Dr. K. Wesley Fluke’s speech to the STRS Board March 9, 2006

Freeze the Defined Contribution Plan

Alternative retirement plans for K-12 employees legislation

STRS Ohio has been notified that a member of the Ohio House of Representatives has been asked to sponsor a bill that would extend alternative retirement plans to K-12 employees. This same concept was one of the driving forces behind our move to the Defined Contribution Plan in 2000. Obviously, such an option would pose a serious threat to the membership base of STRS Ohio and would potentially draw revenues away from our pension fund. The representative has asked for our concerns and we will share these issues.

.......--STRS Minutes December 2005

Observations/Comments:

The Defined Contribution Plan should be revisited, since it apparently does not help those in a Defined Benefit Plan which represents over 80% of STRS members/beneficiaries. In fact, it may be a negative. Some areas in question: Why should STRS investors spend more of their valuable time and hours by serving as brokers for individuals in the Defined Contribution Plan? Also, it is interesting to note that the Defined Contribution Plan had its introduction in 2000, the time of the greatest STRS investment losses. Question: Have participants realized any gains?

Those in the Defined Contribution Plan do not receive a health benefit at retirement. Why should those in this Plan accept an increase beyond 10% to help provide a steady stream of health care? They are not part of the team.

We need more, not fewer STRS contributors participating in the number for bargaining with various health care providers.

Tell those Ohio legislators that promote “corporate” views for pensions that we want to “freeze” those now in the Defined Contribution Plan. Further, it is recommended they investigate West Virginia Teachers’ Retirement System which recently returned to a Defined Benefit Plan (2005), after a period from 1990 – 2005 with a Defined Contribution Plan. It wasn't working very well! Let us focus on the Defined Benefit Plan only.

K. Wesley Fluke, Ph.D.

Legislative Chair, Summit County Retired Teachers Association (SCRTA)

Akron, Ohio