Ryan Holderman: Retirees simply want their situation and viewpoint to be considered and understood

From Ryan Holderman, November 11, 2008
Subject: Sharing thoughts with CORE President David Parshall, STRS Director Nehf, STRS Board members, CORE and fellow retirees

Dear Dave:

I'm sorry that I will be unable to come to Columbus for the CORE meeting with Director Nehf. I will look forward to the report about that meeting. Thank you for making the arrangements and keeping the lines of communication open between CORE and the STRS Executive Director. It is an important relationship. I am taking this opportunity to share the thoughts that follow with you, fellow retirees, STRS Board Members, and Director Nehf

As you know, I exchanged letters with Director Nehf a few weeks ago. I appreciated his response. It was prompt and he carefully outlined the reasons for PBIs, etc. I understand the rationale for the bonuses and, in ordinary circumstances, agree that they are a standard practice in the world of investment managers. We are not, however, in a time of ordinary circumstance. The downturn in the economy, combined with increased scrutiny of perks, bonuses, severance packages and golden parachutes throughout the financial world, indicates that "business as usual" is becoming increasingly less tolerable.

In my discussion with fellow retirees (particularly those who are a members of WCRTA) of the bonuses awarded by STRS has confirmed that we are dealing with two highly divergent points of view. STRS sees the bonuses as a routine expense related to doing business in the investment world and encouraging investment managers to seek the highest level of return for pension funds. Retirees come from a world where doing the job that one was hired to do was expected and bonuses were non-existent. Each side finds it difficult to appreciate the viewpoint of the other.

Each year retirees face increases in costs for health insurance, medicines, local taxes, and living expenses. Their income simply is not keeping pace with those expenses. Those who were fortunate enough to be able to make small investments during their career have seen them shrink dramatically and, in some instances, disappear as the market has failed. Is it no wonder that the enormous bonuses they've read about have stirred feelings of betrayal and skepticism toward STRS?

Retirees that I have spoken with perceive that the STRS Board is reverting to business as usual, turning away from reform, and out-of-touch with the financial struggles of retirees, particularly those older retirees who are living on $30,000 or less. With the exception of Dr. Leone, they don't appear to have a voice addressing their issues.

Part of the resentment felt by retirees is fueled by the loss of the 13th check. A check that many, especially the older retirees with the lowest pension income, depended upon to meet expenses. I want to make it clear that I think that money would have been better spent by putting into the health care stabilization fund. Many, however, feel that retirees were called upon to sacrifice that bit of additional income when STRS faced financial pressure and yet STRS investment employees continue to receive very generous bonuses. They ask why bonuses are so large? Why hasn't the STRS Board capped the bonuses at 25 or 30%. It seems to them that those who have the least are being asked to sacrifice the most.

Throughout the turmoil of this issue one attitude prevails, retirees appreciate the work that STRS employees do on their behalf. They speak of the courtesy extended to them when they interact with STRS staff. They value the quality of service that they receive. They have no vendetta with those good folks. They simply want their situation and viewpoint to be considered and understood.

Thank you for the work that you do as President of CORE and thanks to the CORE officers and trustees who continue to be a voice for reform-minded retirees across the State.

Sincerely,
Ryan Holderman