Saturday, October 13, 2007

RH Jones: A word of advice

From RH Jones, October 13, 2007
Subject: Protecting your checks
To all:
Having been a mail carrier for almost 3-yrs. I learned this: Don’t have checks sent to your home from either the STRS, or your bank.
1) They can be stolen in delivery stream.
2) Rural mailboxes are no longer safe.
3) Any mailbox on the exterior of the house, that has no slot for the mail to be placed through the wall and out of the reach of thieves, is not safe.
4) Even picking mail up at the post office is not safe. Mail is sometimes given to the wrong people or taken by the wrong people.
Conclusion: Pick the new checks while at the bank. And an electric shredder that shreds diagonally. Shred anything the wrong people can use. Have the STRS checks sent electronically. And, finally, nothing is safe in this world. Nevertheless, be alert.
RHJones, a proud CORE Member

Nancy Hamant: Something we need to tell our legislators

Nancy Hamant to Jim Kimmel, October 13, 2007
Subject: Re: ***CORE ALERT*** October 10.2007
Jim, We need to call for support and remind our legislators that over 21,000 educators receive a pension of $19,999 a year or less and an additional 16,500 educators receive a pension in the $20,000 to $29,999 range. That amounts to 40% of all retired educators.


Molly Janczyk: EASY PARTICIPATION: HB 315 (OEA; ORTA sites)

From Molly Janczyk, October 13, 2007
1. OEA:
IT IS NOT EASY TO FIND but on the front page, scroll down to Sen. Oleslager: STRS Health Care Bill. ((I would like to see it at the top with big HB 315 lettering for easy locating)).
Click on this heading and immediately find talking points and most importantly FILL IN YOUR INFO AT THE RIGHT AND CLICK SEND THIS MESSAGE! A prewritten message is seen by paging down AND IT GOES RT TO YOUR LEGISLATOR BECAUSE YOU FILLED IN YOUR ADDRESS AND ZIP CODE!
2. ORTA:
The info on HB 315 IS EASY TO FIND at the top AND by clicking on this, you do to a list of legislators with contact info. CLICK ON YOUR LEGISLATOR TO SEND A MESSAGE ON HB 315!
3. STRS has talking pts and thorough specifics on this legislation but I found no link to legislators or for a online message to them.
Write and call your local school boards asking to meet and/or discuss/present strong valid points given to you previously and found on OEA, STRS, ORTA websites. Follow the guidelines presented. Educators are trying to prepay for their healthcare. Stick to statements on these websites and presented to you earlier by email by Dave Parshall and myself following a meeting on this issue with OEA, STRS, etc.
DO: Contact Laura Ecklar, STRS Communications on HB 315 regarding ANY comments/feedback/questions rec'd:
This helps with future communications.
Molly J.

Friday, October 12, 2007

RH Jones: Federal Internal Revenue Code & STRS HCSF

From RH Jones, October 12, 2007
Subject: Federal Internal Revenue Code & STRS HCSF
To all:
In an e-mail to CORE member, Tom Curtis, on 04/29/05 (Over 2-yrs. ago) Mr. Bob Slater of STRS Management in part wrote: “In the mid-1990’s, we learned that these lump sum dollar transfers were not consistent with provisions of the Federal Internal Revenue Code. This became an issue during an audit by the U.S. Department of Health and Human Services into the use of grant funds to school districts and universities to pay for pension and health care benefits. The board {STRS} can only add funds to the health care stabilization fund by making prospective allocations of employer contributions. A mentioned, this is a Federal tax requirement, not a state requirement. Please refer to Section 401 (h) of the Internal Revenue Code. STRS must comply with relevant provisions of the Internal Revenue Code in order to maintain its tax-exempt status.”
In all due respect, in this very complicated issue, the Ohio School Boards Association evidently were not aware of this Internal Revenue Code or they would have realized that they should back the modest 2.5% employer contribution to supply the STRS Ohio with a steady stream of income for the Health Care Stabilization Fund (HCSF). Presently, in this HC retired member crisis, the STRS, by law, cannot raise funding for educator retiree HC than by raising the contribution rate. There simply is no other way. In my view, what is the difference? It is all in the package of the Ohio school district’s expense account for educator employment.
This is my view,
RHJones, a proud member of CORE

Kathie Bracy to Rep. Cliff Hite: Third request

From Kathie Bracy, October 12, 2007
Subject: Third request
To the Honorable Cliff Hite
Ohio House of Representatives
Dear Rep. Hite,
This is the third time I've written you in the past six weeks about the same topic: Divestment. So far, I've not received a response from you.
I understand you are a retired teacher and coach, drawing your pension from the same pension system I am, STRS. I also understand you are supporting HB 151, requiring all of Ohio's pension system to divest millions of dollars of holdings invested with companies having ties to Iran.
I simply want to know your reasons for your stand. That's all.
Thank you.

John Curry to Rep. Cliff Hite: Hey Cliff, I'm still waiting!

John Curry to Kathryn Williams, October 11, 2007
Subject: Re: Hey Cliff, I'm still waiting!
Dear Ms. Williams,
Thank you for contacting me concerning this issue. I personally met Cliff earlier this summer at the Auglaize County Fair. We spoke for about ten minutes....a time in which we discovered that we both were benefits recipients of the Ohio STRS and had concerns over the expensive medical insurance premiums that STRS charges their retirees and spouses as opposed to OPERS and several other state retirement systems. Also, at that meeting, I gave Cliff a "business card" indicating my personal email address, the address of Concerned Ohio Retired Educators, and the address of an educators blog (Kathie Bracy's blog) that I contribute articles to. In short, contact information was available to Cliff should he have wished to have a dialogue with me. If nothing else, a "reply" key could have been pushed as a reply to my email to Cliff and it would have ensured that he would have not reached "another" John Curry.
I would, if it is possible, appreciate hearing Representative Hite's reasons that his co-sponsored HB 151 Divestments Bill only applied to Ohio's public retirement systems defined benefits recipients and not banks, investment houses, and private individuals' investments in companies that purportedly do business in the country of Iran. This, in my mind, is not "spreading of the misery" of divesting as divesting is an added expense burden to any individual or any entity who is forced into it.
I was at an STRS meeting in Columbus earlier this summer at which I personally heard STRS's Chief Investments Officer, Stephen Mitchell, inform those in attendance that forced divestments entailed by HB 151 would cost the STRS an estimated 70-90 million dollars. A Husted brokered "deal" with the Executive Directors of Ohio's retirement systems did involve fewer companies than HB 151 seemed to call for but would still result in losses of millions of dollars to only targeted entities...Ohio retirement systems and no individuals or businesses. In this respect, this "deal" (in my opinion) is not a fair compromise as it still affects only a fraction of all Ohioans - retirees of Ohio's public pension systems. Maybe Cliff can address this issue as to why. On this same topic, I would like to hear Cliff's reply as to why the Husted brokered deal was not first placed before the five respective state retirement boards for their consideration and subsequent vote rather than the manner in which it was accomplished.
I end this letter by asking Rep. Hite to not personally call me as I (as well as many other of my fellow retirees) believe the "best government" is government conducted in the open and not accomplished in a one-on-one private discussion. Should Cliff choose to reply to my questions above, I ask that he reply in an email so that I can share it verbatim with thousands of my fellow STRS stakeholders so that they will also benefit from his thoughts on this issue first hand. Information "first hand" is much more accurate than my paraphrasing what Cliff would say to me in person and then redistributing it out to others who are also interested in Cliff's responses. I and my fellow retirees are eagerly awaiting to hear Cliff's responses to all the questions above. Thank you.
John Curry - an STRS stakeholder and resident of the 76th House District
From Kathryn Williams, October 11, 2007
Subject: RE: Hey Cliff, I'm still waiting!
Dear Mr. Curry,
This matter has been closed for quite some time but I’m sorry you feel you haven’t received a timely response. Representative Hite spoke at a number of retired teacher events in June and July and he thought you were in attendance. However, since you did not leave contact information in your email, he may have you mixed up with another John Curry.
HB 151 was referred to the Rules and Reference Committee in June. It is a matter no longer of concern to the General Assembly as they have reached an agreement with STRS and other boards that would have been affected. Divestment decisions will be determined by individual pension boards as they see fit. Please contact your retirement system if you have further questions. If you would like to speak to Representative Hite, he would be happy to call if you would be so kind to send us your phone number.
Kate Schock-Williams
Legislative Aide to Representative Cliff Hite
Ohio House of Representatives, District 76
From: John Curry []
Posted At: Thursday, October 04, 2007 7:38 AM
Posted To: District76 Conversation: Hey Cliff, I'm still waiting!
Subject: Hey Cliff, I'm still waiting!
Well, it's been over one month and MY Representative (Cliff Hite-76th Ohio House District) has been non-communicative with me concerning the correspondence below. It's a shame this guy is a retired educator and won't even communicate with a voter of his very own House District. You, your friends, and family might want to remember this the next time he runs for public office. John
From John Curry, August 27, 2007
Subject: NW Ohio (House District 76) and a co-sponsor of HB 151 IS A RETIRED TEACHER!!!!!!
Those of you (including me) in NW Ohio who live in Ohio House District might want to contact Rep. Cliff Hite re. his co-sponsorship of HB 151...this is especially critical since he IS A RETIRED TEACHER AND COACH!!!!!!!!! I already sent him a copy of my open letter to Mr. reply.... ( I'm STILL WAITING). I'm sure he got the didn't come back. With a few additional notes from you... Cliff will get a real message...he might even begin to understand the concept that HB 151 is an unfair burden to place upon STRS stakeholders (INCLUDING HIS VERY OWN RETIREMENT SYSTEM)! Thanks, John
If you click on the red link below you will get a pop up email to send Cliff your sentiments re. 151.
Cliff Hite R Findlay Retired teacher and coach and Cosponsor of HB 151

Thursday, October 11, 2007

Fact: STRS not at fault; bank subcontractors are!

From RH Jones, October 11, 2007
To all:
A weekly newspaper, the Barberton Herald, ran an article on 10/04/07, page 4, Norton Police, Thursday, Sept. 20 – A Johnson Road woman said she received a call from her bank informing her there was fraudulent activity on her checking account, with two checks being cashed in California. She says she was told she was one of 24 victims from the teacher’s retirement account. That worried me, so I began checking into it. My findings, though limited, indicated that the problem was not caused by STRS; a sub-contractor of the Key Bank caused it. Sandy Knoesel of the STRS graciously assured me that as soon as the STRS found out the problem they began working with Key Bank. She said, “… Some individuals who taught or are teaching in the Akron Public Schools were having problems with unauthorized access to their bank accounts. We confirmed that STRS Ohio did not have any data stolen and did not cause this problem. …” Also, She indicated a Key Bank subcontractor had caused the problem. And according to one of the victims who e-mailed me, the Key Bank had to change her bank account. Basically, between the bank & their teacher customers the problem has been straightened out. Perhaps teachers should change their accounts to a teacher’s credit union.
My conclusion is that we retired & active educators need to always BE CAREFUL & STAY ALERT. In these times, especially in money matters, we cannot lower our guard.
RHJones, a proud CORE member

Wednesday, October 10, 2007

CORE Alert: Please take time to save your healthcare

From Dave Parshall, October 10, 2007
Please take time to save your healthcare.
It is time we ALL get involved in HB 315. Mary Ellen and I have been visiting Representatives. They say the only messages they are getting are from the School boards. They say they need postcards hand written from the educators that live in their district. Please take time and send your Rep. a postcard. Your healthcare depends on this. Even if you are a rich retiree or active please think about those among you who are not. CORE members in the Akron area need to send rebuttal letters to the Akron Beacon Journal.
Suggested Rebuttal for The Akron Beacon Journal Letter Published from Linda B. Kersker, President, Akron Board of Education.
Point by point Rebuttal"
1. "Currently, employers contribute 14 percent and employees contribute 10 percent of payroll to pay for retirement benefits."
Rebuttal: These percentages have not changed in 23 years.
2. "As members of the Akron school board, we oppose any such increase in costs to school districts."
Rebuttal: If the additional 2.5 percent increase is not phased in over the five year period as called for by HB 315, then most teachers will not be able to retire because they will have no or limited healthcare on their own. There is no retirement without healthcare. Educators will have no choice, but to continue teaching far into their 60's, 70's, or even 80's. School districts across the state will have an aging staff at the top of the salary schedule with increasing healthcare needs. These teachers will have built up a lot of sick leave which they will use at the cost to the district. This will not be good for education, and will cost FAR MORE than the estimated monthly average cost of $40 per teacher. Forget buy outs. Few could afford to accept them no matter how generous they might be. Teachers on average pay more than $1000 a year to supply their classroom. This will have to stop. This all means a budgeting nightmare for school boards, and points out how short sighted the Akron School Board's thinking is. It is either pay a little now, or pay much more later.
3. "Additional mandated costs, if approved, would not put more teachers in the classroom, buy text books, or implement new programs, rather, they would go directly to STRS for retiree benefits."
Rebuttal: The increase will go only to healthcare for retirees. For years educators were promised a great retirement by the state, and school boards in exchange for low salaries. There is no retirement without healthcare. Few realize that teachers don't automatically qualify for Medicare part A. Many never paid into social security while teaching and those that did via other employment don't get a full benefit, which means about $90 a month at best.
4. "Instead of asking school districts, already struggling under many financial constraints, to provide additional funding, STRS should take a responsible look at its own retirement and health-care benefits."
Rebuttal: This shows how uninformed those who oppose HB 315 are. STRS has been tightening its belt for years. Consider, we cut benefit checks by an average of nearly $3,400 years a year (no thirteenth check), cut the subsidy for spouses, and family member's healthcare premiums. Spouses now must pay 100 % of their premiums. Retirees, with the best coverage still pay 48% of their total healthcare bills. Drug and deductibles are annually raised. Hundreds of retiree's pensions are between $20,000 and $29,000 a year. STRS is prohibited by the ORC from raising its 1.9% to the healthcare stabilization fund because it has a much greater than 30 year unfunded liability.
5. "Demographics such as life expectancy and the number of years people are expected to remain in the work force have changed since the current benefit structure was put in place."
Rebuttal: This is exactly why we need a dedicated budget and stable revenue source for educator's healthcare. Teachers are already working longer and living longer. The percentages from active teachers and school boards have not changed in 23 years. Passage of this legislation avoids forcing a lot of seniors onto Medicaid, and a nightmare for the state. HB 315 is the morally right thing to do.
From CORE( Concerned Ohio Retired Educators).
David K. Parshall, President

Tuesday, October 09, 2007

RH Jones to the Canton Repository re: Repository reader shocked by an uninformed Canton Board of Education:

From RH Jones, October 9, 2007
Dear Editor:
Re: Repository reader shocked by an uninformed Canton Board of Education:
In response to The Canton Repository writer Melissa Griffy Seeton’s column “Canton high school enrollment up”, as an avid Repository reader and retired teacher, I was shocked. Instead of encouraging the public to contact the Honorable State Representative Scott Oelslager, R-North Canton, not to continue the House Bill 315 that he introduced, they should have asked the public to support him. How shortsighted of the Canton Board of Education. Do not they realize that: If this wonderful HB 315 fails, that Canton taxpayers will have to pay it’s professional staff longer into their working years? What teacher in their right mind would retire without Health Care (HC) insurance? While younger school staff teach at the bottom of the salary scale, most elderly, top of the salary scale educators, will work until they are sixty-five when they can draw Medicare. Also, younger staff is generally healthier and use less sick time; consequently, the board pays less in substitute pay as well as less cost for the school system’s HC Insurance. As younger teacher attendance in class is better, students, then, gain by better continuity with class subject matter, presentation and grading.
Does not the Canton Board know that Rep. Oelslager has their best interests in mind? He has crafted a bill that in the long-term will save tax dollars not only for Canton but the whole State of Ohio. Your issue is to pay now or pay later. Taxpayers will be supporting retired teachers, as they show up without HC insurance at the door of emergency room.
The State Teachers Retirement System will begin to eat up the budgeted 1% HC Fund principal by 2009. It will be totally broke by 2021, or sooner. The down stock market of 2000-2001, and inflation of the dollar, has taken its toll on the STRS HC Fund. The STRS pays out $1.2 million per day on HC. After well over 20-years since an employer increase, it is time all the Ohio school districts do the right thing. This cannot be sustained without the help of a change in Ohio law. The HB 315 is just the bill that the doctor ordered; Rep. Oelslager is that doctor. He did his homework. Will the Canton Board do theirs?
Robert Hudson Jones, a retired STRS member

RH Jones: Fact or fiction information needed on STRS retired teacher banks!

From RH Jones, October 9, 2007
To Dr. Damon Asbury and all STRS retirees:
Re: Fact or fiction information needed on STRS retired teacher banks!
Buried deeply in this week’s Barberton Herald was a short paragraph that was not too clear to me. It mentioned that some banks were having trouble with fake STRS checks. Evidently STRS checks are easy to copy on commonly available home copiers.
And, K. Fluke, PhD. mentioned to me today that a retired teacher, who gets her check electronically, found that someone was getting into her account at Key Bank. All this is coming to my attention by “the grapevine”. I wonder if someone at our STRS can inform us as to the facts relating to this matter? Retirees, being ignorant of facts in this case can be financially hurt. We need facts fast (ASAP).
If true, should CORE send out an alert?
RHJones, STRS retired teacher & proud member of CORE

Monday, October 08, 2007

Judge chides OEA--"this is an astounding position for the OEA to take..."

From John Curry, October 8, 2007
CORE members (and others) ...please take the time to not only read what the COREofOEA says in the lines below but take the time to download the 8 page Adobe download of the court opinion [posted below]. Basically, this court ruled in favor of the OEA retirees and reversed a lower court decision. John
Note: any writing below this line is from the COREofOEA.
In a unanimous decision, the 6th District Court of Appeals ruled in favor of retirees that the Summary Plan Description (SPD) cannot override contract language allowing OEA to unilaterally terminate our health insurance benefits.
Now, the case goes back to District Court to rule on whether or not the contract language says what we know it says—that OEA is to provide the Medicare Supplemental Insurance Coverage to bring us up to the level of coverage we had to age 65; in the case of OASU, to provide Major Medical Coverage that includes the prescription drug reimbursement benefit.
Here's an excerpt from the hearing where one of the Judges grilling OEA's attorney about OEA's position; inquiring about OEA's position re: staff, and applying that to its representation of teachers, a School Board could issue an SPD "that takes away something that you contractually bargained..." Judge McKeague stated: "This is an astounding position for the Education Association to take in terms of its practical impact on every teacher in the state you represent..."
CONGRATULATIONS to all our OEA retirees for “hangin’ in there” to see this through! We are one step closer to restoring our insurance benefits. We’ll need to really step up financial support as we get ready for the next round!
This is a win not only for OEA retirees, but for our brothers and sisters throughout NSO and other unions (including our OEA education employee members) that a contract means what it says. Special thanks to NSO and the UAW for filing “friend of the court” briefs in support of our position.
_ _ _ _
Remember..."IT'S IN THE CONTRACT!"
_ _ _ _
This UPDATE is a communication to CORE [of OEA] members and friends...
Seeking a Just and Fair Resolution
Original Adobe version:
HTML version:

Text of the court opinion taken from the Adobe download:
*The Honorable Karl S. Forester, Senior District Judge for the Eastern District of Kentucky, sitting by designation. RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 07a0405p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
JAMES I. PRATER et al., Plaintiffs-Appellants, v. OHIO EDUCATION ASSOCIATION, Defendant-Appellee. X---- ,----N No. 06-4393 Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 04-01077—Edmund A. Sargus, Jr., District Judge.

Argued: September 13, 2007 Decided and Filed: October 3, 2007 Before: SUTTON and McKEAGUE, Circuit Judges; FORESTER, District Judge.*
COUNSEL ARGUED: David M. Cook, COOK, PORTUNE & LOGOTHETIS, Cincinnati, Ohio, for Appellants. Rodger L. Eckelberry, BAKER & HOSTETLER, Columbus, Ohio, for Appellee. ON BRIEF: David M. Cook, Robert E. Rickey, Stephen A. Simon, COOK, PORTUNE & LOGOTHETIS, Cincinnati, Ohio, for Appellant. Rodger L. Eckelberry, Manuel Jose Asensio III, BAKER & HOSTETLER, Columbus, Ohio, for Appellee. Michael F. Saggau, Daniel W. Sherrick, ASSOCIATE GENERAL COUNSEL, Detroit, Michigan, Lisa M. Smith, Samuel C. McKnight, KLIMIST, McKNIGHT, SALE, McCLOW & CANZANO, Southfield, Michigan, for Amici Curiae.
SUTTON, Circuit Judge. James Prater and several other retired employees of the Ohio Education Association (“OEA”) claim that OEA improperly terminated their health benefits, which
(they say) had become vested and irreducible through a series of collective bargaining agreements. Relying in part on our decision in Maurer v. Joy Technologies, Inc., 212 F.3d 907 (6th Cir. 2000), the district court rejected the claims as a matter of law. Because we conclude that Maurer does not
1 No. 06-4393 Prater et al. v. Ohio Education Association Page 2 apply here, because after-the-fact unilateral summary plan descriptions cannot supercede the amendment provisions in a collective bargaining agreement and because the contracts are otherwise ambiguous about whether they promise lifetime, irreducible health benefits to employees upon their retirement, we reverse. I. In its capacity as a union, OEA represents teaching professionals throughout Ohio. Unions are employers too, however, and, in its capacity as an employer, OEA employs numerous individuals who are represented by two other unions: the Professional Staff Union (“PSU”) and the Ohio Associate Staff Union (“OASU”). OEA has negotiated several collective bargaining agreements with these unions, and these agreements have provided for retiree healthcare benefits since 1978 for PSU retirees and since 1981 for OASU retirees. Plaintiffs Montgomery and Whaley, former associate staff employees of OEA, retired in 1999 and 2000, and they seek to represent a class of OASU retirees. Plaintiffs Thorley, Prater and Westfall, former professional employees of OEA, retired between 1984 and 1994, and they seek to represent a class of PSU retirees. The OASU Agreements. When Montgomery and Whaley retired, the collective bargaining agreement for OASU employees said that it represented “the full and complete commitments between both parties and [could] be altered . . . only through the voluntary, mutual consent of the parties in a written and signed amendment.” JA 1101. The agreement provided active employees with medical insurance covering “hospitalization; surgical; major-medical; out-patient X-ray; EKG; laboratory; prescription drug; dental; and optical.” JA 1080. Retirees, the agreement said, “shall be included in the Association group in regard to: hospitalization; surgical; out-patient; and majormedical coverage,” but, “[a]fter the retiree reaches age 65, the Association is required to provide only major-medical coverage.” JA 1086. The collective bargaining agreement also required the company to give each employee “an individual contract guaranteeing the retiree health benefits at the time of retirement.” Id. The PSU Agreements. Like the OASU contract, the PSU collective bargaining agreements in force when Prater, Thorley and Westfall retired provided that changes could be made “only by an amendment properly signed and ratified by each party.” JA 1387, 1501, 1566. The first provision for retiree benefits, in a subsection entitled “Continuation of Benefits,” said that “[t]he Association shall continue to provide all benefits provided by Sections 11.0112 and 11.0113 of this Contract for each retired employee to age sixty-five.” JA 1357 (Thorley); JA 1468 (Prater); see also JA 1547–48 (Westfall). The next subsection, entitled “Reimbursement for Cost of Medicare,” said that OEA “shall reimburse each retired employee over age sixty-five . . . for the cost of Medicare Part B.” Id. And under the next subsection, entitled “Supplement to Medicare,” the agreement said that OEA “shall supplement the benefits of Medicare Parts A and B to provide benefits at a level equal to those benefits provided by Sections 11.0112 and 11.0113 of this Contract for each retired employee to age sixty-five.” Id. The Summary Plan Descriptions. OEA, like other employers, distributes summary plan descriptions to its employees to assist them in understanding the more detailed, complex and formal plan documents. Each of the summaries distributed to the plaintiffs contained reservation-of-rights clauses. The summary distributed to the OASU retirees provided: “Retired employees may continue coverage, in accordance with the collective bargaining agreement . . . . While the employer expects retiree coverage to continue, the employer reserves the right to modify or discontinue retiree coverage at any time.” JA 1832. Elsewhere the OASU summary said that OEA “may modify or amend the Plan from time to time in accordance with the provision of the collective bargaining agreement.” JA 1851. No. 06-4393 Prater et al. v. Ohio Education Association Page 3 The reservation-of-rights clauses in the PSU summaries did not say that any modifications to benefits must be in accordance with the bargaining agreements. “The Plan Administrator,” they said, “may change or eliminate benefits under the plan and may terminate the entire plan or any portion of it.” JA 1934 (Thorley); JA 1976 (Prater); see also JA 2045 (Westfall). The Dispute. For two decades, OEA provided most of its retirees with insurance to supplement Medicare after they reached 65. On March 1, 2004, OEA sent a letter to PSU employees informing them that OEA would honor its “contractual commitment[]” to reimburse retirees for Medicare Part B but would no longer pay for the “optional, supplemental coverage” it had been providing. JA 98. That same day, OEA sent a similar letter to OASU retirees, informing them that “OEA’s obligation to provide coverage ceases” when each retiree reaches the age of 65. JA 138. On August 31, 2004, OEA terminated the retirees’ supplemental coverage. The OASU and PSU retirees filed this class action under Section 301 of the Labor Management Relations Act, claiming that the union had violated the collective bargaining agreements. OEA moved for summary judgment on the PSU retirees’ claims for post-65 supplemental insurance, and it moved for summary judgment or partial summary judgment on the OASU retirees’ claims for prescription drug, surgical, hospitalization and outpatient coverage. After the parties had filed their summary judgment papers, the retirees sought leave to amend their complaint to add several ERISA claims. The district court held that the contracts unambiguously excluded the sought-after coverage. It reasoned that the “to age 65” clause in the PSU agreement “indicates a limitation on coverage available and is not at all ambiguous.” D. Ct. Op. at 11. And it reasoned that the OASU agreement contained a “limitation on coverage [that] could not be more clear or unambiguous.” Id. at 12. The court also held that the plan summaries reserved to OEA an unqualified right to alter or terminate the retirement benefits under Maurer, 212 F.3d at 919, and ultimately granted OEA’s motion for summary judgment on all claims. D. Ct. Op. at 15–16. The court denied the retirees’ motion for leave to amend because the litigation was at an advanced stage. II. At the same time that ERISA carefully regulates the vesting of pension benefits, it leaves the decision of whether employers will provide employees with healthcare benefits upon retirement to contract—a contract that may come in the form of a collective bargaining agreement, an at-will employment relationship or something in between. See UAW v. Yard-Man, Inc., 716 F.2d 1476,
1479 (6th Cir. 1983); Sprague v. Gen. Motors Corp., 133 F.3d 388, 400 (6th Cir. 1998); Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 579–80 (6th Cir. 2006). In the past, the application of “ordinary principles of contract interpretation” to these different types of agreements, Yolton, 435 F.3d at 580, has raised a host of perplexing questions: What is required to establish an employer’s commitment to provide lifetime benefits to retirees? What exactly are lifetime healthcare benefits? Does a promise of lifetime benefits mean that they cannot be reduced over the life of a retiree? What if the employer reduces health benefits for active employees or increases the cost of those benefits to active employees? What if the employer increases some health benefits for active employees but reduces others? Must the retiree take the bitter with the sweet? Or is it a ratchet—with only the improvements in health benefits available to the retiree but with no compulsion to take any reduction? Happily for us, this case sidesteps these questions—at least for now. OEA concedes that, in the absence of a right to terminate retiree benefits under the reservation-of-rights clauses in the summary plan descriptions, a fact dispute exists over whether the retiree benefits provided for in the collective bargaining agreements survive the term of the agreements. That leaves two related but distinct disputes for us to resolve: (1) Are the retirees’ claimed benefits among those enumerated No. 06-4393 Prater et al. v. Ohio Education Association Page 4 in the collective bargaining agreements? (2) Did OEA’s plan summaries give the union the right to terminate any health benefits provided for in the collective bargaining agreements? A. In interpreting collective bargaining agreements, we consider the language of the agreement, the context in which that language appears and other traditional canons of construction. McCoy v. Meridian Auto. Sys., 390 F.3d 417, 422 (6th Cir. 2004). If, after applying these rules of interpretation, the contract remains ambiguous, we permit the parties to introduce extrinsic evidence about their original understanding of the contract’s terms. Id.
1. At issue with respect to the OASU retirees is whether OEA committed to provide them with lifetime prescription drug benefits. In concluding that OEA made no such promise, the district court accepted the following chain of reasoning: (1) when the OASU retirees left active employment, the collective bargaining agreement said that, “[a]fter the retiree reaches age 65, the Association is required to provide only major-medical coverage,” JA 1086; (2) the benefits provided to active employees under the collective bargaining agreement at that time fell into distinct categories: “hospitalization; surgical; major-medical; out-patient X-ray; EKG; laboratory; prescription drug; dental; and optical,” id. at 1080 (emphases added); and (3) the independent provision for “prescription drug” and “major-medical” coverage for active employees suggests that, when OEA said it would “provide only major-medical coverage” for retirees, it would not provide prescription drug coverage for them. In one sense, we accept this chain of reasoning as well. The explicit limitation of healthcare benefits for retirees to “major-medical” plainly indicates that OEA did not commit to provide “prescription drug” coverage as well. But this limitation means only that the promise of majormedical coverage does not include the formal package of benefits provided under the “prescription drug” heading in the agreement. It does not mean that “major-medical” may never include prescription drugs. It shows only that major-medical insurance should not be interpreted to provide the retirees the same level of prescription drug coverage they had enjoyed prior to age 65. When retirees suffer a “major-medical” illness or injury, the contract is at least ambiguous as to whether OEA will provide the retirees with coverage for the drugs necessary to treat that condition. The OASU retirees have presented extrinsic evidence backing up this position. Although the retirees’ summary plan description also contains a section for a “Prescription Drug Program,” JA 1823, distinct from the section for “Major Medical Benefits,” JA 1816, the major-medical section explicitly provides some coverage for “prescription drugs as specified in the Schedule of Benefits,” JA 1820. Notes from the contract negotiations also indicate that drug and major-medical coverages overlap. In the face of this language of the agreement and this extrinsic evidence, summary judgment cannot be granted to OEA solely on the basis of the scope of benefits outlined in the collective bargaining agreement.
2. The pertinent PSU collective bargaining agreement’s provision for post-65 retiree benefits also raises material ambiguities. Here are the relevant provisions: No. 06-4393 Prater et al. v. Ohio Education Association Page 5
11.0141 Continuation of Benefits The Association shall continue to provide all benefits provided [for active employees] by Sections 11.0112 and 11.0113 of this Contract for each retired employee to age sixty-five (65).
11.0142 Reimbursement for Cost of Medicare The Association shall reimburse each retired employee over age sixty-five
(65) for the cost of Medicare Part B.
11.0143 Supplement to Medicare The Association shall supplement the benefits of Medicare Parts A and B to provide benefits at a level equal to those benefits provided by Sections
11.0112 and 11.0113 of this Contract for each retired employee to age sixtyfive
(65). JA 1357; JA 1468; JA 1547–48. The question, as framed by the parties, is whether the clause “to age sixty-five” in the “Supplement to Medicare” subsection cuts off coverage after age 65. As OEA sees it, the “to age sixty-five” clause in the “Continuation of Benefits” subsection plainly places a limit on liability and accordingly the same clause must be read the same way in the “Supplement to Medicare” subsection. The PSU retirees respond that the latter half of the “Supplement to Medicare” subsection must be interpreted as a comparative clause under which OEA commits to provide retirees with coverage “equal to” that which they had been given up “to age sixty-five.” Although courts “should construe terms so as to render none nugatory and avoid illusory promises,” McCoy, 390 F.3d at 422 (internal quotation marks omitted), the task is not always that easy: Inartful drafting sometimes leaves courts with competing interpretations that both render other provisions of the contract superfluous or at least awkward. This is such a case. On the one hand, the retirees’ interpretation renders the same phrase—“to age sixty five”—as a limit on coverage in one subsection and almost meaningless two subsections later. On the other hand, OEA’s interpretation creates problems of its own. Reading “to age sixty-five” to cut off coverage at 65 in both provisions renders the promise of a “Supplement to Medicare” meaningless because the “Continuation of Benefits” subsection already promises PSU retirees that same level of coverage up to age 65. Although OEA hypothesizes that this provision allows them to take advantage of government benefits to fulfill that duty, the “Supplement to Medicare” provision is structured as an obligation rather than something the union may do. As a general rule, moreover, only people with disabilities may receive Medicare before age 65, and OEA’s interpretation renders a subsection that appears to be applicable to all retirees relevant only to a small subset of them. Also supporting the retirees’ reading is the fact that all of the language following the “equal to” phrase parrots the language in the “Continuation of Benefits” subsection, suggesting that the clause has a comparative, not a restrictive, purpose to it. As we see it, then, the agreement is at least ambiguous when it comes to whether it provides post-65 supplemental insurance. The extrinsic evidence—the affidavits submitted by the retirees and OEA’s consistent practice of providing supplemental insurance—sufficiently supports the PSU retirees’ position to raise a material factual dispute over the meaning of the pertinent contract. No. 06-4393 Prater et al. v. Ohio Education Association Page 6 B. The district court also held that OEA reserved the right to terminate or modify benefits through several summary plan descriptions. We disagree. As a general rule, “an existing contract cannot be unilaterally modified.” Baptist Physician Hosp. Org., Inc. v. Humana Military Healthcare Servs., Inc., 481 F.3d 337, 350 (6th Cir. 2007); see also Nagle Heating & Air Conditioning Co. v. Heskett, 585 N.E.2d 866, 868 (Ohio Ct. App. 1990)
(“A contract cannot be unilaterally modified.”); 17A C.J.S. Contracts § 410 (“A signed contract . . . cannot be changed without the consent or subsequent agreement of the parties.”). Were it otherwise, the option of either party to modify a contract unilaterally would defeat the essential purpose of reaching an agreement in the first place—to bind the parties prospectively. This principle applies with equal force to collective-bargaining agreements, where employers are statutorily barred from effectuating “unilateral modification[s] of . . . existing collective bargaining agreement[s].” N.L.R.B. v. Ford Bros., Inc., 786 F.2d 232, 233 (6th Cir. 1986) (per curiam). Even when an employer enters bankruptcy, the law “prohibits the employer from unilaterally modifying any provision of the collective bargaining agreement.” In re Unimet Corp.,
842 F.2d 879, 884 (6th Cir. 1988); see 11 U.S.C. § 1113. One of our decisions, Maurer, complicates matters. There, we held that a summary plan description, issued after a collective bargaining agreement had been signed, prevented retiree benefits from vesting because it reserved the right of the employer to “curtail or eliminate coverage for any treatment, procedure, or service regardless of whether [the employee is currently] receiving treatment.” Maurer, 212 F.3d at 913. Because the reservation of rights was conspicuous and unqualified, we held, “the Union was obligated to grieve or enter suit” if it disagreed with the employer’s assertion of authority—even if that assumption of authority came after the effective date of the relevant collective bargaining agreement. Id. at 919 (internal quotation marks omitted). In McCoy, we limited Maurer to “unqualified reservation-of-rights language,” 390 F.3d at
424, that claims a “unilateral right by the employer to terminate coverage without regard to existing or future collective bargaining agreements,” id. at 425. Because the summary at issue in McCoy said that any “termination” of benefits was “subject to the provisions of any applicable collective bargaining agreement,” we held that it could not “fairly . . . have prompted the union immediately to protest.” Id. at 425 (internal quotation marks omitted). McCoy, we acknowledge, involved a preliminary-injunction decision and thus turned on our review of a likelihood-of-success determination, not a final merits determination. But we stand by this clarification of Maurer because a broad reading of the decision would run headlong into the rule that a plan summary “cannot vitiate contractually vested or bargained-for-rights.” Halliburton Co. Benefits Comm. v. Graves, 463 F.3d 360, 378 (5th Cir. 2006) (“[A] reservation-of-rights clause in a plan document, which allows a company to amend or terminate a plan at any time, cannot vitiate contractually vested or bargained-for rights.”) (internal quotation marks omitted). To our knowledge, no court of appeals has forced unions to file grievances in the face of a summary plan description that purported to remove a promise of lifetime health benefits. As in Maurer, OEA’s summary plan descriptions contained reservation-of-rights language. See JA 1832 (OASU summary stating that “[w]hile the employer expects retiree coverage to continue, the employer reserves the right to modify or discontinue retiree coverage at any time”); JA 1934 (PSU summary reserving the right to “change or eliminate benefits under the plan and . . . terminate the entire plan or any portion of it”). But unlike Maurer, these clauses were not sufficiently unqualified to “fairly . . . have prompted the union immediately to protest.” McCoy, 390 F.3d at 425. As in McCoy, neither summary explicitly represented to the retirees that existing medical treatment could be cut off, as the summary in Maurer did. See id. at 424. And as in McCoy, No. 06-4393 Prater et al. v. Ohio Education Association Page 7 the OASU summary explicitly claimed to be established “in accordance with a collective bargaining agreement,” JA 1801, and referenced the bargaining agreement every time it mentioned potential modifications. Perhaps most importantly, both the PSU and OASU agreements say that the contracts represent the full commitments between the parties and that the agreements cannot be amended without signed, mutual consent, a clause never mentioned, much less discussed, with respect to the Maurer collective bargaining agreement. When a contract contains formal procedures requiring mutual, written assent to amend, that language preempts future unilateral termination of rights. See Pleasantview Nursing Home, Inc. v. N.L.R.B., 351 F.3d 747, 754 (6th Cir. 2003) (holding that oral modification of a collective bargaining agreement was ineffective in the presence of “an express zipper clause prohibiting modification except by written agreement”); Martin Marietta Energy Sys., Inc. v. N.L.R.B., No. 87-5369, 1988 WL 24225, at *3–4 (6th Cir. Mar. 17, 1998) (per curiam) (affirming NLRB’s finding of unfair labor practice when an employer’s “unilateral action” breached a collective bargaining agreement’s formal amendment clause and rejecting an argument that the union waived its right to complain through inaction). On this record, the unions thus could not fairly be “compelled to protest the SPD language,” McCoy, 390 F.3d at 425—at least when the summary does not explicitly renounce the collective bargaining agreement—because both sets of contracts explicitly said that their bargained-for rights could not be terminated in such a manner. The summaries instead serve as extrinsic evidence regarding the extent of the employer’s promise of future healthcare benefits and whether the parties intended the benefits to vest. See Yard-Man, 716 F.2d at 1481–82. They cannot, however, be interpreted to permit the unilateral termination of these alleged contractual rights. III. The retirees also challenge the district court’s denial of their motion for class certification and their motion to amend their complaint. As to the first motion, the court premised its denial of the class-certification motion on its summary judgment decision. D. Ct. Op. at 16. We accordingly remand the case to the district court to address class certification in the first instance. As to the second motion, the district court did not abuse its discretion. See Leary v. Daeschner, 349 F.3d 888, 904 (6th Cir. 2003) (“Denial of a motion for leave to amend is reviewed by this court for an abuse of discretion.”). Leave to amend, it is true, should be “freely given when justice so requires,” but it can be denied on the basis of “undue delay, bad faith or dilatory motive . . . [or] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted); see also Fed. R. Civ. P. 15. And our court, it is also true, has required “at least some significant showing of prejudice” to deny a motion to amend based solely upon delay. Moore v. City of Paducah, 790 F.2d 557, 562 (6th Cir. 1986) (per curiam). Taken together, however, the retirees’ delay, the late stage of the case when the motion was filed and the likely futility of any amendment show that the district court acted well within its discretion. The timing of the motion undermines plaintiffs’ position. They moved for leave to amend on January 13, 2006, nine months after the amendment deadline created by the magistrate judge’s pretrial order. By the time the retirees filed the motion, the parties had fully briefed the summary judgment motions and exchanged a substantial number of documents through discovery. Even if the retirees were not aware of their potential ERISA claims at the outset of the litigation, they had sufficient information to bring these claims long before they filed their motion. The requested amendment also would have added little, if any, value to their complaint. The retirees acknowledge that their proposed ERISA claim “parallel[s]” their existing LMRA claim, Br. at 43, because the two claims rise or fall on the same contractual terms, see Teamster’s Local 348 Health & Welfare Fund v. Kohn Beverage Co., 749 F.2d 315, 317 n.2 (6th Cir. 1984) (noting that, No. 06-4393 Prater et al. v. Ohio Education Association Page 8 where an obligation arises “under the collective bargaining agreement[,] . . . the inquiry relative to both the LMRA claims and ERISA claims is identical”). To the extent the retirees hope to raise distinct breach-of-fiduciary-duty claims under ERISA, that claim almost assuredly would be futile. See Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995) (“[A] company does not act in a fiduciary capacity when deciding to amend or terminate a welfare benefits plan.”) (quoting Adams v. Avondale Indus., Inc., 905 F.2d 943, 947 (6th Cir. 1990)). IV. For these reasons, we reverse the district court’s grant of summary judgment, affirm its denial of the plaintiffs’ motion to amend their complaint and remand for further proceedings.

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Sunday, October 07, 2007

RH Jones: Understanding school budgets 101

From RH Jones, October 7, 2007
To all:
Every Ohio (OH) public school board member and every elected OH politician of both parties needs to understand school financing. School district budgets one fund for professional staff that is inclusive of all benefits including both salary and fringes. The STRS of OH Retiree Health Care (HC) is part of the fringe benefits. Both the employer/employee contributions to the STRS are part of that one benefit package.
The various OH professional education organizations are in agreement that the active OH educator wants HC during their retired years. The Ohio Revised Code (ORC) does not currently require HC for retired educators. HB 315 honorably seeks to change that. It is absolutely vital for OH through its public school districts to provide the funding.
As best as I can recall, a few years back, K. Fluke, PhD. and I researched the ORC in two prestigious OH law books. We found that the STRS board had the power to raise employer/employee rates, if they found a need! We felt the need was there and went public with our findings. Note: I had also found the same ORC statement on the Ohio ORC computer Web site. Fluke and I notified the STRS of that interpretation of the law. The STRS notified me a couple weeks later that our findings were not valid. I then noticed that the statement in the ORC “official” Web site had mysteriously disappeared! And not being lawyers, Fluke and I had no funds for legal help on this. Around that time the Concerned Ohio Retired Teacher (CORE) was being formed with the hope of raising enough dollars to get legal action on our retired teacher problems. The money could never be raised. However, public awareness was raised. Those were terrible political times. The CORE got busy to help change that. Hopefully, those terrible times are now over.
Harmoniously, both major Ohio political parties have now come together to seek a solution to part of our retired teacher problems. They have worked together to introduce HB 315. Also, the various active and retired professional educator groups came into harmony as well. This retired teacher will be anxiously waiting the results of this coming together. A few extreme right wing critics still remain selfishly mean spirited. But, hopefully, that will change too.
The STRS OH is the oldest public servant retirement system in the state. Ladies and gentlemen of vision, of a generation long passed, founded it. And, also, real Ohio political statesmen created the ORC to guide it. We STRS members can only look forward to real ladies and gentlemen, of the present, willing and able to have statesmanship equal to those of the past and to do the right thing: enact HB 315!
Robert Hudson Jones, MSE + plus 27-graduate hrs. & a retired STRS member

From CORE's Nancy Hamant re: Anthem Medicare Advantage program





Cincinnati Enquirer, October 2, 2007


Click image to enlarge

CORE's Nancy Hamant sent this piece of information re. Anthem non-renewing their Medicare Advantage program to some in Hamilton and Butler Counties. Nancy advises, "Looks like CORE & STRS Board were right on target."

Akron BOE badmouths HB 315

Akron Beacon Journal, October 4, 2007
Districts can't carry retirees

The Ohio House is considering a proposal, House Bill 315, that asks for additional dollars from school districts and their employees to pay for health-care benefits for retired teachers. This initiative is being driven by the State Teachers Retirement System, along with active and retired members of STRS interest groups.

H.B. 315, sponsored by Rep. Scott Oelslager, R-Canton, seeks to increase employee and employer shares to STRS by 2.5 percent of certificated staff payroll, for an overall increase of 5 percent. These increases would be phased in over a five-year period, in 0.5 percent increments.

Currently, employers contribute 14 percent and employees contribute 10 percent of payroll to pay for retirement benefits.

As members of the Akron school board, we oppose any such increase in costs to school districts.

At a time when funding for our schools is limited, it is not in the best interest of our district to provide additional retired-educator benefits, taking away dollars that could affect the quality of education for our students today.

These additional mandated costs, if approved, would not put more teachers in the classroom, buy textbooks or implement new programs. Rather, they would go directly to STRS for retiree benefits.

For the Akron Public Schools, this increase, when fully implemented, would be $3,775,000 per year, which equates to an additional 1.26 mills in property taxes dedicated solely for district retirement contributions.

The public and private sectors are facing the challenge of providing affordable, accessible and high-quality health care for both employees and ultimately, retirees.

Instead of asking school districts, already struggling under many financial constraints, to provide additional funding, STRS should take a responsible look at its own retirement and health-care benefits.

Demographics such as life expectancy and the number of years people are expected to remain in the work force have changed since the current benefit structure was put in place.

STRS must live within its means rather than seek higher levels of funding from school districts. Linda B. Kersker President, Akron Board of Education Akron

Editor's note: This letter also was signed by the other six members of the board.

COREofOEA's class action suit against the OEA

From John Curry, October 7, 2007
COREofOEA (OEA retired staffers) has presented arguments 9/13/07 (through their attorneys) to judges in the U.S. District Court in Cincinnati in September in reference to their class action lawsuit against the OEA for taking back benefits in what COREofOEA claims is a violation of their contract with the retirees. Here is a copy from their (COREofOEA) website including a link you can click on to hear the presentation of COREofOea's attorney. Hopefully we will soon know of the results of this court appearance.John
6th District Court of Appeals
Oral Arguments
were held on September 13, 2007. The hearing was attended by over 30 retirees and no one from OEA except counsel. That pretty much tells the story. CORE of OEA has obtained an audio copy of the hearing and you may listen to it by clicking here or going to the legal activities area.
We invite all to listen to the arguments. Listen to the OEA attorney lie to the court to advance their case. It has come down to OEA wanting to advance positions via their attorneys to try to win their case against retirees that are extremely harmful when applied to their own members. The Appellate Court Judges understand, too bad to this point OEA leadership has been going blindly forward with total disregard for its members welfare.
Listen for yourself and see what you think.


Larry KehresMount Union Collge
Division III
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