Paul Boyer and Speaker Jon Husted re: Divestiture

Paul Boyer to Jon Husted, August 17, 2007
Subject: divestiture

To the Honorable Representative Jon Husted:

I am a retired minister and teacher, having spent 29 years in the ministry and 18 years in Ohio Public School teaching. My wife had 25 years as an elementary teacher and principal. We have both enjoyed twenty-two years of retirement under the Ohio State Teachers Retirement System. We have been able to live on that income along with a very small Social Security check each month.

Now I understand that you and some of the state legislators want to cause our STRS to lose millions of dollars by divesting their investments in certain multi-national companies that do business in Iran and the Sudan as only two of the many nations where they operate. I am wondering just how much of your busy time has been spent recently in reading the Ohio Revised Code as it pertains to STRS? Let me quote a little bit of it to you.

ORC 3307:15 SAYS:

"The board and other fiduciaries shall discharge their duties with respect to the funds "solely" in the interest of the participants and beneficiaries; for the "exclusive" purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the system;"

We retirees have all interpreted that to mean that the board members have final say on how to conserve and use our money that has been taken from our pay and that which the school board contributes, also considered part of our pay. Now, when the legislature wants to pass a law telling the STRS investment counselors who and where to invest the money to make the greatest income, you are taking over the responsibilities that the Revised Code say is exclusively theirs. Please understand that our investment people have done a marvelous job in restoring what was lost a few years ago in the stock market downturn and adding more income so that today our fund is the highest it has ever been. The head of our investment division estimates that it will cost many millions of dollars to sell some of these investments and put the money into others and will continue to lose money on the new investments because they may not be as good money makers as those they were forced to sell.

I am sure that you can see that I am trying to say that the legislature will be guilty of breaking the law by forcing its will onto our investment counselors. I am also sure that you know that some of our former board members have been found guilty of using our among in a wrong way. You don't want yourself or fellow legislators to wind up in that condition.

Please look at our side of it very closely and realize that the legis;legislature is beyond the scope of its authority in considering this devestiture bill.

Thank you for your attention.

Paul L. Boyer
Retired since 1985
Life member OEA/OEA-R, NEA, ORTA, CORE
Proud to be named “Core” of CORE by Dr. Dennis Leone
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Here is a reply I just received from House Speaker Husted. It may or may not be a form letter that he is using to reply to all letters and he evidently does not know that STRS Board rescinded their decision last week.

Paul

Jon Husted to Paul Boyer, August 20, 2007
Subject: RE: divestiture

August 20, 2007

Dear Mr. Boyer:

I received your e-mail regarding your opposition to House Bill 151. I appreciate your concern for this issue and its importance to Ohio's public employee retirees, as well as your years of service to Ohio’s students.

According to the sponsors of the legislation, the intent of House Bill 151 is to protect public pension fund dollars from the risks associated with investing in these countries and address issues of national security. As you are likely aware, House Bill 151 was scheduled for a vote on the House floor on June 5. However, after meeting with the pension plans, my colleagues and I agreed to give the plans time to deliver a letter in which they state their intent to divest at least 50 percent of their investment portfolio with the intention of divesting 100 percent at a later, unspecified date. On Thursday, June 7, Ohio’s five public employee pension systems agreed to adopt policies aimed at dropping shares of companies that do business in Iran and Sudan. The systems said that they would divest themselves of half of these investments by the end of the year and ultimately divest the rest. In this case, I am thankful the pension funds have agreed to voluntarily comply.

Again, thank you for contacting me and sharing your views on this piece of legislation. You can be assured that as we continue to discuss this measure in the Ohio House, I will be mindful of your views. If I can be of further assistance, please contact my office.

Sincerely,

Jon A. Husted
Speaker
Ohio House of Representatives