Saturday, October 21, 2006

Jim Kimmel on public-sector pensions: Will we suffer the wrath from private-sector employees?

From Jim Kimmel, October 10, 2006
Subject: Re: Public-sector pensions -- will we suffer the wrath from private sector employees?
Did any of these people ever ask themselves where the money went that was in their pensions? It did not go to public service workers. Instead of being mad at teachers, firemen, and others they should be angry at the selfish bastards who took their pensions away. This is just an example of playing the private workers against the public workers when we should all be working together to get pension reform enacted so that everyone is treated fairly.
The money wasted at STRS is known to have gone for nonessentials, perks and bonuses and trips to Hawaii.,not to mention a $99 million building. These "angry private sector workers" who mostly made much more money than teachers anyway should be angry as hell at their employers who discontinue their pensions so as to pay for giant CEO salaries and bonuses and build new factories in China on the backs of their employees so that their jobs can be terminated in the US even before they are eligible for retirement.
Guess what -- that is not the fault of some teacher or cop in Ohio or anyplace else!! They are playing us all against each other for the final assault on the public pensions.
Vote right in November!!
Jim Kimmel
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From John Curry, October 8, 2006
Subject: Public-sector pensions-will we suffer the rath from private sector employees?

By Molly Hennessy-Fiske
© 2006, Los Angeles Times
(Original Publication: October 8, 2006)

HADDONFIELD, N.J. - Public-employee pensions, one of the last bastions of guaranteed retirement plans in America, are under assault as cash-strapped state and local governments struggle to cover rising costs and resentful taxpayers refuse to pay more to cover them.

Alaska and Colorado have made changes to state pensions, and Illinois, Oklahoma, Montana, New Jersey, Pennsylvania and the city of Providence, R.I., are contemplating similar steps.

Nationwide, about 90 percent of state and local workers have pensions, compared with about 20 percent of private-sector workers, said Keith Brainard, research director at the National Association of State Retirement Administrators.

Instead of company-paid pensions with guaranteed payments, most private-sector workers now are offered 401(k) plans, which are investment accounts that employees pay into and manage while they're working, then tap when they retire. Some employers contribute to the 401(k) accounts as well.

With state pensions, investment management is up to the state, but taxpayers are often called on to cover costs. As of last year, 84 percent of state pension plans were underfunded, meaning their assets didn't cover projected payments, according to Santa Monica, Calif.-based Wilshire Consulting. Many states have been making up the difference by raising taxes.

New Jersey battleground
The tension between public employees and taxpayers is playing out across the country, but nowhere more sharply than in New Jersey.

Setting the stage, several of New Jersey's major private employers recently eliminated pensions. Telecom giants Sprint Nextel Corp and Verizon Communications partially froze pensions last year, affecting some 18,000 workers in New Jersey. DuPont Co., which employs about 1,300 in New Jersey, this summer announced plans to "freeze" pensions, meaning the company would drastically reduce its pension fund for current employees and deny any coverage to new hires.

"More and more New Jerseyans find themselves without pensions and become resentful of the double whammy that they face: fewer benefits for themselves and higher taxes so that the public sector workers can receive generous benefits," said David Rebovich, managing director of the Institute for New Jersey Politics at Rider University in Lawrenceville.

For insurance agent Steve Adams, 51, the resentment began two years ago.

As he worried whether his stagnant 401(k) account would be adequate for retirement, New Jersey lawmakers raised his property taxes to maintain state workers' pensions. Then his wife's employer froze her pension plan, forcing her to rely on a 401(k).

Last spring Adams joined a taxpayer group called Americans for Prosperity, which is seeking limits on government pensions. In June he attended a rally in Seaside Heights where about 200 people urged state legislators to make cuts in such things as pensions rather than raise taxes again - this time, a proposal to raise the state sales tax.

"We don't get anything nearly as generous in the private sector," Adams said of public pensions.

Nancy Burwell, 52, of Morristown also has been attending and organizing meetings of Americans for Prosperity where organizers explain details of the public pension system and how it contributes to local tax hikes.

Burwell works in sales and said she and her husband, a computer programmer, are saving for retirement without a pension or 401(k) because their jobs don't offer them. "We don't expect anybody else to help us out - we take care of it ourselves," Burwell said. "I really resent these public workers. Why should I pay for their retirement?"

"In New Jersey, life is still about keeping up with Mr. and Mrs. Jones. And the Joneses have state pensions and health-care coverage," said state Rep. Paul Moriarty, who is pushing pension changes.

Retired construction contractor Charles Reveliotty, 67, of Cherry Hill complains about public pensions but doesn't talk about it with his next-door neighbor, a town engineer. "It's a little bit like talking to somebody about religion," Reveliotty said. "If you say to somebody, 'You have to give back half your pension' you can imagine what the results are going to be, so I never bring it up. It infuriates people."

Public employees counter that instead of going after their pensions, public officials and resentful workers should defend private sector benefits, which continue to erode.

"Private-sector workers, who should be angry as hell at their employers for walking away from pensions, are angry at public employees," said Jon Shure, president of New Jersey Policy Perspective, a nonpartisan Trenton think tank.

He said eliminating state pensions would feed further benefit cuts in the private sector, leaving all workers with less income for retirement. "If the people who are fomenting this have their way, public benefits will stink, too, and we'll have dumbed it down to the way it is in the private sector," Shure said. "If anything, the public sector should set an example for how benefits should be."

Beyond New Jersey, the debate over public pensions is growing into an election campaign issue.

In Massachusetts, Illinois, New York and Oregon, Republican candidates for governor proposed new 401(k)-style plans for state workers, as did Republican candidates for comptroller in Maryland and New York.

Some cities and states have already made the switch. In April, Colorado began offering state workers a defined contribution plan, such as 401(k)s. The mayor of Providence plans to switch all new hires from pensions to 401(k)s next July. In Alaska, legislators voted last year to close the public pension system to new employees in an effort to stem a $6.9 billion deficit in the retirement fund.

Alaska state Sen. Bert Stedman, a Republican who advocated changing state pensions, warns that if states such as California and New Jersey do not change public retirement benefits to reflect the private sector, they may soon face angry taxpayers.

California sponsors several state and local pension system, including the nation's two largest, California Public Employee retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS), which cover more than 2 million workers. CalPERS is 88 percent funded, CalSTRS 82 percent funded, according to their financial records, levels even researchers at the conservative Pacific Research Institute concede are high compared with states such as Illinois and New Jersey.

"When the private sector has to pay for the public-sector benefit packages they can't get themselves, you're going to have a lot of political and social unrest," Stedman said. "The average homeowner, when he gets his property tax jacked up to pay his neighbor's benefit package, he's going to get upset about it. And that's what we don't want to happen in Alaska."

Friday, October 20, 2006

Betty Montgomery responds to Dennis Leone re: Payment of legal fees for STRS employees

Betty Montgomery's letter to Dennis Leone
October 18, 2006
Re: Payment of Legal Fees
Dear Dr. Leone:
You have requested that our office examine whether the State Teachers' [sic] Retirement System (STRS) has the authority to reimburse legal fees incurred by three STRS employees. This expense arose out of their testimony at the trial of former STRS Board member Hazel Sidaway. Normally, it is the practice of our office to defer such inquiries to the next regular financial audit of the system. However, we made an exception in this case as my tenure as auditor is coming to an end and that audit would not occur until next year. Given your concern, we made the decision to review the situation immediately.
We understand that three STRS employees, [name omitted], [name omitted], and [name omitted] were all subpoenaed to testify in the criminal trial of former STRS Board member Hazel Sidaway. All three were on the trip to New York that was the subject of Ms. Sidaway's ethics charges. None of the employees requested assistance or representation from the Attorney General before retaining their own counsel. All three employees were granted immunity, so none were in danger of prosecution due to their testimony at trial. We understand that expense reimbursement checks were approved June 28th, 2006 by Dr. Asbury and have been issued to [name omitted] and [name omitted]. [Name omitted] has not yet been reimbursed for her legal fees.
As you know from your service as a school superintendent, it is customary for the Auditor of State to defer to the reasoned legal opinion of our clients' statutory counsel which, in this instance, is the Attorney General. This is a long-standing practice which respects the general principle that government entities should be able to rely on their own attorneys for legal guidance. Thus, our office needed to understand whether the Attorney General had offered a legal opinion to the Board regarding the payment of legal fees for these employees.
To that end, we requested, and the Board agreed, to waive the attorney client privilege and reveal the advice received from the Attorney General's Office with regard to the payment of legal fees. The Board waived its privilege as to the executive sessions conducted at the May 18, 2006 and August 17, 2006 meetings when the reimbursement for legal fees was discussed. Our staff spoke with Assistant Attorney General John Patterson, former Board member Steve Busar [sic], Executive Director Dr. Damon Asbury, STRS Chief Legal Counsel William Neville and you. As part of this process, we also reviewed Board resolutions and the bills submitted by the employees.
Let me say how deeply disappointed I was to learn that after all STRS has been through in the last several years, the Board would authorize payment for legal fees surrounding Ms. Sidaway's trial when the employees failed to request Attorney General assistance at the time they received subpoenas. Though I understand the anxiety lay people feel about testifying in court and the desire to retain counsel to relieve that anxiety, I do not understand how the Board views that personal decision worthy of reimbursement with STRS funds. I do not understand why Dr. Asbury, having promised to change the way STRS does business, would approve these bills when the employees failed to make a prior request. If they had made the request, they would have learned that the Attorney General's office would have assisted them free of charge.
Unfortunately, despite not having consulted with the Attorney General prior to the hiring of these private attorneys, Mr. Patterson indicated that his legal advice to the Board on August 17th was that Dr. Asbury was authorized to reimburse these three employees for legal fees incurred under his general delegation to pay administrative expenses passed by the Board on October 21, 2005. Though Mr. Patterson did not believe it wise, he opined that because the employees were called to relate information regarding their work at STRS, and the information sought from them arose out of their status as employees, Dr. Asbury was not precluded from paying the bills. Mr. Patterson further stated that the payment did not require a separate vote of the Board, and the Board's usual approval of monthly expenses would suffice. The Board subsequently approved the expenditure for attorney's fees for [name omitted] and [name omitted] through approval of the June monthly expenditures at the August 18, 2006 meeting.
There is, therefore, no legal basis for me to undo that approval and no ability for our office to render those payments illegal, given the actions taken by the Board, the policies in place granting Dr. Asbury authority to pay administrative expenses, and, most importantly, given the Attorney General's legal advice on this matter.
The Auditor of State does not have the authority to substitute his or her judgment for the judgment of the clients we audit. The STRS Board, understandably without your support, determined that the employees in question were acting within the scope of their duties as STRS employees when they gave testimony in Ms. Sidaways' [sic} case. That is precisely why the Attorney General could have assisted, if only the employees or Dr. Asbury had asked for such assistance. However, according to the Attorney General, the Board and Dr. Asbury did not exceed the scope of their legal authority in deciding to reimburse the employees for private counsel after the fact.
Dennis, I can assure you that had I still been a member of the Board, I would have joined you in objecting to the payment of attorneys' fees in this matter. Had they asked, the Attorney General could have offered legal assistance to these employees. I must, however, discharge my duties as Auditor of State in a lawful manner, and there is no legally justifiable basis for me to determine that these reimbursements for legal fees violate Ohio law as already opined upon by STRS's attorney, Assistant Attorney General Patterson. While this will certainly disappoint you, I can only ask that you respect my obligation to follow the law in making this determination and know that I would have objected to these payments on a policy basis had I been given the opportunity.
Please do not hesitate to contact me if you wish to discuss this issue further.
Sincerely,
Betty D. Montgomery
Auditor of State

John Curry & Damon Asbury re: PAL Settlement

From John Curry, October 20, 2006
Subject: Re: PAL settlement
Damon,
Thanks for your input. After our short discussion yesterday about many PBM's having a less than sterling track record, maybe the University of Michigan PBM plan could be examined by those who are studying the choice of our future PBM.
The U. of M. didn't even "combine" with any other entity -- they did it by themselves for themselves. They serve fewer clients (80,000 active and retired) than does the Ohio STRS Rx program. If you are interested in looking at their program or willing to pass it on I will furnish you with the information I have acquired. It has just been put into service as of January 2006. I might add that transparency (something we both agreed that is needed in a PBM) was of paramount importance in their design of the plan.
John
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From Damon Asbury, October 20, 2006
Subject: RE: PAL settlement
John:
I asked staff to look at the proposed settlement and advise me as to how and if it applies to STRS Ohio. The quick read is that we are excluded from the class, because we are a government entity. Even if we are not excluded it seems like the concessions in the settlement are prospective only -- with price rollbacks first effective in 2007.
In addition, our contract with CareMark utilizes Medispan instead of First Databank as the basis for determining brand drug pricing. Therefore, it is doubtful that it will apply to us, except as pricing in the marketplace changes to reflect the ruling.
Damon
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From: John Curry, October 13, 2006
Damon,
Will STRS and/or retirees see any beneficial results of this settlement? Thank you.
John
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PAL Announces Major Settlement with First Databank

FOR IMMEDIATE RELEASE
Friday October 6, 2006
CONTACT: Alison Strock
(202) 628-7772 strock@venturecommunications.com
SETTLEMENT OF CONSPIRACY CASE FORCES MAJOR RESTRUCTURING OF PRESCRIPTION DRUG PRICING SYSTEM
Up to $4 Billion in Rx Drug Savings Expected
Boston, MA, October 6 — The Prescription Access Litigation Project (PAL) today announced a groundbreaking settlement in a nationwide class-action lawsuit brought by PAL members New England Carpenters Health Benefits Fund and AFSCME District Council 37 Health and Security Plan against First Databank, Inc., the most widely-used publisher of prescription drug prices in the United States. The milestone settlement is forecasted to result in a 4 percent rollback of prices on hundreds of drugs which represent 95 percent of the nation's retail branded drug sales. The net impact will be a staggering $4 billion in savings for health plans which have been overcharged for prescription drugs.
"This settlement is truly remarkable and represents real progress in holding drug industry players accountable for the countless ways they manipulate the system in order to wring out unjust profits,” said Alex Sugerman-Brozan, Director of PAL.
The case alleged that from 2002 to 2005, First Databank conspired with leading prescription drug wholesale provider, McKesson Corp., to arbitrarily increase by 5 percent the markups between what pharmacies pay wholesalers for prescription drugs and what health plans and insurers reimburse pharmacies for those prescription drugs. Pharmacies typically purchase drugs from wholesalers, at a price based on an industry price benchmark called the "Wholesale Acquisition Cost” (WAC). When pharmacies dispense drugs to consumers, insurance companies and health plans typically pay the pharmacy a price for the prescription that is based on another benchmark called "Average Wholesale Price,” or AWP. The difference between what the pharmacy pays the wholesaler and what the health plan pays the pharmacy is called the “spread,” and it is the pharmacy"s profit on that prescription.
AWP is a controversial and outdated system, which has created billions of dollars in unnecessary drug spending every year as reimbursement prices for drugs have far exceeded the market price of drugs. AWPs are not based on actual sales, making them susceptible to being manipulated. The plaintiffs alleged that First Databank and McKesson illegally used the increased markups as a symbiotic business strategy for their respective drug-wholesaling and drug price publication production. The case claimed that McKesson and First Databank agreed to increase the “spread” between AWP and WAC from 20% to 25% on hundreds of drugs, to benefit McKesson's customers and the purchasers of First Databank"s pricing guides. McKesson was not part of today's settlement and remains a defendant in the case.
Under the settlement, First Databank has agreed to “rollback” the spread from 25% down to 20% on hundreds of the most-commonly prescribed drugs. This rollback will reduce what health plans pay pharmacies for the drugs that represent 95% of the retail branded drug market. This is projected to result in savings of approximately $4 billion at a time when drug costs are consuming an ever-greater portion of the nation"s health care dollar. However, the most important outcome of today’s settlement is First Databank’s agreement to cease publishing AWP data within two years of the Court’s approval of the settlement. First Databank is a primary source of AWP data used by insurers, employers, pharmacies and Pharmacy Benefit Managers (PBMs). First Databank’s ceasing the publishing of AWP data is thus likely to be the end of the AWP system. This is likely to result in a shift to the use of a more transparent and accurate way of paying for drugs, which will have ripple effects throughout the health care system.
“AWP is on the ropes. We are hopeful that this settlement will knock it out once and for all and help usher in a new era of transparency in drug-pricing,” PAL’s Sugerman-Brozan emphasized. “The system that replaces AWP can only be an improvement.”
The settlement reached today most directly benefits third-party payers, including health insurance plans, union benefit funds and self-insured employers who pay pharmacies for prescription drugs dispensed to their members, but have been forced to pay artificially inflated prices. Mark Erlich, Chair of the New England Carpenters Health Benefits Fund, commented, “We got involved in this case to make real change for working people, and that’s what we’ve achieved today. Our Fund works hard to provide affordable benefits for our union members and their families, but our hands are tied when this kind of price-fixing is going on.”
Rosaria R. Esperon, Administrator of AFSCME District Council 37 Health and Security Plan, asserts that the proposed settlement will allow her Plan to continue to provide affordable prescription drug benefits for hard working members and their families. “In the face of double digit annual increases, this lawsuit exposed the systematic upward manipulation of the prices of brand name drugs -- a practice that bled real dollars from our plan and, ultimately, from our members’ pockets.”
AFSCME District Council 37 Health and Security Plan and the New England Carpenters Health Benefits Fund are represented in the case by Hagens Berman Sobol Shapiro, one of the most experienced law firms in the country in large-scale public-impact litigation. The settlement agreement filed today awaits approval by the U.S. District Court in Massachusetts, where the case is currently pending. The price rollback is expected to go into effect eight to nine months after final approval of the settlement, resulting in major savings beginning in late 2007.
For more information about the First Databank lawsuit and settlement, please visit the PAL website at www.prescriptionaccess.org/index.php?doc_id=996

October 2006 Board News from STRS

From STRS, October 20, 2006
This week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The October report follows.

OCTOBER BOARD NEWS
NEW APPOINTEE JOINS STATE TEACHERS RETIREMENT BOARD Thomas W. Johnson took his seat at the board table at the State Teachers Retirement Board's October meeting. Johnson was appointed by Gov. Bob Taft on Sept. 15, 2006, to complete the four-year term begun by Judith Fisher. He is currently an executive-in-residence at The Ohio State University in the John Glenn School of Public Affairs. He is the former director of the Office of Budget and Management for the State of Ohio and previously served in the Ohio House of Representatives for 22 years, where he was chair of the House Finance and Appropriations Committee. Johnson will serve on the board through Sept. 28, 2008.

ANNUAL ACTUARIAL REPORT PRESENTED TO BOARD At its October meeting, the State Teachers Retirement Board got its first look at the annual actuarial valuation report of STRS Ohio's pension fund from its actuary, Buck Consultants. The report provides a "snapshot" of the actuarial position of the retirement fund as of July 1, 2006. STRS Ohio's actuarial gains and losses for the past fiscal year (July 1, 2005-June 30, 2006) are documented, including their impact on the system's total liability going forward. The actuary looks at the system's experience in several areas, including investment gains and losses, payroll growth, salary increases, retiree mortality, and the number of retirements and other "separations" from the system, such as account withdrawals -- all of which can either reduce or increase the system's liabilities from one year to the next.
For fiscal year 2006, the retirement system experienced an actuarial gain. The major factor contributing to this gain was the excellent investment returns experienced during the past three years. Due to STRS Ohio "smoothing" its investment returns over rolling four-year periods, the actuarial valuation of the pension fund doesn't show the full positive impact of these returns; more than $4.3 billion of additional gains have been "deferred" to subsequent years. Nevertheless, the fund saw an investment return gain of more than $1.49 billion. The retirement fund also experienced an actuarial gain due to action taken by the Retirement Board last year to lower the interest rates paid on account withdrawals.
Employer payrolls for teachers continued to fall below the 4.5% actuarial assumption, increasing by only 2.03%. This marks the third consecutive year that payroll growth has been below 4.5% and resulted in a $457 million actuarial loss. In addition, more educators retired with 30 years of service than projected, meaning STRS Ohio is now paying out more in retirement benefits going forward than anticipated for this point in time. This factor resulted in a $196 million actuarial loss.
Taking all the actuarial gains and losses into consideration, the retirement fund recorded an actuarial gain of more than $958 million. Overall, the system's accrued liabilities dropped to $19.4 billion from $20.1 billion and both the pension system's funding period and funding ratio improved.
The funding period is the number of years required to pay off the unfunded accrued liability of the system. As of July 1, 2005, STRS Ohio's funding period was 55.5 years. However, with this year's actuarial gains, the funding period dropped to 47.2 years, as of July 1, 2006.
The system's funded ratio -- the market-related (smoothed) value of assets compared to liabilities -- increased to 76.1% compared to 74% last year. This means that STRS Ohio currently has on hand 76% of the assets needed to pay all benefits accrued by STRS Ohio members to date -- even though the liabilities are not payable all at once.
During the next several months, the Retirement Board will continue to discuss the report's results, including analyzing factors that can impact the pension fund's actuarial status - both positively and negatively. For example, increasing the investment return assumption from 8% would decrease the system's liabilities, while lowering the payroll growth assumption would lengthen the system's funding period (how long it would take to pay off system liabilities). These assumptions are currently scheduled for review in 2008. (Assumptions are typically reviewed every five years.) However, the board will be looking at comparative data to see if any actions are needed before then. The progress of the legislative initiative to increase member and employer contributions to help fund retiree health care also will be monitored. This proposal, if successful, would enable the 1% employer contribution going to health care to be returned to the pension fund, further improving the actuarial status of the fund.

AUDITOR OF STATE RESPONDS TO LEGAL EXPENSE EXPENDITURE QUESTION Earlier this year, two STRS Ohio associates were reimbursed for the legal expenses they incurred in assisting the Ohio Ethics Commission and the Columbus City Attorney's office in the prosecution of a former board member for ethics violations. To date, a total of $1,400 has been reimbursed. During its Sept. 14, 2006, meeting, the Retirement Board voted to waive the board's attorney-client privilege for discussions held in executive sessions on May 17, 2006, and Aug. 18, 2006, regarding the payment of these fees. Taking this action enabled the Auditor of State to discuss the expenditure with board and staff members to determine if the reimbursements were allowable. The response received from Auditor of State Betty Montgomery on Oct. 20, 2006, is now posted on the STRS Ohio Web site. (http://www.strsoh.org/pdfs/AG_opinion.pdf)
BUDGET INFORMATION POSTED ON WEB SITE During the October meeting, the Retirement Board approved a motion that provides for a new posting on the STRS Ohio Web site (www.strsoh.org). Each month, the report of administrative expenditures compared to the annual operating budget will be posted under "Related Links" found under the "Retirement Board" section of the Web site. Expense notes will accompany the data.
INTERNAL MANAGEMENT OF INVESTMENT ASSETS CONTINUES TO SAVE STRS OHIO DOLLARS STRS Ohio has participated in comparative studies of public and private pension funds done by CEM Benchmarking Inc. since 1996. Currently, more than 290 funds located in the United States, Canada, Europe and Australia are evaluated annually regarding the cost effectiveness of their investment programs. The most recent report covering calendar year
2005 showed that STRS Ohio saved $93.6 million that year through its significant internal management of investment assets.
BOARD APPROVES EXPLORATION OF PHARMACY BENEFIT MANAGER OPTIONS For several months, STRS Ohio and the Ohio Public Employees Retirement System (OPERS) have been discussing ways to work together to lower cost trends for their retiree health care programs' prescription drug expenses. Both systems would like to explore traditional pharmacy benefit manager (PBM) arrangements (such as the type that currently exists between STRS Ohio and Caremark) and also alternative PBM models that may offer more program flexibility and support for other approaches that lower drug costs. As a result, the State Teachers Retirement Board approved a joint project between the two systems to hire Buck Consultants to help them find a PBM for the three-year period, Jan. 1, 2008-Dec. 31, 2010. By working together, both systems benefit from the collective purchasing power of almost 303,000 covered individuals (198,000 for OPERS and 105,000 for STRS Ohio) and gross annual drug costs of more than $680 million ($458 million for OPERS and $222 million for STRS Ohio). STRS Ohio's share of the contract with Buck Consultants will fall between $80,000 and $99,985 plus travel expenses.
RETIREMENT, INVESTMENT TRANSACTIONS APPROVED The Retirement Board approved the following retirements and investment transactions:
- 490 active members were approved for service retirement; 178 inactive retirements were approved. - In September, fixed-income purchases totaled $232 million, domestic equity purchases totaled $1.46 billion and real estate purchases totaled $31.3 million.
ADDITIONAL ITEMS REPORTED AT THE MEETING BY EXECUTIVE DIRECTOR DAMON ASBURY
HEALTH CARE PROPOSAL ON A STEADY COURSE Efforts by STRS Ohio staff and members of the Health Care Advocates for STRS (HCA) to gain legislative approval for the proposal to increase contributions to fund the health care program are moving along on a steady course. To date, staff and HCA representatives have met with 115 members of the General Assembly. The proposal to increase employer and employee contributions 2.5% each (phased in over five years at a rate of 5% each year) has also been drafted into legislation. Meetings will resume after the November election. The team is hoping to get a bill introduced during the lame-duck session.
STRS OHIO RECEIVES 2006 PPCC ACHIEVEMENT AWARD STRS Ohio has once again successfully met the rigorous requirements for the Public Pension Coordinating Council Achievement Award. The purpose of this award is to promote high professional standards for public employee retirement systems and to publicly commend the systems that meet those standards.
To earn this commendation, STRS Ohio was able to document compliance with specific principles in the areas of benefits, actuarial valuations, financial reporting, investing and disclosure to members. These principles have been reviewed by prominent members of the public retirement system community and are widely acknowledged to be marks of excellence. Systems that earn the PPCC Achievement Award are commended for taking the extraordinary steps to ensure exemplary management.

Shirlee Zerkel: Observations by a retiree of the October 19 STRS Board meeting

From Shirlee Zerkel, October 19, 2006
Subject: Observations by a retiree of the Oct 19 board meeting
Dear STRS Board, Mr. Asbury and Ms. Knoesel:
For this afternoon's Board meeting, I, a retiree, was seated in the overflow area. At times it was difficult to hear all of the discussion, but nevertheless, attitudes of some staff and some board members were loud and clear. Such attitudes have been displayed before from accounts by those in attendance at the meetings.
I was sickened by the attitude of Mr. Meyers to another board member, Dr. Leone. Mr. Meyers told Dr. Leone that he, Dr. Leone, was wasting the Board's time. Then Ms. Ramser told Dr. Leone that issues on contracts would be brought up on Friday and so discussion ended on the topic of the search firm for real estate investment personnel.
Dr. Leone was elected to the board to watch out for the interest of the retirees .-- ORC 3307.15. I see why Dr. Leone had questions because each time Dr. Asbury speaks of this issue the answers are different. Now today we hear that the contract with the hiring firm was not signed earlier, yet last month it was explained that it was signed early in September, and not before. What is the true answer, or do most of you really care?
Also concerning the topic brought up by Ms. Hamant of the possible reduction of the Medicare reimbursement to retirees over 65, you can sugarcoat the words any way you want to, but it still is a reduction in health benefits to any retiree over 65. None of us were told in any information that has been sent to retirees, and as I understand it, some of the board did not even know of this vote; yet I was told by an STRS staff member yesterday that my amount would be less in 2007 because of a decision the Board members would make this week. Isn't that getting the cart before the horse? So the staff already knows what the board is to decide on Friday. Interesting, to say the least!
These Medicare-covered retirees are saving STRS money as most of their health benefits will be paid by Medicare and you will only pay some of the 20% left unpaid by Medicare; and Medicare will again be sending STRS a subsidy for drug coverage in 2007.
Let me explain my views: the Medicare covered retiree will experience a small increase their STRS premium, an increase in their Medicare B premium, an increase in drug co-pays, and now the loss of some of their reimbursement to help cover the Medicare B premium. Any way that the retiree looks at it -- IT IS A REDUCTION OF THEIR HEALTH BENEFITS! If this reduction takes place it will some as a complete surprise to most of the over 65 group!
What about the older retirees who may only be receiving a few hundred in pension a month? Those higher costs of premiums and co-pays and lower reimbursement of their higher Medicare premium bills will push them further toward starvation and death. But the thought of some deaths is probably a desirable thought for some of the Board members and staff, as it will save STRS some money. If this is the vote on Friday, just where is that saved money going??
I can also guess why the health care meeting and the discussion on the Board seeing the contracts before voting was delayed until Friday. The staff knew that most of the retirees would not be there on Friday so let's move those to Friday.
I have written to you before, but I again implore you to be more like the two elected members, John Lazares and Dennis Leone -- independent thinking, questioning and at all times keeping in mind 3307.15.
Also, since we retirees are given certain guidelines to abide by when we address the Board, I would like to encourage the Board members to use those same guidelines in addressing each other. All Board members are equal; some should not silence the concern of others who are trying to best of their abilities to follow the ORC 3307.15.
Sincerely,
Shirlee Zerkel
Retiree 2002
Life OEA-NEA and CORE

Nancy Hamant: WCRTA STATEMENT TO STRS BOARD, OCTOBER 19, 2006

WARREN COUNTY RETIRED TEACHERS ASSOCIATION

NANCY B. HAMANT, LEGISLATIVE CHAIR

TO: STRS Board

Date: October 19, 2006

SUBJECT: REDUCTION OF MEDICARE REIMBURSEMENT

My name is Nancy Hamant. I am a 28.6-year STRS member. Thank you STRS Board for the opportunity to speak to you on behalf of Warren County’s educators.
Our WCRTA members are deeply concerned that the STRS Board is considering reducing the current Medicare monthly reimbursement/subsidy for 2007.
WCRTA members do not understand this action for the following reasons:
At age 65, after STRS members join Medicare, Medicare becomes the primary payer covering 80% of a medical charge, with STRS paying 80% of the 20% remaining after Medicare pays. This is an enormous savings for the STRS Health Care Stabilization Fund
In 2006, STRS started receiving Medicare Part D payments for drugs purchased by STRS Medicare recipients. STRS has stated that the Medicare Part D payments will extend the STRS Health Care Stabilization Fund by almost THREE years
WCRTA understands that Congress intended the Medicare Part D payments to ensure that businesses (in this case STRS) did not “DROP” retirees from prescription plans nor unduly charge them for prescriptions
It is unconscionable that STRS is considering reducing the monthly Medicare subsidy to STRS Medicare members. This will direly affect STRS’s oldest members. They are being hit doubly hard by reductions in health care services, increases in monthly premiums for health care and now this reduction.
WCRTA requests that STRS reconsider this action and not let it become another loss of benefits as the “thirteenth check”.

STRS Board meeting: Some observations and a speech from Jim Reed

From Jim N. Reed to John Curry, October 19, 2006
Subject: Re: your STRS speech today

John, I was uncertain whether I could remain long enough in the "public speak" segment to deliver some remarks so I didn't put my thoughts together until I arrived at about 12:30 and checked the sign-in sheet. I apologize for any lack of organization in the delivery of those remarks. It was nearly an extemporaneous delivery. (I will repeat it at the close of this e-mail if you still believe it's worth sharing.)
I remain amazed at the diversity of the stages of satisfaction-dissatisfaction with STRS that I hear from recipients. (Maybe some are PERS in disguise!)
And besides there OEA whose hero was Mike Billirakis as an STRS board member? What am I missing? With a couple of ethics charges in his resume at what point did he become deserving of the kind of praise lavished on him by Leibensperger.
The snide, arrogant, and condescending remarks from Meyers to Dennis nearly got me out of my seat. Ramser admonished all speakers in her "public speak" preface to refrain from any personal attacks if a complaint was to be identified but permitted, via her silence, Meyers to belittle Dennis's attempts to get some specific answers from Asbury. And then Ramser postpones an effort by Dennis and John to offer a resolution to an obvious contractual error. What a shameful exhibition from the people with whom we are supposed to trust our retirements!
And why was there not some response from every board member during that exchange? Do they not have an opinion? Did they not do their homework? Are there some behind-the-scenes arm-twisting?
(Speech):
"Good afternoon ladies and gentlemen. My name is Jim N. Reed. I am a 42-year educator, teaching on a part-time basis since 1998 when I became an STRS beneficiary.
I appear before you today representing my family.
I would like to publicly express my sincere gratitude to board members Dr. Dennis Leone and Mr. John Lazares for their sacrifices and efforts on behalf of Ohio's retired teachers. They have become a beacon of enlightenment.
I would challenge the remaining veteran and rookie board members to join Dr. Leone and Mr. Lazares in what I hopefully call a "Renaissance for Retirees."
It seems to me that an absolute requirement for participation in this critical transition is a complete knowledge of the legacy of this system.
I submit that it is inexcusable, even absurd, to remain knowingly ignorant of past performance, the good, the bad, and the ugly.
My optimism for this Renaissance hinges on the willingness of all board members to adhere to the "legal promise" of ORC 3307.15 and to always keep in mind that no STRS expenditure is "trivial."
Thank you for your attentive audience.
Jim N. Reed
10-19-'06

Molly Janczyk: Notes on 10/19/06 STRS Board meeting

From Molly Janczyk, October 19, 2006
Investments:
Economics: STRS forecast expects real economic growth will fall slightly below long term potential for 2007. Inflation should remain largely contained. Relative to other economic forecasts, STRS Ohio forecast expects slightly higher real economic growth with a more moderate inflation outlook.
Fixed Income: Staff reduced portfolio's relative duration further during Sept. If rates continue to fall, they will continue to reduce. $337 M of cash was raised from the Fixed Income portfolio during the month.
Domestic Equities: U.S. Stock market gained 2/6% in Sept. and finished the quarter up a strong 4.6%. STRS was a net seller of approx. $256 M of domestic equities during the month to take advantage of market strength.
Internat'l: Internat'l markets rose slightly in Sept. with a gain of .7%. Emerging weight was 5.9% and total internt'l weight was 26.4%. Staff withdrew $95 M during the month and anticipates removing addt'l money from this asset class over the next few months as needed to keep the overwt. near
26%.
Real Estate: STRS sold office property in Cleveland which established a new high for suburban market. Strong performance in real estate led to increase in real estate weighting to 7.7% of investment assets.
During discussion of assets, Leone asked: - if we now have enough to pay right now for 76% of our benefit obligation in response to a statement about this - if we were at 92% over previously - if national average was 86% capability?
Laura Ecklar said yes to all these items.
Laura said we'd be at 37 years unfunded liability is the 1% of contributions to HC was dropped.
Leone asked why only this area shown as dropped when other areas could also affect unfunded liability.
Laura said because this is an area the Board decides and not legislation.
Leone said not true. The Board can make other decisions which would lower unfunded liability.
Laura did have to agree.
It was stated the STRS Board has NO intention of changing the 1% to HCSF (HC Fund) and this was used as an example, only of something the Board determines.
Leone: Question regarding Ferguson Headhunter Contract :
I understand this contract is effective 10/1 and Ferguson to receive $45,000 by 10/1 as start up payment and I have concerns.
Damon: both sides haven't signed so not in effect.
Leone: John Lazares and I feel a copy of this contract should have been given us for review. There are things in it I didn't know. I know we didn't vote on it but we should have. ((Damon worked this contract prior to 9/01 when the $100,000 limit went into effect for him to spend without approval)). We should have known all the specifics. John indicated he did not understand paying for a service not used, either.
Ques: If we received 5 names or so from this headhunter to hire and we only liked 2 from their qualifications and only hired 2 and then go outside of Ferguson to hire , do we have to pay Ferguson the $100,000 fee in effect for up to 18 months?
Ans. Yes , unless we fire one of their hires and hire someone to replace them.
I would think the Board would want to know these issues before hiring Ferguson.
Ques: Did anyone say we are a public pension system and we cannot afford to pay this amount and ask to remove this provision?
Ques: Like with the Russell contract, if people are brought in for meetings, etc., are we required to follow travel policy allowing them to stay over in Cols. or Fla. or wherever for more nights than the meeting dates?
Answers:
Damon: this is industry policy to pay a fee and we did negotiate and got 4 persons for the price of 3. This was their concession for us. They are a very successful firm placing employees and we were not successful looking on our own so we decided to go with them after talking with 4 companies. The choice was to continue to try to find staff or go with professional search firm.
We wouldn't pay for nights over the stay needed for meetings with Ferguson.
If Board members are here for a Board meeting or anywhere for conference, STRS Board policy is to pay for 1-2 additional nights .
Geoffrey Meyers: Not our job to set ourselves up as a professional firm who does this and you (Leone) are wasting our time on this when it has been explained. You want to keep pursuing this and we have so much on agenda. ((So much for oversight of our monies knowing how it is to be spent prior to vote or Director's decision to spend. Just explain it and then move on! We have so much money, why worry over the small stuff, huh Geoffrey?))
Ramser: This is on tomorrow's agenda: Contracts ((Interestingly, it didn't make it to today's when the attendees could hear the exchange)).
Leone tried to introduce his resolutions regarding paying for overstays and credit cards today but was met several times with this is for tomorrow.
After months, he and Lazares are STILL trying to get the Board to approve NO DOCUMENTS: NO VOTE!
Public Speak:
1. Nancy Hamant: speech about Medicare Part B Reimbursements being cut on line and forwarded yesterday. It is said that Medicare doesn't come out with their announcements until fall and STRS must approve a HC plan in August to be ready for the following Jan. so it is a problem.
After public speak, this was the exchange:
Leone: So we are telling retirees something we don't know until later and it can be changed affecting retirees. I feel badly about that.
Lazares: This is a time line problem. Sandy, what can we do about this as it happened before.
Agreement for further discussion at later meeting to see if this can be dealt with more effectively.
2. Bill Leibensperger: Co-chair HCA:
I am here to address a new board again, this month. ((Tom Johnson was appointed by the Governor to replace Judith Fisher who resigned)).
HCA is working to subsidize HC for current and future retirees. Mike Billirakis' experience will be hard to replace in this area as is his experience and behavior as a Board member. I want to thank Mike for all his work. We welcome Tom Johnson and know him for his professional behavior. He sets a tone for respectability and professional atmosphere. Anything less undercuts us with legislators. Let's work as a coalition of professionals. We worked with Judith Fisher and we look forward to working with Tom Johnson.
3. Ralph Roshawn: retired superintendent who says no to STRS providing HC for rehires; take away retirement for rehires-they don't know the definition of retirement. No contracts without review before approval; 4 new STRS staff must be miracle workers for a $315,000 fee and who knows what in salary and benefits; personal legal expenses should not have been paid and staff should have to use STRS attorneys or pay for their own; rescind the '99-2000 benefit increase as it is not properly funded; Boards of Educ. cannot be saviors - 14% good even tho other states pay more - employer should not be increased until employee is increased to meet 14%.
4. Dr. Glenn Keifer: wife and I career educators and service retirees. Thank you STRS! I have always been a supporter and don't like to come with complaint. As a superintendent, I have a nice retirement. My wife hasn't worked since retiring. I am a rehire and I object to the loss of HC benefits with STRS as a rehire . Give this more thought. I oppose employers assuming this responsibility and this creates inequities since I choose to work and may lose my HC with STRS while a rehire and a felon can get it. Unfair.
((Unfair for one making so much to ask for so much more when money could be used for needier retirees not able to work and ill/elderly)).
5. Jim Reed: Thank you Dennis Leone and John Lazares for your sacrifice and efforts! ((Both could have made much more as retirees and rehires but joined the Board because retirees asked them to do so)). You are a beacon of light for us and I challenge any veteran or rookie Board member with this thought. Think Renaissance: It is ridiculous for anyone to have an incomplete knowledge or be knowingly ignorant of past behavior - good, bad or ugly.
Follow the legal promise of ORC: 3307.15! No STRS expenditure is trivial!
Tom Johnson, new STRS Board appointee had to leave for a scheduled appointment made before his appointment. He said he was happy to work with all Board Members and looking forward to it. He thanked the Board for its efforts saying changes made were important and had to be made. He said, 'My mother, now deceased, told me: Remember, dollars are important and people worked hard for those dollars.' (Wise woman).
Someone else wise said: Lively debate; question; discuss and question; strong exchange and question to reach solutions.

Closing:
Former Pres. Clinton spoke yesterday with good advice for all touching on the current climate of communication in this country.
Generous arguments and disagreements lead to good solutions. Use evidence and I never felt I was always right so search for facts for better arguments and consequences of various causes. SEEK OTHERS' OPINIONS and ways especially if yours is not working.

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Please click image to enlarge

New CORE officers, 10/19/06


Congratulations to our new CORE officers
Mary Ellen Angeletti, Vice President; Dave Parshall, President; C.J. Myers (Not shown: Glenna Barr, Secretary)

Molly Janczyk: Minutes of CORE meeting October 19, 2006

From Molly Janczyk, volunteer scribe for 10/19/06 meeting

I was reminded that Ryan Holderman was nominated and approved to be: CORE's Parliamentarian for his excellence in formulating the CORE Constitution for membership! THANK YOU, Ryan!

**CORE Meeting minutes have been approved and are ready for circulation on the email lists, blog, etc.

The Agenda was followed:

A. CORE minutes from 9/14/06 were read by Mary Ellen Angeletti. These minutes were distributed last month and can be requested from Mary Ellen if you would like to see them again or missed them.

B. Voting for CORE Officers was handled by Ryan Holderman. The vote was unanimous for the following:

Pres.: Dave Parshall VP: Mary Ellen Angeletti Treas.: C.J. Myers Secretary: Glenna Barr (This had no nominations until today so this motion and vote to return to elections came later in the meeting).

Ryan Holderman did a swearing in ceremony for these new officers and all were met with a round of applause as was Ryan for his tireless work on the Constitution.

C. Counting of ballots was unnecessary as all offices had one nominee and they were uncontested and the voting was unanimous.

D. Update of Finances: Dave Parshall, former acting Treasurer reported the current totals and that he posted his largest deposit to date recently. It was attributed to the Uncle Sam flyer posted on the CORE website (www.concernedohio.org) and on Kathie Bracy's blog (www.kathiebracy.blogspot.com) and has also been forwarded on email lists and CORE alert emails. We have had a change from the former $5 dues to asking for contributions to sustain CORE. Any amount is welcome and needed.

If you wish a total , you may contact outgoing Treasurer Dave Parshall or newly elected Treasurer CJ Myers.

Contributions can be mailed to: CORE, PO Box 141358, Cols Oh 43214 where CJ will collect them for deposit. Dave is meeting with CJ tomorrow to go over the books and accounting process. All checks have been noted to date and all bills paid. 3 CORE members oversee the account to ensure proper handling and expenditures usually being mailings , flyers, etc. for election related items or CORE items copied.

E. CORE Website update: handled by Dave Parshall: Currently the CORE website (www.concernedohio.org) contains the CORE Constitution (largely written to Ryan Holderman to whom we are very thankful), the Uncle Sam donation poster, HC information, Caremark contact info.

F. Date for next CORE/Damon meeting: The Chair for this CORE/Damon Committee is President of CORE, Dave Parshall. These meetings are held periodically to go offer ideas and present membership concerns to Damon about STRS. Thus far, Dave Parshall and Mary Ellen Angeletti are attending and ask for volunteers to attend. PLEASE contact Dave Parshall if you are able to attend this meeting at 11am on Tues. 10/31/06. Ideas, concerns are welcome and should go to Dave.

To date questions for Damon/CORE Meeting: 10/31/06: pertain to HC premiums for 15 + and 15 yr. retirees, STRS plans for unfunded liability, contingency plans in case of disaster affecting STRS pension funds, replacement for Steve Mitchell should he leave for any reason, credit cards since we found that 4-5 Board Members are using credit cards for expenses. ((This issue was raised by Leone and is on the agenda for tomorrow : Fri. 10/20/06.

John Curry commented that charges were made and large generic sums ($8000 and $14,000 mentioned) were listed on accounts with no specifics regarding location and names unable to be matched with trips. Ryan added it included STRS staff as well.

It was said that even though there is a $6000 cap on travel, evidently registration fees are not included in this amount. See general STRS minutes.))

G. Announcement of CORE Officers took place earlier due to show of hand vote.

H. Submission of Amendment to CORE Constitution was unnecessary as this is where we had a volunteer for the position of Secretary, motion to return to elections, nomination and vote for Glenna Barr who was elected unanimously as stated.

I. Replacement of Members of board of Trustees: it was planned to nominate and elect replacements for Mary Ellen and Dave Parshall since they assumed the positions of Pres. and VP. Both serve on the CORE Trustees Board as well. However, the 6 individuals who had expressed interest declined for various reasons. It was voted on by the Board that the current Trustees who were elected to CORE positions of Pres and VP could also remain as Trustees for the time being. Mary Thomas, Richland Co. RTA agreed to remain open to fill a future CORE Board of Trustees vacancy.

J. List of Contacts/How to proceed w/ Developing District Reps throughout the state: There is a 39 page roster of contacts in most all counties. It was approved by majority vote to ask for volunteers to handle each district. There are 11 districts and 90 RTA's. This spreads the contacting of counties to the persons electing to take on each district. Typically there are 8 counties in each district.

Discussion: Ques. re: use of lists: Each District Rep would contact individual(s) listed on their district roster for each of their 7-9 counties asking for their continued help in distributing materials/info for CORE. Typically calls have been made to many of the 90 RTA's (unless we have known agreeable email contacts) during elections asking retirees to walk info / flyers into schools and pass to any actives/retirees by email or hand to other actives/retirees they know. Many have retired and or active contacts to forward and distribute materials to local school districts and RTA's.

We have grown immeasurably with this grassroots effort in the past 3 years. Many of those contacted individuals are now hearing us and working for us even though not officially "CORE." Therefore, generally, a phone call begins with introductions and being part of the group who elected Lazares and Leone going on to ask if they would help with the current STRS Board election. This has been done whether for retired or active seats up for election.

New CORE District Reps:
District I: Molly J.
District II: Lynne Bracy
District III: Sam Ridder, Dave Speas: Western VP ORTA, Duan Tron have covered this district extremely well and we hope they will continue. Wm Phillips, Distr. Direc. ORTA, was helpful as well.
District IV: Glenna Barr
District V: Mary Thomas
District VI: Mary Ellen Angeletti
District VIII: Molly will ask Betsy Cook
District IX & XI: Chuck Angeletti will call Tom Curtis
District X: Nancy Boomhower, Chuck Chapman, Lloyd Knudson


K. Sharing Candidate Info regarding views on Education without endorsing as CORE voted not to endorse. It was stated that this is already occuring regarding candidates by individuals .

L. Facilitate Active Teacher involvement: Ideas for developing more active contacts is subject for another meeting. Nancy Boomhower suggested possible pizza gatherings after school for voting during elections to counter OEA's donut parties attracting voters this past election. ((Perhaps, indiv. RTA's/multiple individuals could help offset this cost. m.j.)) We need lots of ideas and ways to promote and gather votes in future elections as well as helping to enlarge CORE membership and circulate current and factual STRS information. Glenna Barr, District IV Director of ORTA, said this is working and she is hearing positive remarks about CORE in areas that have been hard to 'reach.'

M. Suggestions for CORE's consideration:
1. Bob Jones: CORE members raise money to bus members, friends and family to Col. next April 2007 for a kick off campaign to pressure Ohio government officials to pass the employee/employer increase for HC/RX legislation. ((The roster can help contact RTA's throughout the State and perhaps this would be something we can ask ORTA to join with us. Lloyd Knudsen was wondering how we could get combined involvement seeing ORTA representation at the CORE meeting.))


Ann Hanning of ORTA and Herschel Grimm of OFT attended today's meeting.
Dave Parshall said we needed to look into all that went into the 8/2003 Rally at the Statehouse as there were porta potty issues, etc.


2. Ques: from Brad Walton & Janice McConky re: Article IX of CORE Constitution: Who decides the HC needs and which most important for dispersing remaining CORE monies should there be any in event of CORE disperseing one day. This could never be done fairly and the money would be better put into the STRS HC fund.

The Constitution states that any remaining money would go to needy retirees in the unlikely event that CORE ever disperse. It was included to make sure no one questioned what would happen to money should this occur.

There was a motion and approval of this idea: all agreed this would be fine to put any money into the STRS HC fund should there be any and should CORE ever disperse, however unlikely that would be.

The meeting adjourned.

This meeting broke approx. 1pm when Joyce called Nancy Boomhower to say Board Members were returning to the Board. The meeting continued later in the afternoon after public speak and some other Board Member discussion to be reported in general minutes.

Respectfully Submitted to the CORE Board of Trustees for approval, additions &/or revisions.

CORE Trustees in attendance were: Mary Ellen and Chuck Angeletti, Dave Parshall, Nancy Hamant, Ryan Holderman, Alt., and author of CORE Constitution, Nancy Boomhower, Lloyd Knudsen, subbing for Chuck Chapman.* Molly J. voted on behalf of Betty Bell who could not attend.

*Chuck Chapman: I asked about Chuck and was pleased to hear he is resting up and plans to return when he is ready for 'action.' I was concerned that he not feel ANY pressure about meetings for now, as we want him to fully recuperate. Chuck, we miss you and need you for your wisdom and balance. "Our gentleman and scholar." Just heal - these things take time and we all know that. None of us heal as fast as we used to and need time to mend. You are with us in spirit and you are in our thoughts.

Molly Janczyk,
Volunteer Scribe for 10/19/06 CORE Meeting.

Thursday, October 19, 2006

Mary Ellen Angeletti: Timetable for CORE meeting this Thursday, October 19, 2006

Mary Ellen Angeletti,October 15, 2006
Subject: Oct. 19th CORE Meeting
A reminder email that the CORE meeting will be this Thursday at STRS. The STRS Bd. meeting begins at 9 a.m. and we hope membership is planning to attend in support of Dennis and John. The CORE meeting will begin at 11:45 in the same location as our Annual Meeting last month. . .the Sublett Room [second floor].
Officers will be elected following the vote count and they will be installed in a brief ceremony. We hope that many of you will be in attendance, and we look forward to working with you. The CORE meeting agenda is very full this month and if we are not done by 1:00, we will return to the Sublett Rm. around 2:00 to continue the meeting after public speak. I look forward to seeing you this Thursday.
Mary Ellen Angeletti

Wednesday, October 18, 2006

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

From John Curry, October 18, 2006
“It’s an ugly problem, with no good solution,” she said, “and we’re in an election year.” (Terri Bierdeman)
Well, Terri, we're in another election year, and it's still an ugly problem that hasn't been solved! John
Pension board may be able to repair health-care rift soon
By Paul E. Kostyu, Copley Columbus Bureau chief
Canton Repository, October 16, 2003
If it wants to be heard, then the board needs a plan soon, said Terri Bierdeman, director of governmental relations for the State Teachers Retirement System.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bierdeman said the “political dynamic” is not unified.

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

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

paul.kostyu@cantonrep.com

Tim Myers re: Debate Transcript

John Curry to Tim Myers, October 17, 2006
Tim,
Thank you for sending this copy to me concerning Blackwell's statement. It ought to scare the wits out of all public employees/retirees across this state. We can be thankful that Strickland now has a double-digit lead in the polls - let's hope it stays that way. I will pass this on to aid other retirees/actives to understand the agenda of Mr. Blackwell.
If Kenny really wanted to drive down the cost of medicine, he would examine the rip-offs of the various Pharmacy Benefits Management companies and push for an Ohio public employees based Rx distribution system where government agencies dictate the terms of the PBM contract (and a transparent contract) rather than the other way around. STRS really doesn't need another trip to the courtroom to reach a settlement with Medco like they recently experienced.
The State of Wisconsin and the University of Michigan are currently practicing this concept and it is working. Of course, the State of Wisconsin and the University of Michigan aren't using public employees' "funds" (translated "investments") to do it with, just their buying power. Of course, this would eliminate the "middleman," and the middlemen are the ones who make fat campaign contributions (something I'm sure Mr. Blackwell would not like to miss.)
As you know, STRS is currently studying the future choice of a PBM. Will they "think out of the box," like the State of Wisconsin and U. of M. did or won't they? Will we collectively work with OPERS to find a more cost effective solution to Rx purchasing and distribution? Will the terms of the future contract be transparent? We shall see.
John
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From: Tim Myers, October 17, 2006 (Sent to some individuals at OEA, STRS, etc.)
Subject: Debate Transcript
FYI - BLACKWELL WANTS TO RAID THE RETIREMENT SYSTEMS TO PAY FOR HIS HORRIBLE PLAN TO MAKE IT MANDATORY FOR EVERY OHIOAN TO PURCHASE HEALTH CARE!
I went back and looked at the DVR of the debate. Here is what Blackwell said about paying for his health care plan when asked if his plan for mandatory HC was an unfunded mandate:
At 14:19 “We would also deal with another cost driver, and that is cost of medicine. We would use the purchasing power of 5 retirement compan... ur ... 5 retirement.... ahhh... funds along with Bureau of Workman’s comp and Medicaid to write down the cost of medicine for our elderly and our working poor.” End at 14:34
At 14:14 he said: “Allow young people to stay on their parents policies until they are 29 upping the age from 21.” WHAT KIND OF HC PLAN IS THAT?
THE MEDIA HAS LET THIS SLIP BY. IT IS VERY DANGEROUS TO TALK ABOUT USING OUR HARD EARNED STRS PENSION FUNDS TO PAY FOR A NON-EDUCATION EMPLOYEE’S MANDATORY HEALTH CARE! Other state’s Governors have raided their state’s pension funds to bail out an airline and to bail out a failed charter school only to be left with a deficit in the end! We can not let this happen! WHAT ELSE DOES A “GOV.” BLACKWELL WANT TO USE OUR PENSION FUNDS FOR?
Tim Myers
Classroom Teacher
Elida Middle School
Elida, Ohio

Paul Kostyu: New report seeks change in Ohio's political culture

This time, Paul Kostyu mentions a report that I have distributed before. Apparently Mr. Kostyu also considers this report worthwhile. Please check out the link below (for this report) which is furnished by Kostyu. John Curry
Canton Repository, October 17, 2006
Paul E. Kostyu
COLUMBUS - What do Duck Run, Roy Rogers and Ronald Reagan have to do with the myriad problems Ohio faces that the next governor is expected to fix?

Well, nothing. But anyone listening to the debate between Republican J. Kenneth Blackwell and Democrat Ted Strickland in Cincinnati two weeks ago may have thought all three were somehow important to improving Ohio’s economy.

Rogers, the famous TV cowboy, and Strickland are from the Duck Run Creek area in Scioto County in Southern Ohio. Both Strickland and Blackwell apparently remember the famous exchange in the vice presidential debate between Sens. Lloyd Bentsen and Dan Quayle in 1988. The updated version went like this:

Blackwell: “I happened to have known Roy Rogers, and, Mr. Strickland, you’re no Roy Rogers.”

Strickland: “I also knew Ronald Reagan, and, sir, you’re no Ronald Reagan.”

Neither candidate explained how those comparisons would help Ohio climb from 43rd of the 50 states in employment growth, 44th in personal income growth and 47th in economic momentum, according to a recent federal report. Nor did they explain how the comparisons solve pressing state problems with education and health care.

“Ohio’s democracy and state government face serious challenges, including public corruption, a flagging economy and relatively low levels of educational attainment,” says a new report titled “Reforming Ohio’s Democracy: What’s wrong, what we can do about it.”

The report is the work of political scientist Herbert Asher of The Ohio State University, Catherine Turcer of Ohio Citizen Action, Daniel Tokaji of Ohio State’s law school, and Ann Henkener and Peg Rosenfield, both of The League of Women Voters of Ohio.

They write about how “campaign cash has been playing a significant role in policy making and in appointments made to public office,” about the “unfortunate tradition of carving districts to benefit the party that happens to control the process” and about “a loss of faith in the judiciary” and the “systemic problems with the state’s system of election administration.”

Ohio is too regional, the report says, and “impedes the government’s ability to address the state’s pressing needs.” Everyone wants a piece of the pie, pitting region against region, city against city, urban area against rural area, universities against each other.

“Governance has focused largely on the spoils of victory, how to reward one’s friends, and how to stay in office, rather than on overarching policy debates,” the report said. Into this, a new governor, whomever it will be, faces “the long-term reality of how business has traditionally been conducted in state politics. Without change in the political culture, the authors suggest, “the sour mood of many Ohioans” will continue.

“We hope this report will jump-start a conversation about what can be done to make our democracy work better for everyone,” Tokaji said. “This conversation must include not only academics and activists, but also public officials, the media and, most importantly, the people of Ohio.”

To see the full report go to: www.ohiocitizen.org

Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: Paul.kostyu@cantonrep.com

Monday, October 16, 2006

Don Gatchell on Strickland-Blackwell debate, October 16, 2006

From Don Gatchell, October 16, 2006
Education Reader:
I really do not want to e-mail anyone about the 3 conversational taboos: politics, religion or sex. However, I have commented on the politics of the Ohio campaigns often this year. I have gotten so involved in the governor's election this year because the outcome will affect education in Ohio for years to come.
Strickland Fends Off Blackwell's Attempts at Character Smears
I am currently watching the last of the televised debates between the candidates for Ohio governor. Kenneth Blackwell again prefers to try to defame Ted Strickland's character rather than discuss the issues. That political approach is from the Karl Rove "school of negative campaigning." This is an insight to Blackwell's true character not Strickland's.
Mr. Blackwell, current Secretary of State, has been in a state-wide elected office for twelve years representing the majority party. Yet he claims to have new ideas about how to improve Ohio if he is elected governor. Where were these ideas the last twelve years? He said Mr. Strickland wants to keep the status quo of the Taft years and claims to have distanced himself from Gov. Taft. However, Kenneth was the recipient of thousands of dollars when the Tafts hosted a fundraiser for him in August. What a hypocrite!
It was revealed that a top contributor to the Blackwell campaign was the for-profit charter school/school voucher lobby. The David Brennan group White Hat Schools, who operate 30 for-profit charter schools, contributed $76,000 and David and his wife contributed an additional $30,000. Charter school lobbyists outside of Ohio have donated an additional $100,000.[contribution records, Ohio Secretary of State] The president of the Advocates for School Choice stated "the school choice movement has no greater friend than Ken Blackwell." [Cleveland Plain Dealer, 7/24/2006] If Mr. Blackwell wanted to save money for Ohio schools, why did he endorse the $1.4 billion of state tax dollars that for-profit charter schools have been paid from the state coffers. Furthermore, even though White Hat Management has received millions of dollars in profits, their schools lagged far behind public schools in proficiency test scores. [Cleveland Plain Dealer, 4/4/2006] What a debacle!
Mr. Blackwell has criticized Ted Strickland for not explaining his final plan for changes in the Ohio education program. The reason is that Mr. Strickland does not want to finalize his plan until he meets with all of the stake holders, gets their input and develops a dynamic plan acceptable to all involved. Mr. Blackwell seems to have forgotten that a complaint against the Taft-Blackwell regime has been that they develop a plan then coerce the state into following it.
Mr. Ken Blackwell -- your & Mr. Taft's turn in Ohio government is over! Your 'gang' ignored the Ohio Supreme Court order to correct the method of school funding. Let's give Ted Strickland & Lee Fisher a chance. They will do better!
Respectfully,
Don
Don Gatchell
Chillicothe, OH
RCRTA, ORTA, CORE
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