Kathie Bracy to Franklin Co. RTA president: Storm clouds looming; retirees need to know

Kathie Bracy to Tom Beck, March 12, 2007
Subject: STRS Report

Dear Tom,

I am pasting below a report for the ORTA Quarterly, by Dr. Dennis Leone, which he submitted yesterday to ORTA. I am also including an attachment of the same report.

There are many interesting facts here -- perhaps "alarming" is a better description -- pertaining to what has been going on at STRS in recent years and even recent months. It bothers me greatly that ORTA has been remiss in getting the word out to its members about the financial situation at STRS as it relates to retirees.

There are four charts that tell the story: there are increasing numbers of retirees on the pension rolls, yet fewer and fewer active teachers are paying into the system to help keep it solvent; at the same time, payroll growth is not "growth" at all -- this figure has dipped from 5.94% in 2002 to 2.03% in 2006, while STRS has been basing their projections on an annual 4.50% growth rate. The constant downward spiral this represents is extremely alarming. We will ALL be adversely affected if this doesn't turn around soon.

The only good news (and as I see it, the only thing saving us at all) is the incredibly good job the STRS Investment Department is doing. You can see the numbers for yourself. But we all know how the economy and the stock market are huge gambles at best, and we are only kidding ourselves if we think the "good times" will continue forever.

Most of the numbers shown in the charts are not good, and 119,000+ retirees need to be made aware before they learn about it the hard way. I hope ORTA will take Dr. Leone's report seriously and get on board to help keep a finger in the dike and turn the tide at our retirement system. If not ORTA, who? If not now, when?

How soon can FCRTA issue an invitation to Dr. Leone to come and speak to one of our meetings? Retirement is what we are all about; if there are storm clouds looming, we need to know about them, and the sooner the better.

Thank you.

Kathie Bracy
FCRTA AND ORTA Life Member

Dennis Leone's STRS Report to ORTA, March 2007