FLASHBACK -- 3 YEARS AGO: The illness, turnover and absenteeism bug struck STRS

STRS unrest led to more absenteeism and resignations, say officials

Canton Repository, February 20, 2004
By PAUL E. KOSTYU Copley Columbus Bureau chief

COLUMBUS — Turmoil at the State Teachers Retirement System (STRS) during the second half of 2003 caused a higher number of employees than normal to leave their jobs or to be absent, officials said Thursday.

The pension fund’s employee turnover rate increased to 8.4 percent in 2003 compared to 4.9 percent in 2002, Lorrie Diaz told the system’s board.

Diaz, the director of Human Resource Services, also reported that absenteeism increased in 2003. The adjusted average of total absences climbed from 19.4 days per employee in 2002 to 22.2 days last year. Sick leave increased to 6.4 days from 4.7 days during the same period, while vacation leave went from 14.7 days to 15.8 days.

She said most of the increases came during the second half of the year when STRS was embroiled in controversy over spending and policy lapses that forced Executive Director Herbert L. Dyer out of office in August and resulted in changes in the fund’s operation.

“The stress level increased in the latter half of the year,” Diaz said.

She also said employees thought changes might occur in how sick leave and vacation days were accrued. Afraid of losing saved days, employees began using them quicker than normal, she said.

Damon Asbury, who was named the system’s executive director on Wednesday, said he believed it was important for the board to hear the report.

“It’s been a difficult year for our staff and our members,” he said. “We have excellent working conditions at STRS, and the changes reflect the trends we need to be aware of.”

Asbury expects the loss of more employees as the national economy improves. He said the quality of the work force makes the employees attractive to other employers. But he said he was “comfortable that we have a committed workforce.”

The report prompted a sharp exchange between board members Joe Endry and Jack Chapman. Endry told of an experience with sick leave in West Virginia, which caused Chapman to accuse him of implying that STRS employees take sick leave unnecessarily. He demanded an apology, and Endry refused to give one. It wouldn't be the last time the two clashed during a series of committee meetings the board held Thursday.

The board heard some good news. The Health-Care Stabilization Fund took in more money in 2003 than it paid out in benefits, resulting in an $383 million increase. That means the $3 billion fund is solvent through 2015, the board learned.

But there was a down side to that news for members. The improvement of the fund resulted, at least in part, in changes the board made to reduce benefits to members and their spouses.

The board delayed a staff recommendation to increase the income threshold for providing help with health-care premiums for STRS’s poorer and older retirees. Endry backed the increase, but Chapman argued that not enough information was provided to determine the impact the increase would have on the stabilization fund. The other seven board members sided with Chapman. More data and an actuarial analysis is expected at the board’s March meeting.

Stephen A. Mitchell, deputy director of investments, reported the investment returns for the current fiscal year reached 15.3 percent. He said the portfolio improved for seven straight months, which he said was unusual.

Those increases netted the portfolio $294 million so far, he said, adding he expected the markets to improve.

Mitchell also reported the sale of a Boston high-rise office building in February which netted STRS $191 million, the largest real-estate profit in the fund’s history.

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