Flashback - Paul Kostyu: STRS board rips ‘Buy Ohio’ clause in reform bill
Canton Repository
November 22, 2003
By PAUL E. KOSTYU
Copley Columbus Bureau chief
"In his report to the board, Asbury disputed a recent actuarial study given to the Ohio Retirement Study Council which said Ohio’s public pension funds were at risk because of a growing under-funded liability. The study suggested increasing contributions and reducing benefits.
Asbury said he believes the current contribution rates are “adequate for current pension levels.”
COLUMBUS — Lawmakers were vilified Friday at the monthly meeting of the State Teachers Retirement System board.
They came under attack for two provisions in House Bill 227, a bill to reform the state’s five public pension plans.
One provision would require the pension systems to send a percentage of their portfolio trading to Ohio brokerages and investment managers. The second would put the state treasurer on each board and allow him to hire and fire the executive directors of each system, with the advice and consent of the boards.
Damon F. Asbury, the teachers’ system’s interim executive director, told the board the Buy Ohio provision would “impede the fiduciary responsibility” of the board, “add excessive costs” and be a “serious risk to our tax-free status.”
He called the second provision, initiated by Ohio Treasurer Joseph Deters, “ill-conceived” and “bad organizational theory.” He said it would create an “improper balance of the board.”
Members of the system agreed, but some laid the blame for the legislation with the board.
Mary Beth Hunter, an Alliance teacher and critic of STRS spending, called it “another fine mess you’ve gotten us into.” She blamed it on the poor decision-making of the board in the past, which led to the need for more legislative oversight.
“It’s time for you to take action to fix it,” she said.
Paul Boyer, a retired educator from Allen County, said the House bill is “a real disaster.”
A companion bill, Senate Bill 133, is “better, but still needs changes,” he said.
The Senate bill has neither the Buy Ohio nor treasurer’s provision in it.
Boyer and other retirees promised their cooperation with the board and STRS staff to overcome those and other issues in the legislation.
Asbury said he and the directors of the other pension systems were to meet with Gov. Bob Taft on Friday afternoon to make their case about pension reform. Asbury and other directors have said in the past that they back most of the reform.
Earlier this week, all five retirement systems sent a letter to Taft, Senate President Doug White and House Speaker Larry Householder opposing the two provisions in the House bill.
The Ohio Federation of Teachers called on its members this week to oppose the House bill’s provisions, particularly the one that would create a “pension fund czar.”
“The potential for mischief is enormous,” said Tom Mooney, the union’s president.
In his report to the board, Asbury disputed a recent actuarial study given to the Ohio Retirement Study Council which said Ohio’s public pension funds were at risk because of a growing under-funded liability. The study suggested increasing contributions and reducing benefits.
Asbury said he believes the current contribution rates are “adequate for current pension levels.”
He said the under-funded liability will grow in the short term, but decrease long term. “There is no cash-flow problem and there is long-term funding stability,” he said.
He also noted that the State Teachers Retirement System bond rating was renewed at the AAA rate, the highest level. The bond rate for the state of Ohio, on the other hand, is lower — AA+ or AA2 depending on the rating service.
You can reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:
paul.kostyu@cantonrep.com
http://www.cantonrep.com/
November 22, 2003
By PAUL E. KOSTYU
Copley Columbus Bureau chief
"In his report to the board, Asbury disputed a recent actuarial study given to the Ohio Retirement Study Council which said Ohio’s public pension funds were at risk because of a growing under-funded liability. The study suggested increasing contributions and reducing benefits.
Asbury said he believes the current contribution rates are “adequate for current pension levels.”
COLUMBUS — Lawmakers were vilified Friday at the monthly meeting of the State Teachers Retirement System board.
They came under attack for two provisions in House Bill 227, a bill to reform the state’s five public pension plans.
One provision would require the pension systems to send a percentage of their portfolio trading to Ohio brokerages and investment managers. The second would put the state treasurer on each board and allow him to hire and fire the executive directors of each system, with the advice and consent of the boards.
Damon F. Asbury, the teachers’ system’s interim executive director, told the board the Buy Ohio provision would “impede the fiduciary responsibility” of the board, “add excessive costs” and be a “serious risk to our tax-free status.”
He called the second provision, initiated by Ohio Treasurer Joseph Deters, “ill-conceived” and “bad organizational theory.” He said it would create an “improper balance of the board.”
Members of the system agreed, but some laid the blame for the legislation with the board.
Mary Beth Hunter, an Alliance teacher and critic of STRS spending, called it “another fine mess you’ve gotten us into.” She blamed it on the poor decision-making of the board in the past, which led to the need for more legislative oversight.
“It’s time for you to take action to fix it,” she said.
Paul Boyer, a retired educator from Allen County, said the House bill is “a real disaster.”
A companion bill, Senate Bill 133, is “better, but still needs changes,” he said.
The Senate bill has neither the Buy Ohio nor treasurer’s provision in it.
Boyer and other retirees promised their cooperation with the board and STRS staff to overcome those and other issues in the legislation.
Asbury said he and the directors of the other pension systems were to meet with Gov. Bob Taft on Friday afternoon to make their case about pension reform. Asbury and other directors have said in the past that they back most of the reform.
Earlier this week, all five retirement systems sent a letter to Taft, Senate President Doug White and House Speaker Larry Householder opposing the two provisions in the House bill.
The Ohio Federation of Teachers called on its members this week to oppose the House bill’s provisions, particularly the one that would create a “pension fund czar.”
“The potential for mischief is enormous,” said Tom Mooney, the union’s president.
In his report to the board, Asbury disputed a recent actuarial study given to the Ohio Retirement Study Council which said Ohio’s public pension funds were at risk because of a growing under-funded liability. The study suggested increasing contributions and reducing benefits.
Asbury said he believes the current contribution rates are “adequate for current pension levels.”
He said the under-funded liability will grow in the short term, but decrease long term. “There is no cash-flow problem and there is long-term funding stability,” he said.
He also noted that the State Teachers Retirement System bond rating was renewed at the AAA rate, the highest level. The bond rate for the state of Ohio, on the other hand, is lower — AA+ or AA2 depending on the rating service.
You can reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:
paul.kostyu@cantonrep.com
http://www.cantonrep.com/
posted by Kathie Bracy at 11:23 AM
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