Molly questions Damon, Board re: 35 year incentive plan

From: Molly Janczyk

Sent: Sunday, January 22, 2006

Subject: Damon: STRS BOARD: 35 Yr. incentive plan: two questions

Thank you, Barb.

DAMON: STRS BOARD: I too wish a complete and clear summary of the report to support or correct any info rec'd from attendees for a full and specific message to be forwarded to membership.

QUESTIONS:

PLEASE ANSWER ALL ITEMS:

Taking into account contributions into the system by those working 35 yrs and actives not withdrawing for 5 add'tl years minus their salaries, does this plan:

1. MONETARILY: -cost the system; if so, how much -earn for the system; if so, how much -is it a wash or neither costs nor earns

2. AFFECT UNFUNDED LIABILITY: -detrimentally and by how many years; for ex., if stopped, my understanding is the unfunded liability would immediately go down to 39 yrs. and if never implemented the unfunded liability would currently be 37 years roughly.

-positively

-with rate of return pays for the plan: completely, partially ________%, not at all.

3. Summary: The 35 yr. incentive affect on the pension system is____________________________.

4. OEA would like us to believe that seeking legislation to increase contributions from actives will be DEAD, KILLED (according to Billirakis to CORE and Bill L. in his speech on Thurs to the Board, 1/19/06) if the 35 yr enhancement is changed.

DOES THE STRS BOARD AND ACTIVE MEMBERSHIP AS A WHOLE BELIEVE THIS ? I find it difficult to accept that actives would hurt themselves in retaliation for the STRS doing what is necessary to help all membership; their duty by law: ORC:3307.15.

These are 2 different issues entirely. I am not going to try to stop legislation which would help me because:

* the former OEA dominated STRS Board hurt me by increasing my HC costs to an unaffordable level as a result of soaring costs affecting the system, market drops and the former OEA ACTIVE MEMBERS on the OEA dominated board riding a high market trend and not protecting membership long ago by fighting for secure health care benefits for retirees.

*This former OEA dominated STRS Board knew health care costs would be prohibitive and did nothing to save it for us. STRS and OEA decided in the early 90's NOT to guarantee HC for membership when a legislative proposal was discussed back then and arguing LSD's wouldn't support it. NOW, OEA says they CAN muster support and be prepared for opponents.

*The former OEA dominated Board DID NOT plan for a rainy day and as most of them personally said to me: "WE WERE RIDING THE MARKET AND THE MONEY SPENT (misused , skimmed funds for perks) WOULDN'T PAY FOR HC" True. But, instead of partying, they COULD have begun to increase premiums back in the 90's in a manner that would have offset the untenable premiums today which have destroyed many retirees. Instead, they rode the wave, rewarded themselves as some of them said they 'deserved such (perks) for all the work they did.' THEY could have worked diligently to find a stream of revenue, NOT relied solely on the market and planned longterm and OPERS has done.

*The former OEA dominated Board created this 35 yr enhancement which rewarded THEMSELVES with little thought of longterm effects. They are gone except for Mike Billirakis and enjoying this additional perk caring little about current actives facing a pension plan unable to pay for this incentive longterm or that if it is continued, caring little about the actives who may have to pay much more than they do to continue this perk.

Some board members wondered WHY the former board created such a slanted, 2 class system. FOR THEMSELVES WAS THE ANSWER to them.

If CURRENT ACTIVES ARE FOOLED BY THE RHETORIC THAT THIS SCRUTINY WOULD NEVER HAPPEN IF OEA WAS DOMINATING THE STRS BOARD: THINK AGAIN!

YOUR PENSION SYSTEM MUST BE SECURE FOR ALL RETIREES AND IT WILL NOT BE IF A PLAN IS IN PLACE WHICH DRAINS IT EITHER MONETARILY OR ITS UNFUNDED LIABILITY OR BOTH!

The problems the former OEA dominated Board brought upon us with short sighted thinking make it mandatory to examine all areas of past practices and no matter who was currently on this board, this would still have been examined for its longterm effects.

It is time to be responsible and consider all retirees, current and the generations to come. WHAT IS IN THE BEST INTEREST OF ALL?

It matters not to me if the plan is saved or eliminated. It matters only how it affects the system for everyone, not just those who will benefit NOW or in a few years BUT THOSE YOUNG EDUCATORS TO COME! WILL IT ENHANCE AND HELP PROTECT THEIR FUTURE RETIREMENT OR CAUSE IT STRAIN?

THAT is the question, the former seemingly short term minded, self serving OEA BOARD MEMBERS DID NOT GUARANTEE! THEY GUARANTEED MORE BENEFITS FOR THEMSELVES.

It is impossible to continue a plan if it benefits only one group of retirees. The law states all membership must be protected. If it rewards one group without harm to others, that is different.

My personal thinking is that a fair and equitable system rewards according to steps, years of service as Soc. Sec. does. For each add'tl year, addit'l % of salary. The 35 yr enhancement does not show that actives would not stay that long if able due to increased HC costs for retirees vs. a better HC plan and costs for actives or actives simply wishing to work longer.

The above is my opinion based on 4 years involvement in STRS matters. Thank you.

Molly J.