Plan members were curious, open to learning, but also confused in the face of complex technical issues, and so IFS is not prepared to take a stand regarding the relationship of ORP to PERS at this moment.

President-elect Turner strongly suggested that it would be good in the best of all possible worlds to see if there were a viable external index for employer contribution rate-setting. Further, Bob reminded us that good individual investment policy involves diversifying one's portfolio, and that official rules precluding individual contributions to BOTH ORP and PERS are possibly regrettable for individual investors.

Thanks for your attention. Please contact Mina or Bob for clarification.

Mina Carson
IFS Senator, OSU
Chair, IFS ad hoc committee on ORP