Lima News misleading re: 13th check/bonuses for teacher

From John Curry, February 20, 2008
Subject: What a MISLEADING title for this STRS article!

Below is today's Lima News (print edition-Section B page 1) article re. STRS and HB 315. Get a load of the title! What bonus? I retired with 30 years service in May of 2000 and have never seen a 13th check or "bonus" as referred to in this highly misleading title......neither have over 116,000 STRS retirees! "Accuracy in journalism" is sure missing in this instance! I do note that there is a venue to comment on this article at the end of the article....care to comment? John Curry Concerned Ohio Retired Educators (CORE)

Teachers retirement system looking for health care funding

Lima News, Feb. 19th, 2008
By Heather Rutz

LIMA — A group managing benefits for Ohio’s retired teachers wants increased contributions from teachers and employers to shore up the finances of its health care system.

The State Teachers Retirement System of Ohio is pushing a House bill that would increase contributions from public teachers, school districts and public universities by 2.5 percent each, creating a dedicated revenue stream for health care for retired teachers.

Local opponent to the action, Kenneth Clemens, a member of the Rhodes State board of trustees, said taxpayers shouldn’t be funding health care for retired teachers and the new money is needed now because STRS squandered other money in past years.

STRS has provided health care for its retirees since the 1970s. None of the five public retirement systems in Ohio is required to provide health care, but they all do.

“As we look forward with health care costs as they are, looking at the amount of money in the fund, and knowing how much we need to pay out of that fund, what we know and what our actuaries have told us is that the fund is going to run out of money,” said Laura Ecklar, STRS spokeswoman.

Through good times, when the pension fund was doing well, STRS acted irresponsibly, Clemens said, by providing retirees essentially a 13th benefit check each year.

“They had so much money, they thought, they gave a 13th check every year, which was not required, and they purchased health insurance for their members, which is not required,” Clemens said. “Seven members of the board are teachers or retired teachers and three are financial experts who didn’t do their jobs; they shouldn’t have let them do this stuff.”

State law allows pension systems to distribute extra investment returns. The 13th check program ended five years ago, Ecklar said. The retirement board has made many changes to the program to try to make it solvent, she said.

“We spend $1.3 million a day on health care here,” Ecklar said. “No amount of cost-cutting can come up with that. Most public agencies have set aside zero toward their liability and we have.”

Currently, pensions are funded with 10 percent of teachers’ pay and a 14 percent contribution from employers. The health care fund has three sources of income: 1 percent of the 14 percent, premiums and investment earnings on the fund, which stands at about $4 billion. Retired teachers, through premiums and out-of-pocket expenses such as co-pays, pay about 48 percent of the program’s cost.

About 116,000 retired and disabled teachers are enrolled in the program; STRS has about 450,000 total active, inactive and retired members.

The additional 5 percent would be phased in over five years, giving school districts time to plan, Ecklar said. The additional money would fully fund the program.

“We believe it’s a viable solution,” she said. “We are well aware of school funding challenges in this state and we appreciate the challenges particularly K-12 districts face.”

STRS tries to sell the idea by reminding districts that teachers are staying in the classroom longer, partly because of health insurance worries, and that is adding to districts’ own salary and health care costs for aging teachers.

Clemens asks a fundamental question: Should taxpayers fund health care for retired teacher?

“Where does the public schools get their money? Where does the money come from? Real estate tax,” Clemens said. “What they’re saying is, ‘We screwed up, we made errors in judgment and now we want a tax on the public to maintain a program that’s not a requirement.’”

Ecklar said if the STRS program ends, the liability doesn’t go away.

“It just means disabled teachers aren’t able to get health care, teachers younger than 65 are not able to get health care,” she said. “As you add to the rolls of the uninsured, taxpayers pay for that too, with Medicaid, social services, charities, the emergency room. We all pay for that.”

House Bill 315 has been introduced and in committee, but no hearings have been held.

[Note: To leave a comment on this article, you must first register with the newspaper. Click here to get to the article, then click on the "Comment on this story" button at the bottom to get started.]