March 2010

Life as a PERAsite

By David Feela

A retired educator with whom I often take my mid-morning coffee break has been at the retirement business longer than me. Since 1983 he has been living off his investment, which has been generous enough to include the price of coffee. The way I figure it, I’ll need to purchase and consume over 5,460 cups to catch up with him.

One morning while we were sipping in the sun he announced he was living a parasitic existence. It sounded unhealthy and I wanted to ask him if he had a tapeworm or some kind of mite, but how do you tactfully ask that kind of question? Then I noticed he was still smiling, so like the unschooled sucker I was, I asked: “What exactly do you mean?”

“I’m collecting a retirement check each month that exceeds the amount of money I contributed to the fund,” he replied. “I’m living the life of a parasite.”

Biologically, he was right, because a parasite is an organism that lives on another organism and benefits by deriving nutrients at the host's expense, but technically, he was slightly inaccurate. As a former educator, he’s actually a PERAsite, one that’s attached to the Public Employee Retirement Association, a Colorado fund that functions much like Social Security for many of the state’s public workers. PERA had been investing his money like a poker player for 28 years, anteing up his contributions every working year to be dealt into the longevity game.

Dick has been retired for 23 years. Last year he received a letter from the PERA people informing him that his beneficiary would not benefit from his death. He already knew that. But they felt obliged to inform him that his investment had expired before he did. Naturally, those are not the words the PERA people used in the letter, but the tables and charts explained everything.

PERA, like many retirement strategies in these lean economic times, is in financial trouble, though the Colorado legislature recently approved a plan to increase PERA’s solvency by reducing cost-of-living increases to existing retirees, stepping up contributions from employers and employees, and pushing back the age of retirement for those who recently joined the ranks. In other words, by the time I’m dead, PERA hopes to be profitable again.

I got to thinking about Dick, who was thinking about himself as a parasite, and I wanted to explain how the insurance and retirement investment industries function as real parasites. On my way to retirement, my health-insurance premium increased for 27 years and I redeemed a small percentage of what I paid in. I know, I’m lucky. I’ve insured my vehicles for 40 years and claimed virtually nothing. Lucky again. My houses have been protected against most kinds of disaster, and I’m still lucky my life has been so claim-free.

Still, it bugs me anyone could make Dick think of himself a parasite. The insurance industry is the real creepy crawly thing that profits by juggling an actuary table of risks against the hazards of living and like a casino, more often than not, the corporation wins.

I’m happy that Dick is alive beyond his calculated window for survival. I hope we all live as long, so that we can reclaim our invested interest. As for me, I’m thinking longevity has something to do with coffee. Black. Just lift that cup up to your lips and sip that sucker dry.

David Feela, a retired teacher, lives in rural Montezuma County, Colo.