Saturday, June 10, 2006

RH Jones, an urgent message: Sen. Dann needs OUR HELP to defeat former STRS Board member Betty Montgomery in race for Attorney General


Two ways to contribute to Sen. Marc Dann's campaign:

Online: Go to Sen. Dann's blog, http://www.blogforohio.com/, and click on "Contribute to Dann for Ohio." (Scroll down the page; you'll find it in a red box in the right sidebar.)

(Or click here:
Contribute to Sen. Marc Dann's campaign)

By Mail: Send your contribution to:
Dann for Ohio
4531 Belmont Ave., Suite C
Youngstown, OH 44505
_______

June 10, 2006

To all:

The Beacon this morning mentions that: "Betty Montgomery, because of her run for governor, has a whopping $1.54 million in her campaign coffers for the race for Attorney General - more than five times the $278,377 her opponent, Sen. Marc Dann has on hand".
Folks, we friends of children and their active and retired teachers, need to contribute to Dann's campaign.

Do we really want someone like Montgomery in office who has shown to be so damaging to the cause of education in Ohio? Her gross neglect of the STRS when she was on the STRS board is a matter of record. Send your checks to your local Democratic Party headquarters earmarked for Marc Dann's campaign. If someone has a better address to share, please make it widely known. [See above.]

At this critical stage in the immoral "pay to play" politics of Ohio's present ruling party, we are in a fight for Ohio's economic and moral future.

RHJones, CORE member and SummitCRTA Leg. CMTE
_____
From the Beacon Journal, June 10, 2006
Candidates in Ohio filling coffers fast
Blackwell, Strickland surpass $6 million mark, but Democrat has more left in bank
By Lisa A. Abraham
Beacon Journal staff writer
Forget about Col. Steve Austin -- Ohio's candidates for governor are the new $6 million men.

Republican J. Kenneth Blackwell and Democrat Ted Strickland both have surpassed the $6 million mark in their fundraising, according to campaign finance reports filed Friday.

Blackwell, Ohio's secretary of state, has raised more than $6.6 million since he started his campaign fundraising in 2003, his spokesman Carlo LoParo said. More than $2.2 million of that has come in since April 13.

Strickland, a congressman from Lisbon, has raised $6.15 million -- more than $2 million of which was raised in the last seven weeks.

Blackwell, who last month was the victor in an expensive primary election against Attorney General Jim Petro, has spent $1.26 million since April 13 -- leaving him with $1.3 million on hand.

``Ohioans have responded to Ken Blackwell's message of economic growth and job creation,'' Blackwell campaign chair Lara Mastin said in a statement. ``After spending nearly $5.3 million during the primary campaign, our call for funding was quickly answered.''

Strickland money has all been raised in the 13 months since Strickland announced his candidacy, campaign spokesman Keith Dailey said. At that time, Strickland set a goal of raising $1 million in 80 days.

``We've outpaced ourselves,'' Dailey said, noting how the campaign raised its most recent $2 million in the past 52 days.

He pointed out that Strickland has more than $2.6 million on hand -- double what Blackwell has at his disposal.

``It's money well-invested for late summer and early fall,'' Dailey said. ``This may be the first time in Ohio history that a Democratic candidate for governor has had the cash advantage over a Republican by two-to-one.''

``I am truly humbled by the unprecedented support our campaign to turn around Ohio has received,'' Strickland said in a statement released Friday. ``Clearly, the people of Ohio are ready for change.''

The Blackwell camp boasts that it has received 25,277 contributions from 15,332 individual donors.

The list includes $100,000 from the Ohio Republican Party State Candidate Fund.

Strickland, meanwhile, has received 10,714 contributions. His report shows that his single biggest contribution was a $40,000 donation from the Ohio Democratic Party State Candidate Fund.

In the race for Ohio auditor, Republican Mary Taylor, a state representative from Green, has $402,806 in the bank, compared with the $237,585 her Democratic opponent, State Rep. Barbara Sykes of Akron, has on hand.

The reports show Sykes has raised $75,500 since April, and spent $41,323, while Taylor raised $165,300, and spent just $16,284.

Ohio Auditor Betty Montgomery, the Republican nominee for attorney general, has a whopping $1.56 million in the bank -- more than five times the $278,377 her opponent, Democrat Sen. Marc Dann of suburban Youngstown, has on hand.

Montgomery has raised $167,000 since April, and spent $211,820 during the same time. Her coffers had a head start with funds left over from her abandoned campaign for governor.

Dann has raised $290,814 since April, and spent $154,677.

John Curry: Questions for Damon

John Curry to Damon Asbury, June 10, 2006
Subject: Re: United Healthcare and others
Damon, thank you for this additional information. I will share it with the "troops."
_____
From Damon, Friday, June 9
John:
I do not believe that there is any way that STRS monies could be involved in any way with the situation referred to in the Dispatch. We have absolutely no relationship to the Southwestern City Schools insurance program or with the vendors identified in the article.
STRS Ohio uses the services of Grossman and Associates, Inc. of Beachwood, Ohio as the broker for securing health care coverage for associates. Ned Grossman is the principal owner and he works directly with STRS in the process. The firm has worked with STRS Ohio for more than 20 years and has rendered exemplary service in negotiating fees with carriers. Grossman also works with many other school district insurance consortium bodies across Ohio.
Grossman has fully disclosed his compensation and commissions with STRS. The firm is compensated directly through commissions with the various carriers. In our case, the firm receives 3% of the premium paid to UHC. This is paid directly by UHC and STRS makes no direct payment to Grossman and we have filed his information with the Ohio Department of Insurance.
I have tried to answer your questions specifically, but please let me know if you have additional questions.
Damon
_____
John to Damon, June 6, 2006
Re: United Healthcare and others
Damon,
Thank you for your reply that didn't totally answer my question and it brings up another question.
From my original question that hasn't been answered:
1. "What guarantee do we have that a situation similar to this alleged incident didn't also involve STRS monies?"
2."Is this being studied?"
The new question I have is in relation to your answer below which I will quote: " We do not use the individuals referenced in the article to represent us in the negotiation with UHC." This new question is as follows:
3. Who (individuals and groups) does represent "us" in negotiations with UHC?
If you feel it is not in the best interest to answer one or more than one of the above questions, please advise and we will understand.
Thanks,
John
_____
Damon to John, June 6, 2006
John:
You are correct in that UHC is the third party administrator used by STRS for associate health insurance coverage. We do not use the individuals referenced in the article to represent us in the negotiation with UHC.
Damon

Jim N. Reed's editorial in the Columbus Dispatch: State Teachers Retirement System in need of repairs


Saturday, June 10, 2006

In a May 30 story, Dispatch Public Affairs Reporter James Nash noted the financial chaos in the State Teachers Retirement System’s health-care package for retired educators. The catastrophic premium increases over the past three years have placed many retirees and their families in serious jeopardy. As retired teacher Molly Janczyk noted, retirees "are selling their homes; people are having to choose between physician visits and prescriptions."

Retired teacher Paul Boyer correctly pointed a finger at the General Assembly for defying the Ohio Supreme Court, which has ruled the state’s school-funding system unconstitutional. Boyer went on to suggest prospective and current educators "will flee the system."

In the same edition of the newspaper, an article about a young prospective geology teacher in Ohio State University’s graduate school corroborated Boyer’s prediction. Education can’t compete with a $75,000 starting salary with an oil and energy company. And the $20,000 signing bonus isn’t far removed from annual starting teacher salaries in some Ohio districts.

Take away what was once considered a blue-ribbon retirement package promised to Ohio educators, and what incentive is there for the brightest of minds to teach today’s and tomorrow’s future of Ohio?

At the core of the recent disaster in STRS retiree health care is a record of horrendous planning for the future by those entrusted with the $65 billion pension fund. Not only did questionable investments go sour, but the inhouse spending practices continued on their shameful pattern of the prosperous ’90s.

The story said that "184,000 retired (Ohio) teachers are struggling under the weight of health-care costs that doubled between 1998 and 2003, when pension administrators began reining in costs."

Doubled is a low-end description of the disastrous increase of health-care premiums between those years. Many retirees would have been delighted at only a doubling of premiums.

I take exception with the phrase reining in the costs if it means the STRS board and administration voluntarily cut operating expenses. The system’s own records provided board member Dennis Leone with a financially ugly pattern of spending between 1998 and 2003, and the accounting fiasco was published for anyone to see. Unbelievably, some of the people who are contributing and who have contributed to the pension fund have not read the embarrassing findings.

If reining in costs translates into higher premiums paid by retirees for their own health-care coverage, accompanied by exclusion of spouse and dependent children, then the statement was at least partially correct. Many retirees are fleeing the system’s health-care plan because they can’t afford to be rained on any longer with the escalating premium rates. They are searching for alternate health-care plans, which means this adverse selection only will exacerbate the problem and facilitate a quicker demise of the system.

In the May 21 Dispatch, a political cartoon focused on the rocky road ahead for Medicare recipients, who happen to include retired educators. That system appears to be headed for a dead end in 2018. That’s near the same date health-care Armageddon has been diagnosed for the State Teachers Retirement System’s health-care stabilization fund, without intervention.

Intervention must come from the General Assembly, the system and the constituents and recipients of the current health-care system, both retired and active.

Unfortunately, the first two groups have been notorious for defiant footdragging and poor planning. We must have hope that new leadership in those groups will not be too late to salvage the ailing system.

Also, unfortunately, educators have not admitted partial ownership of the dilemma. Witness the April election of two board members to represent Ohio’s active teachers. The results indicated "winners" for the two seats, but sadly the losers were the 85 percent of my profession who chose indifference by not exercising their right of franchise. Actives and retirees must get on the same page before the final chapter is written.

Yes, some corrective action within the system has resulted, but hardly on a voluntary basis. Yes, there are some signs of recovery. Recently elected board members Dennis Leone and John Lazarus have spearheaded some sorely needed reforms, but much still needs to be done to restore the trust and confidence in a once proud system.

JIM N. REED

Baltimore

Friday, June 09, 2006

Kathie Bracy to Conni Ramser: Two questions

June 9, 2006
Dear Ms. Ramser,
Two questions:
1. How can you have full knowledge of the sordid side of STRS' history (and therefore a more intelligent basis for making crucial decisions affecting the lives of thousands) if you have not read Dennis Leone's papers of 2003 and since?
While his investigative findings may represent only the tip of the iceberg, they still give a pretty accurate picture of the types of self-serving shenanigans that were rampant at the time (2003 and before) with the STRS Board, and which will have adverse effects on our pension system for years to come. An often quoted truism admonishes us "Those who forget the past are destined to repeat it." From all appearances, you are well on your way.
2. How can you know exactly what you are voting on when you do not have detailed documentation in front of you, and why are you opposed to having such documentation when votes are taken, especially when it involves spending millions of dollars of retirees' funds?
I would appreciate an explanation on how a display of this kind of irresponsibility conforms to the spirit and the law of ORC 3307.15, and how it serves the STRS membership: thousands who are counting on you to make intelligent, informed and compassionate decisions on their behalf.
Thank you.
Kathie Bracy
STRS Retiree

Molly Janczyk to Conni Ramser: Empty promises

June 9, 2006
Dear Conni,
I was so glad to hear you tell me at an STRS meeting where we talked that 'We learned from our mistake' referring to our discussion about voting on contracts, etc. without documentation before you. You said it would not happen again. Yet, you are not voting to prevent that. I can not imagine any circumstance where one responsible for membership funds would vote on the use of that money without complete information before them. You said you relied on the attorney's recommendation and learned a lesson. "We learned' and you emphasized it by turning around to face me as I had sat down behind you in the OEA section in the outer room.
Conni, I took you at your word. You added 'Let's keep the doors of communication open.' I put your words out to membership. Now you must live up to your word. Whatever the reason for not voting to approve this motion to have documents in front of you for all votes or to have studied them personally in entirety is not comprehensible. For no other reason than to earn the trust of membership, this should be approved regardless of attorney advice.
I understand some feel some expenditures so small as to be insignificant. It is not insignificant to a needy retiree who cannot afford their meds. John Lazares always stands for these retirees reminding the board of how it looks and affects membership to even appear cavalier about any amount of money. It further erodes trust and hurts gained ground. Dennis Leone will not rest until this issue is resolved to his credit. NO amount is OK to waste unnecessarily and only a corporate mentality of being above the common folk could possible think this way.
I am disappointed in Board Members sent by VOTERS to ensure proper oversight but instead merely mirror other board members. APPOINTEES are not placed by membership and come from backgrounds far richer than mere mortal classroom educators. MEMBERSHIP ELECTED LAZARES AND LEONE TO OVERSEE EVERY ITEM POSSIBLE AS THAT WAS NOT BEING DONE! THAT IS WHY THEY ARE THERE AND WHY THEY WERE ELECTED! I fail to see what other elected Board Members are doing for membership and complaints are being heard about lack of action. Future board seats will be heavily contested if membership lacks faith that Board Members are not acting solely on their behalf.
Dennis Leone travels far and wide to speak to actives and retirees who are adamant on this issue and overseeing the budget which is another item where
9 Board Members lack understanding of the oversight membership wishes.
Except for Lazares and Leone, this STRS Board needs to see retirees, current and future before voting any issue and vote on their behalf. These 2 issues are clearly basic oversight issues and it remains unsatisfactory and unbelievable that 9 of you refuse to vote for the simplest of oversight which you promised to provide.
Sadly disappointed by empty promises,
Molly J.

The HC quagmire: Damon writes to the Columbus Dispatch

May 30, 2006
Letters to the Editor
The Columbus Dispatch
34 S. Third St.
Columbus, OH 43215
To Whom It May Concern:
I am writing in response to an article titled "Systems struggling too provide for retirees" that appeared in your paper on May 30. Since 1974, the State Teachers Retirement System of Ohio has been providing optional health care coverage to Ohio's retired teachers and their family members and has about 111,000 individuals enrolled at this time. While health care coverage was once one of the least expensive programs public and private employers and pension plans could provide to their workers and retirees, we all know that escalating costs and increased utilization have made providing affordable health care insurance a national issue. Today, STRS Ohio spends $1.2 million per day on retiree health care.
STRS Ohio currently supports its health care program through a fund that is separate from its pension fund. This health care fund includes retiree premiums, a portion of employer contributions and special allocations to help ensure the long-term solvency of this fund. While the unprecedented market downturn that occurred from 2000-2003 had an adverse effect on this fund, as well as the pension fund, investment returns have been excellent the last three years. STRS Ohio's investment returns for the 2004 fiscal year, which ended on June 30, 2004, were 17.7%, and returns for the 2005 fiscal year were 12.25%. This year to date, our returns are about 14%. But, as noted above, double-digit increases in health care costs have eaten away at the monies in the health care fund and it is now predicted to last only until 2021 -- in spite of the fact that retirees are paying about 46% of the health care costs through their premiums and out-of-pocket expenditures.
Consequently, STRS Ohio and the Health Care Advocates for STRS (HCA) have jointly developed an initiative to phase in an increase in teacher and employer contributions over a five-year period to strengthen the health care fund. We are now working on draft legislation while we continue to talk to our membership, who currently voice majority support for this proposal, and to employers. We are well aware of the funding challenges school districts in this state face. Unfortunately, our members' employers will not escape the financial impact of retiree health care should this initiative fail. We are already seeing many educators teaching beyond the traditional 30 to 35 years because they can't afford health care coverage in retirement. This translates into higher medical costs and higher wages -- increased costs that are being absorbed by their employers. The liability for health care for retired teachers, faculty and administrators will continue to exist whether or not STRS Ohio provides coverage.
Our Retirement Board and the HCA have taken a proactive approach to address this issue and look forward to continued and constructive dialogue with our members, employers and members of the Ohio Legislature in the months ahead.
Sincerely,
Damon F. Asbury
Executive Director
[State Teachers Retirement System]

STRS employment grows even during tough times (2003)

From Steve Ohlemacher’s article, Teacher pension losses don’t stop spending

Cleveland Plain Dealer, 06/08/03

[This is an attempt to put into prose form what originally appeared as a bar graph, which would appear too small to read in this blog. KBB]

STRS employment grows even during tough times

The State Teachers Retirement System has increased its employees by nearly 42 percent since 1998.

(Year – Number of employees)

’98 – 499

’99 – 558

’00 – 632

’01 – 726

’02 – 715

’03 – 707

Source: State Teachers Retirement System of Ohio

STRS market losses (2003)


From Steve Ohlemacher’s article, Teacher pension losses don’t stop spending
Cleveland Plain Dealer, 06/08/03

[This is an attempt to put into prose form what originally appeared in bar graph form, which would appear too small to read in this blog. KBB]

STRS market losses

The investment portfolio of the State Teachers Retirement System of Ohio has lost $12.3 billion, or 20.9 percent, from its peak on Aug. 31, 2000.

8/31/00 (peak): $58.8 billion
9/30/02 (bottom): $41.6 billion
6/4/03 (current): $46.5 billion
Source: State Teachers Retirement System of Ohio

Assets decline, bonuses don’t (2003)


From Steve Ohlemacher’s article, Teacher pension losses don’t stop spending
Cleveland Plain Dealer, 06/08/03

[This is an attempt to put into prose form what originally appeared as a bar graph, which would appear too small to read in this blog. KBB]

Assets decline, bonuses don’t

While the State Teachers Retirement System (STRS) was losing billions from its pension portfolio, its investment staff and administrators received performance-based bonuses for meeting certain goals, such as outperforming a stock index. The STRS investment staff also is eligible for additional “discretionary” bonuses to help the pension fund “recruit and retain experienced, valued staff.” Bonuses may total no more than 115 percent of an employee’s salary.

Bonuses paid

(Year – Total amount awarded in bonus pay – Number of employees receiving bonuses)

’00 – $4.8 million – 290
’01 – $6.1 million – 345
’02 – $5.7 million – 395
’03 – $2.1 million – 105*

Top pay for 2001

(Employee – Base salary – Bonus – Total pay)

John Imboden $164,000 - $178,880 - $342,880
Elizabeth Lynch $154,000 - $171,342 - $335,342
Mary Ellen Grant $140,000 - $165,000 - $305,000
Stephen Mitchell $215,000 - $73,000 - $288,000
James Meeth $126,000 - $133,000 - $259,000

*Includes only performance-based incentives for the investment staff. Additional “discretionary” bonuses are scheduled to be released in July.

Source: State Teachers Retirement System of Ohio

Thursday, June 08, 2006

State pension fund investments foundering (2003)

From Steve Ohlemacher’s article, Teacher pension losses don’t stop spending

Cleveland Plain Dealer, 06/08/03

[This is an attempt to put into prose form what originally appeared as a bar graph, which would appear too small to read in this blog. KBB]

State pension fund investments foundering

A performance review commissioned by the Ohio Retirement Study Council, a legislative committee, found that the five-year returns for all five public employee pension funds in Ohio were “troubling.” Here are the five-year, three-year and one-year annualized returns for all five funds, as of Dec. 31, 2002.

[Percentages are indicated in the following order: 1-year, 3-year and five-year]

State Teachers Retirement System: -11.6%; -6.6%; +1.8%

Highway Patrol Retirement System: -8.4%; -3.9%; -0.4%

Public Employees Retirement System: -10.8%; -5.5%; +1.6%;

Police & Fire Pension Fund: -9.9%; -5.0%; +2.1%

School Employees Retirement System: -11.6%; -6.0%; +2.4%

Source: Ohio Retirement Council

State pension funds compared (2003)

From Steve Ohlemacher’s article, Teacher pension losses don’t stop spending

Cleveland Plain Dealer, 06/08/03

[This is an attempt to put into prose form what originally appeared as a chart, which would appear too small to read in this blog. KBB]

State pension funds compared

Ohio’s five public-employee retirement funds vary dramatically in how they are administered and the amount of money invested in their pension funds.

Listed across the top:

1. Public Employees Retirement System

2. State Teachers Retirement System

3. Police & Fire Pension Fund

4. School Employees Retirement System

5. Highway Patrol Retirement System

Listed down the side, followed by five figures, which represent, in order, the pension systems listed above:

Members and beneficiaries: 1. 797,234 2. 424,171 3. 51,741 4. 180,000 5. 2,761

Employees: 1. 539 2. 707 3. 183 4. 164 5. 9

Investment assets: 1. $51 billion 2. $46.5 billion 3. $7.7 billion 4.$ 7.1 billion 5. $558.5 million*

2002 budget: 1. $75 million 2. $87 million 3. $38 million 4. $20 million 5. $3 million

% of investments done in-house: 1. 61% 2. 85% 3. 13% 4. None 5. None

Employee bonuses? 1. Yes 2. Yes 3. Yes 4. Yes 5. Yes

Bonuses in 2000: 1. $599,470 2. $4.8 million 3. $27,500 4. $62,450 5. $10,286

Bonuses in 2001: 1. $698,741 2. $6.1 million 3. $36,094 4. $131,370 5. $10,302

Bonuses in 2002: 1. $765,252 2. $5.7 million 3. $5,954 4. $146,391 5. $9,488

*As of Dec. 31, 2002

Source: Information for each retirement system was provided directly from the retirement system.

Tom Mooney responds to Molly re: May 31 meeting at OEA

From Tom Mooney, June 8, 2006
Molly,
I'm glad you had a constructive and productive meeting with OEA leaders. We all need to work together to preserve retiree health care and strengthen and protect STRS in general.
Just wants to point out two things.
The meetings with legislators have been conducted by team of STRS staff and HCA representatives, not just OEA. In fact, each meeting has included a rep. of employer organizations, unions, and retiree organizations within the HCA. I have been at some of these meetings along with Bill L., Ann Hanning from ORTA, and the other organization reps.
Likewise, the task force working on school funding reform is a broad coalition, including many education organizations as well as Ohio's urban mayors. OFT has been active in it. This will be a huge undertaking; no one organization can pull off alone. I fact, the coalition will have to become much broader than it is now in order to be successful.
OFT also screens and endorses candidates based on their record and positions on public education and the rights of public employees. We voted on some in March (including Strickland for Gov. and Sherrod Brown for US Senate) and should complete our endorsements this weekend. I can provide them to anyone interested next week.
It seems that we are turning a corner, with less polarization and more concerted effort by all who represent educators, active and retired. You deserve much credit for helping to bring that about.
Tom Mooney

Non-Profit Pharmacy Benefit Managers (PBMs)

From National Legislative Association on Prescription Drug Prices (NLARX) website

United Scripts Administrators has established a partnership with NW Pharmacy Services to offer the full range of pharmacy benefit management services to states, businesses and others interested in a transparent, nonprofit cooperative PBM. Dr. Arthur Zoloth and Peter Shumlin, former Association President and now President of the Board of United Scripts gave a presentation on nonprofit PBM at the January meeting. To view the presentation (PPT format), click here. To find out more contact Norman Reitz at norm@nwpsrx.com or Peter Shumlin at Pete@goputney.com

Visit the new USA Website! (http://www.unitedscriptsrx.com/index.html)

NLARX website: http://www.nlarx.org/

History lesson for newbies: Steve Ohlemacher's exposé of piled-high-and-deep corruption at 'our' STRS; Cleveland Plain Dealer, June 8, 2003

The Plain Dealer

Sunday, June 8, 2003

.

Teacher pension losses don’t stop spending

Educators and officials question big bonuses for fund employees

Stephen Ohlemacher

Plain Dealer Bureau

Columbus – The State Teachers Retirement System lost 21 percent of its investment assets in the past three years, a total of $12.3 billion.

Despite the losses, employees of the public pension fund got a total of $14 million in bonuses during the decline.

In 2001, STRS handed out a total of $6.1 million in bonuses to 345 employees, according to STRS documents. One employee’s base salary of $164,000 was bumped to $342,880.

It was the same year the fund lost 5.66 percent of its assets, more than any of the four other public employee pension funds in Ohio, according to the Ohio Retirement Study Council, which oversees the funds.

A lot of pension funds lost big money while the stock market plummeted.

But STRS spending practices – and the fallout from lost investments – have sparked outrage among some of the 424,171 teachers and retirees in the system.

The fund now stands at $46.5 billion, after peaking at $58.8 billion in August 2000.

“They are spending in a manner that is completely foreign to their members, and the employers that send them dollars,” said Dennis Leone, superintendent of Chillicothe schools in southern Ohio.

Leone has documented many of the STRS board’s spending practices and shared them with teachers, retirees and public officials across the state.

The revelations came as retirees learned their health insurance premiums will soon double, and their benefits will be cut.

The spending includes a $94.2 million office building adorned with $869,000 in artwork, generous fringe benefits for STRS employees, and frequent out-of-state travel for pension board members.

STRS also is getting criticism from unlikely sources: two public officials who sit on the nine-member board that controls the pension fund.

Ohio Attorney General Jim Petro and Susan Tave Zelman, state superintendent of public instruction, said STRS spending has been excessive.

Both have been on the board for years. Both promised to be more diligent in monitoring the fund in the future.

“At a time when there are shrinking resources, you don’t give bonuses,” said Zelman, a board member since 1999.

“When times are good people tend not to look at these things,” she said. “You can rest assured, now I’m going to be more aggressive in looking for ways to have a more efficient system.”

Petro said he is a big supporter of performance bonuses. But, he said, the STRS bonuses appear to be out of line, considering the fund was losing billions of dollars a year.

“If school districts, especially in financially tough times, would have been as extravagant as STRS has been, we’d have spanked them even harder,” said Petro, who often criticized the spending policies of school districts when he was state auditor.

“I think there have been occasions when we’ve been brilliant in our advocacy for accountability, and there’s been other occasions where we’ve probably not been as aggressive as we should be,” said Petro, and eight-year member of the STRS board.

A third board member, state Auditor Betty Montgomery, defended STRS spending policies, though she said they should be reviewed.

“If you kept them on public employee salaries alone, you would not be able to attract or keep the quality investment managers that keep our fund growing,” said Montgomery, also an eight-year member of the board.

STRS Executive Director Herb Dyer said the pension board is simply trying to recruit and keep good investment staff in a competitive profession that pays well and offers good benefits.

“I appreciate that people who don’t do that kind of work for a living might not understand it, but that’s the reality of the professionalism involved,” Dyer said.

Teachers take a hit

The investment losses, combined with increasing health-care costs, are proving expensive for teachers and retirees. In July, teachers will have to start contributing a larger percentage of their pay to the retirement system, an increase from 9.3 percent to 10 percent. In January, health insurance premiums for retirees are scheduled to double. Insurance co-pays will increase, and benefits will be cut.

Teachers contributed $827 million to the retirement system last year. Their employers – mostly school districts spending taxpayer money – contribute 14 percent of teacher payroll, a total of $1.2 billion last year.

Some teachers complained that STRS spending hasn’t reflected the financial problems of the pension fund.

The STRS board completed a $94.2 million expansion of its office building in downtown Columbus in 1999. The seven-story building is decorated with eight pieces of artwork, all by Ohio artists, Dyer said.

The $869,000 art budget follows guidelines for state buildings, but some of the price tags have angered school officials, nonetheless.

One piece, called “A Whole Morning World,” is a series of painted metal tubes shaped like birds hanging from the seventh-floor atrium. The cost: $378,500.

Another sculpture, called “Integrity,” cost $100,000.

The building also has a childcare center that cost $818,000 and a $426,000 fitness center, according to STRS documents. In 2002, the pension board paid $487,748 to subsidize the childcare center so employees could get discounted rates for their children. Workers with family incomes of up to $66,000 are eligible for subsidies.

“I’m all for working mothers, and I certainly support day care,” Zelman said. “But I don’t think that STRS finances should be subsidizing STRS child care.”

The number of people working at STRS has increased nearly 42 percent since 1998, from 499 to 707. The pension board added 137 new positions in fiscal 2001, including 69 administrators, according to STRS documents.

The lost investments haven’t slowed the travel of board members, who have flown to conferences in Hawaii and Alaska, among other places. The STRS board spent an average of nearly $174,000 a year the past three years on travel, according to STRS documents. The biggest spender was board member Hazel Sidaway, a teacher from Canton who spent a total of $61,400 for travel the past three years. Board member Jack Chapman, a teacher from Reynoldsburg, came in second at $52,600.

“When your assets are declining, you don’t spend money like that,” said Marianna Lijoi, a teacher in Eastlake. “That is not their money to spend frivolously. That money is for teachers’ retirement.”

Susan Jacoby, a retired teacher from Canton, said, “They have spent our money like it belongs to them.”

The STRS board is made up of six members (five teachers and a retiree) elected by the active and retired teachers, and three state officials who serve as part of their jobs.

The elected members are paid expenses, but not a salary. The public officials designate members of their staffs to attend board meetings.

The board approves STRS policies and votes on an annual budget. The executive director is responsible for the day-to-day operations.

Wednesday, June 07, 2006

Tom Curtis reports on June 5, 2006 CORE Retreat


June 7, 2006

Hello CORE Members,

Please allow me to personally thank each of you for attending the CORE retreat on Monday, June 5th. Your willingness to give up another day to our cause is exemplary of your dedication to CORE.

A special thanks goes to Janet Hanson for hosting our retreat for the 3rd year at her beautiful home in Worthington. She is very gracious to do this for our group.

I realize all of us are tired of the monthly trek to the STRS to attend the board meeting and CORE meeting each month. You have been there lending your support to our efforts to help bring about the much needed reform of management processes and procedures at the STRS.

Have we made a difference? In connection with the outstanding leadership of Dennis Leone and John Lazares, yes, we have made a huge difference! CORE's efforts have been recognized and had to be considered by the leadership of nearly every other organization that represents the members of the STRS, active and/or retired.

In my opinion, from what was discussed at the retreat, it is time to consider whether CORE will continue to play an active role in the reform process. If so, it is imperative that CORE become more structured. This means that CORE will need to elect officers and provide the president with the authority of speaking for the group when necessary, but more importantly, become the person other groups will identify as our leader. Other organizations have voiced their concern with the fact that they do not know whom to address in CORE, because we claim to have no leader. This issue needs serious consideration, if CORE is to continue and hold credibility as an organization.

Therefore, at the June CORE meeting on June 15th, I will make a motion that this issue be considered and carried forward, if the membership in attendance is in agreement and passes a motion to do such.

I do not have the desire to become the president of CORE and will not accept a nomination for such at this time.

Right now I need to step back and place more time with my own personal needs and family. I have devoted most of my time to CORE over the past 3-years and find I must now address many issues I have neglected during that time.

I ask each CORE member to please address your own thoughts about CORE's future and attend the June CORE meeting on the 15th to join in and be part of this discussion and/or decision about the future direction of CORE.

Take care,
Tom Curtis

P.S. The following is the agenda followed during the retreat. No formal minutes were scribed.

CORE Retreat & Planning Meeting

June 5th, 2006

9:15am – 2:30pm

Hosted by Janet Hanson in Worthington

Agenda

9:15 – 10:00am Welcome, coffee and donuts

!0:00am Introductions and announcements

Topics for discussion

  1. CORE focus, next year
  1. Preserving our STRS Pensions by continuing to support and monitor STRS - 2006
  2. Monitoring STRS Health Care and insuring that grandfathering occurs - 2006

B. Health care
1. Does anyone remember hearing Damon,
Knoesel or board members indicate that the
difference of increase above 3% this year
would be added to next year’s increase?
2. What are those needing to insure a spouse
going to do in 2007?
3. HCAC legislation proposed
4. Actives paying the entire 5%
5. Working with the OEA/OFT toward
legislation

C. Gary Monto – president of retired Ohio
Police & Fire Retired Association
1. What the OP&F are doing
2. What CORE should be doing
3. Willingness of CORE & OP&F to work
together for the good of all retirees

12:30pm Lunch/break

D. Performance audit – Independent Fiduciary
Services
1. Auditor of state involvement – time line
2. What purpose will it, or should it serve

E. Elections

F. Non-response from board members

G. Board not following ethical rules
1. File complaint with OEC
2. Executive director contract – expires
2.18.07

H. Additional

A history lesson for newbies: A 2004 letter that tells how it all started

The Plain Dealer

OHIO’S LARGEST NEWSPAPER

July 2, 2004

To the judges:

It would have been easy to dismiss a call from a disgruntled retiree complaining about extravagant spending at the State Teachers Retirement System. But Stephen Ohlemacher thought it was worth checking out.

The retiree was upset that health insurance premiums would soon double, while benefits would be cut, something that was happening at other pension funds that took a hit when the stock market plummeted. But at STRS, the retiree said, the lavish spending continued even as the assets declined.

Ohlemacher combed through STRS records and found that the tip was on the money. STRS had handed out $14 million in bonuses to its employees during the three years when the system lost $12.3 billion in assets. Among those rewards was a bonus that boosted one employee’s $164,000 salary to $342,880.

STRS also granted generous fringe benefits to employees, allowed board members to travel frequently out of state and spent nearly $900,000 in artwork at its $94.2 million headquarters. The building included a fitness center and a childcare center that STRS subsidized so that workers with salaries as high as $66,000 could get discounted rates for their children.

The revelations outraged retirees and working teachers, as well as more than 100 state lawmakers who demanded that executive director Herb Dyer resign.

Dyer was forced out, the STRS board adopted new policies and lawmakers adopted legislation to bring more accountability to all five of the state’s public employee pension funds.

But Ohlemacher’s reporting didn’t stop after those results. Among those calling for reform were state Attorney General Jim Petro and Auditor Betty Montgomery, who complained that their designees on the STRS board had been outvoted or ignored when they tried to raise questions about expenditures.

Ohlemacher examined the voting records of the designees and found that in fact, they had gone along with every vote on expenditures from January 1999 to October 2003.

Jane Kahoun

State Editor

Tuesday, June 06, 2006

From Jim McGreevy: OEA Executive Committee Report to OEA-R

June 6, 2006
Thanks for sending me this, Jim. I hope Conni can also get the Board to work on the issue of double dipping by rehires. There's a loophole that definitely needs to be addressed, as it's hurting the pension system. It's certainly not helping new or laid-off teachers, either. It sure is helping the school boards and the rehires, though. Something's wrong with this whole picture.
Kathie Bracy
_____
From: Jim McGreevy, OEA-R Representative to the OEA Executive Committee
Re: OEA-EC Report to OEA-R
Date: June 6, 2006

The OEA Executive Committee met in Columbus on Saturday, June 3, and generally dealt with routine matters and reports.

Among items of interest to OEA-R members:

1. The Constitution & Bylaws subcommittee reported that it has received the initial attorney’s opinion on the rights of “rehired retirees” to hold elective office in OEA. No formal recommendations will be brought forward until further study has been concluded.

2. In his report President Gary Allen discussed a future (2007) push for a statewide ballot issue concerning school funding should the legislature continue to fail to act. If necessary, members will be asked to circulate petitions to secure the requisite voter signatures. This will be a developing story following the upcoming general election.

3. Gary Allen also reported on a recent meeting held at OEA headquarters with members of CORE (Concerned Ohio Retired Educators). All parties are interested in passage of legislation to provide a dedicated revenue stream for post-retirement health care for STRS members, both now and in the future. The legislation will be put in final, legal form very soon and will likely be introduced following the fall election. Several Senators and Representatives from both parties are considering sponsorship of the legislation and discussions held with lawmakers have been generally positive thus far. Notable exceptions to this are Sen. Lynn Wachtmann and Rep. Michelle Schneider who are hostile to the needs of retired teachers if additional taxpayer support is necessary. They offer no alternatives. OEA-R members should raise the issue with their representatives and senators as they see them at county fairs, community festivals and other public places as they campaign this summer. Urge their support for the STRS/HCA (Health Care Advocates) legislation. A comprehensive campaign for the legislation is under development by HCA and its member organizations, including OEA.
4. Conni Ramser, recently elected STRS Board member, reported that STRS is working on the problem of “adverse selection,” the tendency of relatively younger, healthier retirees to leave STRS-provided health care plans for less expensive private insurance. STRS must offer “products” that are attractive to all members to maximize the long-term viability of our health care plans. The HCA legislation should provide a solution on the funding side, but correcting the adverse selection problem would add greater stability on the “consumption” side. Speaking for herself and successful Board candidate, Mark Meuser, Conni thanked OEA for its support in the recently concluded election.

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Molly quizzes a legislator re: his views on HC legislation

From Molly Janczyk, June 6, 2006:
Thank you, Jim. As you are aware, educators are screening legislators heavily this year. I anticipate your response. Regards, Molly J.
_____
Subject: FW: Rep. McGregor: Front Page"Public Pension Plans: Systems Struggle.."
Jim McGregor to Molly Janczyk & Kristin Malone, 6/6/06:
Dear Kristen,
Please forward our educational paper to Ms. Janczyk. I will work on the other questions.
Thanks,
Jim
_____
Molly Janczyk, 5/30/06:
Dear Jim,
Thank you for your reply. You have been responsive throughout this crisis on varying issues. We retirees of STRS certainly wish we were on OPERS State retirements also.
Jim, may I ask you for:
1. Your opinion on the proposed HC legislation for increased contributions. We hear nothing but negatives and this current pension crisis, of course, hurts education in Ohio.
2. What is your stand on fixing funding for education in Ohio? Please be specific on your goals and acts to date. This is something we will be asking and researching for all legislators up for election/re-election at any point from now on.
3. What ideas do you have to improve these areas; work done to date and plans for future assistance to improve education funding in Ohio and pension security with HC for an important group of people: those who educate your children. We cannot possible retain or attract quality educators asking them to take lower salaries AND also have their retirements at risk without or with untenable costs for HC.
Your fellow legislators seems to think we have it too well already. They certainly are not living our lives after dedicating full careers at lower pay for the promise of a decent retirement with HC second to none according to STRS literature. STRS HC Pamphlets discouraged our purchasing other insurance which would only erode our pensions since we had some great HC. Now, we have made irrevocable decisions and are retirements have been robbed. I assure you, Sir, there is NO retirement without HC.
Sincerely, Molly J.
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Subject: RE: Dispatch: Article:5/30/06: Front Page"Public Pension Plans: Systems Struggle.."
Jim McGregor to Molly Janczyk, 5/30/06:
Dear Molly,
You asked about State legislator's retirement; we are in the PERS system with the benefits of other PERS employees. The only exception that I know of is that people elected in Ohio, both local and state, can buy a fifth year of retirement benefits for every four years that they serve. They have to pay the full price as I understand it. I am not very familiar with this program; I have thirty-three or four years in now. So I will not take advantage of it. Thanks so much for your important work.
Sincerely,
Jim McGregor
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Molly Janczyk, 5/30/06:
A Pension System article is in today's Dispatch. I didn't ask to receive it as it is not much new.
But I am quoted and not entirely correctly.
I did not say STRS did not set aside enough money in the system's dedicated HC fund as quoted.
I said STRS did not seek a dedicated stream of revenue for HC in the early 90's when proposed legislation was discussed for guaranteed HC. I said Endry, former Exec Direc who then became the STRS Retiree Board Member said in the early 90's that if something was not done about HC costs, we would not have HC. Instead OEA and STRS said legisation was not necessary and
Dyer said he wanted out of the HC business.
I did go on to say that instead of seeking revenue for HC, the former STRS Board approved perks and pleasures for themselves on our dime. I was also very clear that the amount of money they spent would not have paid for HC. It was just wrong to spend earnings on our money as they did.
PAUL BOYER's quote was much more insightful and pertinent regarding legislators contributing to the crisis by defying (4) court rulings to fix education funding in Ohio. THAT IS THE REAL PROBLEM! (Ohio has never properly funded education and we always rank low in priority to education).
The lawmakers are quoted in this article as feeling educators are liberally pensioned with Wachtmann saying: "The system is already extraordinarily generous."
I ask Wachtmann: QUES: WHAT IS YOUR PENSION AND HC PACKAGE AS A PUBLIC SERVANT? Legislators should have to live like the rest of the public!
Molly J.
Larry KehresMount Union Collge
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