Damon Asbury to Tom Curtis on SB 190: Grandfathering to be discussed at December Board meeting

From: Damon Asbury

To: Tom Curtis
Sent: Tuesday, December 06, 2005
Subject: RE: 120505 Curtis To Asbury; No Response To 2 Emails

Tom:

I will reply to both of your 11/22/05 e-mails with this one reply.

With respect to your 11/22/05 e-mail, sent at 3:57 a.m., dealing with SB 190, I offer the following comments:

As you know, Buck Consultants has been asked to provide the Board with an analysis of the financial impact of SB 190. The impetus for this request comes from many sources, including staff, Board, individual members and organizations such as yours. Completing this study as of the end of the 2004-2005 school year is particularly appropriate since we have just completed the first five years under the provisions of the bill which included an enhancement in the benefit formula for extending the years of service from 30 to 35 years.

The report was expected to be completed for the November Board meeting, but the actuary asked to delay until December due to technical issues. At the November Board meeting, additional questions were posed, so the report will be presented at the January Board meeting. That report will show the impact of all aspects of SB 190, including the 35 year enhanced formula, the change to a 2.2% benefit formula for active teachers, the change to a 2.1% benefit formula for those who had already retired, and the provision to bring the purchasing power of benefit recipients to at least 85% of that at the time of retirement. While I would have preferred an earlier report, the additional information will make for a more complete report.

The analysis reported in the May 13, 2003 letter from Buck Consultants, to Mr. Herbert L. Dyer, was requested by the Retirement Board in 2003, due to suggestions from the membership that the 35 year enhancement might be too generous.

You suggest that the impetus for SB 190 was solely that of the Board in 1999. Actually, there were many sources of support because the system was nearly 100% funded at that time and both actives and retirees were seeking benefit enhancements. SB 190 provided for both with an estimated $900 million in benefits for retirees and $1.4 billion for active teachers. This was roughly proportional to the active/retiree ratio at the time.

It is my recollection that the discussions in 2004 with CORE about SB 190 centered on (1) whether the proposal was based on an actuarial study and (2) what the experience had been to date. Staff reported that an actuarial study had been performed by Buck Consultants at the time and that it was their opinion that receiving contributions from the employee and employer for five additional years, and paying pension and health care benefits for five fewer years would be “a wash.” I further indicated that STRS Ohio would have a study of the actual results prepared when there was actual data for five complete years.

You chose to characterize a desire for such as study as “flippant.” I believe it is the appropriate course of action. It is important, I believe, to base decisions on data, and not opinion, whether mine or yours.

I do think you will be pleased to know that the discussion of grandfathering that you and several Board members have requested is scheduled for the December Board meeting.

The IFS study you refer to is not under STRS Ohio control. It is being done independently under the auspices of the ORSC. We have no control over either the completion of the report or the timing of its release. I am also eager to receive the report.

Concerning the Buck Consultants report of 2002, the study has been previously shared with you, the Board, with the ORSC, etc. I don’t see that I can amplify on its contents.

With respect to your e-mail of 11/22/05, sent at 2:32 p.m., I appreciate your comments, but I certainly don’t feel that you need to apologize for any comments that you have made in the past. You are entitled to your views and opinions and even though you and I may share differing viewpoints, I respect your right to express yourself.

If I inadvertently angered you by posing the simple question about “who” promised you health care, please understand that it was an honest question on my part. As you may know, I began my own service as a contributing member to STRS Ohio in 1967 and I didn’t recall anyone promising me health care. Like you, I certainly hoped that it would continue to be available.

I know that we all can evoke strong feelings with our comments even when we don’t intend to do so. So, I also apologize to you if my question angered you. I didn’t mean to have that effect on you.

Damon

From: Thomas Curtis

Sent: Monday, December 05, 2005
Subject: 120505 Curtis To Asbury; No Response To 2 Emails

Hello Damon,

I sent you two emails on 11/22/05. I have received no reply from you concerning either email. Would you kindly respond to both?

Thank you,

Tom Curtis