Saturday, January 22, 2011

Bob Buerkle: Did the STRS Management do a "snow job" on the Board?

Bob Buerkle to John Curry, January 21, 2011
Subject: Re: Fw: STRS - Page 2
John,
Were you at the Board meeting today? I'd like to know if they really looked at all of the possibilities that "new rules for new hires" could provide. For instance, if there is no provision for a COLA like Georgia put in place last year it makes a tremendous difference. Also, you would save the most with a lower formula than the current 2.2% by as much as possible. A 1.8% or 1.9% formula that would require 35 years of work would also provide a huge reduction in the unfunded liability period.
However, if the STRS Management did a snow job on the Board about a new plan for new hires that only put them in a "Defined Contribution Plan", just to get them back to discussing what Management wants to see happen, then they will not be able to achieve 30 year funding. Under the current STRS Defined Contribution Plan only 3.5% of the 14% employer contribution can be used to pay off the "unfunded liability" while the "defined benefit" members have 13% of the 14% of their employer contributions currently going to pay off our debt.
Can you or someone who was there let me know if this was discussed?
Please forward my email to Dave Parshall or somebody else who can answer my question.
Thanks,
Bob Buerkle

A harebrained idea.....

From John Curry, January 22, 2011
Please read what Nancy says below. Tim M. was championing this idea at the board meeting yesterday. This is a harebrained idea. And then....they wonder why retirees get irate!
John
From Nancy Hamant, January 22, 2011
Please read the third paragraph regarding components of possible changes to Pension.
[The components contained in these scenarios include member contributions, age and service requirements for retirement eligibility, benefit formula, final average salary (FAS) period, and the cost-of-living adjustment (COLA), as well as the impact of moving the 1% employer contribution currently going toward the STRS Ohio Health Care Program to the pension fund.]
One change on the list includes consideration of moving of the 1% Health Care funding to the Pension Fund. This disaster continues to become more devastating each day.
Nancy

John Curry: Green Beans - Part II

From John Curry, January 22, 2011
Almost two years ago this writer made a statement about the reasons why STRS continued down a path that we are now on and ORTA didn't take an active role in halting this journey. I revisited those words and found a paragraph that really puts the finger on the pulse of our current situation. With forenotice of repeating myself, here is that passage. It rings true today as well as it did two years ago.....doesn't it?
John
"Far too many of us have stood idly by and trusted our professional (?) retirement organizations to be a watchdog over the actions and day-to-day work at STRS. These organizations have, for the most part, served only as social gathering service clubs fostering a monthly opportunity to hash over old times with portions of meat and mashed potatoes with gravy and green beans.
"A tasty time-out in a retiree's monthly calendar, with a smidgen of current, and the most important part but not realized by retirees, legislative report which was and is usually met with the more often heard request, 'Please pass the green beans!' And then.....the legislative report is neither discussed nor thought about for another month because most retired educators, as well as actives don't pay attention to their retirement system's actions and planning (or lack thereof), do they? Guess what.....they are now!
"The best way, unfortunately, to get the attention of a retiree is to reduce benefits or increase deductions on that monthly paycheck, isn't it? By the way…when was the last time you saw a representative of ORTA or OEA-R stand up, at an STRS 'public speaks' portion of an STRS Board meeting and…speak as a representative for ORTA or OEA-R while calling the STRS administration or Board to task over an issue of misspending, mismanagement, or entitlement? It’s been a long time, hasn't it?"

John Curry: My take on the board's suggestions....

From John Curry, January 21, 2011
They are strongly based on an OEA platform of dragging their feet by "phasing in" the actives' contributions (which are too small) over a period of up to 5 years. This way, the OEA won't have to take as much "heat" from the actives while the suggested immediate implementation of the COLA cut slaps current retirees in the face once again.
STRS surely didn't' "phase in" the spousal trashing when they cut off spousal subsidy to retirees who were insuring their spouses, did they? They did it overnight. If they couldn't give our spouses a 5 year "phase-in", then they shouldn't give actives 5 years....especially in these hard times. The OEA will do their damnedest to see that actives are not hit as hard as retirees. Remember, actives pay OEA dues and retirees don't.
By the way, notice how ORTA remains silent on this issue and hops right in bed with the OEA? Lack of opposition shows approval, doesn't it?
John

Dave Parshall reports on the special January 21, 2011 STRS Board meeting

From Dave Parshall, January 21, 2011
Subject: Notes about today's STRS meeting
Today the STRS Board met and discussed 3 Plan Scenarios presented by Bob Slater and his staff. The bottom line is that no decision was made concerning a final plan to send on to the Statehouse.
Two of the plans offered a 30 year or below unfunded liability. The below 30 plan was at the cost of our COLA (1.5 %); John Curry is sending scanned copies of the various scenarios.
Points of contention are still the COLA and length of service and age for retirement eligibility, and the percentage increase from actives. Several additional Scenarios were requested by the board to be presented next Wednesday, January 26th.
One surprising request and one which was followed by much discussion was to take the 1 % contribution from school boards that is paid into the Health Care Stabilization Fund and add it annually into the general pension fund so actives teach one less year. This idea was suggested and pushed for by Mr. Myers. If all things stay the same, this would cost the healthcare fund “One Year”. In other words the fund would be bankrupted by 2020 instead of 2021.
The reasoning behind this idea is not really not clear. Actives would still need healthcare, even if they retired at 59 instead of 60. The average retirement age is now 59 years, so this may have been much discussion about nothing. To go after our health care fund at this time cannot be justified.
On the bright side, more reasoned comments and suggestions were made by Mr. McGreevy, Mr. Stein and Mr. Price. In short, the saga goes on another week. I will let you know how things go next Wednesday.
At the end of the meeting Mr. Myers closed by reminding the board that what we send over to the legislature may not be recognizable in the final bill. This is, of course, the political reality.
Dave Parshall

Pension Funding Scenarios from the January 13, 2011 Board meeting

Click here to view Pension Funding Scenarios as presented at the January 13, 2011 STRS Board meeting.

Friday, January 21, 2011

From special STRS Board meeting January 21, 2011; click images TWICE to enlarge










Report on special STRS Board meeting January 21, 2011

From STRS, January 21, 2011
This week, the State Teachers Retirement Board held a special meeting. Following meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The January report follows.
JANUARY BOARD NEWS
RETIREMENT BOARD WILL CONTINUE DISCUSSION ON PENSION PLAN CHANGES AT ANNUAL RETREAT
During its special meeting on Jan. 21, 2011, the State Teachers Retirement Board continued its discussion about potential changes to its pension plan design to strengthen the financial condition of the pension fund. Feedback from the Statehouse had indicated that any final pension legislation for STRS Ohio should not include an increase in employer contributions. Further, the plan must also result in a funding period for the pension fund that does not exceed 30 years. The plan adopted by the board in October 2010 brought the funding period down to 35.1 years with the inclusion of an additional 2.5% in employer contributions - and to only 46.1 years without the additional employer contributions.
The board reopened its discussion about possible pension plan changes at its regularly scheduled meeting on Jan. 13; then continued that discussion today. After reviewing several scenarios' impact on the funding period, the board asked for additional options to review during the board's annual retreat at STRS Ohio scheduled for Jan. 26 and 27. The meeting on Wednesday, Jan. 26, will begin at 1 p.m.
The components contained in these scenarios include member contributions, age and service requirements for retirement eligibility, benefit formula, final average salary (FAS) period, and the cost-of-living adjustment (COLA), as well as the impact of moving the 1% employer contribution currently going toward the STRS Ohio Health Care Program to the pension fund. Changes affecting only new hires, including moving them into a defined contribution plan, would not be enough to move the pension fund from its infinite funding period. Consequently, the board's goal is to come up with a combination of changes affecting both active and retired teachers that results in a funding period of 30 years or less.
The 30-year funding period is a "measuring stick" used by the Ohio Legislature to assess the solvency of Ohio's public pension funds. The funding period refers to the number of years required to "pay off" a pension fund's unfunded liabilities. In layman's terms, this would be similar to a home mortgage. A lender doesn't expect the homebuyer to have all of the money up front for a 30-year mortgage, but it does expect the buyer to have a plan to pay it off over the course of the mortgage. Similarly, STRS Ohio's plan must result in its ability to "pay off" its unfunded accrued liabilities over no more than 30 years.

Retirees re: Why?

January 21, 2011
Bob Buerkle:
John,
If it didn't save money by only changing the rules for "New Hires" then 18 other states wouldn't be doing so. Look at Illinois, the state that every study has shown to be the state in the worst shape, if you think it won't save enough money. It can and is being done.
Your question "Why?" is well taken. The answer is that, at least so far, the STRS upper management team and the Board have been unwilling to request their actuaries to bring these projections public. They may have these actuarial projections but they have never been made public if they do have them. The explanation that I have been told for not doing this is that it would be too unfair for future teachers. I don't buy that because the experiences that thousands of Ohio Teachers had between 1965 and 2000 was a long list of pension improvements. I think it is reasonable to assume that future STRS Boards would try to provide improvements for new hires over their careers as well.
Another fact that will make pension improvements happen for these future "new hires" is that their "Normal Cost", as calculated by the actuary, would have a value worth less than their STRS Contributions. This would happen even under the most recent STRS Plans and the normal cost would drop from the current 14.3% to 11.79%. But as we have seen, the 11.79% normal cost was not enough to get us to a 30 year funding period. I think they could achieve the 30 year funding goal with a normal cost for new hires that was around 10.5%. If the employee contributions are raised to 12.5% over 5 years the new hires would be contributing about 2% more than their "normal cost" to provide their pensions. Hopefully by that time the STRS Investments will have sufficiently recovered to begin to make some improvements for the new hires.
-----
Nancy Hamant:
To All,
For years CORE requested the actuarial studies of the impact of the Enhanced Benefit
(88.5% calculation for 35 years) on the STRS Pension Fund. Damon Asbury kept replying that the studies would made available. Later, Bob Slater stated that a comprehensive actuarial study had not been completed on the Enhanced Benefit impact.
Warren County's Ohio legislator at the time of passage, indicated that the FY 1999 changes (including the Enhanced Benefit) was passed by legislators on the basis that it was necessary to have teachers work 35 years to counteract a "future" teacher shortage.
Many of us at the table stated to the legislator that the 35 year enhancement would do the opposite, it would limit the opportunity of new college graduates from entering the teaching field as there would be fewer openings, and that there was no information on the impact on the Pension Fund. The legislator said that they had been informed that the impact on the Pension Fund was a "wash". One Billion dollars later, we find out that is not true.
As stated below, actuarial data is again not being provided. This is astounding considering that the STRS Executive Director, the STRS Chief Financial Officer, and each member of the STRS Board has fiduciary responsibility for actions taken regarding the Pension Fund. So, are all STRS fiduciary members violating their obligations when actuarial data is not provided about actions? or when actuarial studies are not completed? Does this mean there are legal implications?
I do not know. However, I feel that such actions are morally and ethically wrong and do not address all STRS members fairly or equitably.
-----
RH Jones:
Bob Stein:
You have the authority to introduce a motion at the next OH STRS Bd meeting. If it is voted down, at least you can say you tried. If I were on the Bd, I would ask the STRS management to come up with a math computation. If they say no, I would expect that they are not responding in the best interest of retirees or all the members.
My reason for sending Mr. Curry's message out, was to inform those on the list of what Mr. Curry and I think is a legitimate concern. The laws on the books now were negotiated in good faith and should remain so. However, the "new hire" scenario should be a consideration. The income that we retired teachers are receiving now was passed into the law by Ohio's elected reps and any new laws should be considered only for those who will be hired in the future, or to improve on the retired STRS income along with a proper HC/Rx. Our fixed COLA of 3% definitely does not keep retirees up with inflation. As U.S. President Kennedy said at his inauguration: "Let us never negotiate out of fear, but let us never fear to negotiate". That, sir, is the civilized thing to do for both active and retired OH teachers. All the while, being civil to one another.
Just my thinking.
By the way, I am not attending the Special STRSmeeting today. Driving is to difficult for this retired teacher, and I suspect a lot more of us would be attending today, if it had not been for the snow storm. Really, the elderly should not be out in sub-zero wind chills. Besides, if we get sick, it costs our HC/Rx. We elderly do need to stay healthy.
-----
Tom Curtis:
WHY?........................ because the OEA (administrators) will never allow that to happen...
The OEA is today and has been in control of the STRS for 20 years, maybe more. They have held the majority of board seats for that long. Is it conceivable that the OEA may have forced past Executive Director C. James Grothaus to retire in December 1992? Did the OEA hold the majority of board seats then? If so, then it is plausible, isn't it?
Let's get real stakeholders! The OEA is in charge. Make no mistake about that! Further, until the OEA can no longer buy the majority of board seats, and/or influence the selection of the 3 consultant positions, they are going to rule for years to come.
Think about this! Who has held the majority of the STRS board seats for 20 years? Who has made the vast majority of all motions and voted YES, in unison, as a union is supposed to do? (Only exception: the 3 years John Lazares and Dennis Leone were on the board at the same time) The OEA controls the STRS because they have controlled the board for 20 years. This has been detrimental, because no one group (OEA) should ever be permitted to be in charge continuously. Unfortunately, educators as a whole were far too busy doing their jobs and were blind to what the OEA administrators were doing behind their backs.
Flashback!
Vol. No. 78
August 1992
STRS News for active members
Executive director announces retirement; Board to select successor this fall
State Teachers Retirement System Executive Director C. James Grothaus has announced he will retire December 31. He intended to retire July 1, but agreed to extend his contract while an executive search firm (OEA) helps the Retirement Board find his successor.
History shows that the OEA has definitely controlled the STRS since 1992, when the OEA administrators chose Herb Dyer to be the next ED. The OEA held 5 of the 9 board seats. Those 5 voted for Herb Dyer. We all know what transpired after that time.

Thursday, January 20, 2011

Why?

From John Curry, January 20, 2011
Why won't the STRS administration offer up "alternative scenarios" of pension reform to the STRS board by doing what the majority of other states who are legislating pension reform are doing by passing reform legislation that affects only the newly hired educators? Where are those "alternative scenarios," STRS?
If this type of reform is not economically viable then tell us so!
John

RHJones comments on: That "Miserable 1%" is still that Miserable 1%

RH Jones to John Curry, January 20, 2011
John,
Up until retired teachers were hurt by the 2000 OH STRS decision to act on cutting our HC/Rx, the employer contribution to the HC/Rx fund was 4%. That was still below the 5.5% that OPERS was receiving from the employer contribution. Our OEA-R and ORTA went along with the cut. We in CORE strongly objected.
At the time, If more active/retired teachers would have listened to CORE we would all be better off. Actives getting the 88.5%/35 and retiring at a much greater final average than us can afford their own HC/ Rx for a while; however, in a few years "down the retirement road", they will need the STRS HC/Rx as we do now.
The Beacon mentioned today, 01/20/2011, even a hamburger at Mc Donald's is going to cost more. McDonald's is having higher costs, just like us retired teachers. This is because of the rising demand for petroleum, food and especially gold worldwide and at home. Gold is used in most all computerized gadgets.
Yes, we do need the miserable 1% left alone. The states that are cutting it are facing expensive lawsuits. Our 3% COLA was legislated into law.
By the way, the NEA is closing ranks to fight the nationwide untrue campaign against public employees and out retirement systems. NEA needs to know how some of the highly paid OEA executives have manipulated the OH STRS for their own personal gain -- mostly at our STRS retired teacher expense.
RHJones, a CORE member

Wednesday, January 19, 2011

Debbie Rudy-Lack: Letter to Bob Stein

From Debbie Rudy-Lack, January 19, 2011
Subject: Fwd: Quote from Duke & Jane Snider's letter....
Mr. Stein,
I recently read a response letter that you wrote to Duke & Jane Snider, dated January 16, 2011, regarding their concerns with the reduction of the COLA for retirees. One sentence in your response to the Sniders really struck me and I felt a need to address it. The quote is as follows:
"I also know we would be dealing with a more sympathetic executive and legislature if educators and other public employees had been more attentive and active".
-- Bob Stein, STRS Bd member
As a retired teacher of 32 years, I take exception to this statement, Mr. Stein. For 32 years, I paid my dues to OEA, believing that they were supporting me, a public educator. Every time there was an election for seats on the STRS Board, I received letters for candidates that OEA endorsed, and thus believed would best represent the pension system for teachers- whether they were already retired or still in the classroom. I voted for those individuals believing that those candidates were going to do their jobs, because OEA, the union that represented me and my colleagues, said that they were qualified to do the job.
Was I naive in believing that to be the case? As I write this letter to you, I most certainly believe I was. But at the time, I was busy with my teaching career. I was going to work everyday and doing all of the things that I was supposed to do in my classroom, building and district, in the hopes that OEA supported me, and that together, STRS and OEA were looking out for me and the future of my retirement.
Unfortunately, the OEA and the STRS Board Members at that time weren't doing what they were supposed to do. Little did I know that OEA-endorsed Board members were "living large" on the pension monies of retirees, both present and future. Little did I know that OEA endorsed STRS Board members were building a very expensive facility and decorating it with expensive works of art. Little did I know that OEA endorsed STRS Board members were approving bonuses for investors that were making salaries that teachers could only dream about, just for doing the job for which they were hired. Little did I know a lot of things about STRS at that time....or the OEA, for that matter.
To say that if I, a public educator, had been more attentive and active is a slap in the face to all the public educators that you represent. We were all busy doing what we were hired to do: teach in a public school. It's unfortunate that the OEA and STRS Board members during that time weren't doing what they were suppose to do. That being to represent teachers and protect the pensions of the teachers of the state of Ohio.
Debbie Rudy-Lack retired Ohio educator

That "Miserable 1%" is still that Miserable 1%

From John Curry, January 19, 2011
Here is a table taken from the Ohio Retirement Study Council's 2009 Annual report (the most recent one available from the ORSC and submitted in Feb. of 2010). Yes....STRS still only applies only 1% toward health care for retirees (and of course, unlike OPERS, zero for retirees' spouses).
If STRS hadn't paid out over one Billion dollars since the 88.5%/35 years enhanced formula that they passed in 2000, they would have had more monies to apply a higher percentage of the employer's contribution to healthcare. The STRS board of 2000 weren't thinking about this, were they?
That's OK...the Legislature will be the ones to put the "kibosh" to the 88%/35 years won't they? I guess I can't blame them for correcting the nearsightedness of a former (2000) STRS board which was staffed with quite a few OEA active teachers who encouraged the passage of the "Enhanced formula" and many of them took advantage of the 88/35 to pay out 11% more moneys at retirement than any other state retirement system paid out. That 5.5% that OPERS now collects from the employers is five and a half times the rate of the moneys at which STRS receives for our healthcare payments from school systems, isn't it? Of course, if we were to meet the 30 year unfununded liability mandate (like OPERS did) then we could have a higher employer contribution rate to our healthcare, couldn't we? Would someone like to tell the OEA about this? Of course, they wouldn't listen as retirees don't pay OEA dues, do they?
John
Ohio Retirement System
Percentage of Employer Contribution Allocated to Health Care in 2010
OPERS 5.5%%*
STRS 1.00%
SERS 0.46%**
OP&F 6.75%
HPRS 4.50%
*The OPERS board will review the percentage allocated to health care at the February 2010
board meeting.
**Does not include employer health care surcharge of up to 1.5% of total active member payroll.

THE REAL STRS PROBLEM!

From Mario Iacone, January 19, 2011
Many reasons are being bandied about in the recent discussions on the STRS situation, but, in my opinion, all are a drop in the bucket, by comparison to investment losses.
INVESTMENT LOSSES are the largest factor causing the STRS problem. Examine the chart below and you will see STRS had great Funding Periods before severe losses occured during 2001-2002 and 2007-2008 time periods.
The repeat of the 2001-2002 losses were avoidable as at least two Board Members, especially Dr. Leone, wanted a contigency fund which would soften another severe market downturn.
Dennis Leone urged in MARCH, 2007 " I am hopeful my fellow board members will be agreeable to approving a contingency plan to minimize the negative impact of a significant stock market downturn………………………
Right now, we have approximately 20 Billion less in assets that we had in 2007. To make matters even worse, we have already lost the return on an average of 25 Billion Dollars for FOUR YEARS and the way things look for MANY MORE YEARS.
I hear nothing from ORSC, the Legislature, or the Governor which indicates that the issue of a more stable Investment Policy is even being addressed.
Yet, it is obvious that the pension systems have a Serious Systemic Problem, SEVERE LOSSES during market downturns. And, those severe losses significantly impact retiree benefits.
Click image to enlarge.

Donald Hyatt: Comments to the STRS Board

From Donald Hyatt, January 19, 2011
Subject: Bob Stein
Mr. Stein,
I am very offended by
"I also know we would be dealing with a more sympathetic executive and legislature if educators and other public employees had been more attentive and active".

~ Bob Stein, STRS Bd member
I was teaching the children of Ohio. I trusted the State of Ohio and the STRS to do the right thing. I spent a lot of time to teach. It takes a lot of time at school and home to do the best for my students, parents, and community.
I guess I was wrong to expect the same from my government and STRS.
I did my job. I guess the government and the STRS did not do their job.
And you blame me,
Shame on you.
Donald Hyatt
Public science teacher at Ashland Jr. High, Upper Arlington Jones Jr. High, Worthington City Schools

A retiree sounds off.....

From a retiree, January 16, 2011
"I don't believe it is fair for 500 or so employees of STRS to be expected to fix a solvency problem created by 450,000 members, even if that were possible, which it isn't. We have a liability problem, not a spending problem". James McGreevy
[Corrected quote:
"Just as taxpayers shouldn't expect teachers to carry the burden of balancing a school district budget, we should not believe that 500 employees could possibly fix a $38 billion unfunded liability problem."]
So the solvency problem was created by teachers??? Wow! I remember getting endorsement letters for OEA-backed Board candidates....and stupidly, (yes I'm calling myself stupido.....voting for them b/c, go figure, I thought OEA/STRS represented ME, the educator.
1. The expense of the "new" STRS bldg....w/expensive art work (don't ya think they could have put out a notice to Ohio art teachers to have their students create art work for display...and offer a $500 award for the chosen work?)....no wait, that's MY fault, damn another stupid move on my part!
2. All of the $ spent on trips, food, cars being used by family members (and anything else Dr. Leone found and addressed during his tenure on the Bd).....damn, my fault, another jackass move on my part!
3. The bonuses given to investment staff, even in good times, which was a lot more than the educators they represented would ever see in their careers....uh-oh, my fault again....
4. Conclusion: damn I'm just a real moron for having made all of these decisions and causing the solvency issues at STRS
5. Don't even get me started on the comment about "fair"....I just might have to crazy on someone's [xxx]...& it might be McGreevy's.......
I don't have a problem taking repsponsibility for the decisions I make, good or bad, but hell's bells, I NEVER made the aforementioned decisions.....the STRS Bd did......but then again, I voted for them, didn't I....

Minutes - January 2011 CORE meeting

From John Curry, January 19, 2011
Minutes of the Jan. 13, 2011 CORE Meeting
After welcoming the fifteen retirees, President Dave Parshall opened the January meeting of the Concerned Ohio Retired Educators (CORE) by asking for approval of the minutes from the two earlier meetings. Dr. Alice Faryna moved to approve the minutes; Mary Ellen Angeletti seconded her motion. The members then approved the motion.
President Parshall immediately informed the group of three concerns. The first item was the update of CORE’s website, which he encouraged all to visit. Once again, President Dave repeated his concern that we need to watch out for our most vulnerable retirees. Lastly, he made members aware that the CORE trustees had voted to support HR158, healthcare for all Ohio.
The central part of this month’s meeting was Dr. Alice Faryna’s address to those in attendance. Her presentation consisted of: pointers about speeches to legislators; the creation of a binder (with a cover letter, contact information, as well as educational materials); effectiveness in engaging with legislators; mindfulness of the legislators’ time; and the importance of a follow-up letter. Dr. Faryna closed by reminding us that it’s always helpful to have a good relationship with the aides!
When Dr. Faryna asked for comments or questions, Mary Ellen Angeletti suggested that members might want to have Dave Parshall with them whenever they talk with senators and representatives. She praised Dave’s ability to communicate effectively with the elected officials that they’d conversed with when the two of them lobbied for healthcare two years ago.
President Parshall opened a discussion about the health care- pension plan. Although the exact plan – or bill – is unknown at this time, the group did agree that we all need to help sell a plan which is the best for retirees. (A point in our favor is that we are not professional lobbyists – we’re real people. We have a different point of view, one that the legislators need to hear.)
Prior to the closing of the meeting, President Dave welcomed the three new CORE attendees, Terri Thobaben, Linda Waddell, and Virginia Peterson. He urged all in attendance (and those who are absent, but who regularly check minutes and CORE alerts) to be sure to look at the CORE website.
The meeting was adjourned at 12:53.
Respectfully submitted,
Marie M. Fetters
CORE Secretary

Linda Meinelt to STRS Board: Keep our COLA at 3%

From Linda Meinelt, January 19, 2011
Subject: COLA
To Mr. Nehf and Bd. members,
After reading the remarks from Bd member McGreevy and I quote: "the truth is that all of us who receive or have received benefits that were not fully funded at the time of retirement are at least partly to blame for the problem that presents itself today", I am livid. I had taken from my paycheck whatever was deemed necessary by STRS or the Bd. of Education to send to STRS. I had no control over that and felt assured that, when the time came for me to retire, I would have a decent pension and good health benefits.
I also had to contribute to the OEA coffers so they could have a grand old time. Well, now I and thousands of other retirees are being blamed for problems we had no control over. Dyer and the Bd. chose to spend our pension monies on frivolous items and even to say the money was theirs to do with as they pleased. OEA has no concern for retirees.
So, after mulling all of this over, I retract my earlier statement that I want you to hold the line at a 2% COLA. INSTEAD, I want current retirees GRANDFATHERED with a 3% COLA. Figure out a way to do it that entails cuts from STRS staff, rental of building space., etc. Health benefits for STRS staff should be no better than those we retirees receive.
I am convinced that, if STRS employees were covered by STRS and not PERS, they would be a lot more concerned about saving money!! I have had to cut my expenses to cover the increase in health insurance and so should the Bd. find ways to cut expenses and not by taking away from retirees!!
Let's get rid of the smoke screen comments that selling the building and firing everyone employed at STRS would still not solve the financial problem. In my mind, COLA was the item of choice to cut from the start and not much consideration has been given to anything else. Leave my COLA at 3% and let those who still have years to teach and at higher salaries than we retirees made take the lower COLA amount when they retire. GRANDFATHER current retirees at 3%
Linda Meinelt

CORE's Tom Curtis to Jim Reed............

From Tom Curtis, January 19, 2011
Subject: 011911 Re Never again - Part II.... CORE member Jim Reed says it so well!!
Hello Jim,
Very well stated Jim. Wouldn't it be refreshing if the powers to be would actually listen to those of us that have been yelling from within their very sanctuary of the board room for nearly a decade?
I finally stopped being involved in the attempt to bring about change. In 2008 I finally came to the sad realization that after talking to the administration, board members and the members of the ORSC, that absolutely no matter what we the stakeholders had to say, the administration, board the ORSC were completely deaf to our concerns. They only do what they claim is best for us. That has been so far from the reality of what should have been done.
Dennis Leone pointed out many years ago that at least one of the numbers they used in the determining of the unfunded liability (the amount of teacher payroll into the system) was so far off, that the reality was, the unfunded liability actually stood at infinity at that time, but that was not what the accounting firm (Melon) was reporting. This effort was totally ignored by everyone of the administrators and board members in the board room that day. That was disgusting and yet no one was held accountable for making and accepting the false picture that had been presented.
It made me physically ill from the anger that grew within me. Then I came to this realization. The elected people that hold the positions that make these decisions are never going to be held accountable for their failure to listen to the stakeholders and bring about the necessary changes that will shield us from the repeated crashes of the stock market. They do not care, it is not their money. Most are all vested in OPERS, which has a 30 year unfunded liability. We the people are powerless and they know it.
TC

Bob Buerkle to STRS Board: A way to meet the 30 year funding mandate

From Bob Buerkle, January 19, 2011
Subject: Letter to STRS Board Members and STRS Staff
In the January, 2011 Legislative News Report by Terri Bierdeman we get a picture of the approved changes happening in 27 other State Pension Plans. Of the 27 plans covering 23 States we see that 18 of them have created plans that have “new rules for new hires”. In five of the remaining nine plans where changes are being imposed on retirees and current workers, lawsuits have already been filed. More lawsuits will follow.
In looking at the alternative scenarios discussed at the January 13, 2011 Board meeting they all create a new Tier with a lower formula as well as age, final average salary and service requirements for future retirees. If you plan to create a new Tier I would suggest the Board look at the savings if the new rules applied only to new hires. If your scenarios applied only to new hires I think they all would come up short of the 30 year funding goal unless you also added something like Georgia did. The Georgia Plan for new hires has no current guarantee to provide for a COLA for new hires after retirement. If STRS added this change for new hires, to the scenarios you are currently looking at, STRS would be able to meet the 30 year funding mandate.
If STRS took this approach our current workers and retirees would remain whole, and all future strategies and energies going forward could be devoted to improving the benefits for the New Hires to be as close as possible to what we currently have. STRS would avoid wasting millions of dollars on litigation, using the money that rightfully should be spent for the benefit of our members, rather than against our members.
Bob Buerkle
STRS Retiree
Former Retirement Chair,
Cincinnati Federation of Teachers

Jim Reed comments.....

Jim N. Reed to Kathie Bracy, January 18, 2011
Subject: Your Concentration Camp Letter Stirred Some Feelings
Hello Kathie,
The tragic historic perspective posed by your recent letter to the STRS board was very relevant to anyone who understands the "forget your past (infamous) and be doomed to see it repeated" paradigm. Those of us who see your metaphor as poignant will most likely be challenged by the disloyal opposition to let the past go.
Unwisely, those of us branded as CORE malcontents and dissidents are frequently admonished for dredging up the past. As Dyer reminded us, we needed to stop rocking the boat, quit belly-aching, be grateful for what we are receiving (especially since it wasn't ours anyway), get past it and move on.
I have never accepted that mantra. CORE is not at the core of our current retirement dilemma. Absent professional foresight, poor planning, self indulgence, an out-of-touch board-administration mentality and STRS's fiscal mismanagement are. Plain and simple. Dealing with that dysfunctional agenda would have been preferable to shoving it under the STRS Palace carpeting, behind the "Integrity"sculpture or beneath the pavers in the garage.
Have we been encouraged to back off public criticism of our retirement system and professional organization in hopes of appearing to have closed ranks in order to pacify our detractors in the General Assembly only to see fewer educator-friendly legislators speaking out on our behalf? And it doesn't appear that we have a friend in the "push 'em under the bus" Governor (at least until we publicly apologize for our non-support of his candidacy).
Let me address a couple of unpalatable written letters causing a case of indigestion. I found the messages of Mr. McGreevy and Mr. Stein and the recent STRS Bulletin to contain statements that were tough to swallow.
Mr. McGreevy's comment about retiree culpability regarding the unfunded liability: "Individuals who retired, to this point in time, contributed to the unfunded liability by not making adequate contributions." And whose bleeping fault was that?
To his credit, McGreevy points a finger at board members who "chose to ignore them (actuarial projections)..." The ignorance in understanding those projections was hardly an excuse for dispensing retiree funds for their own private gratification for over a decade.
Perhaps Mr. Stein's responsive letter (I give him credit for his response as it was punctual and included some important information) to the Sniders already provides part of the answer to the unfunded liability conundrum. He blames educators who should have been "more attentive and active." Here, I find some common ground. Far too many educators have been passive far too long, STRS illiterate too long, and too blindly trusting as stakeholders toward their caretakers. We foolishly believed their promises.
Where Mr. Stein misses the mark is with his blanket statement about inattention and inactivity. Since 2003 every board member, every executive director, every CORE member and many investigative reporters were aware of the lack of ethics and plenitude of mismanagement that had transpired in and out of the boardroom.
The admonitions and prognostications of Dr. Dennis Leone and Mr. John Lazares during their board tenures brought them ridicule with attacks on their professionalism and character. Even when their words were proven to be accurate there were few admissions, let alone apologies. Shameful.
Mr. McGreevy claims: "We were happy to accept the pre-2008 reality as sustainable." Who the heck is "we?" He had access to Dr. Leone's 2003 award-winning piece of investigative journalism. He also sat in on many of the "public speaks" sessions from '03-'08. Many of those speakers understood reality better than most of the people up-front. "We" who were STRS-literate did not accept the pre-2008 status quo as sustainable and we shouted and shouted about it. What our shouts got us was name-calling..."malcontents and dissidents" and worse.
"Based on the support we have received from our constituents, we know that Ohio educators are willing to make necessary changes to preserve their pensions." Executive Director Michael Nehf entered this observation in a recent letter to the "Columbus Dispatch." On what is he basing the "we know?" Is it the Saperstein Associates Eighth Annual STRS Members' Survey? Out of about 450,000 actives, retirees and beneficiaries 600 were contacted for their views and value judgement regarding their retirement system.
Who commissioned these surveys and at what expense? Did the board's constituents initiate the surveys? Of what real value to retirees was the current survey and previous surveys? What real changes in STRS operations have been altered for the benefit of retirees from these surveys? For some time there has been a question among many STRS-literate retirees regarding how the survey's responses can be factually representative. Is there a preponderance of Mr. Stein's inattentive and inactive constituents among the responders to these surveys?
Just as I dislike and mistrust any politician who purports to speak for me by saying "most Americans" I find it equally indigestible when I am spoken for as being among Ohio educators willing to swallow "necessary changes to preserve their pensions."
If a retiree consensus admitting guilt to causing the unfunded liability is the way to the General Assembly's heart, when does it become part of the cleansing for STRS policy-makers and administrators to demonstrate some semblance of remorse for fiscal mismanagement, self-serving entitlement decisions, and subsequent lack of corrective action?
Finally, retirees are constantly being reminded that even if many of their in-house grievances should be addressed to their satisfaction, it would only be a drop in the bucket toward rectifying the system's unfunded liability. That retort misses the point. Retirees deserve to know that each dollar that they have invested is being treated with respect and that the fiduciary responsibility of the caretakers of their retirement is considered urgent business yesterday, today and tomorrow.
Jim N. Reed
Malcontent (not satisfied with current conditions)
Jnrfore@aol.com

Tuesday, January 18, 2011

Cinci retirement plan in even deeper doo-doo and.....does this sound familiar?

From John Curry, January 18, 2011
"These are just the two latest signs in our region of a crisis that governments across the nation face - public employee pension systems that face crushing deficits, often caused in part by overly generous benefits that were expanded in economic boom times but have now proven unsustainable."
Gee...that wouldn't be like STRS paying out 88%/35 years when all the other Ohio systems only paid 77% and still do, would it? Nawww.....that couldn't be!
John
We must tackle our pension problem head-on
January 15, 2011
On Thursday, Cincinnati Retirement System trustees failed to agree on a pension reform plan, setting up a renewed clash among taxpayers, city employees and retirees on how to fix the system's projected $1 billion-plus shortfall. Meanwhile, the Kentucky Senate considered controversial legislation to convert the state's pension system, which faces a $30 billion shortfall, to a 401(k) format for future employees.
These are just the two latest signs in our region of a crisis that governments across the nation face - public employee pension systems that face crushing deficits, often caused in part by overly generous benefits that were expanded in economic boom times but have now proven unsustainable.
The figures are staggering. A Northwestern University study puts the states' total unfunded pension liabilities at $3.3 trillion, while the nation's cities face $574 billion in shortfalls.
And the options are sobering. Some cities and states are enacting tax hikes to deal with pension issues. Some may cut government services and lay off workers. Some are exploring bankruptcy as an option. And many are hoping for a federal bailout, which is increasingly unlikely given Washington's cost-trimming mood.
The wisest course, one that Cincinnati and Kentucky are following, is to simply tackle the problem head-on. They are looking at reforms to their pension systems - reducing benefits, changing the terms for future employees, tightening rules that have allowed some employees to get far more in pensions than they got in salaries. Understandably, the efforts meet fierce opposition from the public workers whose retirement incomes would be affected.
That task often is complicated by the web of laws and regulations that govern such pension systems. In Cincinnati's case, a lawsuit by retirees challenging changes to their health plan, which the city argues it has the right to make, has added uncertainty. And despite public hearings on the pension mess, the city has yet to persuade residents that the need for reform is urgent.
Cincinnati has to get a grip on its pension system. As we saw with the city's agonizing budget debate last month, the more resources it must devote to shore up such a system, the fewer dollars it has for the services its residents want and need - picking up yard waste and keeping pools and recreation centers open.
On reform, Cincinnati needs to:
Make the reform process as vigorous, honest, inclusive and public as possible.
Provide strong, courageous leadership that's willing to make tough choices and take the political heat for them.
As New York Times columnist Thomas Friedman put it recently: "We are entering an era where to be a leader will mean, on balance, to take things away from people."
The city of Atlanta, whose history of public pension woes has remarkable similarities to Cincinnati's, has been held up as a national model for reform.
Ironically, a Cincinnati native, retired Atlanta Journal Constitution publisher John Mellott, has led the reform effort in Atlanta. In January 2010, he was asked by incoming Mayor Kasim Reed to tackle the city's $1.5 billion pension gap.
Mellott, who previously had overseen pension plans for Cox Newspapers, formed a 15-member study panel of employees, elected officials and business leaders, insisted that all its records and proceedings remain open and transparent, and took a full year studying all the financial details of Atlanta's plan. The final report next month will lay out options but not advocate a particular solution.
That's a job for the city's political leaders. And that takes some courage. In some cases, reform won't produce immediate savings - in fact, the opposite. The proposed Kentucky changes would require cities, counties and the state to pay more into the fund for 10 to 15 years, but they'd save money - and the system - in the longer run.
For those who think, as some have argued in Cincinnati, that all we have to do is wait for a stock-market surge to recover pension-fund investments battered by the recession, Mellott has a message based on his group's deep study of the economic fundamentals behind pension funds: "Hope is not a strategy. Mathematically, you cannot recover from the last decade."
Mellott's advice for Cincinnati: "First of all, have courage. Cincinnati is not alone in this issue.
"Also, process is important. Its high visibility, and the participation of the community in the process, has been vital to Atlanta."
Cincinnati needs a healthy, open debate to produce a healthy pension system that works for everybody.

Wow, ORTA is now issuing 'ALERTS' as CORE has done for years!

From Ann Hanning (posted on ORTA website)
Subject: ORTA ALERT!!
ALERT -
It is time to contact STRS Executive Director & all STRS Board Board members, particularly Mike Nehf, Jim McGreevy & Bob Stein to let them know that you do not support any further reductions in the COLA. The original STRS proposal reduced the COLA from 3 – 2% for current retirees & 1½% for future retirees. The amended proposal (10/10) kept the 2% COLA for current retirees & future retirees (who would wait for 3 years before receiving it).
Note: The COLA affects not only current, but future retirees. So we are asking for no further reduction from the 2% COLA for everyone’s benefit!
The STRS Board needs to vote on a new pension proposal that meets the 30 years funding requirement & does not include an employer contribution increase. A STRS proposal & vote is expected by the end of January.
Please continue to check the ORTA and STRS web-sites for information.
Ann Hanning, ORTA Executive Director

RH Jones re: Proposed COLA cuts

From RH Jones, January 18, 2011
Subject: The surrender of ORTA's Ann Hanning and ORTA board.
To our retired education union leaders, STRS retired board members, and fellow retired teachers:
ORTA’s Director, Ann Hanning, who works for and is paid by the ORTA board stated: “So we are asking for no further reduction from the 2% COLA for everyone’s benefit.”
Retired teachers, it is not for your benefit, or mine, that we accept a 1% COLA cut. Personally, I can ill afford it; and, have already this past year 2010 experienced the hit of approximately the $700 cut in the income from my 12 “take-home” checks.
Ann’s statement seems to pass on to the membership that the COLA cut is a “done deal”; that, it is not. Since a COLA cut has not legally, nor legislatively, been addressed yet, I think it is time for a “pep talk” by this old soldier and classroom teacher: me. So here it is:
Being the voice in the wilderness. As we go into battle, our best defense is a steady offense. When you notice an injustice, speak up, and take action, always using respect for your opponents. Be the one to speak out on the injustices. Be a help to retirees, not a hindrance.
To positively change the situation around for us, often it only takes one person: you. And, all the while, fear not; it’s human to fear trouble. Above all suppress your fears, and get moving forward. Never surrender. If knocked down always pick yourself up, and continue the fight on today, and live to fight on for another day.
As Martin Luther King said: “We shall overcome.” And, my fellow retired teachers, we shall.
That’s my opinion,
RHJones, retired ORTA member, SummitCRTA Legislative CMTE, and one of the proud “founding fathers” of the CORE

Donna Seaman to STRS Board: Time to tighten STRS' belt, too

From Donna Seaman, January 16, 2011
Subject: 30 yr. plan To: STRS board
Board members and Mr. Nehf:
I read with interest that you have been "given an opportunity" to come up with another plan for the state legislature in which STRS would have a 30 yr.funded liability.
Now you have another "opportunity" to show retirees that you are really looking out for THEIR interests! As you prepare a new proposal, I know you'll hit retirees first! You always do! In only the past few years you've changed our health insurance benefits and costs, you've totally eliminated the 13th check, and all the while you've continued paying bonuses to the investment staff, whether or not the portfolio funds are generating income. I've repeatedly implored you to reduce the size of the STRS internal staff, to eliminate inappropriate and exorbitant bonuses, to revise staff insurance plans so that they are comparable to what STRS retirees have. But my pleas have always fallen on deaf ears!
The COLA should NOT be reduced! You must make this a priority, to maintain COLA for those of us who have no other access to jobs or any supplemental income. And your outside survey which showed that nine out of ten STRS retirees have additional income is totally inappropriate. It is not STRS business what income retirees have!
Please, this time, keep retirees' benefits in place, such as they are. Please, this time, reduce your own operating expenses, even though you maintain those expenses are "just a drop in the bucket." It's time for the board to make that first move, a drop in the bucket, to demonstrate your willingness to take the same belt-tightening steps that retirees have been forced to do over the past few years.
I've read Mr. McGreevy's and Mr. Stein's responses to other concerned, frustrated retirees, and am horrified to read that the party line is still in place: Board members blame retirees for the financial mess and take no responsibility for actions you and past Boards have done.
Donna Seaman, 2002 retiree

Sunday, January 16, 2011

Kathie Bracy to the STRS Board: Don't touch our COLA

From Kathie Bracy, January 16, 2011
Subject: Some thoughts to ponder as you work on that proposal
To the members of the STRS Board:
As you work to put together a proposal to present to the state legislature to bring our pension's funding period down to 30 years, a daunting task by any stretch of the imagination when you consider the fund’s current position, I wish to implore you not to recommend cutting the retirees' COLA. If you already support this recommendation, you have my sincere appreciation for your understanding and compassion. If you do not support it, please read on.
You were not here when the STRS Board was allowing -- no, designing and encouraging -- unchecked wild, reckless spending of retiree funds. I do not need to go into the details; chances are you already know them, and are well aware that no one at STRS at that time had any intention of putting a stop to it till Dennis Leone and John Lazares investigated and exposed what was going on.
If you are a relative "newbie" to the Board and need to know more details, you can find them easily by visiting my blog (www.kathiebracy.blogspot.com) and clicking on a number of links I keep in the top section. If you have never read Dennis Leone's investigative report of May 16, 2003 to the STRS Board, you need to start there. If you do not find its contents shocking and reprehensible, then you need to begin considering ways to make use of your time other than as a member of the STRS Board.
I know there are those who tired long ago of hearing rehashings of what happened back in the days of partying, fancy trips and monstrous bonuses handed out right and left. Those are the people most closely connected to the group behind it all and to those who eventually met with convictions on ethics charges. That group has not gone away; it has merely exchanged one set of sheep’s clothing for another, and continues to seek ways to benefit their own at the expense of those who have little (if any) power to stop it: the retirees.
I'm wondering how many STRS Board members have ever visited a Nazi concentration camp. If you have, you know firsthand it's a very sobering experience. I have visited Dachau many times. I have also visited Auschwitz, Birkenau, Terezin, Bergen-Belsen and Buchenwald. My point is this: millions of people suffered untold atrocities at the hands of Nazi perpetrators. While historically that period is behind us, morally it is not. It is not enough simply to say "Never again", as admonished in bold lettering in five languages on a stone memorial in Dachau. Constant vigilance and actions to protect future generations are imperative. If you reread that last sentence, I hope you will see a parallel to your moral responsibility as a member of the STRS Board.
Thousands of retirees have taken draconian hits at the hands of the STRS Board, and you probably weren’t around when they occurred. Nor were you around when those concentration camps were carrying out those atrocities (though many of us were), but that doesn’t mean their effects are no longer felt 70 years later. It is the same with the inequities that have filtered down to the current time from those “salad days” of the STRS Board in the early 2000s.
Overall, retirees’ incomes are far less than what educators are earning today. There are some, particularly the most elderly among us, who are struggling to make ends meet on pensions less than $20,000 while their healthcare costs continue to escalate out of control. Many are having to choose between medical care and food on the table. Those people are particularly dependent on their COLA. Would you reduce or take this away from them?
If you stop to think about it, our COLA has never been a real COLA. Because of the way it was designed, it does not begin to keep up with the cost of living since it is a simple COLA, not compounded, as it should have been all along. “Cost of Living Adjustment” is a misnomer; it should either have been done right or never have been called a COLA in the first place.
It is my understanding that a reduction in our COLA is not only recommended as a means of rescuing our pension fund, but it is also recommended to take effect as soon as the legislative bill is passed, while at the same time changes affecting non-retirees are not to take effect for several more years. Again, retirees are told, in effect “You don’t matter – we’ll take your money any time and any way we can, just because we can.” Remember, it is too late for the vast majority of retirees to make plans to improve or even stabilize their financial situations.
They were not given the benefit of “grandfathering” when the 13th check was unceremoniously dropped, with no warning whatsoever. They were not “grandfathered” when the STRS Board decided to push their healthcare premiums to astronomical heights. “Grandfathering” is not even being considered for the hits the Board is currently considering for their COLAs: immediate action in the way of reduction or elimination altogether. While this is draconian and insulting in itself, in view of previous hits retirees have already taken, it does not even begin to compare with the ultimate insult: recommendations for a generous “grandfathering” timeline for those whose incomes are far greater than ours, and who still have time to make plans for their financial futures.
You are going to be remembered for your actions, just as previous STRS boards are remembered for theirs. It is entirely up to you to determine what you want those actions to be. It is my fervent hope they will be compassionate ones. You have the power; retirees do not. Please – let our COLA alone.
Kathie Bracy
STRS retiree
Larry KehresMount Union Collge
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