FLASHBACK -- 3 years ago & still no dedicated stream of revenue!

From John Curry, October 18, 2006

“It’s an ugly problem, with no good solution,” she said, “and we’re in an election year.” (Terri Bierdeman)

Well, Terri, we're in another election year, and it's still an ugly problem that hasn't been solved! John

Pension board may be able to repair health-care rift soon

By Paul E. Kostyu, Copley Columbus Bureau chief

Canton Repository, October 16, 2003

If it wants to be heard, then the board needs a plan soon, said Terri Bierdeman, director of governmental relations for the State Teachers Retirement System.

Bierdeman presented a legislative up-date to the board, which met Wednesday night as its health committee. Members also heard from representatives of Healthcare Advocates for STRS, an organization formed by constituent groups to deal specifically with health-care issues.

They reviewed the group’s guidelines, policy priorities and short-term and medium-term goals, one of which is to establish a dedicated revenue stream for health care.

From her conversations with lawmakers, Bierdeman said, it’s clear that they first want to deal with operational issues. Senate Bill 133, which deals with reform of the state’s five pension plans, has had several hearings and its sponsor still expects to send it to the governor by the end of the year.

In a related move, the Ohio Retirement Study Council, approved Wednesday a re-quest for proposals for a performance audit of STRS. The bids are due Nov. 18 and the audit is expected to cost as much as $400,000.

Once SB 133 is completed, lawmakers want to tackle “health-care funding, health-care benefits and actuarial” issues, Bierdeman said.

She said lawmakers believe the issue of funding will have to be dealt with at the legislative level, and there will be no money coming from the state. Increased employer or employee contributions or some other source will have to be used, she said.

“Someone has to pay,” she said. “It was the same challenge 10 years ago. It’s the same challenge today.”

She said lawmakers are talking about instituting “give backs” which could require changing the age of retirement, changing eligibility or changing the pension plan design.

“Health care is going to drive pension fund design,” Bierdeman said. “What are we willing to consider?”

“If we want health care,” said board member Michael Billirakis, “we have to decide how to pay for it. There has to be a solution somewhere. What is our timeline?”

“Short,” Bierdeman replied. “We need to be ready on tradeoffs and have a position. If we’re not pro-active, the legislation will be written without our input.”

Billirakis suggested the board consider extending the retirement age from 55 to 57 and the number of years teaching from 30 to 32.

Bierdeman said lawmakers are hearing from constituents in and out of the state systems worried about their pension and health care benefits. She said there would be no federal solution soon, even though the problem is a national one.

Bob Brown, the newest member of the board, said colleagues may want to consider operating the health-care stabilization fund differently than the pension fund to improve its portfolio return. “It might call for a different type of strategy,” he said.

Bierdeman said the “political dynamic” is not unified.

“It’s an ugly problem, with no good solution,” she said, “and we’re in an election year.”

You can reach Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:

paul.kostyu@cantonrep.com