Thursday, April 19, 2007

Bob Buerkle’s speech to STRS Board, April 19, 2007

STRS – Who will be hurt if the 120 day rule is changed?

Staff recommendations to change the 120 day rule seem reasonable enough, but there will be some pain to many STRS members. Here are a few examples, but there are probably more than this.

  1. Teachers who run out of sick leave before the end of a school year. This sometimes happens to teachers after severe, chronic and long illnesses. It usually happens to our older teachers who are closer to retirement. This makes it even more devastating for them because they are losing important current income, and second, they also will be subject to a lifetime penalty in a reduced FAS pension calculation. If this proposed change in the 120 day rule goes into effect, they will be penalized in a third way: they will have to work into another year to make up for the shortfall of lost service credit time. This will cause a delay in starting their pension by many months in most cases.
  1. However, it could also happen to younger teachers who are struck down with terrible diseases, organ transplants and automobile or other accidents. We had one 34-year-old Cincinnati teacher, about five years ago, that had a heart transplant and was turned down for a disability. He was too weak and susceptible to infections to return to teaching that year, and his sick leave ran out. If this 120 day rule change had been in effect, he may not have earned a full year of service credit for that year.
  1. What about women who return from pregnancy leave after 2 years and can’t start the school year at the beginning of a year, but return weeks or several months into the year?
  1. The same thing could happen to people who have interrupted teaching careers due to military service that may end in say, September but they can’t start back until halfway through the year or later, due to no fault of their own. Eliminating the 120 day rule could, and will, hurt some of our returning veterans.
  1. I believe that changing this rule will also not substantially affect our unfunded liability or the length of our unfunded period by any significant amount. I believe this is born out from the staff statistics in last month’s report. The report also says that the number of retirees who use the 120 day rule in their final year is a very small percentage of the total number of retirees. And for nearly all of those teachers who select this option, they too will pay a penalty; they will have a lower final average salary used for their pension computations that will reduce their pensions and penalize them monthly for the rest of their lives. This then saves STRS money every month that they draw a pension. I think STRS will survive just fine without changing the 120 day rule in effect for many years. It is more of a member safety net than an abuse problem, and I hope you leave it alone.
Larry KehresMount Union Collge
Division III
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