Lunch at the STRS cafe 8/16/07

From John Curry, August 17, 2007
From left to right:

CORE Prez. Dave Parshall, RH Jones, Ann Hanning (of ORTA fame), Mary Ellen Angeletti, and Chuck Angeletti. I wonder if Dave's discussing the 5 more years for 88% provision? By the way....where were the ORTA and OEA public speakers at the meeting this day? I counted zero! CORE had four as Paul Boyer had to leave early and we know that one can't read another one's speech, don't we? John

Shades of Herb Dyer and the already-convicted former Board members!!! (And we thought we had gotten RID of all the miscreants!!!)

"Before the vote, STRS staff members spoke in defense of the severance checks (and the continuation of STRS-paid health insurance for the laid-off employees) because the laid-off employees were "deserving," because many of them "have car payments," and because we shouldn't "send the wrong message of other STRS employees." Funny, isn't it, that staff wasn't as concerned about retirees' car payments in 2002 when health insurance was cut for spouses."
~ Dennis Leone

Dennis Leone to Mary Ellen Angeletti, August 18, 2007
Subject: Update: STRS Board on August 17

Thank you Mary Ellen. Interesting, wasn't it (as the Canton Repository accurately reported), that Puckett accused me of "badgering" on August 16, seconds after I expressed my concern over the fact that the STRS staff had NOT given full information to the Board before the original June 21 divestiture vote. I guess it did not bother Puckett (who seconded the motion on June 21 to direct the staff to prepare a divestiture plan) that he did not have all of the facts before him at that time. It was okay in the past for Puckett, as you know, to have an STRS-purchased credit card, to have STRS pay for his personal long distance phone calls, to have STRS spend money on wine for a Hazel Sidaway going-away party, to vote for a settlement agreement without having a document in hand, and to support STRS paying for the private legal fees of 3 employees. Maybe I should do a little more "badgering" when it comes to Steve Puckett's behavior.

You soon will be reading about a motion I made at the STRS Board meeting on Friday, August 17, regarding Damon's decision to issue severance checks
(costing $93,000) to eight STRS employees who were laid off recently from the IT Dept. I challenged that Damon did not have the authority to do what he did and pushed for a formal Board action to have our internal auditors (who now report directly to the Board, not to the STRS exec director) do an investigation into whether the payments were proper and pursuant to board policies. (They clearly were not proper and not pursuant to adopted policies, in my opinion, based on my research of ALL policies, board minutes, etc.) I made this motion, and Chapman seconded it. Before the vote was taken, Meuser gave a speech that he was not about to "jump because Leone says jump" and that he was NOT sure if such a follow-up was "worthy." After hearing that, I replied: "From my perspective, any board member who does not vote for this resolution is engaging in misconduct from a fiduciary standpoint." (Meuser's "don't know if this is worthy" statement and Puckett's "badgering" comment remind me Judith Fisher's "intrusive" comment, Geoff Meyers' "waste of time" comment, and Bob Brown's "shut up" comment.)

Anyway, after Meuser and I exchanged words, even Conni Ramser (yes, Conni Ramser) told Meuser that the spirit of my proposed resolution was to have our own internal auditors look into the matter. The motion then passed 7-0, with Meuser voting yes as well. Board members Johnson and Puckett had to leave the meeting before this vote was taken. Board member Hayden was absent on Friday. Before the vote, STRS staff members spoke in defense of the severance checks (and the continuation of STRS-paid health insurance for the laid-off employees) because the laid-off employees were "deserving," because many of them "have car payments," and because we shouldn't "send the wrong message of other STRS employees." Funny, isn't it, that staff wasn't as concerned about retirees' car payments in 2002 when health insurance was cut for spouses. Meuser's comments on Friday also reminded me of his written comments of a few months ago, when he wrote that any board involvement in vendor contracts "inhibits the staff's ability to negotiate." Whether Meuser realizes it, it was individual board involvement in the recently adopted PBM contract (as it was being negotiated) that caused it to be a better contract in the long run. He just plain doesn't understand this.

One vote change occurred on Friday. If you recall on Thursday, Ramser was the abstaining vote in the 5-4-1 vote to raise the reimbursement costs for retirees who are on the Medicare Part B plan. Ramser asked on Friday to change her vote to a yes. This means the record will now show that Ramser, Cervantes, Meuser, Johnson, Puckett and Brooks voted yes. Voting no on this cost increase were Leone, Lazares, Chapman, and Hayden.

All of the above can be verified by the Board meeting tapes. Also, Fayette County retiree Marie Fetters was in the audience on Friday and heard it all.

As you can tell, it sure is very hard to predict how board members will vote on these issues.

Dennis Leone

Mary Ellen Angeletti to Dennis Leone, August 17, 2007
Subject: The badger is a good guy

We thank you for " vociferously" asking THE important questions of Steve Mitchell at yesterday's STRS meeting. Being compared to a badger by Steve Puckett is quite an honor because what Mr. Puckett doesn't know is that the badger is vital for the controlling of the rodent population. So you should thank him for giving you this honor. As you know a rodent is a RAT, and you made a few squirm yesterday. We try to back you up as much as possible but since they don't listen to retirees, it is not always easy.

YOU MADE SOME SOLID INROADS YESTERDAY AND FOR THAT WE SURE DO THANK YOU!!!!!!!!!!!!!!!!!!!!!!!!!

THE ANGELETTIS

Nancy Hamant's speech to STRS Board, August 16, 2007

CONCERNED OHIO RETIRED EDUCATORS (CORE)

August 16, 2007

STRS Board Members and Dr. Asbury:

My name is Nancy B. Hamant. I am a 28.6 years STRS member. It is my privilege to present CORE’s position on four issues. CORE requests your action in monitoring those issues and reporting the results to STRS members. First, CORE thanks Mr. Mitchell and staff for an outstanding year 2007.

CORE is deeply concerned about proposed changes to the STRS Health Care fund and the proposed negotiated changes to the STRS Pension Fund and the continued impact of the 1999 changes to benefit calculations to 88% for those retiring with 35 years of service (which have increased by 330%).

Health Care

1. Medicare Advantage Option

a. Nationwide Medicare Advantage has limited benefits, access to doctors and medications. The cost of Medicare Advantage is up to 30% higher than traditional Medicare for the same services. Great caution is needed when considering any Medicare Advantage Plan.

b. Any federal subsidy for Medicare Advantage may be over ridden by Medicare Advantage’s increased costs, thereby further depleting STRS Health Care Fund.

2. PBM Selection

a. PBMs continue to be sued for not disclosing rebates and for steering clients to drugs for which the PBM receives the highest rebates. At the least, the practice is unethical, to CORE members it appears to be illegal price fixing that is a federal trade violation.

b. Select the PBM which has the most honest track record. To do otherwise would revisit the illegal practices of a past PBM—Merck—whose practices cost the STRS health care fund a fortune, albeit a $50 million settlement.

Pension Fund

1. Divestiture—Pending STRS Board Action—Possible Negotiated Settlement

a. Any divestiture has the potential of a dire negative impact on the STRS Pension fund. Especially considering the 585-point drop in the Dow Jones in July as well as 281-points and 387 points so far in August 2007.

b. Full disclosure of any divested funds and the full cost of such divestiture, including losses, gains and administrative costs, need to be provided to all STRS members, immediately upon any divestiture taking place.

2. 1999 Legislative Change to Pension Calculation (88% for 35 years)

a. In STRS Ohio News, it was reported on page 3 that “35-year retirements have increased by 330%” since 2000. These educators are retiring at 88% calculation for pension benefits. Those who retired prior to 1999 are calculated at about 66%.

b. This increase in benefits has to have a major impact on the STRS pension fund. What are the full parameters of that impact?

CORE is requesting that STRS conduct full analyses for the two health care issues and for the two pension fund issues. The research should be conducted to determine the direct impact on not only the total health care stabilization fund and the total pension fund but to determine any effects on individual STRS members, i.e., the effect of Medicare Advantage option on a STRS member for surgery, doctors or medicine versus the effect of using traditional Medicare for the same procedures. CORE is requesting that all the research in the four areas listed be conducted in light of the effect on the funds and on STRS members, not just a reporting of general information gathered from nationwide sources that hold little relationship to the impact on STRS members.

Thank you and CORE looks forward to receiving data from comprehensive studies conducted by STRS in the four areas of concern.

RH Jones' speech to STRS 8/16/07

From RH Jones, August 18, 2007
Subject: My STRS speech of 08/16/07

To all:

I have 4-topics:

First, I would like to congratulate the STRS investment employees, and the board, for having 0% dollars of ours sunk in Sublime Mortgage Investments. I salute you.

Second, I would like to invite all those retired educators who reside in other states to return to live, and to spend their checks here in Ohio. Somehow, if legally possible, the STRS Ohio needs to reward those teacher members who do live and vote here.

Third, 2-years ago, I brought to the attention of the STRS board and Dr. Asbury that the Veteran's Administration (VAS) "Health Buddy" -- a small lightweight electronic appliance -- could save my STRS much money. In the meantime, the VA reported last year that 11,713 patients, diagnosed with any of 45 different chronic health disorders, transmit daily to their health care providers. Therefore, this device can be especially helpful to those of them who do not live near health facilities, live alone, or who are infirm; and, by avoiding more hospitalizations per patient, individual costs are lowered from $50,000 per year, to $10,000. This "avoidance factor" consequently also lowered of the number of visits to the ER, or ICU, reportedly brought down costs from $100,000 per year, to $25,000, a significant savings. Improvements in the "Health Buddy", such as voice recognition, are ongoing. Even more reasons for chronically ill retired patients to now have this device. The cost of the "Health Buddy" would be a bargain for the STRS.

Fourth, and lastly, to the majority STRS board members who voted in June for divestiture" It is obvious to reasonable persons that the outcome of the vote was not in the spirit of the ORC 3307.15.

Respectfully submitted, Robert Hudson Jones (End of speech)

Note: To those who are not aware of ORC 3307.15, it is basically an Ohio law that says that the STRS board members are to vote solely in the interests of the STRS members.

A further explanation of my speech: First, I would like to a say to those of you who live out-of-state: "Y'all" come home to Ohio! And to everyone: If you want to read the whole explanation of the "Health Buddy", it can be found ( Note: Better late than never, notice that it is a 2006 magazine) in the VFW magazine, September 2006, page 24 an article entitled: "Health Buddy; T-E-L-E-M-E-D-I-C-I-N-E T-O G-O by Janice Arenofsky."

In conclusion of yesterday's events at the STRS meeting, I would like to report to you that I am extremely proud of my CORE group. Those who spoke were tremendous. And, retired board member,.Dr. Leone, and board member, John Lazares, together were even more tremendous. They are competently representing the interests of all STRS members, not only retired members. They are just great. You have a moral obligation to back these wonderful gentlemen. Please remember that they and CORE are volunteers, for you! By the way, at the meeting, there was no comments to the board from the OEA/OFT or ORTA Pres. Dr. Don Bright, or of the ORTA Ex.Director, Ann Hanning. Also, by the way, my SummitCRTA is planning 2-bus trips this month. Neither of the two were to sit in on a STRS meeting. How sad.

RHJones, an extremely proud CORE member and SummitCRTA Leg. CMTE Mem.

News media articles & the public employee retirement systems as the sacrificial lamb

From John Curry, August 18, 2007
Subject: News media articles & the public employee retirement systems as the sacrificial lamb

Note: In the letter below, the author speaks about the "nasty list." This is a list of companies that, at one time, was posted on the Ohio Retirement Study Council's website and listed Honda as one of those companies that was available for consideration to drop investments in by Ohio's retirement systems so as to be in line with Josh Mandel's HB 151 divestiture desires. If you wish a copy of this list (the "nasty" list) I will gladly email you a copy as it quickly (and without explanation) disappeared from the ORSC website.

P.S. It's a good thing that I don't need a replacement limb or drive a Honda as it may be an unpatriotic desire! It sure appears as if Joe McCarthyism (version 2007.1) is still alive and well in the Buckeye State, doesn't it? Be careful on your way home today...there may be a terroristic company hiding in the bushes at your local industrial park! John

John Bos to John Curry, August 18, 2007
Subject: Re: News media articles & the public employee retirement systems as the sacrificial lamb

John,

I have shares in Stryker Company, Kalamazoo, Michigan. This company was on the "Nasty List" that was published on the internet for several days. I wish to review a few items about Stryker. They are most noted for making replacement limbs. Jack Nickolas is an endorsement for their products. It addition, the make hospital beds, surgical tables, and related medical equipment. They are a very highly regarded company that supports Kalamazoo, Michigan, and the United States of America.

I contacted Stryker regarding being on the Ohio "Nasty List". They had NO KNOWLEDGE of this list and were shocked! No one from the Ohio Legislature or any of the 5 retirment systems ever contacted them. Here is the real story. They were contacted by Sudan to sell an operating room table. This was needed for humanitarian purposes. Any U.S. Company must have approval from the U.S. State Department to make sales to certain countries. This authority was granted and the sales was completed. (my memory was that the sale was for approximately $50,000. The product was shipped following U.S. State Department guidelines.

This sale placed them on "OUR NASTY" list. No one in Ohio wants to talk about how the list was compiled, why it was removed from public viewing, etc.

This information can be confirmed by contacting Stryker Corporation, Investor Relations Department.

If you recall, others on the list included General Electric, Wells Fargo, and many other well known companies. Many of these companies were eventually removed. This entire legislative process was a Flag Waving, Special Interest, Scratch My Back process. It smells!!!!

John Bos

Paul Kostyu/Canton Repository: Pension divestment is contentious

From John Curry, August 17, 2007
Subject: Paul forgot to mention that the vote was 10-0 to table divestment plans & someone suddenly springs to life!

"At one point, Steven Puckett, who represents the Ohio superintendent of schools, accused Leone of badgering Mitchell with his questions."

Maybe I should be positive by saying that at least we now know that Steve is finally among the living as he is finally speaking...even though it is in criticism of Dr. Leone. That's OK, Steve...I'm sure Zelman would be proud -- especially with the ODE's laxity over charter school supervision and the resultant (and deserved) bad press.

Dennis is just trying to press for complete and accurate information from Mr. Mitchell. Mr. Mitchell is a big boy now....he can take the heat without bailing out of the kitchen. Where was Mr. Puckett during the past several years when it came time to ask pressing and challenging questions of certain STRS administrators?.... At best, the descriptive word "AWOL" comes to my mind. John

P.S. Mr. Kostyu neglected to mention that the vote to table the divestment planning was a unanimous 10-0 !!!!

Pension divestment is contentious

By PAUL E. KOSTYU
Gatehouse COLUMBUS BUREAU CHIEF
Canton Repository, August 17, 2007

COLUMBUS Under pressure from the Legislature, the state's five pension systems are wrestling with how, and even if, they should move their investments out of publicly traded companies doing business in Iran and Sudan.

A two-hour meeting Thursday by the board of the State Teachers Retirement System showed just how contentious the issue is with the systems, who think lawmakers should keep their noses out of the pension investment business. Nonetheless, all five systems are trying to find a way to voluntarily divest to ward off passage of House Bill 151, which mandates divestment.

After numerous hearings, some of which included emotional testimony from Iraq War veterans and parents of soldiers killed in the war, the House Financial Institutions, Real Estate and Securities Committee passed the bill in May. One of its sponsors, State Rep. Josh Mandel, R-Lyndhurst, is now on military duty in Iraq.

House Speaker Jon Husted, R-Kettering, however, told pension executive directors in early June he would not bring the bill to a floor vote if they voluntarily divested at least 50 percent of their holdings by the end of the year and the rest later.

The Ohio Senate has not taken a position on HB 151, but Gov. Ted Strickland supports Husted's compromise, according to his spokesman Keith Dailey.

ANOTHER PROPOSAL

A plan presented by Stephen A. Mitchell, deputy executive director of investments, does not obligate STRS to a set any goal or deadline for getting rid of investments. In fact, it states STRS will not divest from and could invest in companies with links to the two countries "unless a comparable substitute of equal risk and return is available." And it limits divestment to its international portfolios on equities and fixed income.

If the system is mandated to divest, Mitchell said, STRS would lose between $70 million and $100 million, which could affect retirees' benefits. He said representatives of the five systems are meeting to develop similar approaches to Husted's request.

"We are not going to compromise the board's fiduciary responsibility," he said.

"It does appear the pension systems are taking positive steps toward what is in the letter," said Karen Tabor, a spokesperson for Husted. "We expect them to keep their word."

That June 7 letter committed the executive directors to work with their boards "to expeditiously develop an investment policy consistent with the boards' fiduciary duties" with the intent of divesting 50 percent of "active, direct holdings in certain non-U.S. publicly traded companies doing business in Iran and Sudan ... as of Dec. 31."

LOSE, LOSE?

"If we take no action, we risk a mandatory policy," said STRS Executive Director Damon Asbury said. "If we develop a plan, then we control it, but the Legislature could come back. There's no sure-fire win."

"It's a gamble either way," said Mark H. Meuser, a board member from Franklin County.

"I do not like to be held hostage by the Legislature for some political reason," said Craig C. Brooks, who was appointed to the board by the state treasurer.

"I hope our membership understands we did vote to oppose mandatory divestment," said board chairwoman Constance K. Ramser, a teacher in the Jackson Local Schools. "It's the only position the board has taken."

Board member Dennis Leone, who represents retirees, argued vociferously that the board shouldn't adopt any plan and shouldn't allow staff members to explore divestment, because both use financial resources and time for a political issue and divert them from the system's responsibilities to its members. And he repeatedly asked Asbury and others why the board wasn't given more information and rushed to develop a voluntary plan. At one point, Steven Puckett, who represents the Ohio superintendent of schools, accused Leone of badgering Mitchell with his questions.

The board members decided to wait another month to vote on the voluntary plan until after they hear evaluations of it from their legal counsel and investment consultant.

Reach GateHouse Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:

paul.kostyu@cantonrep.com

Dispatch: Pension funds may skip divesting Iran, Sudan links

Friday, August 17, 2007
By James Nash
THE COLUMBUS DISPATCH

After weeks of often-emotional debate pitting homeland security against financial security for Ohio retirees, state lawmakers thought they had a deal.

The five public pension systems would withdraw half of their investments in companies that do business with Iran and Sudan by the end of the year, and work to fully rid themselves of the investments as soon as possible.

That deal, however, appears to rest on shaky ground.

In interviews this week, officials with two of the five pension systems said they might not go through with the deal if it ends up costing them money. They said their deal with House Speaker Jon A. Husted's office requires them only to study the issue and take it to their boards, which would have the final say.

"They're independent boards," said William J. Estabrook, executive director of the Ohio Police & Fire Pension Fund. "They may have a totally different idea of what to do. I don't anticipate that this will go the same way for everybody."

On June 7, executive directors of the state pension systems -- which collectively represent 1.3 million current or retired government employees -- signed a deal with Husted to work toward dumping investments in companies tied to Iran and Sudan. Their letter said they would "expeditiously develop an investment policy consistent with the boards' fiduciary duties."

Each system has interpreted that statement slightly differently. The Ohio Public Employees Retirement System has been in touch with Husted's chief of staff, Scott Borgemenke, to make sure it complies. Even after signing the deal with Husted, the State Teachers Retirement System passed a resolution continuing to oppose legislative efforts to limit its investments.

The issue has inflamed emotions since state Reps. Josh Mandel and Shannon Jones introduced a bill in April to force state pensions to dump billions of dollars in investments tied to Iran. The two Republicans -- one a veteran of the Iraq conflict, the other a mother of two young children -- pitched their bill as a way to strike at terrorism by getting public pensions out of the business of subsidizing an enemy state. Sudan was later added because of its government's unwillingness to stop the massacre in Darfur.

Hundreds of retired state employees have complained about the bill, saying it's unfair to link their retirement incomes to foreign policy. They have found sympathetic ears among members of pension boards, some of whom flatly reject Mandel and Jones' approach.

"I believe that (pension boards) need to have wiggle room," said Judy Stalter, a retired assistant clerk of the state Senate who is active in Public Employee Retirees Incorporated, an advocacy group. "It should be their right to look at the investments and make sure their fiduciary responsibilities are not breached. If they are breached, they should be able to take action to meet their fiduciary responsibilities."

Yesterday, the board of the State Teachers Retirement System debated the issue for more than two hours. Some board members expressed their distaste for what they see as legislative meddling, while others agreed that they should back out of the deal with Husted if it means their investments will generate lower returns. The board hired an investment analyst to study that question and also asked the attorney general's office to look into the pension system's obligations to both the legislature and its members.

Husted expects that the pension systems will have half of their money out of companies that do business with Iran and Sudan by year's end, spokeswoman Karen Tabor said.

"The fact of the matter is, honorable people keep their word," she said. "We expect the pension systems to keep their word. Rep. Mandel is keeping his word to the American people by going back to Iraq for a second time."

jnash@dispatch.comA

John Curry: An open letter to House Speaker Jon Husted

From John Curry, August 17, 2007

Subject: Open letter to the Honorable Jon Husted

Honorable Speaker of the House
Mr. Husted,
Upon reading this morning's Columbus Dispatch I find interesting a statement issued by your spokesperson, Karen Tabor. Here is that statement as it relates to divestment by Ohio pension systems:

"The fact of the matter is, honorable people keep their word [re: divestment]," she said. "We expect the pension systems to keep their word. Rep. Mandel is keeping his word to the American people by going back to Iraq for a second time."

For a minute....let's revisit the Ohio Revised Code which relates that all state pension board members have a fiduciary duty to act in a manner which is prudent and responsible to those that these people represent. Our financial investments chief at STRS, Stephen Mitchell, estimates that divestment will cost our STRS retirees in the neighborhood of 70 to 100 million dollars. Let's be conservative and use the 70 million dollar figure.... that's enough money to pay for the medical expenses for all 100,000 plus Ohio STRS retirees for about two months! Interpreted another way... that 70 million would equal 3,500,000 co-pays for prescriptions!!

Rep. Josh Mandel is a true patriotic American and should be praised for his duty to his country and his state. He has good intentions by pressing for divesture of investments in companies who do business with countries who are terrorist in nature BUT...he (and you) neglect to tell the voters of Ohio that this "divesture" only applies to state pension funds and not to private individuals, banks, and investment companies. Even as it applies to state pension funds it only applies to the defined benefits portion of Ohio's pension funds.

Mr. Husted, I too am a patriotic American. Besides being a retired educator I have also spent thousands of hours as a part-time law enforcement officer as a Special Deputy Sheriff for my county of residence and as a full time (in summers) ODNR Park Officer at a nearby state park. I retired with a combined retirement from OPERS and STRS with a defined benefits retirement. Mr. Mandel's bill and your related pressure on all of the Ohio retirement systems is good at flag waving but is sorely wanting in one respect. Remember that phrase in the last sentence of our Pledge of Allegiance..."with Liberty and Justice for all?" I'm concentrating on the word "Justice" as in equal justice....two very American words, don't you think? Where is the equal justice in a bill designed to ONLY zero in on state pension monies of defined benefits stakeholders? I certainly don't blame the STRS Board for sending a strong message that they won't jeopardize retirees' monies when the rest of the good citizens of this state don't have their future (or their funds) touched by this well-intended but unfair piece of legislation sponsored by a young State Representative of northeastern Ohio.

Mr. Husted, should the Legislature succeed in passing a divestments bill and waive the fiduciary responsibility of the boards so as to hold individual board members immune from litigation because their respective funds lose millions of dollars on divestment....please remember this: There are retirees who are skipping meals or medications in this fair state... ALL BECAUSE THEY CAN'T AFFORD BOTH. Many of these retirees are paying over $700 a month STRS healthcare premiums for themselves and their spouses. I don't want this additional burden to them embedded in my conscience... how about you?

Sincerely,

John Curry
A public schools retiree and recipient of an STRS defined benefits pension
A patriotic American who believes in equal justice

Dennis: Board vote clarification

Dennis Leone to John Curry, August 17, 2007
Subject: Board Vote Clarification

John -- The 6-3 vote against adding Advantage as a health care option for STRS retirees occurred yesterday (August 16, 2007) as follows:

Conni Ramser expressed her desire to make a motion to approve the staff's recommendation that Advantage be added. Legal Counsel Bill Neville informed Ramser that current Board policy prohibits the Board Chair to make a motion. He stated that she could, if she wanted to, second a motion. Jeff Chapman then made the motion to accept the staff's recommendation that Advantage be added to the STRS health care program. Ramser seconded the motion.

The motion failed 6-3, with Lazares, Leone, Hayden, Puckett, Johnson, and Meuser voted no, and with Chapman, Ramser and Cervantes voting yes. It was necessary for Brooks to leave the meeting just before this vote occurred, which accounts for 9 votes, instead of 10 votes.

That is what happened.

Dennis Leone

Dennis Leone formally credits John Curry

August 16, 2007

At the STRS Board meeting on August 16, 2007, the Board employed a new PBM firm to replace Caremark and Board member Dennis Leone publicly commended retiree John Curry in the process. Leone said he was pleased with the “airtight” contract the STRS staff negotiated with the new firm, Express Scripts, and he credited Curry with providing research that translated into a better contract. “John’s research put me in a position that I could give the staff ammunition to negotiate a better contract so we won’t see a repeat of problems that other pension systems have had with their PBM contracts,” Leone said. Calling him a “research wizard,” Leone told fellow board members and those in the audience: “If you had a speeding ticket when you were in high school, John Curry has the ability to find out about it.” Leone also said he was pleased with the guarantees and legal protection language in the new PBM contract, which was approved on a 9-0 Board vote.

August 16 STRS Meeting Highlights & Some Very Intersting Board Votes

From John Curry, August 16, 2007
Subject: Aug. 16 STRS Meeting Highlights & Some Very Intersting Board Votes

Today's STRS meeting yielded some rather surprising results. I will try to furnish just a "bare bones" coverage since a more detailed description and discussion of today's votes will be forthcoming in the next several days. Hopefully, until then, this will give all of us something to ponder and also some results that indicate that the Board is finally listening to retirees on some issues.

John

1. The proposed Medicare Advantage "pilot" program that was planned to be instituted on a limited basis for retirees of some northeastern counties was defeated by a 6-3 vote:

Voting for: Chapman, Meuser, Cervantes

Voting against: Hayden, Lazeres, Leone, Puckett, Johnson, Ramser

Absent: Brooks

2. Proposed rate hike for Medicare Part B retirees passed 5-4-1 :

Voting for: Johnson, Brooks, Meuser, Puckett, Cervantes

Voting against: Leone, Lazares, Chapman, Hayden (Leone said that other options to be considered first.)

Abstain: Ramser

3. A motion to rescind and basically "put on the back burner" a plan of action concerning the divesting of holdings of stock in companies purported to be doing business with "terrorist" countries like Iran and Sudan:

Voting for: ALL 10 BOARD MEMBERS!!!!!!!!!!!!!!!!!!!!!!! (How's this for a surprise?) The Board voted 6-2 in June (with Leone and Brooks voting no) to instruct the STRS to develop a policy/program for implementation on January 1, 2008. Leone requested the rescinding. STRS Legal Counsel reported that since Leone and Brooks voted no in June, other board members would need to propose a rescinding action. After a heated 2-hour debate, Hayden made the motion and Lazares seconded it.

4. Proposed increases in 2008 premiums for retirees utilizing STRS health insurance plans adopted 8-2:

Voting for: Johnson, Brooks, Meuser, Puckett, Cervantes, Hayden, Ramser, Chapman

Voting against: Leone and Lazares (Both stated that the Board needed to set a better example of controlling costs internally.)

5. Voting to choose Express Scripts as the 2008 STRS Pharmacy Benefits Manager adopted 9-0.

Voting for: Johnson, Meuser, Puckett, Cervantes, Leone, Lazares, Chapman, Hayden, Ramser

Voting against: None

Absent: Brooks

Note, on this vote some CORE members may be surprised. Dennis talked with me on this one and assured me that "this time 'round" we really got a great contract offer from Express Scripts AND the Board (and Express Scripts) is fully aware of the former bad experience we had with Advance PCS several years ago. He advised that Express Scripts has been made fully aware that we are ALSO aware of Express's current and ongoing lawsuit against them by the State of New York. They have been informed that we will be watching for signs of any wrongdoing and that any "funny business" on their behalf can and will result in quick termination of our contract with them. Personal comment - If Dennis and John can go along with this decision... I certainly can trust their judgment concerning this new contract with Express Scripts. John

MAJOR NEWS: STRS Board votes to rescind and amend June 21 action on Iran/Sudan

Dennis Leone to John Curry, August 16, 2007
Subject: News Flash

John -- more later, but the board -- after 2 hours of heated debate -- voted to rescind and amend the June 21 action on Iran/Sudan. Since Leone and Brooks voted no in June, we could not make a second a rescinding motion. Hayden made the motion, and Lazares seconded. Passed 10-0. More later about the actual changes.

D. Leone

Jim Kimmel and Mark Meuser re: Medicare Advantage

Jim Kimmel to Mark Meuser, August 15, 2007
Subject: Fw: Medicare Advantage

Mark:
Thanks for your prompt reply. While I may not even be around in 10 to 12 years many retirees will be. Please keep an open mind to other health care alternatives if the legislation does not pass. There have been quite a few "errors in judgment" from this and previous boards as we all know. Keeping an open mind, but one focused on the needs of all retirees, should be primary.It is OUR money!

I would also like to suggest that the 88% rule which makes out of retirees "haves and have-nots" should be phased out. Those who currently enjoy the fruits of 5 more years of teaching should be able to keep their extra benefits. But it was a bad decision and has had a bad result for the fund. Doing this one thing could very well bring us back to 30 years AND do a lot for the health care stabilization fund.

When I retired the choice was not there. I might have taught beyond 30 years. The additional years back then did not provide much incentive. And STRS can't afford this largesse. Stopping the 88% situation over, say, five years to give those nearing retirement now a way to plan would also show the legislature STRS was truly interested in cutting excesses done during the Deyer era. Of course most of those board members who voted for the 88% rule were eligible to benefit from it. I understand that you were not on the board at that time. But that IS the long and short of it.

Thanks for reading my concerns

Jim Kimmel

From Mark Meuser, August 14, 2007
Subject: RE: Medicare Advantage

Dear Mr. Kimmel,

Thank you for your e-mail. I appreciate hearing from you.

I have noticed a number of articles describing both benefits and concerns regarding the issue of Medicare Advantage. If STRS does offer a Medicare Advantage plan, it would be totally voluntary. I would certainly not be in favor of it if it were mandatory. But as it is has been proposed, it could result in a reduction of premiums for some retirees. As such, it is worth looking into. It is on the agenda for this month's meeting.

STRS does not want to get out of the health care business. It may be forced to do so, though, if the legislation to assess teachers and school districts an additional 2.5% is not passed. If that legislation is not passed, the Health Care Stabilization fund will run out of money in about 10 or 12 years. Then we will be out of the health care business.

Sincerely,
Mark Meuser

Jim Kimmel to Mark Meuser: Vote No on Medicare Advantage

From Jim Kimmel, August 14, 2007
Subject: Medicare Advantage

Mr Meuser:

Please do not vote for Medicare Advantage even on an "experimental" basis. It is inferior to Medicare and will not provide the coverage Medicare does. Once out of Medicare it may not be possible to return -- or if so it will be at a higher price. Also, if, as it appears, STRS is "going out of the healthcare business" why should the legislature approve an increase in teacher/board contributions? Think about it carefully.

James O. Kimmel
STRS Retiree

Caremark's bottle labeling restrictions

From a retiree, August 15, 2007
Subject: Caremark's bottle labeling restrictions
I see a problem with how Caremark is labeling their prescription bottles. For example, I just received a new bottle of synthroid for which I used a new prescription from my doctor. It was filled 8/07/07 and contains 90 pills or a three-month's supply, taking one a day. But, they label I am allowed 2 refills until 11/28/07. Well, if I got 90 tabs., that takes me to November 8th, but that would be the date for the FIRST refill. But, I have to get the SECOND refill before 11/28/07 or I need a new prescription in order to get the SECOND refill. WHY are they requesting I get the second refill when I still have two months' supply on hand from the FIRST refill????? How are they benefiting from this restriction? Why are they allowing a patient to receive DOUBLE the amount or a two month's supply on hand in order to meet their label restriction about getting BOTH refills in the time period when only one is still be used???

Do we retirees have a specific person/committee that handles questions/complaints regarding our medications? I already wrote to Mr. Dann and explained the danger in Caremark using the SAME color capsules for both 10 mg. and 25 mg. of the same drug, which I take daily. AND, the smaller amount capsule is LARGER than the SMALLER amount capsule. Figure that one out for me. Mr. Dann wrote back and stated he has sent my complaint on to the pharmacy, but it might take 90 days for the matter to be resolved in some way.

Well, I am about to call Caremark and complain about the date on the labels restricting customers from using the same prescription to order the two designated refills in the time period when only ONE refill is needed. Isn't that encouraging elderly patients to make mistakes with their meds. and possibly overdose, thinking they have too many pills left and must have skipped taking them when the doctor directed them to use them.

Taxpayers' education monies and a non-cooperative White Hat -- an ASU study

From John Curry, August 14, 2007
Subject: Taxpayers' education monies and a non-cooperative White Hat -- an ASU study

This two page Adobe Acrobat summary [link below] re:a study done by the Education Dept. of Arizona State University is none-too-kind to one of Ohio's community school agents, White Hat Management. Every public school administrator in Ohio should be aware of this summary of an in-depth report conducted by researchers at a public university. This report was released by ASU in August of 2007. Please share this with an Ohio school administrator and/or educator.
EPSL-0708-239-CERU-press.pdf
John Curry

Member of Concerned Ohio Retired Educators (CORE)

Retired public school educator

Retirees from Wayne, Stark, Carroll, Holmes & Tuscarawas counties: Dennis needs to hear from you by this Weds., 10:00 p.m.

From Dennis Leone, August 13, 2007
Subject: Medicare Advantage Plan IS on the Agenda

Shirlee, John, and Nancy – I have received my packet for the Board’s August 16-17 meeting, In response to your question, the answer is yes…….staff is recommending that the STRS Board approve “adding AultCare’s Medicare Advantage HMO to the STRS Ohio Health Care Program.” A vote on this matter is scheduled to occur sometime after 9:00 a.m. on Thursday, August 16, likely after 11:00 a.m., but before noon. The recommendation is on page 56 of the board packet. There are 4 pages in the board packet (page 52-55) that provide the staff’s justification for the recommendation and the premiums associated with it. The following is on page 53:

“The AultCare HMO offers significant premiums savings to enrollees. AultCare’s ability to provide less expensive premiums result from the provider discounting and the plan’s care management. This health plan is controlled by the Aultman Health Foundation and has a regional focus. The AultCare Medicare Advantage HMO option is now available in five counties: Wayne, Stark, Carroll, Holmes, Tuscarawas. AultCare has offered a Medicare managed care plan for 10 years and has more than 18,000 enrollees.”

The staff’s “conclusion” is shown on page 54, as follows:

“Staff does not recommend adoption of the Aetna or Medical Mutual PFSS plans for 2008 for the reasons previously described (………. “plans are more limited in their ability to manage care and in their ability to control medical costs”). Staff recommends the adoption of AultCare’s Medicare Advantage HMO for the following reasons:

• Plan offers favorable premiums.

• Plan has stability and should be a low cost option for several years.

• AultCare has the experience of offering a Medicare managed care plan for 10 years and has more than 18,000 covered lives in the market place.

• Pilot program will help staff learn more about this type of plan offering.

• Adverse selection, if any, caused by this plan offering is expected to be limited.”

I intend to vote no absent speaking first with retirees with Wayne, Stark, Carroll, Holmes and Tuscarawas counties. I would appreciate hearing from retirees from those counties by Wednesday night, before 10:00 p.m. if possible, about their experiences with the Advantage program.

Dennis Leone

dennisleone@roadrunner.com
740-649-2173

Nancy Hamant: When will STRS staff provide timely actuarial info to Board members?

From Nancy Hamant, August 12, 2007
Subject: Fwd: Fw: STRS Retiree Health Care Problem

Med Mutual's provider in Arizona is causing a major problem for an STRS retiree. He is thinking about going to a private provider and dropping STRS health care insurance. If STRS adds Medicare Advantage as a third option -- even if it is a pilot -- that will cause many STRS retirees to rethink where they are getting their health care. Many may think it is time to throw in the towel and move to an outside insurance provider such as AARP rather than trying to continue to fight the STRS system to maintain reasonable health care. What that will do, will be to continue STRS's Health Care Fund's death spiral due to loss of healthier members -- leaving only those who are much sicker. When will STRS staff provide STRS Board members actuarial information on the impact of various decisions on the STRS Health Care Plan (prior to STRS Board making those decisions)?

Nancy Hamant

RH Jones: Even more for STRS to worry about

From RH Jones, August 12, 2007
Subject: Yet even more for STRS to worry about.
To all:

Dr. K. Fluke, VP of the SummitCRTA & Leg. Chair, (& a Charter Member of CORE) reported to me: "An economics report from Barrington, Vermont, says that a bill has just been passed in Washington mandating that the STRS will now have to report to the federal government how much each pension system has to pay into HC funding. This data will then become public domain..."

Personally, my opinion is: Again, I say, I can hardly wait until election day when I can, with my one vote, help to retire these misguided politicians. Now, will STRS OH have to further drain our funds by having to hire more people to tally & report all the school district and teacher HC contributions required to be sent to Washington? Why should this be a concern of Washington's. If Ohio's teachers did not want retirement HC/Rx, they would have negotiated those funds with their school districts into their salaries. Is that Washington's business? I wonder!

RHJones, SummitCRTA Leg. CMTE & a very proud member of CORE