Molly: Issues for Damon and Board

From Molly Janczyk, February 6, 2006

Damon, STRS BOARD, CORE/DAMON GRP:

I have been trying to get the other areas addressed for 3 yrs. Please tell me if these items can be discussed for benefiting retirees and unfunded liability.

Please tell me WHY they cannot be discussed if not, or why they would NOT save money for each point below.

STRS has long told us that legislators are more apt to listen if they see us taking steps to address problems.

By raising retirements ages, increasing years for minimum retirement and using scales to pay for ourselves, we can show we are bearing as much burden as possible.

ANY changes would be for new retirees only far enough from retirement to have ability to make sound decisions, something NEVER afforded current retirees.

How can we hope to attract new educators without benefits and HC?

Could any of these affect unfunded liability enough to help lower it:

1. Percent of pension vs. straight dollar amount for retiree HC. Premiums would be proportionate to affordability. Medicare factored in?

2. 20 yr minimum for all NEW retirees for HC benefits: -access for 15 to 19 only (NEW retirees 5 yrs out; no one already retired or about to retire)

3. Sliding scales for NEW retirees 5 yrs out: (NO current retirees or about to be retired) -higher costs for 20 yr retirees for all medical and RX costs (copays, premiums, out of pockets and RX) with costs decreasing as go up in service credit to 30 or more years with 30 yrs. paying the least in total costs in all areas of medical and RX expenses.

4. AS SOON AS POSSIBLE : GRANDFATHERING RETIREES: SPOUSAL SUBSIDIES: for those who retired before the HC costs soared and spouses were dropped with no prior knowledge or recourse. I know retirees were being told as late as
2000 or 2001 that they'd never have to worry about HC when asked this specific question. I don't know exactly when warnings and proper info began but then all retirees who were close to retiring within a certain period of that should be included in the grandfathering for a % of spousal subsidy to be reinstated.

5. Bonuses for investment staff based on return per advice of Consultants to STRS: If no gain, no bonus! Then percent of bonus equivalent to the earnings made for STRS. For ex. 20% gain = 20% bonus. Bonus range depend on amount earned.

6. Objective and measurable standards ONLY for all raises, bonuses, etc. NO SUBJECTIVE awards, raises, bonuses, etc.

7. The STRS Board voted to stop bonuses for non investment staff and yet it continually is revisited. Bonuses by all other names are still bonuses whether merit, incentive, etc. are tacked to it. COLAS of 3% for all staff annually and step raises at certain junctures IF the individual is performing to OBJECTIVE standards as with educators-every 4 yrs seems fair. The government has steps; educators have steps.

8. Raise the age for FULL retirement/30 yrs or more incrementally as Soc. Sec. did:
xxx• 5 yrs out: 54 yrs old to retire
xxx• 6 yrs out: 55 yrs old to retire
xxx• 7 yrs out: 56 yrs old to retire
xxx• 8 yrs out: 57 yrs old to retire
xxx• 9 yrs. out: 58 yrs old to retire
xxx• 10 yrs out: 59 yrs old to retire
xxx• 11 and more: 60 yrs old to retire

9. NO MORE CONSULTANTS FOR 5 years! We've paid enough consultants and hired enough companies to make decisions. Let's conserve! This is based on comments over the past few years and currently re: this management's style of hiring consultants.

10. Any consideration of change of enhancements of SB190, to NOT affect anyone in the process of receiving or about to receive: IF changes made, grandfather ALL current recipients and all close to making a decision beyond 30 yrs. Such as several years out from 30 yrs. If the 35 yr enhancement earns and does not lose any money for STRS continuing to only affect the unfunded liability by 3 yrs, leave it in place and look only at other enhancements which add nearly 10 additional yrs to unfunded liability. NO MORE TAKING ANYTHING FROM THOSE WHO ALREADY RECEIVE OR ARE CLOSE TO RECEIVING HAVING ALREADY MADE LIFETIME ALTERING DECISIONS.

11. If legislation fails to increase contributions, institute an enforced savings HC plan to offset costs and preserve HC for and benefits will be based on their contribution level. If only voluntary plans acceptable, only contributors will benefit as above.

12. ALL INACTIVES in the system beyond 5 yrs. MUST be paid out by check. Most companies do not allow inactives with a year or a month of work to remain on dockets for payouts to drains their systems. You compare salaries with private and public; compare this area. Inactives must withdraw funds after 5 yrs. Most decided on other careers and the VAST MAJORITY WILL NEVER RETURN TO EDUCATION. Let those careers pay their benefits.

13. It is ludicrous to pay benefits with 5 yrs. of service. They obviously do not need our money. No benefits for anyone with less than 10 yrs and no HC for any unless 20 yrs. 15-19 to have access only HC. REWARD CAREER EDUCATORS! REWARD THOSE WHO WORK LONGER SO THEY WILL WORK LONGER!

DISABILITY is a separate field and not to be included in the above. Those experienced know that area and should make their own suggestions that pertain. I do not pretend to understand their complications through no fault of their own. They should always be protected.