John Bos and Jeff Chapman re: Raises and new positions at STRS

John Bos to Jeff Chapman, May 2, 2007
Subject: Re: Would you kindly explain the recent STRS Board Actions
Thank you VERY MUCH for sending me this email. This helps to understand some of the issues. I do have concerns about adding new positions. I do not have a problem with a modest pay raise. I do not have a problem with efforts to improve the investment returns.

I did have a problem with hiring the consulting firm to secure new investment staff members. To the best of my knowledge that has not produced new associates.

Please keep your eyes and ears open during the discussion of the PBM contract for 2008. Many of us are not happy with Caremark. Dr. Asbury keeps telling us how much we have saved, but we have never seen the spreadsheet to document these savings.

Thanks for your efforts.

John Bos

---

From Jeff Chapman, May 2, 2007
Subject: RE: Would you kindly explain the recent STRS Board Actions
Mr. Bos,

Thanks for writing. Let me assure you that there have been NO pay increases of 14% for anybody on the STRS staff. At our April meetings, the Board heard the initial estimates regarding next year's budget. Of the projected 10% increase, a good deal of that would be for positions and salaries that have already been adopted unanimously by the board as part of an overall compensation package. Staff has taken a look at that proposed budget and have made cuts that enable the projection to be 8.6% now. No action on the budget will be taken until the June meetings.

Also at that meeting, the Board was asked to approve the annual review of the investment incentive program.Part of that package is an attempt to compete effectively for investment talent by bringing our compensation target to the 25th percentile of current private market levels, thereby allowing us to replace investment associates that have left STRS. I was/am in favor of that -- the board had previously indicated that it supports this change.

However, also included in the report was the creation of new staff positions. I could not support the motion to approve the report because I knew nothing of these new positions.

I hope this clears things up for you -- at least a little. You can access all Board documents at the STRS website (www.strsoh.org). You can also ask to have recordings of all Board proceedings sent to you on CDs.

Please let me know if I can be of any further help and thank you, once again, for writing.

Jeff Chapman

---

From John Bos, April 30, 2007
Subject: Would you kindly explain the recent STRS Board Actions
Good Morning Mr. Chapman:

I have just heard via the Internet that the STRS Board approved a 14% pay increase for the staff and also added 9 additional positions. I also understand that you did not support these actions.

Would you kindly explain to me briefly the issues regarding these actions.

For your benefit, I have not had a raise in my STRS pension for the past 2 years due to the increase in medical expenses. My wife (on Medicare) and I depend on STRS and Medicare for our medical coverage. As a result, we are going down hill $$$ with STRS and will continue this course next year with an estimated 12% increase. My 3% increase in benefits does not equal this increase in medical costs.

How can we justify an increase of this size that NO school district, state agency, industry, or other employment is granting increase beyond 3%.

Thanks for your assistance to help me understand the actions of the other board members.

John Bos
A 1989 Retiree