Tuesday, June 29, 2038

NOTE: To find the most current posts, please scroll down to the two big red arrows. You can't miss them.

Friday, June 25, 2038

Angel of Grief

Thursday, June 24, 2038

Garrison Keillor

Friday, May 28, 2038

Items of interest in the Archives: The 2013 STRS Board Election

Many people have been very interested in reading about the irregularities of the 2013 STRS board election. There are many posts related to this topic, beginning the first week of April 2013, after the ballots were mailed to retirees from STRS. You can find them by going to the Archives for this blog, over in the right sidebar, and clicking on dates beginning with April 7, 2013. Dennis Leone announced his candidacy for a retired seat in November, 2012. There is a lot of information about him in the Archives, beginning with November 12, 2012 posts. 5/28/13

Wednesday, February 27, 2036

.....so what REALLY happened in 2003 that touched off a firestorm at STRS that is still smoldering today? Read it here, from the Cleveland Plain Dealer. (Hint: It ain't over yet!)

More here (Akron Beacon Journal, 2003)

Wednesday, April 11, 2035

Thursday, March 10, 2033

To find current, day-to-day posts -- pull your scroll bar down a ways, just below the big red arrows (you can't miss them). Thanks.


Monday, September 15, 2031

Note from this blogger.....

In case you weren't aware, I am quite willing to post opposing views on this blog; in fact, I welcome such opportunities. If you disagree with anything you see posted on my blog, please feel free to submit your views and I will gladly post them.
Kathie Bracy 
kbb47@aol.com 9/15/10.........................................

Monday, February 24, 2031

Find your state representative and senator here.

Tuesday, May 15, 2029

Gettin' a little tired.....

Some communications to Mike Nehf and Tim Myers, dating back as far as 2009, continue to go unanswered. Looks like it will be a long wait, but we haven't forgotten. You can see them here and here.

Saturday, April 29, 2028

I know, it's weird.........

Many posts that appear "at the top" for a while are eventually moved down, where they can be found under their original posting dates. Also, if you are confused by the postdating, this is done to keep these posts up there; otherwise, they drift down when new posts are added. It's a "blog thing" which I have no other way to control. KB

Wednesday, February 24, 2027

Handy links: Contacts, information and more (short version)
This is an abbreviated version of the original 'Handy links' post.
 Click here to view a more complete list. (Some of it is old.)
STRS Board.....STRS website
Board calendar
E-mail contacts at STRS (old, but some may still work)
Map/directions to STRS, 275 E. Broad St. Columbus, OH 43215
Rich DeColibus' PowerPoint presentation STRS' PBI Program; Does it work?: click December 21, 2008 (blog Archive) and scroll down to December 23 posts.
Popular links; click, then scroll down: , , , ,

Tuesday, February 24, 2026

SPECIAL (must read):

Dennis Leone's INVESTIGATIVE REPORT on STRS: May 16, 2003...Who is Dennis Leone?........(PDF version)...More on Dennis Leone .......(PDF version)
Dennis Leone's STRS Report to ORTA, March 2007
Dennis Leone's Testimony at the Statehouse 9/5/12
The Plain Dealer article that started it all
Historic PBI vote, January 16, 2009

Sunday, February 23, 2020


Friday, June 16, 2017

Suzanne Laird's speech to STRS Board June 16, 2017

Note: This was Suzanne's first visit ever to an STRS Board meeting; she wrote her speech on the spur of the moment shortly before the Public Speaks portion of the afternoon session, with just moments to spare. No doubt she spoke for many of the newer retirees in situations similar to hers. Kudos to Suzanne for having the courage to speak out! Let's hope we hear more from her in the future! KB
Good afternoon, My name is Suzanne Laird, I retired in 2013 with 30 years experience. The reason I retired with “only” 30 years is because I was promised  a cost of living increase each year after 2014. It was on this advice, your advice, that I made my decision. Now, that promise has been rescinded, with no recourse for me and all others placed in that situation.
This morning, I heard the discussion on healthcare. I'm sorry the gentleman who presented did not stick around, but I'm glad several board members asked for examples of how these proposed changes might affect teachers. [Later, we found that Gary Russell, the presenter, was still in the room.] Please allow me to share my experience:
When I was making my decision to enter this profession of teaching, part of that decision was based upon receiving decent healthcare in my retirement years. As a Non-Medicare retiree, my portion of the premium, deducted from my STRS pension check, is $417.20 each month. I have my pay stub with me here today as proof. To offset that cost, I must substitute teach 5-6 days each month. I will not reach the age of Medicare eligibility for 6 more years. Without the COLA and with the looming threat of rising premiums (never mind co-pays and deductibles) I will be forced to continue to substitute at least 10 or more days out of the 20-25 work days each month.
As I walked away from the microphone, I sang “Happy Retirement to me” to the tune of “Happy Birthday."

Thursday, June 15, 2017

Bob Buerkle's speech to STRS Board June 15, 2017

STRS has always used the More Conservative Entry Age Normal (EAN) Actuarial System

Under EAN, the total Normal Cost for the plan is the sum of each individual’s Normal Cost. The Actuarial Liability for the plan is the sum of each individual’s Actuarial Liability. This Entry Age Normal methodology is well established.  EAN is based on sound principles that came originally from level premium whole life insurance pricing and reserving--way back in the 19th century. 

Entry Age Normal is a great invention that prevents plan sponsors from claiming that pension costs are rising faster than pay--and therefore they have to cut benefits or get rid of the plan.  

Projected Unit Credit is another actuarial invention designed to secure the proper funding to deliver on promised pension benefits.

What's the difference between the Projected Unit Credit method and the Entry Age Normal method? Both methods create a distinction between past service liability, and current normal cost, as a part of the total projected liability. Stated one way, the EAN method is a level cost over all years, while the PUC method changes the cost as the person gets older.

As life insurance actuaries understand, Projected Unit Credit (PUC) is like Annual Renewable Term (ART) Life Insurance, where the premium costs go up every year. Entry Age Normal (EAN) is more like whole life, where the premiums are levelized, higher than Annual Renewable Term in the early years and lower thereafter. The projected benefit with salary increases makes the relationship more complicated, but if the actual increases match actuarial expectations, then Entry Age Normal can be determined to be a level percent of salary. If the premiums are level, the insurance company, or STRS in our case, would also hold a higher reserve in the early career years that can be invested longer. 

The problem at STRS is that they changed the Earnings Assumption rate to less than the 8% level in 2013 even though it had been fine for a decade, and reduced it to 7.45% on 04/20/17.  Our pension COLA benefit has been eliminated because of this action. Why do this when the 8% average earned by STRS has always exceeded 8% over past thirty consecutive year periods? 

The OP&F plan still uses an earnings assumption rate of over 8%; why don’t we? If they also reduced their earnings assumption to 7.45% they would have to cut their COLA and make other drastic pension changes, but they chose not to.

The current 30 year STRS investment return average is still over 8% and that includes several recessions. The one in 2001 was bad but the 2008 recession was the worst in a century and unlikely to be repeated in our life time. 

With STRS cutting our COLA they are taking an unnecessary step towards “Ultra Conservatism” and denying the true facts which are that no benefits would need to be cut and none would be in danger of default, if the investment returns continue to exceed the 8% level that they are actually averaging, and are projected to average, over the next 30 years. This was even confirmed recently by Callan Associates, STRS’ own investment advisers.   

Bob Buerkle’s STRS speech on June 15, 2017

Wednesday, June 14, 2017

COLA issues: some recent links worth checking out

Union Protests Cuts to Retired School Employee Pensions at Statehouse:
STRS Pension Board Votes to Eliminate Cost-of-Living Increases for Ohio Teachers:

Tuesday, June 13, 2017

A look at Ohio's five state pension systems

Ohio pension funds cutting back
By Alan Johnson
The Columbus Dispatch
June 12, 2017
Information from a chart posted with the article:
Ohio's public-employee retirement funds 
Here are facts and figures on Ohio's public-employee retirement funds, which cover more than 1.7 million people.
School Employees Retirement System; founded 1937; covers 200,820 active and retired non-teaching school employees; assets $12.3 billion; 2016 payout $1.1 billion in pensions, plus $196 million in health care
Ohio Police & Fire Pension Fund; founded 1965; covers 27,000 active, 30,000 retirees, beneficiaries; assets $15.1 billion; 2016 payout 1.2 billion in pensions, plus $223.5 million in health care
State Teachers Retirement System; founded 1920; covers 480,515 active and retired teachers; assets $74 billion; 2016 payout $7.1 billion in pensions, plus $677 million in health care
Ohio Public Employees Retirement System; founded 1935; covers 1 million active, retired members, beneficiaries; assets $90.6 billion; 2016 payout $5.6 billion in pensions, plus $1.2 billion in health care
Ohio Highway Patrol Retirement Fund; founded 1941; covers 3,200 active, retired and beneficiaries; assets $850 million; 2016 payout $59.9 million in pensions, $14.7 million in health care
Sources: Ohio retirement systems
*     *     *
Public-employee pension funds are big business in Ohio, providing a safety net for 1.75 million people.
There’s a lot riding on them.
Collectively, Ohio’s five public pension funds have $192 billion in assets and last year paid out more than $15 billion in pension benefits and $1.1 billion in healthcare benefits. They are not required by law to provide health insurance, but all five do. Whether they will in the future is uncertain.
Although the funds have been mostly reliable and financially sound for decades, recent economic downturns, soaring healthcare and prescription-drug costs, and the increased longevity of retirees have taken a toll. Several of the funds are reducing or eliminating cost-of-living adjustments, cutting subsidies and increasing health-care premiums.
The five funds are the Ohio Public Employees Retirement System (public workers); State Teachers Retirement System (teachers); School Employees Retirement System (school-bus drivers, cafeteria workers, janitors, secretaries); Ohio Police & Fire Pension Fund (municipal police officers and firefighters); and the Highway Patrol Retirement System (state troopers). The Ohio General Assembly has oversight of all five through the Ohio Retirement Study Council.
The big question: How long can the pension funds hold out financially in this economic climate? A study released in December by the Mercatus Center at George Mason University painted a gloomy picture.
“Ohio’s four largest public pension plans are severely underfunded based on traditional metrics of pension solvency, and they are only guaranteed to be able to finance their promised obligations for roughly the next decade without additional taxpayer contributions,” economists Erick Elder and David Mitchell wrote.
“However, the funding ratio does not take into consideration the investment risk associated with pension-plan assets; even if Ohio’s pensions were fully funded today, they would still only have a fifty-fifty chance of being able to fulfill their promises in the year 2045.”
The School Employees Retirement System
Members of this pension fund are the lowest-paid of the five, averaging about $24,000 a year, and the fund is under fire from members and the Ohio Association of Public School Employees, a labor union, because of proposed changes in cost-of-living adjustments.
Retirees receive a 3 percent COLA one year after retirement, but fund administrators propose eliminating the COLA from 2018 to 2020 and then capping it at 2.5 percent thereafter. Retirees would get no COLA until their fourth anniversary.
About 200 union members marched last week from the Statehouse to the fund headquarters at 300 E. Broad St. in protest. Some said they are worried that the proposed COLA changes signal bigger problems.
“The fear people have is not having a pension,” said OAPSE President JoAnn Johntony, 76, head custodian in the Girard City Schools in Trumbull County, where she has worked for 50 years. “To try to solve these problems on the backs of school employees is wrong.
“We have to live and pay bills like everybody else,” Johntony said. ‘They’re not seeing the human side of this. They’re not seeing how this affects our daily lives.”
Lois Carson, 57, the union’s vice president and a secretary in the Columbus school district, said she will live on her late husband’s small pension and her pension when she retires.
“I will probably be moving in with my kids to survive,” she said. “I’m very scared about it.”
Facing increases in healthcare costs, SERS retirees will be making less in retirement benefits than they did 30 years ago, Carson said.
The fund must get legislative approval for the COLA changes. Bills are pending in both the Ohio House and Senate. Administrators say the changes are needed to stabilize the fund and continue to provide healthcare benefits that otherwise probably would run out in less than a decade.
The Ohio Retirement Study Council recommended last week that the legislature approve the COLA adjustment for the school-employees fund.
Ohio Public Employees Retirement System
With 1 million active members and retirees, this is the largest public pension fund in Ohio and the 12th-largest public retirement system in the nation. It affects about 1 in 12 Ohioans and has 3,680 public employers in the system.
Changes began in 2012 when the General Assembly approved cost-cutting measures.
OPERS spokesman Todd Hutchins said the changes keep the health-care package intact “for the foreseeable future.” Hutchins said the fund is 80 percent funded for the future, falling within the 30-year requirement under state law for paying off pension liabilities.
Some of the changes, however, will make it harder for younger retirees and spouses of retirees. New retirees will pay about $219.33 in monthly health premiums, more than six times what retires paid last year. The fund is also ending both premium payments and reimbursement of some Medicare expenses for the spouses of members.
Ohio Police & Fire Pension Fund
The fund provides pension, disability and optional health-care benefits to full-time police officers and firefighters and their dependents.
“We continue to meet the state requirements as far as our funding level. That’s something we have to look at every year,” spokesman David Graham said. “We must be able to pay off our unfunded liabilities in a 30-year period, and we’re at 29 years.”
But changes are coming for fund members as trustees begin the process of providing stipends to retirees to seek their own health-care coverage rather than providing health insurance for them.
John Gallagher, the fund’s executive director, told The Dispatch, “Our investment returns in 2016 were excellent, with a net 10.9 percent return for the year. Our current challenge is finding a way to sustain a healthcare option for our retired population. While it is not a requirement that we provide a health-care plan, we realize it is a vital part of a secure retirement.”
State Teachers Retirement System
Like other public employees, retired teachers face big changes in their benefits. As of July 1, the system will temporarily eliminate all new cost-of-living increases in pensions to “preserve the fiscal integrity of the system.” Spokesman Nick Treneff said the situation will be re-evaluated in five years.
The system previously reduced the annual increase to 2 percent from 3 percent.
Treneff said the decision to eliminate the COLA resulted from three factors: lower-than-expected returns on investments, a larger-than-expected payout in pension benefits, and new mortality statistics showing that retirees are living longer, thus increasing the fund’s financial liability.
“Health care isn’t a requirement, but we know members value it,” Treneff said “To have good coverage is essential to the life of retirees. We don’t divert any money to health care from employee contributions.”
Ohio Highway Patrol Retirement Fund
With 3,200 members, the fund is by far the smallest pension system, and it has had to increase health-care premiums annually to remain in the black.
Like the other funds, the patrol system is struggling to meeting costs, said Mark Atkeson, the executive director. “Health-care costs have skyrocketed. The collapse of 2008-2009 set everything back, and we’re not completely recovered from that.”
Last week, the retirement study council approved removing a provision allowing patrol members to retire at age 48 with unreduced benefits; it also approved some reductions in off-duty disability and survivor benefits. The changes need the approval of the legislature.
Although those adjustments will help, the system’s health-care fund is projected to run out of money in less than a decade, Atkeson said.

Members of the Ohio Association of Public School Employees, a labor union for non-teaching workers, march outside the Statehouse on Wednesday in protest of proposed changes in cost-of-living increases in their pension benefits provided under the School Employees Retirement System. [Tom Dodge/Dispatch]

Monday, June 12, 2017

Here's one we missed in February: Teacher pension update points to problems

Teacher pension update points to problems
John Damschroder, Columnist
Published Feb. 21, 2017
John Damschroder
In a classic late Friday afternoon bad news dump, the State Teachers Retirement System of Ohio announced plans to cut its investment return assumptions from the 7.75 percent annual projection currently used. The teachers now join the Ohio Public Employee Retirement System and the Ohio School Employees Retirement System in trimming a half percent from investment return assumptions. (www.strsoh.org/news/board-news/2017/february-board-news.html)
The combined holdings of these Ohio public pension funds is $170 billion, so the half-percent adjustment means the state acknowledges an $850 million additional annual increase to the unfunded liability of the retirement systems.
Ohio is not alone in recognizing the futility of the financial assumptions they’ve failed to meet for a decade. But unlike most states, Ohio is maxed out on pension contributions unless the legislature changes the law and forces municipalities and school districts to pay much more to cut the increased deficit.
That’s not what’s going to happen. Instead, STRS, which increased teacher pension pay-ins from 10 percent to 14 percent of salary, is going to close an additional $11.5 billion gap between assets and obligations over the next 30 years, by “changing the benefit design plan.” That is how bureaucrats announce they are going to cut benefits. This follows a 2012 pension reform plan that cut $18 billion from state liabilities by charging employees more and delivering less.
The politicians and bureaucrats are crafting a storyline that blames increased life spans of retirees for the problem, with STRS's Friday announcement saying a new study recommends "adopting updated mortality tables that account for increasing lifespans among benefit recipients." But our public employment retirees don’t need to feel guilty for ducking death on the state’s timetable. The real problem is an asset allocation strategy that has been an abject failure.
Ohio’s emergence as the largest source of alternative investment funding has made Wall Street wizards rich on annual fees that totaled $734 million last year alone. STRS and OPERS both earned less than 1 percent last year and ended the year with less money than they started with. To compound the irresponsibility, leadership of both retirement systems wrote to this newspaper professing financial strength, while these sub-par results were known to them but still unknown to us.
How different things could have been if Ohio had not changed state law to allow the exotic investments that first brought losses to the Ohio Bureau of Workers Compensation and have now inflicted a much bigger calamity upon the entire state retirement system. Relying upon a 60-40 stock-to-bond investment fund, Ohio would have earned 8.63 percent last year and would have returned an annualized 10.67 percent over the last eight years. Going aggressive with a broad-based stock-only program like the S&P 500 would have returned 11.96 percent last year and 14.88 percent annualized for the last eight years.

Sunday, June 11, 2017

STRS...this guy has got your number!

New U.S. Census data show Ohio's pension woes
John Damschroder, June 6, 2017
In Ohio, 458,372 people receive their income and health insurance from a state pension system suffering from the twin calamities of too little compounding and candor.
Regular readers of this column know that the top executive of three of Ohio’s pension system’s wrote to this newspaper insisting that there is no problem, although no one was so bold as to match Gov. John Kasich’s absurd claim, made on national TV no less, that Ohio pensions, unlike most in the United States, are “rock solid.”
The newly released U.S. Census Bureau data on public pension plans reveal what an outlier Ohio would be if the claims of financial strength made by the governor and pension leaders were actually true. Sadly, Ohio is not outperforming the nation, it is simply making performance claims that are contradicted for the second consecutive year by the facts reported to the federal government.
The Ohio pension data reveal that payments to the retirees in the system total nearly $7.5 billion more than the payroll extractions from public employees and state and local government, plus the earnings on more than $178 billion in assets. At the same time, the future pension obligation for Ohio grew by nearly $7 billion, putting Ohio more than $14 billion in the red last year, while proclaiming either unique strength or no problems.
In truth, Ohio has a very big problem, compounded by the political determination not to recognize that fact, lest the implications of the issue cause the 1,311,351 citizens with a claim on the assets to awaken with fear and anger over a brewing crisis.
Between 2014 and 2016 Ohio’s pension obligations grew by $17 billion while the state's pension assets fell by more than $6 billion. In three years the state pensions have added $23 billion to a liability that currently stands at just under 10 percent of the state’s gross domestic product and assumes future investment earnings that the retirement systems have not been able to achieve.
Moreover, these performance failures have occurred during strong markets.  The pension leaders tell us the $734 million they paid in outside management fees for 2015 provide protection in a down market. I fear that hypothesis will be tested soon with results that make our current situation seem like the good old days.
Ohio has altered the payout formulas and increased the pay-in rates to keep the liability from growing. But charging workers and their employers more for less doesn’t solve the problem when investment earnings lag the market as has been the case for Ohio.
The state pensions are the functional equivalent of a company with $15.7 billion payroll that is deeply cash-flow negative. In the campaigns for state office that are currently taking shape, this issue needs to be forced into the debate. More than 1.3 million Ohioans are directly affected, and the income they keep or lose is a huge factor in the state's economic ecosystem just as it would be if a huge employer suddenly cut its payroll.
John Damschroder, a Fremont resident who worked in Gov. George Voinovich’s administration, writes about business and economic development in Sandusky County.

Tuesday, June 06, 2017

Wayne Clark and Bob Buerkle: More financial inequality in your pension amount?

STRS Board Makes the Same Mistake Four Years Later
(Something Every July-December Retiree Should Know)
In June 2013 I contacted STRS through email to complain about the inequality of how the Jan-June retirees were the only ones being granted the last 3% COLA prior to the one year suspension. I explained to the rep that by not receiving the last 3% COLA a July-Dec retiree with an annual monthly COLA increase of $100 would lose $33 per month for the rest of their life compared to the Jan-June retiree with the same $100 monthly COLA. The rep responded that the 2014 COLA suspension starts at the beginning of the fiscal year which happens to be July 1, 2013. I questioned the rep on why the suspension had to start on July 1st? The rep responded that it had to start somewhere. Realizing that the rep wasn't going to help expose this inequality and feeling there was nowhere else to turn I chose to close the book and accepted the loss of COLA compared to my fellow Jan-June retirees.
Fast forward to April 2017:
After hearing about the STRS Board starting the indefinite COLA suspension at the beginning of the 2018 Fiscal Year (July 1, 2017) I contacted STRS member services again to complain. After explaining to the rep that the Jan-June retirees would be receiving what could be the last COLA ever and by not receiving the same 2017 COLA the July-Dec retirees would again be the victims of inequality. Like in 2013 I was informed by the rep that the suspension has to start somewhere and the first day it will start is the new fiscal year which happens to be July 1, 2017. The rep also assured me the July retirees would be the first to receive the new COLA when it was reinstated and the Jan-June retirees would have to wait a year. I told the rep that might work with a one year suspension, but a multiyear suspension will result in a financial inequality between the two groups of retirees. The rep replied that my concerns would be forwarded to management and the Board for review.  The rep also informed me that the Board's decision was final and they do not expect the Board to revisit their decision regarding the COLA change or the effective date. 
At that point I developed four charts, the first two charts dealt with the financial inequality of the 2013 COLA reduction and suspension. In chart 1-A I showed how by using the "Fiscal Year" calendar method in 2013 the July-Dec retirees lost and continue to lose 1/3 of the 2013 COLA that the Jan-June retirees were granted. (Note: I used an example of a $100 per month COLA with a $33 monthly loss in my communication with the STRS rep in my 2013 email;  on chart I-A I have used a $75 per month COLA with a $25 monthly loss, both examples have a 33% loss of COLA in comparison to January-June retirees.)  In chart 1-B it shows that if an "Annual Calendar" method for granting, adjusting and/or suspending the COLA had been used all retirees would have been treated the same and there would have been no financial inequality in 2013.
In the second set of charts (2-A, 2-B) I point out this year's financial inequality between the Jan-June retirees and the July-Dec retirees.  Chart 2-A reveals how under STRS's current practice by using the "Fiscal Year" calendar method the Jan-June retirees would be receiving a 2017 COLA that could be their last COLA while the July-Dec retirees would be denied the 2017 COLA.  This STRS Board decision will now place the base pensions for July-December retirees 3.0% behind the Jan-June retirees. The 2-A chart uses a hypothetical three year suspension of our COLA to show the financial inequality between the two groups. The last chart 2-B shows how by using the "Annual Calendar" method for granting and suspending our COLA it will allow all retirees to receive the 2017 COLA. Using this method would treat all retirees the same and there would be no financial inequality between the two groups for the current suspension of the COLA. I asked the STRS rep to forward the charts to the STRS Board and the rep responded that all of my concerns and charts would be forwarded to the management and Board for review.
Thinking I can't be the only person upset with this financial inequality, I contacted Kathie Bracy and asked if any other July-Dec retiree had complained to her regarding the financial unfairness of how July-Dec retirees were being treated in regards to the 2017 COLA?   Kathie forwarded my email to Mr. Bob Buerkle, Mr. John Curry and Mr. Dennis Leone. Mr. Bob Buerkle responded to my complaint and said he saw issues with the financial inequality between Jan-June retirees and July-Dec retirees as well. Together we have set out to reverse the Board's financial inequality between the two sets of retirees. We will explore all legal options to resolve this financial inequality.
Wayne Clark 

Click images to enlarge.

Monday, May 29, 2017

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What me worry; Cadillac
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What me worry

Saturday, May 27, 2017

Mario Iacone: COLA Clarifications

From Mario Iacone, May 27, 2017
For those of you that have sent me questions and information on COLA!!!
Only new retirees will lose their COLA.
    Read p.3 at the top of the STRS letter we just received. It states,
        "The cost of living increase will be reduced to 0% for all benefit recipients."
            That is a direct quote.  Worse comes to worse, call STRS.
COLA will be restored in five years.
    Read p.3 at the top of the STRS letter we just received. It states,
        "...in 2022, the board will evaluate whether an upward adjustment of the cost of living increase is payable without materially impairing the fiscal integrity of the retirement system."
            That is a direct quote.  Worse comes to worse, call STRS
In order to have the COLA restored five years from now, INVESTMENT EARNINGS
would have to meet the target of 7.45% just to stay even.
Then, at least another 10 BILLION DOLLARS would have to be made.
Even, if all foes well as described in TRUE COLA FACT #1, there is another factor.
THE UNFUNDED LIABILITY.  Right now, FUNDED RATIO stands at approximately 56%.
Even with great investment returns over the next 5 Years, if the funded ratio does not get close to 90% or so, COLA WILL NOT BE RESTORED!
Please start to build your STRS email recipients as we are trying to develop a huge network of recipients for possible future actions.

Tuesday, May 23, 2017

Wanna see what those guys in the Investment Dept. are getting (while your income keeps shrinking away) ?

Jim Stoll to John Curry and Others
May 23, 2017
John and All,
This salary and bonus chart paid to our 88 investment staff should make us all sick.. 88 STRS employees collected over $7,000,000 in bonuses for a performance way less then the 7.5% return which is STRS goal each year!  This is crazy! How does losing your Cola feel now?
Jim Stoll
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Thursday, May 18, 2017

Letter to us from Mike Nehf...and it isn't a love letter!

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Worth repeating.....

I also believe we have something I call the STRS Investment Mis-Management Tax
It's a tax you can't get back
It's a tax you can't vote on
It's a tax you can't deduct
It's a tax that's gone forever, and
It's a tax that currently provides smaller benefits than everybody paid for
~ Mike Mulcahy
STRS speech May 18, 2017

Bob Buerkle's speech to STRS May 18, 2017: Warren Buffett Wins $500,000 Investment Bet

"For the past few months we have been telling this STRS Board that your investment returns would be larger (and less expensive) if you used index funds. This is the same thing that Warren Buffett has been saying for a very long time. This Board should take notice and learn from the 'Oracle of Omaha'."

"Here are a few index funds you should be familiar with and they are beating the tar out of your investment experts. The reason you should be familiar with them is simple. They are index funds that STRS provides to Defined Contribution Plan members through the Nationwide Insurance Co. and you can see them yourself on your own STRS website."

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Bob Buerkle: The STRS Pension Penalty for Working in June During Your Last School Year

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Dean Dennis' speech to STRS Board May 18, 2017

"I retired in 2008. In 2008 a teacher named John Curry wrote Director Michael Nehf about the safety of his pension. Director Nehf responded back reassuringly."
"The applicable provisions of the statutes that govern STRS Ohio and SERS are very similar. The pertinent language of each state provides that pensions are vested when granted. This means that retirees vested in the STRS Ohio defined benefit plan cannot have their pension formula reduced by STRS Ohio. In simple language, once an STRS Ohio member begins receiving a pension STRS Ohio cannot reduce that pension." 
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Mike Mulcahy's speech to STRS May 18, 2017: The 2 main types of pension plans

"Who is responsible for fulfilling the pension promises made by STRS when your investment experts lose so much of 'our' money? I suggest to you that it is not the retirees. However, STRS acts as if they have the right to steal the benefits that we were promised after we signed our retirement contract.This is what we worked for and paid all of our STRS required contributions for." 
"Now, you think you have the right to make us pay for your mismanagement, when the obligations are clearly on the STRS to deliver on our promised pensions. Find a way!"
Click image to enlarge.

Wednesday, May 17, 2017

Jesse Parete: Some questions for Nick Treneff

From: Jesse Parete 
Date: Thu, May 11, 2017 
Subject: Questions I hope you can answer
To: Nick Treneff
Dear Mr. Treneff,
One of the immediate topics engaging STRS retired teachers when they socialize is what is going on with STRS. I have tried to synthesize from those conversations the following questions.
1. When was the percentage teacher pay into STRS raised from 10% to 14%? 
2. Two years ago STRS retirees skipped a COLA: What effect did it have on the solvency of the STRS system? 
3. For the past several years retirees have received 2/3 of their original COLA.  When did this start and what effect has this had on the solvency of the STRS system? 
4. Are any of the other four state retirement systems in the same financial straits as is STRS?   
5. Have any of the other four state retirement systems altered or suspended  their COLA for their retirees?
6. Why has STRS had trouble averaging 7.5% with investments?
I don’t know about what those that I talked to actually have been averaging more than 7.5%, but I know that I have a very conservative Edward Jones advisor who has helped me average 9% from 2009 through 2016 and so far this year it is much more than 10%.
I hope that you can provide some context and answers.  We all want what is best for Ohio as well as for ourselves.
Jesse Parete
Retired since 2009

Thursday, May 11, 2017

You can bet nobody at STRS has to look for a cheaper apartment now! Thanks, Board!

STRS retiree to John Curry
May 11, 2017
John, I am looking into finding an apartment due to increase. As my STRS check is going down, I have to look into lower living costs. I just can't believe I am facing this due to the incompetency of STRS. I only fear more doom is coming. I have called several places and told them about STRS and its financial condition. Several of the resident managers said they have gotten calls from people like me and the STRS mess. Isn't that just wonderful??? I can't believe I am facing this at age seventy. Can't something be done with this STRS group?  I know they meet next week, but they seem insurmountable.

John Curry: the STRS investment staff should participate and retire in the same system they invest in

John Curry to Dean Dennis
May 11, 2017
Subject: Re: What STRS isn't doing
Dean...well stated. Another concept that I would like to see is that the STRS investments staff be forced to participate (and retire in) the SAME SYSTEM that they invest in ....rather than retiring in OPERS as they currently do. Maybe that would cause them to invest smarter and be more conscious and responsible with their investing. As it is now....if they make risky investments to pad their healthy bonuses and FAIL...they simply don't get the bonus....but their nice salary remains intact and the retirement system THEY retire in doesn't take a hit for their careless risk taking.
John Curry

Dean Dennis: What STRS isn't doing

Dean Dennis to Jim Stoll
May 11, 2017
Subject: What STRS isn't doing
I've been going to the STRS meetings with Bob lately trying to encourage them to make investments in our interests. For instance, why has STRS lowered their earning assumption to 7.45%? This makes no sense. Are they trying to enrich their investment staff or our pension fund? I say this because S&P 500 has historically annually averaged over 9% since the 1920's. There have been sixty (60), thirty year (30) cycles from which to measure. In other words, over a thirty year cycle how much will the S&P 500 return on an annual basis? The answer is the S&P has always returned greater than 8% and over a third of the time has returned greater than 10%. Simply investing in ETFs (Equity Trading Funds) tied to the S&P 500 lowers risks and provides a greater return that STRS performance.
Also consider this, why aren't they investing significantly in other baskets of ETF's in different segments to increase what they can earn with our monies?  Here are four: XSD (a basket of semi-conductor stocks) it has returned 157% over the last 5 years, PSCT (a basket of information, software and electronic stocks) it has returned 142% over the past 5 years,-VHT (a basket of stocks tied to health care) it has averaged 124% over the past 5 years, XBI (a basket of biotech stocks) it has returned 170% over the past 5 years.
My point is the above basket of ETF's have averaged 18% annually over the last 5 years. Why are we investing in hedge funds, foreign equities and real estate. It take very little research to discover that Foreign Equities have under performed US Equities over the last 5, 10, 15, 20, 25 year periods. That said, STRS likely pays a quarter of a million annually to outside firms who either don't share this information, or it is simply ignored. Bottom-line, when you refuse to look at solid investments maybe you do need to lower your earning assumption expectations to lower than the market provides.
Dean Dennis

2011 PBIs

Jim Stoll to Nick Treneff
Subject: Investment Staff Salaries and Bonuses fiscal years 6/30/ 2016 AND 6/30/2017
Date: 5/11/2017
Here is the format you had sent previous similar requests in.  If this is still possible that would be great.
Jim Stoll
(Click images to enlarge.)

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