OEA Retirement Systems Update

OEA Retirement Systems Update

Report to the OEA Executive Committee: January 2006

Please distribute to other OEA members

Ramser and Meuser Earn OEA Endorsement for STRS Board

In April 2006, the State Teachers Retirement System will conduct an election for two contributing member seats on the STRS Board. A committee of OEA members conducted screenings of four candidates for the STRS Board and unanimously recommended Constance Ramser for re-election to the Board and Mark Meuser for election to an open seat. On January 15, 2006 the OEA Executive Committee approved the recommendation of the steering committee and endorsed Ramser and Meuser for the STRS Board.

Conni Ramser is a teacher at Jackson Memorial Middle School in Stark County. She presently serves as Vice Chair of the STRS Board and is seeking reelection. Mark Meuser is a teacher at Gahanna Lincoln High School in Franklin County and also serves as President of the Gahanna Jefferson Education Association. Both Ramser and Meuser earned the OEA endorsement because of their understanding of the issues and challenges facing the pension system and their steadfast dedication to preserving benefits for Ohio’s teachers.

Each candidate is required to file petitions with at least 500 signatures from active teachers in order to qualify for the ballot. Petitions for each of the OEA recommended candidates will be sent to OEA local presidents in the next President’s mailing. Ballots will be mailed to all members eligible to vote in the election on April 5, 2006. The deadline for voting will be May 1, 2006.

Strong Support Among Active Teachers for STRS Health Care Proposal

During October and November 2005, the Health Care Advocates for STRS (HCA) joined with the STRS Board to conduct an education and engagement campaign with STRS members regarding the issue of health care. This campaign had two goals: (1) educate active members about the economic realities of health care costs and (2) gauge support for a possible legislative initiative that would increase member and employer contributions to provide a dedicated revenue stream for the STRS Ohio Health Care Program. Survey results from this campaign show that there is strong support among active teachers to pursue a dedicated revenue stream for health care benefits for current and future STRS retirees.

During the two month campaign, more than 10,000 STRS Ohio members were surveyed. A significant amount of data was collected and analyzed from the 7,100 postcard surveys, 595 online surveys and 713 meeting surveys that were returned to STRS Ohio. The data show that the information provided by STRS Ohio and the HCA increased members’ recognition of the need to save for health care. Secondly, member feedback indicates there is majority support for creating a dedicated revenue stream for health care through the increase of member and employer contributions over a five-year period.

Of those surveyed after attending a meeting, 80% of the respondents supported the proposal to increase the employee and employer contribution by 2.5% over 5 years to create a dedicated revenue stream for health care benefits for current and future STRS retirees. Respondents to the postcard and online survey were also supported that motion, 73% and 71% respectively.

Based on the results of the campaign, and with continued support by the STRS membership represented by the HCA, the STRS Board committee instructed STRS Ohio staff to begin drafting a legislative proposal and a plan for continued member education and engagement.

STRS Board Notes

Additional actions taken by the STRS Board at the December 8-9 Board meeting:

• The Board voted to settle the lawsuit brought by non-investment employees regarding the STRS failure to pay performance-based incentives. Franklin County Court of Common Pleas had ruled in favor of the employee plaintiffs in the class-action lawsuit. A special counsel appointed by the Attorney General negotiated a $3.4 million settlement and recommended settlement to avoid further court costs and possible punitive damages.
• The Board voted to lower the interest rate paid on account withdrawals to 2% for members with less than three years of service and 3% for members with three or more years of service. These changes put STRS’s rates closer to market interest rates. This change is effective January 1, 2006 and interest accrued before that point will not be affected by the change.
• The Board voted to replace the key computer platform for STRS operations from Legacy, a custom built system maintained by staff, to a new platform developed by a Vitech Systems Group. This is a costly transition but should result in substantial savings once the new system is online. Implementation costs are estimated at $19.5 million over a three-year period, accruing total costs of $64.5 million over the next ten years. This compares favorably to the expected ten-year cost of $97.9 million for the current system.

OPERS Partnership Aimed at Helping Smokers Quit

The Ohio Public Employees Retirement System (OPERS) has formed a partnership with the Ohio Tobacco Use Prevention and Control Foundation to promote the Ohio Tobacco Quit Line, 800-QUIT-NOW, and fund nicotine replacement therapy for its members. The program includes five telephone counseling sessions and an eight-week supply of nicotine replacement patches.

Nearly 200,000 OPERS retirees and their dependents will have access to the service. Research shows that there are immediate and long-term health benefits to quitting smoking regardless of age; and improving the health status of enrollees is one of the strongest ways to combat skyrocketing health care costs. OPERS is the first public entity to partner with the Ohio Tobacco Quit Line in this manner.