Saturday, April 19, 2008

WSJ re. State Pension Systems' Divestment ...... an article that Jon Husted and Josh Mandel might profit from reading!

From John Curry, April 19, 2008
Pension Funds Gain Leeway On Terror Laws
Lawmakers Ease Stance On Divestment Push As Credit Crisis Pinches
April 15, 2008
Wall Street Journal (
[Click on images to enlarge]
In the $3 trillion public-pension-fund world, strict divestment laws could be the latest victim of the credit crisis.
A year ago, legislators rushed to sponsor bills compelling their state pension funds to sell off companies doing business with Sudan, Iran or other states deemed sponsors of terror. Governors could hardly wait to sign the measures into law.
"These bills limit a pension fund's scope for investing and adds to their administrative costs," says Mark Ruloff, a Watson Wyatt consultant. "That isn't necessarily what beneficiaries want to hear at a time when markets are down and their fund's liabilities are poised to rise."
In the first quarter, the average public-pension fund lost about 5%, while its funding liabilities rose about 2%, according to Watson Wyatt.
The recent turnabout suggests a possible change in the continuing debate over what role, if any, taxpayer-supported funds should play in world affairs. Many lawmakers have argued that public money shouldn't be used in a way that could threaten national security. Funds counter that legislative efforts, while well-meaning, conflict with a fund's fiduciary duty to get the best returns for beneficiaries.
Although U.S. companies are banned from doing business in countries suspected of aiding terrorists, many foreign companies still operate there. More than 20 states have passed laws that could compel public pensions to divest from companies doing business in one or more of the offending countries, including New Jersey's Iran divestment bill signed into law in January. Several other bills are pending and may still pass.
"Fighting the war on terror is still on people's minds," says Jeff Klein, a Democratic state senator in New York whose Iran-divestment bill has passed the state Senate but is stalled in the Assembly.
New York Comptroller Thomas P. DiNapoli announced in November a plan that would examine the state's $155 billion pension fund for offending companies in the energy and defense sectors that could lead to eventual divestment. But he has said the fund won't act in a way that would compromise his fiduciary duty.
The past few weeks also have seen an unexpected softening in efforts to force pension-fund hands. In Tennessee, for instance, a council of Senate and House members rejected the "Terror Free Investment Act" and the "No Investment in Iran Act" and instead recommended a bipartisan bill that would merely require the $32 billion pension fund to identify certain overseas investments.
Arizona Gov. Janet Napolitano signed a bill that sounds tough, forcing the state retirement system to divest within 18 months holdings in companies doing business with Sudan. But according to the fine print, any of the pension fund's managers are exempt from the new law if dumping securities costs them the equivalent of a quarter-percentage point.
The Maine House of Representatives was more direct: It voted down a bill that would have forced pension funds to divest from companies doing business with Iran. An Idaho Senate committee recently rejected a bill that could have forced the state's retirement fund to withdraw money from companies doing business with Sudan. That came after one of the bill's initial sponsors -- saying he didn't want to encourage other bills that might limit investment options -- reversed himself to vote against the measure.
Others sound worried about the public outcry if retirement checks start to shrink. "We have to be very careful about getting out on a slippery slope when we're dealing with people's retirement money," says Rep. Craig Fitzhugh, a Tennessee Democrat who co-sponsored the more moderate bill.
Funds that must comply with new laws also are eagerly publicizing what they say are the costs. New Jersey's Division of Investment says the state's Sudan- and Iran-divestment laws will force the roughly $78 billion pension fund to sell off more than $2.5 billion in holdings and reduce its investible universe by more than 10%. And the California Public Employees' Retirement System says California's Iran-divestment law could force the fund to sell about $2 billion in shares.
Separately, a California assemblyman, Democrat Alberto Torrico, withdrew a bill Wednesday that would have prevented Calpers and the California State Teachers' Retirement System -- the nation's two biggest pension funds -- from investing in private-equity firms that are owned by so-called sovereign-wealth funds. The bill's supporters maintain that some of the governments running these investment funds have poor records on human rights.
But Republican Gov. Arnold Schwarzenegger, who signed bills related to divestment from companies doing business with Sudan or Iran, publicly opposed this bill. He said it would place too big a burden on the funds to monitor myriad human-rights issues.
The two pension funds also criticized the measure. Calpers estimates that this legislation could have cost it $12 billion in future returns over the next decade. Calstrs says it would have had to forgo $5 billion over five years in potential returns, though the bill's sponsor has questioned the figures.
Write to Craig Karmin at


From John Curry, April 19, 2008
.....below is an email sent one year ago when Rep. Widener introduced HB 152. Since then, this bill is still sitting on the shelf in the Ohio House of Representatives. Maybe you retirees who did give these sponsors "a piece of your mind" helped this bill to stay where it is today. In any case, let sleeping dogs (and ducks) lie!
From John Curry, April 18, 2007
Subject: Who sponsored and co-sponsored HB 152
So, who are the State Representatives who sponsored HB 152 (alternative retirement plans for teachers and school system employees) and co-sponsored this bill? Here they are: Widener sponsored it and Combs, Flowers, and Seitz co-sponsored this bill which will take monies away from STRS and SERS. If they are YOUR representatives.....please give them a piece of your mind! John


REPRESENTATIVE Chris Widener (R) District 84
77 S. High St
12th Floor
Columbus, OH 43215-6111
Telephone: (614) 466-1470
Fax : (614) 719-6984
Email Address:
Term in Office: 4th (This includes appointed and elected terms)
City: Springfield
Occupation: Architect

REPRESENTATIVE Courtney Eric Combs (R) District 54
77 S. High St
12th Floor
Columbus, OH 43215-6111
Telephone: (614) 644-6721
Fax : (614) 719-6954
Email Address:
Term in Office: 3rd
City: Hamilton
Occupation: Real Estate Broker

REPRESENTATIVE Larry L. Flowers (R) District 19 Majority Floor Leader
77 S. High St
14th Floor
Columbus, OH 43215-6111
Telephone: (614) 466-4847
Fax : (614) 719-6958
Email Address:
Term in Office: 4th
City: Canal Winchester
Occupation: Retired Fire Chief

REPRESENTATIVE Bill Seitz (R) District 30 Majority Whip
77 S. High St
14th Floor
Columbus, OH 43215-6111
Telephone: (614) 466-8258
Fax : (614) 719-3584
Email Address:
Term in Office: 4th
City: Cincinnati
Occupation: Attorney; Legislator

Express Scripts and one of the dirty little PBM's secrets.... Trade Secret Contract Terms and Specialty Drug Contracts

From Nancy Hamant, April 19, 2008
Subject: Fwd: Express Scripts and one of the dirty little PBM's secrets.... Trade Secret Contract Terms and Specialty Drug Contracts
It appears that the Pill Buying Marketeers--excuse me, PBMs, continue to do anything to make exorbitant profits. Until the government regulates the PBM companies, it seems that it would benefit all of Ohio's five public pension plans to explore and move ahead with plans to serve as their own PBMs.
Nancy Hamant
From John Curry, April 19, 2008
Subject: Express Scripts and one of the dirty little PBM's secrets.... Trade Secret Contract Terms and Specialty Drug Contracts
Steve Miller, an Express Scripts executive vice president, said of the H.P. Acthar Gel episode: “The increase was a manufacturing decision. I can’t comment on that.”
“This sort of puts the spotlight on the greed angle of the business,” said Dr. Robert R. Clancy, a pediatric neurologist at Children’s Hospital of Philadelphia.
Jessica Kourkounis for The New York Times
An anti-seizure drug used to treat Reegan Schwartz’s [Photo] epilepsy registered a fourteenfold increase in price last summer.
April 19, 2008
New York Times
Benefit Managers Profit by Specialty Drug Rights
Doctors treating children with a rare and severe form of epilepsy were stunned by the news. A crucial drug, H.P. Acthar Gel, that had been selling for $1,600 a vial would now cost $23,000.
The price increase, put in place over last Labor Day weekend, also jolted employers that provide health benefits to their workers and bear the brunt of drug costs.
As it turned out, the exclusive distributor of H.P. Acthar Gel is Express Scripts, a company whose core business is supposed to be helping employers manage their drug insurance programs and get medicines at the best available prices.
But in recent years, drug benefit managers like Express Scripts have built lucrative side businesses seemingly at odds with that best-price mission. A growing portion of their revenue comes from acting as exclusive or semi-exclusive distributors of expensive specialty drugs that can cost thousands of dollars. And the prices of such medicines are rising much faster than for the mainstream prescription drugs available through a wide variety of distributors.
Critics say that distributing specialty drugs with ever-higher prices runs counter to the best interests of the employers that hire companies like Express Scripts.
“We are headed right down into conflict alley with these exclusive arrangements,” said Gerry Purcell, an Atlanta-based health benefits consultant to big employers. As exclusive or semi-exclusive distributors of specialty drugs, the benefit managers “can raise the prices at will,” Mr. Purcell said, “and the employer will have little chance but to pay the bill.”
Express Scripts’ main competitors, CVS Caremark and Medco Health Solutions, have also built lucrative side businesses in specialty drugs. So have some of the biggest insurers that provide medical benefits to corporate America, including UnitedHealth Group, Wellpoint, Aetna and Cigna.
When asked about the potential conflicts, Express Scripts and the other companies — which are known as pharmacy benefit managers — tend to describe themselves as mere middlemen with little influence over what the drug makers choose to charge.
Steve Miller, an Express Scripts executive vice president, said of the H.P. Acthar Gel episode: “The increase was a manufacturing decision. I can’t comment on that.”
The pharmacy benefit managers say that keeping a lid on employers’ drug costs is still their top priority. And they defend their involvement with specialty drugs, saying it helps them keep better track of the medicines’ use.
“I don’t believe it is a conflict,” said Dave Rickard, an executive vice president of CVS Caremark. “We saved clients $115 million last year that would have been spent on specialty drugs that were not appropriate.”
But CVS Caremark, meanwhile, sold nearly $6 billion in specialty drugs last year through its pharmacy benefit management business — nearly 14 percent of the company’s annual revenue.
The main drug benefit managers make as much as 10 to 15 percent on each sale of a specialty drug, whose prices can range from $5,000 a year for certain anemia drugs to $389,000 in the case of Soliris, a drug for a rare blood disorder, whose distributors include Express Scripts’ specialty drug unit, CuraScript.
Spending on specialty drugs rose 16.5 percent in 2006, growing twice as fast as traditional drug spending, and totaled about $62 billion — which was about 23 percent of overall drug sales in this country, according to Charles Boorady, a Citigroup health care analyst.
Big employers and organizations including General Motors, Caterpillar and Calpers, the large California public employees health and pension group, say their spending on specialty drugs is growing at double the rate of the rest of their drug benefits for employees.
In some cases, employers are starting to push back. A group of large- and medium-size companies like Kinder Morgan Energy, a Houston pipeline company, and Enodis, an international restaurant equipment maker with United States headquarters in Florida, recently pushed CVS Caremark to agree to hand back $15 to the employers on each prescription filled for all specialty drugs listed in a Caremark contract.
The giveback is meant to let the employers share a portion of the rebates that the pharmacy benefit managers often collect from drug makers in addition to keeping a portion of sales. But the giveback is relatively minuscule, acknowledged David Dross, a drug benefits specialist at the Mercer benefits consulting group who helped organize the employer effort.
With specialty drugs, the pharmacy benefit managers are “getting a lot more than the $15 in rebates,” Mr. Dross said.
Susan A. Hayes, a drug benefits consultant based in Lake Zurich, Ill., said she had seen rebate contract terms that give the pharmacy benefit managers rebates of 3 percent to 10 percent of the selling price.
Specialty drugs are aimed at diseases that include cancer, multiple sclerosis and hepatitis C. Some, for rarer disorders, may have federal “orphan drug” status that gives a manufacturer exclusive marketing rights for a certain period. Specialty drugs also include medications whose distribution is tightly regulated as federally controlled substances, like the narcolepsy treatment Xyrem, which is distributed through Express Scripts.
Makers of specialty drugs can command lofty prices mainly because patients have few alternatives, and there is typically little or no competition — whether because the medicine still has patent protection or the drug is difficult to make. Or it may be, as with H.P. Acthar Gel, that the patent has long since lapsed but there is a relatively small number of patients.
With specialty drugs representing about 60 percent of the new medicines submitted for approval by federal regulators, their overall cost will probably keep pushing up drug expenses well into the future.
Express Scripts is smaller than Medco and CVS Caremark, but it gets a bigger share of its revenue from specialty medicines — 19.8 percent of its 2007 revenue of $18.3 billion.
That compared with about 13 percent of Medco’s $44.5 billion total revenue last year. And it compared with about 13.9 percent of CVS Caremark’s total of $43.3 billion, not counting $2 billion sales of specialty prescriptions filled at CVS retail drugstores.
Express Scripts also has a larger number of exclusive distribution deals, with sole rights to 7 specialty drugs, all of which have orphan drug designation, as well as 11 more that are available through only one or two other national distributors.
Medco’s specialty unit, Accredo Health, lists 4 orphan drug exclusives and 21 more drugs it shares with one or two other distributors. CVS Caremark said it had one exclusive and 35 drugs available from a limited group of specialty pharmacies.
In the case of H.P. Acthar Gel, an injectable anti-seizure medication derived from hog hormones, the fourteenfold price increase came after the maker, Questcor Pharmaceuticals, gave exclusive distribution rights to Express Scripts’ CuraScript unit last summer.
“This sort of puts the spotlight on the greed angle of the business,” said Dr. Robert R. Clancy, a pediatric neurologist at Children’s Hospital of Philadelphia. He has been using H.P. Acthar Gel to treat a severely ill 3-year-old girl, Reegan Schwartz. Employer health plans bear most of the drug’s steep cost, with individuals in many cases making only a standard co-payment. In the case of the two courses of Acthar treatments for Reegan, the cost to her father’s health plan was about $226,000. Her father, Mike Schwartz, who works for a large pharmaceutical company, Merck, that has no ties to Acthar or its manufacturer, said he ended up paying only $60 out of pocket for the Acthar therapy.
Steve Cartt, a Questcor executive vice president, said the new price was chosen by looking at the prices of other specialty drugs and estimating how much insurers and employers would be willing to bear.
“We did some market research,” Mr. Cartt said. Talking to pediatric neurologists and others about various pricing options “gave us some comfort that the strategy would work, and physicians would continue to use the drug, and payers would pay,” he said. “The reality was better than we expected.”

Friday, April 18, 2008

April Board News from STRS

From STRS, April 18, 2008
This week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The April report follows.
PROPOSED BUDGETS FOR 2008-2009 PRESENTED TO RETIREMENT BOARD At its April 17 meeting, the State Teachers Retirement Board reviewed the proposed system budgets for the 2009 fiscal year (July 1, 2008-June 30, 2009). The proposed operating budget totals $99,537,200, which represents a $3.5 million, or 3.7%, increase over the current year budget. The proposed capital budget for fiscal 2009 totals $2,242,500. Additionally, the system expects to spend $4,883,100 on the project that is under way to replace STRS Ohio's obsolete pension management computer system.
Overall, the budgets for fiscal year 2009 continue to:
• Make system operations in all areas as efficient as possible, without jeopardizing delivery of pension benefits and services and health care coverage to members; adversely impacting investment operations; or failing to meet fiduciary responsibilities or legal requirements.
Provide an appropriate compensation and benefits package and work environment to attract, retain and engage highly motivated associates.
Comply with all Board Policies.
Address Retirement Board priorities; and
Demonstrate and communicate to members that STRS Ohio is managing operating expenses prudently.
In building the budget each year for presentation to the Retirement Board, staff looks at both needed increases, as well as opportunities for cost savings. Like any service organization, the majority of STRS Ohio's operating budget goes toward expenditures for salaries and benefits. To ensure that STRS Ohio can attract and retain qualified investment professionals, it provides a cash compensation package to these associates that includes a base salary plus a Performance-Based Incentive (PBI) component. The PBI enables eligible Investment associates to receive an additional percentage of their base salary, depending on both total investment fund performance and their individual goals. STRS Ohio associates internally manage a significant portion of the system's assets -- about 80% -- versus using outside money managers. Third-party studies have shown that this practice is extremely cost-effective for STRS Ohio. Just as an example, internal management saved STRS Ohio $88.4 million in fees in calendar year 2006 alone.
The goal of the Retirement Board is to maintain the total compensation (base salary plus PBI) for eligible Investment associates at the 25th percentile of private market levels. Thus, the 2009 fiscal year budget includes a 4% merit and promotional increase for eligible associates, plus an additional adjustment to Investment associate compensation to maintain the 25th percentile level. Merit and promotional increases are awarded based on each individual associate's performance. STRS Ohio associates do not receive step increases nor annual cost-of-living increases.
Other factors contributing to the fiscal 2009 budget include: higher postage and fuel costs; additional planned field counseling for active members; new software purchases; due diligence travel; costs related to conducting two board elections; building maintenance; and increases in existing contracts for such items as copier service and maintenance and professional service contracts. Five new associate positions are included in the budget, but due to other personnel changes during this fiscal year, the total staff size will decrease to 628 full- and part-time associates from 637.
The fiscal 2009 budget also reflects significant decreases in such areas as actuary fees, contract services for the Information Technology Services Department, custodial banking fees, disaster recovery, consulting services and outside printing.
The Retirement Board will be asked to approve the budgets at its June meeting.
MEMBER SURVEY RESULTS PRESENTED Dr. Marty Saperstein of Saperstein Associates presented the results of the annual telephone surveys of STRS Ohio active and retired members that were conducted from Feb. 26 through March 10, 2008. The research measures the membership's perceptions and attitudes about a number of issues. The results were also compared to surveys conducted in the previous four years.
In summarizing the results, Saperstein noted that almost all members have positive impressions of STRS Ohio overall. These impressions extend to the Retirement Board and pension benefits and are caused primarily by three factors: (1) excellent service to members, (2) good investment returns and (3) improved communications. Health care continues to be an issue of concern among retirees and, to a lesser extent, among active members. Retirees are primarily concerned about cost, while actives want more information about health care.
The research also showed that majority support among actives and retirees continues for House Bill 315, which would create an ongoing, dedicated revenue stream for the STRS Ohio Health Care Program.
Looking to the future, STRS Ohio members reiterated that the Retirement Board should continue to focus its attention on preserving health care coverage; managing investments and expenses responsibly; and maintaining or improving pension benefits.
Additional details about the survey results will be included in the next edition of the STRS Ohio newsletters.
RETIREMENT, INVESTMENT TRANSACTIONS APPROVED The Retirement Board approved the following retirements and investment transactions:
105 active members were approved for service retirement; 71 inactive retirements were approved.
In March, fixed-income purchases totaled $639 million, domestic equity purchases totaled $623 million and real estate purchases totaled $94.7 million.
STRS OHIO ACHIEVES NO. 1 SPOT IN CEM ANNUAL BENCHMARK SURVEY STRS Ohio holds the No. 1 spot among 74 leading global pension systems for its service to members. STRS Ohio has been the highest-rated system in service levels for eight of the 10 years of the benchmarking survey conducted by CEM and rated second for the other two years. The benchmarking survey includes 38 U.S. systems as well as systems from Canada, Australia and the Netherlands. STRS Ohio's service level score was 87 compared to a median score of 73 for all systems. Service level is based on a weighted score of 15 different activities, such as paying annuity pensions, benefits counseling and member calls.
STRS Ohio's counseling services and member contacts through the call center received the highest score among the 74 participants. These two categories account for about one-third of the weighted score. In fact, the average wait time for callers and call abandon rate account for 10% of the score. Mass communications, which includes member education programs, Web sites, newsletters and member statements, rated third among all participants and accounts for another 21% of the score. These three areas -- counseling, call center and mass communication -- make up about 55% of the score and drove STRS Ohio's top rating.
HOUSE BILL 315 AND HOUSE BILL 270 RECEIVING ATTENTION Rep. Scott Oelslager (R-North Canton), the sponsor of H.B. 315, has scheduled a meeting with key stakeholders interested in the legislation. H.B. 315 is the bill creating a dedicated revenue stream for the STRS Ohio Health Care Program. The proposal would increase contributions from active STRS Ohio members and their employers by a total of 5% of salaries, with the increases phased in over a five-year period. STRS Ohio and other advocate groups anticipate a series of meetings with interested parties over the course of the spring and summer. The bill was introduced in September 2007.
Legislation designed to prevent active members from returning to their former positions immediately following retirement is likely to be on the agenda of the House Financial Institutions, Real Estate and Securities Committee this spring, according to the sponsor of H.B. 270, Rep. Michelle Schneider (R-Madiera). STRS Ohio has not taken a position on the primary purpose of the legislation. However, the system is seeking several amendments to the bill, mostly technical in nature. The Ohio School Boards Association and the Ohio Association of School Business Officials have testified in opposition to the bill. H.B. 270 has been reviewed by the Ohio Retirement Study Council, which recommended its passage to the Legislature.

The STRS Ohio news e-mail list is designed solely to provide timely and accurate news and information about legislation, benefits and other issues affecting the STRS Ohio membership.
To view past news e-mails, go to
If you wish to comment on a topic, please either e-mail or call the Member Services Center toll-free at 1-888-227-7877.

Thursday, April 17, 2008

Double viewed by a retired judge and a retired educator

From John Curry, April 17, 2008
Subject: Double viewed by a retired judge and a retired educator
State legislators should change law on double dipping
Canton Repository, April 17, 2008
Those of us who have been privileged to retire from such occupations as teacher, police officer, firefighter, state or county officeholder or judge should be thankful for having fulfilled our dreams. We've had our day. We should step aside, deal with our aches and pains, draw our pensions and let the energized and young people fill our positions.
Unfortunately, too many of us who retire, for one reason or another, pursue the retire-rehire thing. We become part of a process that is known as double dipping. This practice has been around for a number of years and is legal. It enables politicians and civil servants to draw their pension while working in a similar full-time job.
In some circumstances, double dipping is acceptable and may even be necessary in rare instances if a position requires the unique experience and knowledge of a retiree and no one else is available. But double dipping has a negative effect, in that it denies the community new ideas and new blood.
When a superintendent of a school district resigns, gets his or her pension and then continues in his or her old job or becomes superintendent in another district, that means someone else was probably denied the opportunity to be a superintendent. In the present economic climate when so many teachers are being laid off, there is plenty of untapped talent among teachers and other educators who are looking for an opportunity to advance in their careers.
Furthermore, double dipping conveys the wrong impression to the community at a time when so many people are losing their jobs and homes and cannot support their families. They understandably believe that greed motivates double dippers.
As The Columbus Dispatch reported last September, elected officials in Ohio "were forbidden to double dip beginning in 1993. However, lawmakers say they unwittingly repealed the ban in 2000 amid changes to allow school districts to keep experienced educators who otherwise would have been lost to retirement."
Ohio law permits a state retirement system member to retire and subsequently be re-employed in a position that is covered by the same or another system, such as the Public Employees Retirement System, State Teachers Retirement System, School Employees Retirement System, Ohio Police and Fire Pension Fund and State Highway Patrol Retirement System.
The Dispatch stated, "About 11,400 workers covered by the Ohio Public Employees Retirement System are drawing pensions and have returned to other jobs covered by the system." In the days ahead, this number will increase.
I am happy to note that Ohio Supreme Court Chief Justice Thomas Moyer is not in favor of judges' retiring and returning to the bench. He has called the move "working the system."
A few elected officials in Columbus are attempting to close the loophole that allows double dipping. It is about time. The Dispatch noted that House Bill 270, introduced by Rep. Michelle Schneider, R-Madeira, "would suspend the pensions of elected officials and public employees who return to the same or similar jobs within six months."
HB 240, introduced by Rep. Bruce Goodwin, R-Defiance, provides that those who want to double dip would have their salary capped at about 60 percent of their former salary.
The time has come for taxpayers to protest and compel their state legislators to focus on the practice of double dipping.
Regardless of how I feel about it, I cannot find fault with someone who is double dipping because he or she is only doing what is allowable by law. I find fault with those who make this right under our legal system.
Failure to correct this problem undermines trust and confidence in government because it encourages the notion that public officials are talking advantage of the offices to which they were elected to enrich themselves at the taxpayers' expense.
Many states outlaw or restrict double dipping. Isn't it time our state legislators take bold action to resolve this important issue?
Harry E. Klide is a retired Stark County Common Pleas judge.
From John Curry, April 17, 2008
Note from John - Well, I just had to comment on this I will share it with you since the Canton Rep thinks it's too wordy.
I do understand Mr. Klide's position re. double dipping. As he is retired under OPERS and under the final average salary retirement formula from OPERS he (if not of Medicare age) only faces an $80 monthly healthcare premium through OPERS for his and his spouse's health insurance. Had he retired under STRS (as an educator) his monthly healthcare premium (non-Medicare age retiree) would currently be $850 per month or, over eight times as much! This is due to the lack of healthcare planning by an STRS administration and an OEA dominated board which (in the late 90's and early 2000's)was busy with entitlement, mismanagement, and misspending at STRS rather than carefully planning ahead for their educators' future retirements as did those who managed OPERS. In fact, a former Canton area educator and former STRS Board member, Hazel Sidaway, was convicted of Ohio ethics violations due to her acceptance of gratuities while being an STRS Board member. She was not alone as four of her fellow board members and fellow OEA members (Jack Chapman, Eugene Norris, Michael Billirakis, and Deb Scott)also were convicted of Ohio ethics violations that arose out of their STRS leadership (or lack thereof). Had they and the OEA spent their board leadership time planning ahead for the retirements of their fellow Ohio educators the current crop of retired educators wouldn't now be facing highway robbery healthcare premium rates and would not be rehired and/or never retired in the first place.
This lack of planning is causing current educators to stay in the classroom until they reach Medicare age so as to prevent paying premiums like the ridiculous $850 a month that retired educators now face with an STRS retirement. This compounds the problem of finding jobs for newly graduated teaching candidates as there are no job openings in Ohio's schools thanks to educators not retiring and/or being rehired due to this obscene monthly healthcare premium.
The STRS administration and board has now been pretty well "cleaned up" thanks to being exposed by former Chillicothe Schools Superintendent Dr. Dennis Leone who now sits on the STRS board as a retiree representative and STRS reformer and the Canton Repository's investigative reporting of Paul Kostyu, who won an award for his investigatory reporting of Ohio STRS in a series of revealing articles. Even though the STRS has been reformed (for the most part), there are still educator retirees who face these ungodly monthly healthcare premiums due to this mismanagement and lack of planning...something that OPERS retirees don't face. I do understand that many retired superintendents are really not "hurting" with 88% of their final average salary coming in each month...they certainly are able to pay the stiff tariff of eight hundred fifty bucks monthly but, many educators who retired before the 88% final average salary came into being retired with the 66% formula. 88% of a superintendent's salary is a whole lot more than 66% of a classroom teacher's salary. This is why we see all those older educators still in the classroom and why some teachers double-dip. In their case, double dipping is a necessity.
John Curry
A retired educator and member of CORE (Concerned Ohio Retired Educators)
After submitting my comments, I immediately received this comment from the Canton Rep:
Your comment was not accepted due to the following reason:
Your comment must be 250 words or less.
There are approximately 527 words in your comment.
Please shorten your comment.

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Dennis Leone lone dissenting voice in committee hearing on SB 264 re: Teacher Strikes

Columbus Dispatch, April 17, 2008
(Under Bills Heard in Committee)
SB264 TEACHER STRIKES (Carey, Jr. J) To prohibit classroom teachers employed by boards of education from striking and instead require binding arbitration to settle their unresolved collective bargaining disputes and to make an appropriation.
The committee heard from one opponent, Dr. Dennis Leone, a former superintendent of 23 years, 13 of which were in Talawanda City School District in Oxford. He showed little patience for amendments to the bill, which would close a school during a strike. He said essentially that, instead of eliminating what he viewed as union maneuvering during a strike, the amended bill would give labor groups what they purportedly want: stalled education, a portrayal of teachers as suffering for the sake of students, and financial rewards in the end. "The language in amended SB264 is a gift for the Ohio Education Association and the Ohio Federation of Teachers," he said. "It will be hell for any school board and any administrator who decides to keep schools open during a strike in the future. The old State Loan Fund made it easier for unions to strike in the 1980s. Please don't let the language in SB264 do the same in 2008."
During questioning, Leone explained further that, in his view, binding or advisory arbitration would always result in the union getting more than it had to start with, regardless of the merits. The sponsor of the bill returned to the question of school closings and student safety, asking whether the witness would really want to send his child to a striking school with the all the attendant confrontation. Leone said the most vociferous strike activity generally occurs in the first day and tapers off. Sen. Carey said the experience of his district was quite different, and suggested the bill had reached that point of mutual dissatisfaction to all involved, making it perhaps the best bill for the children rather than any adult stakeholder. "No one agrees with the bill at this point," noted the sponsor.

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Betsy Cook's letter to teachers in support of Dan Vincent (Marietta Times)

April 9, 2008
Educators of Washington County, it is STRS active board member election time again. Early April, you will receive your ballot to elect an active member to the State Teachers Retirement System Board.
I encourage you to read about the two candidates running for the position and hope you will consider this article as just one piece of reading. I recommend Dan Vincent for the active teacher position on the STRS Board. After a review of this year’s activities at STRS, I will share information about Dan Vincent and why I feel he is the best candidate.
Each active and retired teacher that voted in the last three STRS elections can feel proud because you were an integral part of “democracy in action”. After learning about the abuse and misuse of your retirement funds by the STRS Board, you voted the old board members out by electing new board members. With the help of Senate Bill 133 passed by the Ohio Legislature and your votes for change, the 11-member board has all new faces! As I attend the board meetings, I notice that these new members are not “rubber stamps” but thinking, questioning and concerned participants.
We, the members of STRS, have sent the message that we expect board members to fulfill their duty “to act solely on the behalf of STRS membership”, that we are paying attention and will remove board members not carrying out their elected duties responsibly. The new board members have heard us and are now listening to us, the members.
There is still much work to be done. The budget has been reduced but still has waste. Salaries, bonuses and perks for employees need to be further studied and made reasonable. The childcare center has not yet become self-sustaining. A pet peeve of mine is the extravagant building that is a drain on the budget and has much wasted and unused space. This will take some creative problem solving. Our investors are making great gains for the pension system but a vitally important issue to be resolved is permanent affordable health care for all members and their dependents. The board has many issues to deal with and will require the help of a strong, involved membership working in collaboration and unison.
The members of CORE (Concerned Ohio Retired Educators — active and retired teachers that joined Dennis Leone in exposing the previous board and administration) realize the importance of involvement, perseverance and collaboration. CORE members continue to attend every Board and committee meeting to keep STRS members throughout the state informed. This all-volunteer group is vigilant and works to build positive communication channels with STRS Board members, ORTA (Ohio Retired Teachers Association), AFT (American Federation of Teachers) and OEA (Ohio Education Association). As a member of STRS, CORE and ORTA, I realize it does not matter with which group you are affiliated; we all have an equal stake in the solvency of STRS. It is vital that we not forget the past but learn from it and together build a stronger STRS for the future of all Ohio educators.
The active seat that is up for election is that of John Lazares who, along with Dennis Leone, uncovered the massive waste and extravagant spending by the previous board. John is retiring at the end of this school year and will not be an active teacher when the new term begins. We need someone on the board that will continue the work of John Lazares as an independent thinker, one who studies and questions board items, a person willing to work for all STRS members and someone who will stand up for what he believes is right.
Earlier, I stated my recommendations of Dan Vincent. Not only does Vincent come from generations of educators, but also he himself has been an elementary teacher, speech and language therapist, middle school principal, assistant superintendent and director of curriculum. With his background, Dan is well aware of educator needs and concerns. He pledges to strictly adhere to ORC 3307.15 “act solely in the interest of membership,” have open communication with members and prudently oversee the STRS funds and work for permanent affordable health care. Vincent has served on well over 100 boards so he is experienced in board policy, procedures and working relationships needed to resolve issues. Finally, CORE has endorsed Dan Vincent because he is an independent thinker and shares the reform philosophies of Dennis Leone and John Lazares.
More information is available at .
I know that as an active teacher, your time is very limited but your retirement future may depend on a few minutes of that time. When you receive your ballot in early April, please vote. I encourage you to elect Dan Vincent to continue a diverse board with no majority from any one organization, to ensure the responsible management of our retirement funds and to work toward guaranteed affordable health care for members and their family.
Betsy Cook,
Retired Marietta teacher

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Jim N. Reed's speech to STRS Board, April 17, 2008

Good afternoon ladies and gentlemen. My name is Jim N. Reed and I am a retired 42-year educator speaking for myself.
It is highly probable that somewhere in Ohio an active, contributing member to STRS has misplaced a ballot for this month's STRS Board election. There is also a good chance that another educator will mark a ballot without independently researching the candidates. Political apathy is often the residue of the ever increasing time required to meet the standards, accountability and expectations within the education community. What a shame. Few investments in our professional lives are more significant than the one we place in our retirement system. Educators cannot afford to not pay close attention.
It would seem that the dissemination of information regarding the qualifications of candidates for the Board of an $80 billion corporation would receive top priority in the minds of contributing members and retirees. Yet passiveness and obstruction often rule the day.
In canvassing educators and their lead administrators in the school districts in my home county, I discovered a variety of attitudes regarding the dissemination of information in the form of credentials and qualifications for the active seat on the STRS Board. Fortunately, most of the administrators were receptive to the notion that an open, independent and informed election process would be beneficial to their districts.
Some districts were anxious about the method of distribution of flyers other than those for the endorsed bargaining unit candidate. It seemed that in the halls of an institution of learning it was acceptable to restrict access to information unless it was pre-approved. It dawned on me that this stranglehold on information dissemination was not dissimilar to the classic Negro College Fund PSA, "A Mind is a Terrible Thing to Waste."
I also found it unacceptable that my profession's retirement organizations would not take a position to endorse either a candidate or even a strong support of the free distribution of candidate qualifications so educators could make an informed choice.
As an example, would it not be of significance to an educator-voter to know that Dr. Daniel Vincent was a classroom teacher prior to continuing his education and moving on to add his expertise among the administrative ranks? Yet many uninformed April voters will be reminded that Mr. Tim Myers is the "ONLY classroom teacher candidate."
Anyway, is an administrator in the active Board seat such a bad choice for Ohio's educators? STRS-literate educators, active or retired, cannot dispute the effectiveness and personal sacrifice of Mr. John Lazares during his tenure on this Board. He, along with Dr. Dennis Leone, has brought sorely needed enlightenment and correction to a maligned and underachieving retirement system. There is little doubt that their training and experience inn fiscal management and responsibility as administrators have made major contributions to this Board and to 440,000 STRS members.
Being reminded today that his term is nearing expiration, Ii would like to take this opportunity to publicly thank John Lazares for his service on the Board and acknowledge his personal sacrifice. His perseverance and loyalty to his station have gone beyond the call of duty.
I would also like to express my appreciation to any Board member who has determined to continue the Renaissance at STRS by their insistence on independent thinking and committing to a strict observance of ORC 3307.15.
Thank you for your attention.
Jim N. Reed

Cards for Paul Boyer

April 15, 2008
Word has it that Paul Boyer is having a very difficult time dealing with losing his wife Alice two weeks ago, along with his own illness. It would be nice if he could get a shower of cards from us. His address is:
....Paul Boyer
....c/o Volunteers of America
....Lost Creek Care Center
....804 S. Mumaugh Road
....Lima, OH 45804

Special tribute to John Lazares: Betsy Cook's speech to STRS Board April 17, 2008

Good afternoon. I am Betsy Cook, a retired educator from Marietta, Ohio.
When I retired in 2003 and the report came out about the former STRS Board misspending my money, I became active in CORE. CORE is a group of retired educators willing to give their time and money to monitor and, if need be, work to change the STRS Board. They felt it was important to use the democratic process to send a message to the STRS Board, so they worked tirelessly to get John Lazares elected.
Though I didn't know John at the time, I got to know him through teachers that work for him and observing his work on the Board. Since John Lazares is leaving the board at the end of his term, I wanted to take this opportunity to say thank you, John.
You came into a very difficult situation and through your humor, charm, persistence and steadfast beliefs, you created change. You have shown caring for all STRS members and willingness to question policies and the workings of STRS. You have listened to STRS members to hear what was important to us; and tirelessly, sometimes against great odds, stood up for our issues.
Thank you, John, for giving your time to represent the educators of Ohio on the STRS Board. You carried out your responsibilities with integrity and compassion. As an STRS member, someone whose retirement future depends on the Board's decisions, I appreciate all John has done to rebuild trust between STRS members and the Board. There is still much work to be done, such as in the area of permanent, affordable health care. I hope we can work together to continue what John has helped to start: listening, questioning and working for the members of STRS.

Wednesday, April 16, 2008

Next CORE meeting

April CORE meeting
Thursday, April 17, 2008, 11:45 a.m.
STRS Building
275 E. Broad Street
Columbus, OH 43215
Second floor, cafeteria room behind Sublett Room
Free parking (garage) behind the building
Agenda: Vacancies for officers and trustees; future direction of CORE
Additional items as submitted. These need to be sent to John Curry ( by April 15. Items received after that date will be held over to the May CORE meeting.
STRS Board meeting: usually begins at 9:00 a.m. in the 6th floor Board Room (TBC later); it is open to the public. CORE members generally stay till 11:30, then go to the second floor cafeteria to get lunch, carrying the lunch trays into the adjoining room for the 11:45 CORE meeting (yes, we eat during the meeting to save time so we can get back to the Board Room in time for the Public Speaks portion of the Board meeting, which occurs any time after 1:00).

STRS April Board Meeting

From STRS, April 9, 2008
The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:
Wednesday, April 16, 2008
...3 p.m. Disability Review Panel (Executive Session)

Thursday, April 17, 2008
...8:30 a.m. Ad Hoc Committee for Retreat Review
...9 a.m. Retirement Board Meeting
The Ad Hoc Committee for Retreat Review will meet briefly at 8:30 a.m. in the Hearing Room on Thursday, April 17. The Retirement Board meeting will come to order at 9 a.m. and begin with a report from the Investment Department, followed by a report from the Finance Department. The Executive Director's Report is scheduled to begin at 1 p.m., followed by public participation and a report from the Member Benefits Department regarding pension benefits. Member and associate survey results will be reviewed prior to routine matters and any other issues that require the Board's attention.

Caremark CEO received a paltry 1% raise last year.....but don't feel sorry for him till you read this!

From John Curry, April 16, 2008
Subject: Caremark's CEO only received a 1% raise last year!?
.....and so.....his 2007 compensation package was $17.7 million! Here's the link [click here, then click on "Skip this Welcome screen"] if you want to read more!

Beacon Journal: Patients can get $100 to reveal hospital bills

From John Curry, April 16, 2008
Subject: Canton area retirees...wanna' make $100 by sharing your hospital bills and Medical Mutual's/AultCare's payments or lack thereof?
Alliance Community offers to pay for statements, will use data so public can compare medical costs
By Cheryl Powell
Beacon Journal medical writer
Akron Beacon Journal,
Apr 15, 2008
Alliance Community Hospital wants to pay you $100 or more to find out how much your health insurer paid for care you received at rival hospitals.
The hospital announced on Monday that it wants patients from Mercy Medical Center in Canton, Robinson Memorial Hospital in Ravenna or Salem Community Hospital to hand over their bills and corresponding ''explanation of benefits.''
These EOB statements from insurance companies detail how much medical institutions charge for procedures and treatments, as well as how much insurers and consumers actually end up paying.
Patients who are insured by companies such as Cigna, Anthem, Medical Mutual, UnitedHealthcare, AultCare or SummaCare can receive a $100 ''donation'' from the nonprofit Alliance Community Hospital for every eligible EOB statement, for a total of as much as $1,000, according to the hospital.
Alliance Community Hospital Chief Executive Stan Jonas said the offer is part of the hospital's attempt to provide consumers with more information about the true cost of medical services.
The hospital plans to share the information eventually on a new Web site.
''We feel that consumers should be able to compare prices before they buy health-care services,'' Jonas said. ''We are doing this because we want to prove our value in the marketplace and to provide meaningful comparisons with our own pricing, as well. So in order to help inform consumers, we are seeking information about procedures performed at other hospitals.''
The American Hospital Association isn't aware of any similar initiatives at any other hospital nationwide, spokeswoman Elizabeth Leitz said.
But, she added, ''hospitals are trying to be more transparent with our community about the price of health care.''
At least one insurer is raising concerns.
''To the best of my knowledge, this appears to be a new type of initiative,'' said Richard Waldron, director of provider networks for Medical Mutual of Ohio. ''While we support the concept of transparency, this initiative seems problematic. Looking through EOBs from unrelated facilities poses issues of data collection, interpretation and validity. Moreover, there may be numerous legal issues inherent in such an effort.''
However, Mike Bernstein, spokesman for Akron-based SummaCare, said the EOB statements belong to the patients, who can choose to share them.
''The EOB is the property of the patient, and we have no concerns if they choose to share it publicly,'' Bernstein said.
The Alliance hospital is seeking patient insurance statements from 2007 for inpatient stays, emergency room visits, MRI and CT scans and physical therapy.
Patients are asked to black out personal information, including names and Social Security numbers.
Interested patients can call the billing office at 330-596-7556 ''to set up a brief interview with an ACH professional to determine if your EOB information qualifies,'' a hospital statement said.
Increasing transparency
In recent years, ''transparency'' has become a buzzword in the medical industry as patients are being forced to foot a higher percentage of the bill.
The Centers for Medicare & Medicaid Service's Web site, for example, includes average Medicare payments for some procedures, as well as results from patient satisfaction surveys and other quality indicators.
Hospitals also are required to publicly share the prices they charge. But the discounted rates that insurers pay and the out-of-pocket share footed by patients often are difficult to obtain.
''We want you to comparison shop for your health care in much the same way you do for other major investments or capital expenditures in your personal or professional life,'' Jonas said.
Alliance Community Hospital is independently owned but has an affiliation with Aultman Hospital of Canton and other hospitals in Orrville and in Holmes and Tuscarawas counties through the Independent Hospital Network.
Hospitals respond
When told about Alliance Community Hospital's initiative, Mercy Medical Center issued a statement on Monday indicating that the Canton hospital already shares pricing and quality information and ''supports educated, informed consumers.''
'' . . . Quality and pricing reports are just one tool for consumers, who should also talk with their physicians and check their health insurance coverage when making choices about their health care,'' the statement said.
Officials at Robinson Memorial Hospital ''do not have any concerns about patients voluntarily sharing our contract rates because we provide low-cost, high-quality care to our patients in Portage County and beyond,'' said Carl Ebner, the hospital's vice president of finance.
''We believe in transparency and have no qualms about sharing our prices.''
Ebner noted, however, that federal regulations and contract terms forbid hospitals themselves from telling competitors the payment rates they negotiate with insurers.
Cheryl Powell can be reached at 330-996-3902 or
[Gee, I think that's twice what my parents paid when I was born in that Alliance hospital (well, the old one, not the beautiful new one they have now). KBB]

RH Jones: Another reason the legislature should back HB 315

RH Jones to John Curry, April 16, 2008
Subject: Re: An oldie (1-28-08) but a goodie from the Plain we know another reason why public schools are hurting!
John & all:
If it were not for charter schools in Ohio, the Ohio School Boards could afford heath care (HC). in retirement for their career teachers. That is not an opinion, but quite obviously a fact. And where was the conservative-dominated OSBA when these types of schools were being proposed in the legislature? They now should back H.B. 315 to provide that needed HC.
RHJones, a retired Ohio STRS teacher member

Another reason why public schools are hurting

From John Curry, April 16, 2008
Subject: An oldie (1-28-08) but a goodie from the Plain we know another reason why public schools are hurting!
Cleveland Plain Dealer, January 28, 2008
324: Current number of charter schools in Ohio.
80: Amount in billions Ohio taxpayers have paid to charter schools since 1998.
40: States with charter school laws.
4,100: Number of charter schools in the U.S.
1.2: Million enrolled in U.S. charter schools.
SOURCE: Ohio Department of Education, Center for Education Reform

A joke?

Would be funny if it were not so true!!!
My father-in-law had prostate surgery. We brought him to the hospital at 7:30 a.m., and he was operated on at eight. We were amazed when the hospital called at noon to tell us he could go home.
Two months later our beagle, Bo, also had prostate surgery.
When I brought him in, I asked the veterinarian what time I should pick him up. The vet told me Bo would remain overnight.
"Overnight?" I said "My father-in-law came home the same day."
The vet looked at me and said,
"Bo's not on Medicare!"



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