Fall 2006 ORTA Quarterly: Dennis Leone's STRS Report

STRS Report

Fall 2006 ORTA Quarterly

By Dr. Dennis Leone, Retired Teacher Member, STRS Board

http://www.orta.org/strs_report_fall_06.htm

I am obligated, as an elected retiree member of the STRS board, to tell you the truth about STRS issues and why I vote as I do. I am providing you with information below that you will not see in any official newsletter of STRS or ORTA. Here is my report, after serving exactly one year on the board:

What Have I Supported?

1. I made the motion to prohibit rehired retirees who are working full-time elsewhere from utilizing STRS health insurance, beginning January 1, 2009. This passed on a 5-2 vote, with board members Conni Ramser and Steve Puckett voting no. Rehired retirees utilizing STRS health insurance cost our pension fund $2 million last year. I also was getting tired of school districts ‘using’ STRS to help solve their financial problems, not to mention the fact that many districts are not even considering new teachers or recently laid-off teachers. I thought we all believed in the notion that schools need a mix of both new and veteran teachers.

2. Between October of 2005 and April of 2006, I voted no on the executive director’s monthly spending report seven times because of my opposition to the lavish nature of many staff perks at STRS. Finally, in May, the Board agreed to cut staff perks in six areas and reduce the budget by $410,000. John Lazares and I voted no on three of the six cuts, because we felt they should be deeper.

3. I supported a new structure for how the investment staff will be compensated in the future, insuring that no subjective factors will be used for determining bonuses. Instead, investment bonuses will occur only if STRS receives positive returns. The investment staff has had three fantastic years in a row for STRS. Bonus checks for the other 500 non-investment employees have been ended.

4. I advanced an initiative in May to impose a spending cap of $50,000 on the STRS executive director. The board rejected this 8-2 in June (with only Lazares supporting my motion) and, instead, gave the executive director an incredible $1 million spending limitation. Two months later, my fellow board members had a change of heart. The board adopted a $100,000 spending cap on a 5-4 vote, with board members Puckett, Flannagan, Fisher and Brown voting no again.

5. I have asked my board members to support the development of a contingency plan to activate in the event of a national or worldwide catastrophic happening. At present, a board majority supports doing this. A plan must be developed, even if some board members may later vote no on such a measure.

6. I support the board’s legislative initiative to raise the contribution level of active members and employers 2.5% each to address future health care needs. I worry that when the board does other things that are managerially irresponsible, it hurts our credibility, which translates into hurting our legislative initiative. See below:

What I Have Opposed:

1. In August, I was the only board member (Lazares was absent) to oppose a $315,000 expenditure for a Chicago employment agency to seek three real estate employees at STRS. I feel betrayed on this issue. I voted in favor of adding the three new employees in June, but it was never even implied that we would later be expected to spend $315,000 for a headhunter. Worse, the board approved the expenditure without knowing one specific thing about the contract we have with the agency. Some board members don’t want to know. I attempted, in May, to get a motion passed that would prohibit spending pension money on such a contract unless the board first had the opportunity to know what was in the contract. This idea failed, 8-2, with only Lazares joining me with a yes vote.

2. Also in August, the board authorized the executive director to pay for the personal and private legal fees of three STRS employees, who decided on their own to secure external legal advice after they were subpoenaed to testify in the trial of former board member Hazel Sidaway. Lazares and I both expressed outrage over this payment occurring. Pension money never should have been used, especially when free legal advice was available from STRS lawyers.

3. I very much opposed the $3.4M settlement agreement entered into between the board and the STRS non-investment staff members, who sued to get one more bonus check for work they did in 2003. No one reported the fact that I offered a substitute motion (defeated 9-2) for the board to first seek restitution from Herb Dyer and the board members who inappropriately approved the bonus checks in 2003. Worse, the board actually adopted the settlement agreement without even having a document in hand. Lazares and I were the only board members who voted both against the agreement and in favor of seeking restitution.

4. I opposed the board’s decision to pay $300,00 to a law firm that represented the board in the above mentioned settlement agreement. It upset me that there was no discussion by the board to pay this final bill, other than a poll by email and telephone. I still question the legality of this. I requested that the item be put on the board agenda, but this was ignored. I was never even informed that the bill had been paid. The bill should never have been paid given the fact that the law firm, without the board’s approval or knowledge, inappropriately added a provision to the final agreement. Of course, since the board did not have a document in hand when a vote was taken, the misconduct could not be proven.

5. While Lazares and I both voted in favor of a new policy that is designed to allow the full board to discipline other board members if they engage in misconduct, we both expressed our opposition to the board discussing this in executive session. Discussion of a proposed policy is not a legal reason to go into executive session. It never should have happened. It is ironic that the board engaged in misconduct to privately discuss a proposed policy to deal with board member misconduct.

6. Lazares and I have voted against board members taking out-of-state trips, not because we are opposed to board member in-service, but because we feel STRS has not exhausted options to bring the desired speakers to Ohio (especially when the other four pension systems are sending their board members to the same out-of-state meetings). Further, at a time when so many retirees are struggling to make ends meet, Lazares and I feel that the STRS board should set an example and not spend thousands of dollars on meetings in Florida.

While I am pleased with many of the changes at STRS, I worry about the fact that a board majority thinks it’s okay to allow the executive director to negotiate and implement contracts without the board even knowing what’s in them. Why is it wrong for me to desire to know what the heck I am voting on? I also worry about board members believing that the more they know or learn, the more they become personally liable. This cancerous, look-the-other-way attitude is exactly what gave birth to the entitlement culture in the mid-1990’s with the previous board and staff. Two board members, when I recently requested information about the budget and vendor contracts, publicly accused me of being ‘intrusive.’ I thought it was my fiduciary responsibility, as a caretaker of retirees’ pension money, to be ‘intrusive.’

[ORTA's disclaimer]: The views expressed in the STRS Report are those of the author and do not necessarily represent ORTA or STRS official positions or viewpoints.

Comments on Dennis Leone's STRS Report in the ORTA Quarterly

From John Curry, September 30, 2006:

Note from John - by golly, ORTA finally broke down and printed it. Who knows, I (and many others) may even want to join or re-join ORTA now! The wheels of enlightenment grind slow, but they grind fine. What additional good news will we see next? We retirees need it!!

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From Kathie Bracy, September 30, 2006:

Such a nice surprise -- Thank you, ORTA!! (I wonder, though, why Dr. Leone's report was the only one in the entire issue that had a disclaimer tacked onto the end.)

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From Molly Janczyk, September 30, 2006:

Thanks to ORTA for publishing Dennis Leone's Report on this past year serving on the STRS Board as a Retired Board Member-one I worked to help elect.

I was very pleasantly surprised to open my ORTA Qrterly and find Leone speaking to us on matters he has supported and why and matters he has opposed and why. This is such a positive changed from generalities on issues. This report is filled with reasoning and detailed explanations on issues.

Leone did not expect this, obviously, as he states his report will never be seen in a newsletter of STRS or ORTA. He forwarded it to those of us with email chains to get his word out to retirees. BUT NOW, every retiree who is a member of ORTA will be able to hear his thoughts and see another aspect of the STRS Board to consider for themselves issues discussed.

THANK YOU ORTA FOR ALLOWING ME TO HEAR MY ELECTED REPRESENTATIVE ON THE STRS BOARD SPEAK TO ME THROUGH THIS VEHICLE!

ALL sides need to be heard with details of why and why not. This is an excellent step towards opening that door for all voices.

Sincerely,
Molly Janczyk

Confucius say.....

"STRS Associate who take gratuity today, have gratuitous visit with Judge tomorrow!"
.
(A rare, heretofore unknown quotation recently uncovered by supersleuth John Curry)

Duane Tron: A wake-up call

From John Curry, September 30, 2006
Subject: Re: PA Education Association official says their pensions not in fiscal trouble -- despite warnings to the contrary!

Duane -

Well said. ...and, I'll add one more factor: Did you ever see a "poverty struck" insurance company/consultant/broker? (Case in point - the recent Columbus City Schools/Unitedhealth fiasco where a local consultant/broker received commissions from both the school system and the insurance company -the attachment with this email) They've also made out like "fat cats" during these last several decades and will continue to do so despite the bleak times ahead. The Robber Barons of yesteryear could have taken a lesson or two from these folks. They, along with Big Pharma's lobby dollars, have had a strangle hold on our politicians from Columbus all the way to Washington D.C.

As I write this, they are aiming their lobbyists in the direction of the Dems. so as to be in their "good graces" as we get nearer to November 7. It's a high stakes chess game and we are the pawns. Lobbyists have the dollars and all we have is faith in humanity - lately, campaign dollars have spoken much louder than faith in our elected officials' pursuit of humanity.

John

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From: Duane Tron, September 30, 2006

Subject: Re: PA Education Association official says their pensions not in fiscal trouble -- despite warnings to the contrary!

John,

I just read an article in the newspaper this morning and a non-partisan group has come out indicating how severe the crisis is in public pension funds across the nation. They said a lack of attention to negotiated agreements during the past 30 years coupled with a lack of adequate planning and funding of retirement plans, and associated HC, are becoming a major crisis nationwide. They indicated that their studies indicate that very few public pension funds planned well for the large numbers of people who are retiring and this is coupled with the fact that people are living much longer. They said almost every system they have examined is facing a crisis in the near future! They said a lack of planning by government leaders and public employee unions is creating one of the most daunting crises facing this country among retired police, firefighters, teachers, and other public employees! No kidding!!!

The report stated that instead of addressing these issues when they first realized they were coming the people in charge pushed them to the back burner for others to deal with later! Later has apparently become, NOW! A lack of prudent planning and ignoring the problems for future managers to deal with was the modus operandi. The people who have enjoyed the benefits for the past 30-40 years aren't the ones who paid for them. It is those of us who are retiring now who are paying! We paid for those before us and now we are being required to pay for those who will come after us. Inspiring isn't it??!!

There has been absolutely NO planning, or accountability, in the past! Now we face a major crisis because of lousy leadership and mismanagement by others! State after state are trying to figure out how they are going to maintain and fund their pension plans!

My wife contends that HMO's helped precipitate the crisis. If nothing else they exacerbated the problem because they opened the doors to widespread abuse. The fact that people are living longer and require much more medical attention are driving costs more than health care providers. She pointed out that people with HMO's go to the ER for headaches, hang nails, colds, and all kinds of minor health concerns. She said this has driven operating costs through the roof. Instead of people waiting and going to see their primary care physician, at a small portion of the cost of the ER visit, they go to the ER so they don't have to wait. She points out that this kind of abuse has driven many HC costs through the roof. Combine all of the elements and we have a recipe for a national disaster for which few predicted! She says politicians have been blind to all of it because it is such a dicey topic they don't want to touch it. Now they're going to have to address it! They won't have any choice!

She pointed out that major corporations, and businesses, didn't adequately fund retirement packages either and they are now cutting everyone they can. They are cutting pensions and benefits because they lack the revenue streams to fund them. Again more mismanagement and poor planning! All of these factors are fueling what will emerge as the greatest economic crisis in this nation since the Great depression! My wife is a pretty smart lady and I listen to what she has to say. In the age of "entitlement and privilege" the people overseeing our pension and HC plans engaged in the "we play now and pay later culture." Now we are being told WE have to pay for it! This all stems from the fact that nobody had the guts to stand up and tell people just how much all of this was going to cost 30-40 years ago! this is the result of lousy leadership by both Democrats and republicans! neither group has a right to point any fingers at the other. They were both complicit in this failure just like they were both responsible for the failures of 9/11.

When I hear all of the politicians start the finger pointing I hold up two fingers and point at both parties. In recent times I hold up my two middle fingers, one on each hand and point it at THEM! Anybody who thinks this debacle is the fault of the democrats or republicans is living in Lah, Lah Land! They both screwed up and they are both responsible for multiple failures in about every area of government. No guts, no glory, and none of them have done their jobs. They have been too busy telling teachers what a lousy job we have done and blaming us for about every failure in society. They have leveraged hundreds of unfunded mandates on schools to try and fix all of the problems. THEY have neglected and ignored multiple problems, from the war against terrorists to pension plans, so they could promote their political fortunes. My take for what it's worth!

Now WE are being required to pay for all of THEIR failures! Comprende?

Duane Tron

PA Education Association official says their pensions not in fiscal trouble -- despite warnings to the contrary!

Posted on Sat, Sep. 30, 2006

The Philadelphia Enquirer

Pensions warning questioned A Pa. teachers' union said there's no fiscal crisis, and doesn't back all of the auditor general's ideas. By Joseph N. DiStefano Inquirer Staff Writer

The head of Pennsylvania's largest teachers' union is urging the public not to worry about the Public School Employees' Retirement System's financial condition.

"PSERS is not in a fiscal crisis," James R. Weaver, president of the Pennsylvania State Education Association, said in a statement Thursday. Auditor General Jack Wagner had warned two days earlier that the system faces a growing gap between investment assets and pension liabilities.

Wagner's remarks followed his release of audits reviewing the state teachers' and state workers' pension systems. He said the systems were generally well run, although he recommended improvements to their management and governance. But mostly, Wagner called for fiscal solutions that would "not be easy or painless."

According to Weaver, the auditor general meant to warn not of an actual financial crisis, but rather of a "potential" crisis, "which can be avoided if prudent measures are adopted."

But the union does not support measures that are key to Wagner's program.

Wagner's recommendations begin with a cap on current pension levels and a return to the former minimum 10 years' employment requirement to qualify for a pension, instead of the current five-year standard.

The teachers' union does not support those proposals, union spokesman Wythe Keever said.

To the contrary, the teachers' union wants the General Assembly to pass a cost-of-living adjustment boosting pensions for retirees - although Keever acknowledged that goal faces "an uphill battle in the current political environment."

The union also wants to keep the minimum-service requirement at five years. That standard was set in 2001 as part of a general increase in pensions to elected officials and other government retirees.

The union is comfortable with other Wagner proposals, including a guaranteed minimum yearly subsidy to the pension plan from Pennsylvania taxpayers, Keever said.

The pension is financed by investment profits, school districts' payroll deductions, and direct subsidies. The subsidies rose as pensions and eligibility increased and investment profits fell.

Retiree health care may overwhelm governments

By Bob Porterfield, Associated Press

USA Today, September 24, 2006

SAN FRANCISCO — The bill is coming due for years of generous benefits bestowed upon the nation's public employees, and it's a stunner: hundreds of billions of dollars over the next three decades, threatening some local governments with bankruptcy and all but guaranteeing cuts in services like education and public safety.

This staggering burden is coming to light because of new accounting rules issued by the Government Accounting Standards Board. They require public agencies to disclose the future cost of health care and other benefits — such as dental, vision and life insurance — promised alongside traditional pensions to the nation's estimated 24.5 million active and retired state and local public employees.

AGING AMERICA: Should U.S. move toward universal health care? | Innovators win $250KRetiree health care costs have been quietly mounting for decades while public agencies have passed out generous retirement benefits during labor negotiations — often in lieu of salary increases. But government negotiators rarely considered the long-term financial consequences of awarding such perks, according to Brian Whitworth, a retirement benefits specialist with JP Morgan Chase and Co.

"A surprising number of public entities didn't even make informal estimates of long-term costs prior to the new accounting rules," Whitworth said.

Many cities and state agencies already are struggling to fully fund their pension obligations, but experts say those liabilities pale in comparison to the debt accumulated for other retirement benefits.

Last month, JP Morgan released what it considers the most comprehensive preliminary estimate. It projects the present value of unfunded health care and other non-pension benefits at between $600 billion and $1.3 trillion.

By comparison, the debt rating agency Standard and Poors estimates the country's total unfunded public pension debt at around $285 billion.

"There's a good chance some government entities are going to go bankrupt," said California Assemblyman Keith Richman, a Republican from Chatsworth. "But the issue isn't just bankruptcy, it's governments dying of a thousand cuts in services. The costs of promises that have been made are going to be astronomical."

Union officials say it's not their fault municipalities put themselves in a hole by promising more than they can deliver.

"This is a monumental problem and government is going to have to deal with it," said Steve Regenstrief, head of the retirement division at the American Federation of State, County and Municipal Employees.

When the new accounting rules take effect in 2008, taxpayers will be able to see for the first time just how much they're paying to provide benefits to active and retired state and local public employees.

"When the numbers are produced, they're going to be shocking," said Ronald Snell, director of state services for the National Conference of State Legislatures. "They'll be in the hundreds of billions, and it's definitely something that policymakers are going to have to take notice of and act upon. ... There are consequences of decisions made in the past."

The Government Accounting Standards Board is an independent non-profit organization that establishes accounting standards for public agencies. Seeing a need to bring public sector disclosure rules in line with those of the private sector, the board unveiled the rules change in 2004 and gave governments several years to implement them.

The new rules don't require governments to come up with the money right away, just to disclose the present value of these future costs and estimate how much more money is needed to pay for them. To prepare for these disclosures, public officials across the country already are beginning to calculate how much they might owe.

So far, California, New York, and Maryland appear to have the biggest burdens, but that could change when estimates begin trickling in from Florida, Texas, Illinois and Pennsylvania. Of the country's 10 most populous states, none has completed a formal estimate of their liabilities, but those that have completed preliminary assessments are reporting astounding numbers.

•The California Legislative Analyst's Office estimates $40 billion to $70 billion in retiree health care and related liabilities for the state. With cities and counties included, JP Morgan pegs California's debt at $70 billion to $200 billion. The state controller is just now beginning a detailed study.

•New York's preliminary analysis puts state liabilities between $47 billion and $54 billion. In a recent budget report, the state acknowledged "these costs are substantial and would significantly reduce or even potentially eliminate" New York's current $49.1 billion in positive net assets.

•Maryland has initially estimated its liability at $20 billion.

•Other states also have reported significant amounts: Alabama estimates $19.8 billion, Massachusetts $13.2 billion, Alaska at least $7.9 billion, and Nevada between $1.62 billion and $4.1 billion.

Many local governments also are beginning to acknowledge huge liabilities. The City of San Francisco reported its burden at $4.9 billion, and the Los Angeles Unified School District said its liability is $10 billion. New York City has yet to complete its analysis, but is expecting a large shortfall and already has set aside $2 billion to help cover it.

How this will impact citizens depends upon the size of their government's obligation and how it's handled.

At the least, experts say, the public can expect increased taxes and fees or reduced public safety and public works services as governments adjust their budgets to amortize the debt.

They probably can't expect much in the way of concessions from public employee unions, said Suzi Rader, director of district and financial services for the California School Boards Association. Any attempt to limit benefits already granted in future negotiations will be a contentious issue, she said, so employers must instead hold the line on granting additional perks to future retirees.

John Abraham of the American Federation of Teachers said union negotiators have long been aware that future retirement benefits must be paid from shrinking resources.

"If they haven't been looking at the numbers, shame on them," he said. "Do we recognize there is a cost problem? Absolutely. As costs have gone up we've made accommodations."

Lori Moore, spokeswoman for the International Association of Fire Fighters, said nothing is really changing except the need for cities to reveal how much they'll owe in non-pension retirement benefits.

"The liability has always been there," she said. "They had to know in the back of their minds that it was there."

Most governments now fund retiree health care on a pay-as-you-go basis, with annual appropriations from their general funds, focusing most of their attention on current expenses.

Under the new accounting rules, the liability can be paid over 30 years, just like a home mortgage, but it forces public officials to recognize the debt and calculate an annual payment.

If officials choose not to set aside additional money each year to cover the payment, it counts against net assets, potentially putting a city or agency deeper into the red. Because assets are a critical component in the credit ratings that allow governments to borrow money at lower interest rates, governments that don't handle their liability properly could end up insolvent.

Parry Young, director of public finance at Standard and Poors, said few governments are prepared for the annual contributions they'll be expected to make.

"It's been a growing liability that wasn't being addressed. But now the chickens are coming to roost," he said. "For some it's going to be a big credit issue depending upon what resources they have."

Young says one way governments can get a jump on their liabilities is by putting more money into retiree health care plans, something "easier said that done."

Public officials "might also choose to issue bonds, or review benefit costs and maybe make changes in the benefits themselves," he said.

Some states have taken a proactive stance. Ohio sought to address its future liabilities by establishing a Post Employment Health Care Fund containing more than $12 billion, an amount the fund's trustees say will not be enough. In order to cut health care costs, the state has reduced the amount it will pay for employees who retire with less than 30 years of service.

Utah, with a relatively small liability estimated at between $536 and $828 million, has taken a unique approach, earmarking unused sick leave for retiree health care expenses. Under a law passed last year and upheld by the Utah Supreme Court, retirees can no longer cash out unused sick leave earned after January 2006. Instead, 25% must be placed in an employee's 401K and the remainder in a Health Reimbursement Account.

"The law really stopped the out-of-control-escalation of health care costs," said John Reidhead, director of Utah's Division of Finance. "From a financial perspective it's a good deal. From the employee perspective, maybe not."

Wall Street Journal on Columbus Public Schools: Health-care consultants reap fees from evaluees

Health-care consultants reap fees from evaluees

Monday, September 18, 2006

By Barbara Martinez, The Wall Street Journal

When Kevin Grady took over as an employee-benefits consultant for the Columbus Public Schools District in 2001, he signed a contract promising to act "in the best interest" of the schools. The Ohio district agreed to pay him $35,000 a year to help it choose a health insurer. Officials thought that was all Mr. Grady was getting out of the deal.

It wasn't. After the district switched its health insurance to UnitedHealth Group Inc. on what it says was Mr. Grady's recommendation, he started getting payments and other compensation from the big Minnetonka, Minn., insurer. "Thank you and United for the steaks," Mr. Grady wrote in a Dec. 20, 2001, email to a UnitedHealth employee. "We'll have those on Christmas eve."

All told, UnitedHealth paid Mr. Grady $517,138 for helping it get the district's business. The district says it learned about the payments two years ago after a new human-resources chief came on the job. It canceled Mr. Grady's contract. Last month, the Ohio Department of Insurance suspended Mr. Grady's license for three years, accusing him of "deception." He was ordered to pay $137,000 in restitution to the Columbus district and a $25,000 civil penalty. Earlier this year, UnitedHealth agreed to pay a $125,000 penalty to settle the matter without admitting wrongdoing.

The episode spotlights a widespread and largely invisible practice that critics say boosts the cost of health care. Many consultants and brokers who are hired to help employers get the best deal on health insurance or prescription-drug coverage have significant financial ties with the health vendors they are supposed to be scrutinizing. The ties may take the form of bonuses for bringing in business, commissions or consulting fees. Often they are disclosed only partly or not at all.

Mr. Grady's son, Joe, who is president of the family consulting business, says his father is appealing the suspension and did nothing wrong because the payments he received are standard in the industry. "All (insurance) companies offer bonuses," says Joe Grady. "It's a way to sell the product and saves them from hiring 20,000 agents." He denies that his father pushed the district to choose UnitedHealth and contends the district knew all along about the payments. The insurer declined to discuss the specifics of the Columbus case.

Consultants and other middlemen are prospering even as employers struggle with spiraling health-care costs. Some employers are dropping health coverage or raising workers' payments. That has contributed to an increase in the number of Americans without health insurance to 46.6 million last year from 45.3 million in 2004, according to the Census Bureau.

Tamar Frankel, a professor at Boston University Law School, says employers who hire middlemen need to ask: "Are you recommending me someone who is now paying you?" If the answer is yes, she says, it is best to hire someone else.

Consultants play down the importance of their financial ties to vendors and say they are part of the solution to rising health-care costs. "Health-care finance and delivery are ... not the core mission of most employers," says Robert O'Brien, the head of health and benefits consulting at Mercer, a unit of Marsh & McLennan Cos. "We help employers manage the expense and complexity of their health and benefits programs in a way that maximizes their value for employees."

A handful of consulting giants such as Mercer, Hewitt Associates, Lincolnshire, Ill., and Towers Perrin, Stamford, Conn., dominate the benefits-consulting business, but smaller ones also thrive working with local employers. Mercer says it expects its health-benefits consulting business to bring in revenue of $526 million this year.

Payments to a consultant are at issue in an Ohio case involving the South-Western City School District, which encompasses suburbs southwest of Columbus in the central part of the state. In 1996 the district hired Joseph James & Associates of Dublin, Ohio, to help it choose a health insurer.

The district had fired its previous consultant after learning he had financial ties to health insurers. Superintendent Kirk Hamilton says the district made clear that it expected Joseph James not to take money from district health-care vendors. "We wanted to make sure the people representing us were solely working in our best interest," he says.

Each time the health-insurance contract came up for bidding in subsequent years, Joseph James managed the process. Each time, UnitedHealth won the business. Over 10 years, the district paid the consulting firm about $380,000 for its services.

Earlier this year, Dr. Hamilton discovered that Joseph James also was getting paid by UnitedHealth. The district quickly sued both the consultant and the insurer in Franklin County Common Pleas Court. Documents filed in the suit showed that Joseph James was receiving 1 percent of premium dollars paid by the district. The consultant received more than $645,000 from UnitedHealth from 1999 to 2004 for bringing in the district's business, according to the documents. Joseph James, in court filings, says it became eligible for the bonus as part of a "recognition program" by UnitedHealth rewarding its "overall contributions."

In its lawsuit, the school district contends the deal gave Joseph James a financial incentive to continue choosing UnitedHealth and to ensure that the district's premiums kept rising. The premiums increased to more than $21 million this year from $5.2 million in 1996, according to Dr. Hamilton. He says it is possible "we could have negotiated lower premiums" if not for the behind-the-scenes deal.

In court documents, Joseph James argues that bonuses from insurers are an accepted and legal practice in the insurance business and it didn't need to disclose them to the school district. The consulting firm's lawyer, Kort Gatterdam, says: "There's no evidence of steering. They provided an excellent service to South-Western schools and saved them millions of dollars." He says Joseph James helped the district move in the late 1990s to a managed-care plan that saved $6 million and after that the consultant worked hard to squeeze the best rates out of UnitedHealth.

UnitedHealth declined to comment on the South-Western case. A spokesman said that in general, bonuses and other rewards for consultants who bring in a large amount of business "are not built into premiums or fees that customers pay" and don't raise the cost of health care.

The practices of brokers and middlemen in other forms of insurance were the target of a widely publicized investigation two years ago by New York state Attorney General Eliot Spitzer. He was particularly concerned about payments brokers received from insurers for bringing in a certain volume of business from corporations buying property, casualty or life insurance. Mr. Spitzer said the corporations were entitled to an unbiased opinion from their brokers rather than one potentially influenced by so-called contingent commissions.

Mr. Spitzer reached several high-profile settlements with insurance brokers and consultants. Marsh & McLennan, New York, agreed to pay $850 million and stop accepting contingent commissions. Only a handful of brokers agreed to settlements, and the probe didn't delve into health-benefits consulting. Major health insurers including UnitedHealth, Aetna Inc., Hartford, Conn., and WellPoint Inc. of Indianapolis say they continue to offer contingent commissions.

Aetna gives brokers a "retention bonus" for staying loyal. If a broker keeps 90 percent of his Aetna clients with the insurer for another year, he gets a bonus equal to 0.75 percent of the clients' total premiums. If 100 percent stay, the bonus rises to 1.25 percent of total premiums. Though employers typically put their health-insurance contracts up for bid every few years, such bonuses are one factor encouraging brokers to keep their clients on the same plan.

A spokeswoman for Aetna said the insurer requires consultants and brokers to disclose such fees to customers. She said Aetna also makes its broker fees public via its Web site and in annual disclosures to clients. Many other insurers don't detail their contingent commissions on public Web sites.

Consultants also may have financial ties with pharmacy-benefit managers, or PBMs, which administer prescription-drug benefits for employers. Mercer, the big benefits consultant, has done consulting work for a leading PBM, Medco Health Solutions Inc., even as it was advising employers choosing among PBMs including Medco, of Franklin Lakes, N.J. In a proposal for a 1998 job handled by Mercer Management Consulting, Mercer said it could help Medco "refine its pricing to increase its profitability." Mercer also said it would help Medco "improve relationship with key benefit consultants to better position (Medco) for winning target accounts."

In 2000, the top Mercer pharmacy-benefits consultant, Nicholas K. Vasilopoulos, gave a written declaration in a lawsuit by Medco clients who accused the PBM of overcharging them for drugs. In it he defended Medco as "forthright" in its business dealings. Mr. Vasilopoulos said he advised employers seeking advice on PBMs -- and advised Medco in assessing its competitiveness against other PBMs.

In an email, Mr. Vasilopoulos said "there were no conflicts of interest" when he was a Mercer consultant. He said Mercer had no reason to favor any particular PBM because it provided advice to all the major ones over the years. This advisory role gave Mercer a "more thorough understanding" of each PBM's offerings, which benefited Mercer's employer clients, he said.

Lisa Zeitel, a senior consultant at Mercer's pharmacy-benefits consulting practice, said much of the work for Medco was done by the management-consulting side of Mercer, which is "totally separate" from her unit. She said her own unit occasionally undertakes small assignments for PBMs, but this "in no way interferes with the work that we do for individual clients."

Joseph Sawicki Jr., the comptroller of Suffolk County on Long Island, N.Y., discovered the ties between consultants and PBMs after the county sought a routine audit of its PBM, Express Scripts Inc., in 2003. The county hired Mercer for the job. Mr. Sawicki says officials didn't realize at first that Mercer also serves as Express Scripts's employee-benefits consultant and had other consulting arrangements with the PBM. Mercer says it did disclose the ties.

Mr. Sawicki wasn't happy with the audit's results, which initially found that Express Scripts had overbilled the county by more than $1.1 million but later suggested that the overbilling amounted to only $14,000. Mercer charged the county $93,000. Mr. Sawicki withheld half the payment and asked Mercer to return the half it already had received, saying he doesn't pay for "shoddy" work. A spokeswoman for Mercer, Stephanie Poe, says Mercer made clear its initial estimate was likely to be reduced and it did a good job on the audit although it wasn't allowed to complete its work. The dispute over the $93,000 is unresolved.

The county didn't pursue any refunds from Express Scripts in connection with the billing Mercer had audited. It then hired another auditor to review Express Scripts's billing in subsequent years. That review led to a settlement in which Express Scripts paid the county $865,000. A spokesman for Express Scripts said the company has saved "millions of dollars" for Suffolk County. He declined to comment on the settlement.

Back in Columbus, school-district human-resources chief Craig Bickley wants consultants who aren't getting money from the same people they are supposed to be evaluating. He was annoyed to discover that under the previous consultant, Kevin Grady, the district switched to UnitedHealth from Anthem (now part of WellPoint) even though UnitedHealth's administrative fees were $776,000 a year higher. Mr. Grady's son, Joe, says UnitedHealth offered more coverage for the money.

Mr. Bickley says his first question to consultants nowadays is: "Who are you working in the best interest of, yourself or the client?" The district insisted that the consultant replacing Mr. Grady forgo commissions and bonuses it might otherwise receive from health insurers for bringing in the district's business. Mercer won the contract and agreed to do so.

RH Jones speaks out: Hearsay or a good idea for STRS?

From RH Jones, September 30, 2006

Subject: Hearsay or a good idea for STRS?

To all:

Yesterday, at Brian Williams' 41st Distr. Rep. Re-election Fundraiser, I was privileged to talk to a retired state patrolman who told me that his retirement fund has three investment employees. Each year one is cut, if they do not produce. This makes for furious competition among the three of them; and the fund, therefore, grows far beyond the need to pay out retirement member obligations. In a like manner, perhaps our STRS should increase competition among the investors.

To expand on this, at the fundraiser, Dr. Fluke, the SummitCRTA VP & Legislative Chair, showed me an earnings chart, made public by our STRS, that illustrated growth since 1969 in our funds that was a steady slope that looked much like the ramp of an Olympic Ski Jump. At first glance, stopping at $65-billion, it looked great; but, after thinking about it, I realized that in this chart even with this upward ramp in the growth, after the payouts and expenses to operate the STRS, it was not growing fast enough to outstrip inflation! One can assume then that without the employer/employee increase, we will be the skier who jumps off the ramp to perhaps fall on our faces. I might add, this is why it is so very critical for us to get this legislation passed, and soon. One way or another, both the STRS members and their employees at STRS will be affected.

However, trusting politicians to pass this legislation is to gamble. In outstripping inflation, to trust in the competition between our STRS investor employees is a more sure bet. It is my hope that our STRS Bd. & employees will create this competitive environment in the investment department for the good of us all who depend on God, and the STRS, for the "bread of life".

Note: We, also, need to forever stay alert to any greedy politician who may wish to raid and divert our STRS funds to solve their various shortcomings.

Robert Hudson Jones, STRS retired member

Jim Kimmel and George Doyle to John Curry re: Preparing us for the kill

From Jim Kimmel, September 29, 2006

Subject: Re: STRS - Are THEY preparing US for the kill?

Tell George it makes sense if you are attacking the concept of STRS provided health insurance from all possible angles in order to "get out of the healthcare business" as Dyer mentioned a few years ago. They are rolling along with their agenda. It is the idea of privatizing everything they can and dividing and conquering the retirees Never mind who it hurts if a few can make millions!!.

1. If all retirees are in hundreds of private insurance companies for HC they cannot unite and complain the way CORE has done.

2. The individual stock options for new teachers will put each one at the mercy of stock brokers who can make a killing on their backs. (again- divide and conquer)

3.Some of the options for new teachers in the stock market individual (stock broker) plans will give them no health insurance when they retire. I wonder how fully that is explained to the new teachers who are young and think they will never be sick .

4.It is very uncomfortable and unacceptable to many in the business world that mere teachers, police, fire and safety personnel and other "mere" public servants should have retirement systems which own large blocks of stock of large corporations, enough to influence management decisions. I think for a long time the goal has been to diminish these funds, built from the sweat of honest teachers, cops, etc., with no regard for the retirees they are destroying. The individual plans would "divide and conquer" and eliminate the influence of these workers. There have been situations where retirement systems like STRS (including STRS) have thrown their weight around at tobacco companies and others and made changes. By sabotaging STRS corporations can stop such "interference".

5. The reason, I think, that OPERS has been run more effectively, especially in the area of Health Care, is that OPERS has as its retirees and potential retirees a lot of the powerful politicians and bureaucrats in the state of Ohio. They of course protect their own, including the STRS staff. I taught with a guy who, besides teaching, had been a member of the Township Trustees and our local city council, as well as other elected posts. he was a HS government teacher and in a very real way practiced what he preached. When he retired after 30 years of teaching he chose OPERS because he had a choice between OPERS and STRS. He knew which one was the best.....

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From George Doyle, September 28, 2006

Subject: RE: STRS - Are THEY preparing US for the kill?

John:

I think this is a crock!! If they are so concerned about healthy people leaving the system for other health care, why are they forcing healthy people who work in the private sector to take their employer's insurance? This makes no sense at all!!!

George

STRS Palace

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A view from the west; complex is much too large to get into one picture. An alley (on the left) runs through it; playground visible to the left of the alley, above the bottom left corner. Photo from Google Images

Why Hutras didn't want to respond: now we know WHY -- thanks to Sen. Dann's office!

From John Curry, September 28, 2006

Subject: From Sen. Marc Dann's Office -- the ORSC commissioned study delayed by additional ORSC requested info!

No wonder ORSC didn't answer my requests to them (3 times) for an update concerning the delayed ORSC commissioned study re. the State Teachers Retirement System of Ohio and the Ohio Police and Fire Retirement System - they (ORSC) were the ones who contributed to the delay! Now we will have conclusions based upon some data that is two years old. Will we not get conclusions based upon outdated information? Thanks to a representative from Senator Marc Dann's office, we now have the truth as to the cause of the delay.

John

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From Kevin Stolecki, September 28, 2006

Subject: ORSC Study Update

Mr Curry

Today I spoke with Aristotle Hutras, Director of the Ohio Retirement Study Council about your concern on the status of the studies of the Ohio Police and Fire Retirement System and the State Teachers Retirement System of Ohio, which was commissioned by the Independent Fiduciary Services of Washington D.C.

As of today, September 28, the ORSC is still waiting on the reports to be finished. One of the main reasons is that during the process of the study, the ORSC went to the IFS and asked to have another provision added to the study, particularly whether or not the current system of dealing with custodial assets is the best way to do so. Currently the state Treasury has the power to pick which banks hold the assets. The ORSC wanted included in the study the possibility of the ORSC having some kind of say where the assets are held. This addition to the study is one of the reasons the report has yet to be finished.

Mr Hutras had no way of knowing when the report would be finished but informed me that when it is presented they are planning to have all members present.

I hope this clears up any questions to the status of the report.

If our office can be of any further assistance in the future please do not hesitate to contact us.

Thank you,

Kevin Stolecki

Office of Senator Marc Dann

The Ohio State Senate

(614) 466-7182

(614) 466-5559 (fax)

kstolecki@maild.sen.state.oh.us

Versailles

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Duane Tron gets an answer -- but not from the ORSC office

From Duane Tron, September 28, 2006

Subject: O.R.S.C. Study

FYI

I received this from Justin Walton in Senator Jordan's office this morning. I had requested the information from him as well as other reps and senators.

Duane Tron, Legislative Chair

Champaign County

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From Justin Walton, September 28, 2006

Subject:: O.R.S.C. Study

Mr. Tron,

According to ORSC they plan to have the STRS IFS fiduciary audit completed by the next month. If you have any further questions please contact our office at 614.466.7584.

Sincerely,

Justin Walton

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How our money is viewed in the Board room

RH Jones: An April '07 Massive STRS Retiree Gathering in Columbus?

From RH Jones, September 28, 2006

Subject: An April '07 Massive STRS Retiree Gathering in Columbus?

To all:

The SummitCRTA held their board meeting yesterday, 09/27/06. Dr. Fluke indicated that: "Without the employer/employee increase legislation passing, down the road in the year 2020, the STRS HC/Rx will expire. And at that time Ohio can expect that thousands of us will be forced into the Ohio Medicaid HC/Rx system. Also, an alternative would be for the legislature to pass an Ad Hoc increase in the retiree base so that we can pay for HC/Rx."

He also stated that: "There is a strong movement to have a massive busing of retirees to Columbus, next April, for a "Kickoff" of a campaign to pressure the elected Ohio government officials to pass the employer/employee increase for HC/Rx legislation."

Fluke also gave credit to Sondra Stratton for "bird-dogging" the OH Ethics CMTE. Thank you Sondra!

The SummitCRTA General Luncheon Meeting will be held on 11/06/06. And the next SummitCRTA Bd. meets 01/09/06. At that time their will be a report on membership numbers.

Note:

As a member of Dr. Fluke's Legislative CMTE, my thoughts on the meeting is that too much time and money has been wasted on the Honors Account and the Scholarship CMTE reports. Honors & Scholarship should be done away with, and the money transferred to an account to provide a free, or inexpensive, bus ride for SummitCRTA members to the April Protest. With our HC/Rx in serious jeopardy. At this critical time, we cannot afford to spend membership money on anything but our lobbying efforts in Columbus. Without the STRS retiree HC/Rx, the alternative is too scary to be wasting our funds on the Honors & Scholarships. Further, I strongly urge all CountyRTA's, ORTA & CORE members to do the same and to unite in raising funds for busing members, friends and families to Columbus next April or after the Nov. election, even sooner.

RHJones, SummitCRTA, ORTA & CORE member

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So what's the problem? Just eat out less often!

RH Jones to Ann Hanning: Why no objection from you?

From RH Jones, September 28, 2006

Subject: Fw: Letter to the editor - Katherine Bracy

Ann Hanning:

Why haven't you objected to this type of "Rubber Stamp" vote at the STRS Open Meetings? Why are you being so quiet in this continuing "entitlement" syndrome at the STRS? Speak up for us!

RHJones, ORTA Life Member

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Compliments of John Curry
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Molly Janczyk to Sandra Knoesel: What else CAN we do?

From Molly Janczyk, September 27, 2006

Subject: RE: Restrictions considered

Dear Sandra, I find you a compassionate and professional person and have personally witnessed and been privy to your attention towards being fair. This is not directed to you, personally.

I, again, understand this is not now a motion or recommendation other than to look at it and wait for how the legislation ends up. However, my concern DOES NOT pertain to having plenty of advance notice as NO amount of time or notice will prepare me or many if not most other retirees for this type of action.

Age rating and restricting retirees from HC from their own pension system is prejudicial and shameful even if legal. There are ethics and there are fine lines of laws. 3-4 yrs. ago, I and others said over and over how retirees would be adversely affected by what has happened to us with HC. Some will die, or have, some refuse treatments now and cut or don't fill meds, sell homes, and use or used up their resources. TELL ME, WHAT ELSE CAN WE DO?

STRS is killing and harming retirees literally. We CANNOT BEAR MORE, REGARDLESS OF 1 or 3 or 10 years notice. We have given all we have to give. THERE IS NO MORE ADJUSTMENT. We went back to work being robbed of our retirements if we were healthy enough and we got rid of everything we could if we couldn't work including homes, finances. WHAT ARE YOUR SUGGESTIONS?

1. Raise the retirement and service requirements for retirement: It WILL give plenty of notice and won't hurt anyone to work one or 2 or so more years if given ample notice years out.
2. Become your own PBM
3. Join with Ohio educators - active and retired for HC and any other public employees who will have us.

Even if HC legislation passes, it doesn't improve our status and only holds it somewhat. BE PROACTIVE TO GET US RELIEF!

WE NEED HELP DESPERATELY, NOT MORE HARM FOR THOSE WHO GAVE YOU JOBS!

I am horrified at what may happen and that STRS Staff and Board is EVEN considering such harmful and destructive restrictions.

Thank you, Sandra. But I know this content. It is what may happen that destroys me. WHEN and IF you tell me these items are OFF the table FOR GOOD, I will feel better.
It is clear, STRS is considering and waiting to see legislative outcome regarding age rating and restricting retirees from enrolling in STRS HC if they previously declined because they went to work unable to pay for STRS HC. This is beyond harmful to retirees who did nothing more than work to serve their communities and their children.

Molly J.

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From Sandra Knoesel, September 27, 2006

Subject: RE: Restrictions considered

Dear Molly:

Dr. Asbury asked me to clarify the issues that you are concerned about from the August Retirement Board meeting regarding the discussion on enrollment restrictions. Since I write the draft minutes for the health care and pension portions of the agenda, I regret if the issues were not explained clearly. I hope this e-mail adds to the understanding of this issue.

Before each Board meeting, the staff provides background materials to the Board on the issues that they plan to discuss. This information is provided in advance so Board members can be prepared for a full discussion of the agenda item. As you know, the discussion on enrollment restrictions came out of the Board's review of the effects of adverse selection on the STRS Ohio Health Care Program.

Adverse selection occurs when healthy people who are paying premiums but not using many services leave the plan. When these healthy enrollees leave the plan, their premium dollars are no longer available to help pay the claims expenses of enrollees who remain in the plan. Consequently, the premiums must increase even more the following year because of this "adverse selection." When healthy retirees who left the STRS Ohio Health Care Plan decide to return, we have data that shows these individuals have higher claims expenses. In short, some enrollment changes could help those enrollees in the STRS Ohio Health Care Program by keeping the increases in premiums smaller.

However, I want to emphasize that this is just one idea that the Retirement Board has discussed. Staff recommended that this idea be put on hold for two years until we know how the health care cost trends are shaping up for 2009. Hopefully by then, we will also know whether the health care legislative initiative has passed and if there will be a dedicated revenue stream for the health care program.

I understand your concern about getting plenty of advance notice of any possible changes to the health care program that are being discussed. The STRS Ohio Web site, newslist, active and retiree newsletters and various meetings across the state are some of the ways we are telling active teachers and retirees about important health care issues, like the health care legislative initiative.

Thank you for your input.

Sandy Knoesel

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What's left for us....
....if we're lucky

Mary Ellen Angeletti on Dispatch editorial: They should have gone after Taft, too

From Mary Ellen Angeletti, September 27, 2006

Subject: Re: Cols. Dispatch editorial - Sept. 27th

And should have gone after Taft for vetoing the Inspector General's inquiry into the mess. Yes, it was refreshing to see that the Columbus Dispatch, which has had blinders on for 6 years, now has finally admitted that what happened at STRS was WRONG!!!! As I told the Cols. Dispatch reporter at the Billirakis, Scott, Norris & Endry arraignment, "I cannot believe that a reporter from the Cols. Dispatch is actually here covering this STRS story! Where has your paper been for the last 6 years?" to which she just smiled and continued to write. Of course, WHIO-TV channel 7 in Dayton was there with cameras, as were reporters from the Canton Repository, the Toledo Blade & the Cleveland Plain Dealer. Thanks, Dr. Leone, for submitting your substitute motion in an attempt to go after the money Dyer and the STRS Board members squandered.

Mary Ellen

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Kathie Bracy's response to Columbus Dispatch editorial: The mindset is still there; they are STILL squandering our money

To the Editor:

In response to today's Dispatch editorial, Raising ethical standards, I wish to point out that ethical immorality and impaired judgement of board members continue to exist at STRS.

You are right on target when you point the finger of blame at former executive director, Herb Dyer, for setting "the wrong tone for STRS board members by accepting meals, golf outings, travel, Broadway tickets and other gifts."

However, even with a new board, many of whose members appear to act as "rubber stamps" for current executive director, Damon Asbury, the mindset does not appear to be much different.

Last December, STRS board member Dennis Leone, in a fervent effort to stem the continuing unconscionable squandering of retiree funds by the STRS board, made a substitute motion regarding the proposed settlement agreement for the lawsuit filed by the non-investment staff members who felt they were entitled to one final bonus check from 2003.

The motion stated that before the board agreed to any payment, the board first needed to seek restitution from former executive director, Herb Dyer, and from the board members who carelessly approved the bonus checks in 2003 and before. It was heavily defeated, 9-2, with Dennis Leone and John Lazares remaining as the two lone board members possessing the moral and ethical fiber to support it.

It deserves noting that two of the nine STRS board members who voted against Dr. Leone's substitute motion were Michael Billirakis and Steve Puckett -- two board members who were personally affected by the outcome of the vote. They should have abstained.

Catering to the entitlement culture of STRS staff members -- and some board members -- is ethically and morally wrong! With such a mindset still prevalent on the current board, I fear greatly for the future security of pensions and healthcare for thousands of retired educators. This board is STILL squandering our money.

Katherine B. Bracy,
Retired educator and STRS beneficiary

Taj Mahal

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John and Damon: On the same page at last

From John Curry, September 27, 2006

Subject: Damon - we are now on the same page

Damon, I think we now are on the same page. John

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From Damon Asbury, September 27, 2006

Subject: RE: Curry to Asbury #2 - Damon, maybe this will help explain (scroll down)

John:

When I first read your e-mail, it seemed to me that you were suggesting that people who had left “could not come back in.” I wasn’t sure what time parameters your were putting on the restrictions. When you referenced Molly’s e-mail, which I had not had a chance to read before I had your e-mail, it became clear to me that you were referring to the August board meeting discussions.

Damon
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From John Curry, September 27, 2006

Subject: Re: Curry to Asbury #2 - Damon, maybe this will help explain (scroll down)

Damon - Help me understand where, in my letter, I "suggested that enrollment restrictions were in place," (your words) when I begin with my first sentence to you which contains the words, "some at STRS are considering the possibility." This does not sound to me like my "e-mail suggested that the enrollment restrictions were in place!"

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From Damon Asbury, September 27, 2006

Subject: RE: Curry to Asbury #2 - Damon, maybe this will help explain (scroll down)

John:

I certainly do recall the board discussion and presentation on possible ways to address adverse selection in the health care program. What was not apparent from your e-mail was that you were referring to that discussion. Your e-mail suggested that enrollment restrictions were in place, when in my understanding they were not in place. There were a variety of ideas put on the table for Board discussion and understanding. The staff did not recommend that these be put in place.

Damon

Duane Tron's vision of Tent City for Elderly Educators

Duane's response to Beacon Journal article below

Duane Tron to John Curry, September 26, 2006

Subject: Re: Health Insurance premiums - Good News that's really Bad News & Seventh Class Retirees

Ours is increasing at a heck of a lot faster pace than 7.7%. In 2007 I will have to expend over 50% of my retirement check to pay for my wife's health insurance, my health insurance, and our co-pays, deductibles, and prescriptions costs. I'll bet all of the top people at STRS and OUR associates are paying for health insurance at a rate of 50% of their annual salaries aren't they? When what freezes over? Say again!

Damon had his letter in the Urbana Daily Citizen today explaining the ethics violations, etc. I promptly put the paper down and went to the back door to puke. I didn't want to make a mess on the floor of our HUMBLE home. Anyone who doubts my contention is welcome to look at my tax returns and I'll show what we've paid each year since 2003. Remember my wife is a non-teaching spouse. You know the spouse I married nearly 42 years ago when we were promised quality and affordable health insurance for the rest of our lives! The health insurance is somewhat quality but hardly affordable! I guess one out of two is supposedly not too bad??!!

I'll bet all of our elected public officials are paying at least 50% of their annual income for health insurance and related costs aren't they??!! When you know what freezes over! Some of my friends who retired from GM and Delphi just threw a hissy fit this year when they were told they were going to have to pay $80.00 per month for health insurance out of their fifty thousand dollar retirement checks. I told them to try living on $34,000 per year and paying nearly $17,000.00 for health insurance, co-pays, deductibles, and prescription costs. They all shut up! They looked at me and couldn't believe what we are having to pay! They didn't believe me when I told them. I'll bet Damon is paying at least half of his annual income for the same benefits don't you suppose??!

Excuse my sarcasm and bombastic attitude in all of this! The words of that STRS counselor just keep ringing in my ears from back in 1998 in Bowling Green, Ohio.. "Mr. Tron, the Ohio State Teacher's Retirement System is second to none! WE have the finest retirement system in the world. You NEVER have to worry about health insurance and there isn't ANY need to purchase supplemental health insurance for your wife and yourself!" I still contend that as a representative of STRS they are liable for paying damages to those of us with non-teaching spouses. I still contend we can find the right attorneys to represent us and I still contend that we will beat them in court! The sad part is how many of us will still be alive when the judgment is rendered against them!

We were promised! We were LIED to! The pain has NEVER been spread evenly across the board to ALL retirees of STRS. A select group was singled out and punished for having non-teaching spouses after promises were made and broken. We continue to be victimized by outrageous increases that are destroying our ability to exist! Many have already been financially ruined and thousands more are facing the same fate!

So much for the claim that the Ohio State Teachers' Retirement System is the "finest in the world," and "second to none!" Second to none what? Really starting to feel the pain here in beautiful downtown St. Paree.

When we are evicted from our homes I think we need to go to Damon's house, at Christmas, and pitch tents in his front yard! I think we need to go to all of the former board members' homes and do the same. We should start camping in their yards! I have a plan! We start camping in their yards! This will bring national attention to the plight of Ohio's retired educators and I promise that it will place us on the front page of the national news. I'll bet the politicians will quit ignoring the problems any longer! I think we need to start camping in the front yards of many state officials as well. We can start building tent cities on their lawns and force them to have us arrested and taken away. That'll be really impressive hauling a bunch of elderly retirees away with walkers, canes, wheelchairs, and other health concerns. They will have to obtain restraining orders and we go back and put up more tents! I'll even take an enlarged photo of my modest home and the media can then compare it to the homes of the STRS and OEA fat cats! I think it's a wonderful plan! I know it will embarrass the hell out of them, cost them a lot of money, and make our case nationwide! Let's discuss this further!

Duane Tron

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From:: John Curry, September 26, 2006

Subject: Health Insurance premiums - Good News that's really Bad News & Seventh Class Retirees

Note from John: Of course, the article doesn't mention the fact that pre-Medicare aged OPERS retirees (with 30 years service) still pay $80 monthly this year ($0 for retiree and $80 for spouse) for an 80/20 Medical Mutual PPO) like they did last year and comparable STRS retiree coverage is now over $600 per month! They (OPERS retirees) had no rate increase this year. Of course, OPERS (years ago) planned for the future, didn't they? Some will say this is comparing apples to oranges, I say it's comparing planning for the future to not planning for the future AND 30 years public service is 30 years public service. Why should educator retirees be second class retirees while we watch retired employees of our very own STRS facility in Columbus (with 30 years service under OPERS) enjoy the $80 monthly premiums? The active teachers need to be informed of this - too many of them still don't have the slightest idea that one day they will be second class retirees also - or, should I say seventh class retirees: $80 X 7 = $560 (pretty close to $600, I'd say)?

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Posted on Tue, Sep. 26, 2006

Insurance premiums increasing

By Cheryl Powell

Akron Beacon Journal medical writer

Though health insurance costs aren't increasing as much as they did several years ago, the annual hikes still are far outpacing workers' annual pay raises.

The average premium for health insurance provided by an employer rose 7.7 percent this year, according to survey results released this morning by the Kaiser Family Foundation and the Health Research and Educational Trust.

The non-profit organizations team up each year to find trends in employer-sponsored health plans. Kaiser Family Foundation is not affiliated with Kaiser Permanente, the insurance company.

This year's increase -- the lowest rate of premium growth since 2000 -- is less than the 9.2 percent average hike seen in 2005.

But premium costs are still increasing more than twice as fast as workers' wages, which rose an average of 3.8 percent this year, the study found.

All together, premiums have increased an average of 87 percent during the past six years.

Employees are picking up part of these increasing costs.

Workers are paying about $259 more this year than they did last year toward the cost of family health coverage, the study found.

More about the findings and how employers are responding to the rising health-insurance costs will be published in Wednesday's Akron Beacon Journal.

Sen. Dann's office to investigate John Curry's request to ORSC for study status

From: Kevin Stolecki

Sent: Wednesday, September 27, 2006

Subject: O.R.S.C. Study

Mr Curry

I just wanted to let you know that I am looking into your request for the status of the study on the Ohio Police and Fire Retirement System and the State Teachers Retirement System of Ohio.

I will contact you as soon as I hear anything.

Please feel free to contact me if you have any other comments or concerns.

Thank you,

Kevin Stolecki

Office of Senator Marc Dann

The Ohio State Senate

(614) 466-7182

(614) 466-5559 (fax)

kstolecki@maild.sen.state.oh.us