Tom Curtis: Response to George Doyle

From Tom Curry, February 18, 2009
Subject: 021809 Curtis To Doyle, Re Outlandish Raises

Hello George Doyle,

From reading your letter to the Board chair, you seem to have your concerns directed at the wrong person or persons. The Board is and has been the real problem for approximately 3 decades now.

The people that have sanctioned all of the outrageous costs of the operation of the STRS are the board members, not the Director. He truly has no authority to do so any longer. Even all cost decisions made above 100 K must be approved by the Board (thanks once again to Dennis Leone).

No one, but the Board, can allow for the outrageous expenditures to take effect.

Mr. Nehf is doing his job, but at a cost far above what it should be in my opinion. Yes, he works for us, but ultimately, he works for his own self interests. He and all STRS staff pay their retirement contributions into the OPERS, which by the way, still offers a HC plan for $80/month, which includes a spouse.

The STRS management has for many years used our money to pay for professional accounting, budgeting and/or consulting services, which in turn call for increases in their salaries. That is what I call a mutual admiration society. The STRS pays these outside sources big bucks to call for salary and program increases. Everyone benefits, but the stakeholder. The STRS staff has grown to the largest of any of the five public employee pension funds, yet we do not have the largest holdings. No one seems to understand this very basic concept and call for change. This is wrong, but until the stakeholders as a group, call for reform, it will not likely happen. To my knowledge, the staff has never elected to take any pay cuts or reduction in benefits, yet the stakeholder has had to do both. This is wrong and they know it!

Please understand, not one employee of the STRS pays one dime into our retirement system. So ask yourself, what has any employee got to lose, other then their employment? The investment people can invest our money at will and have absolutely nothing to lose.

The $6 million paid out recently to the investment staff at a time when our holdings had been reduced by approximately $30 billion dollars would surely document my statement above. Unbelievable!

Our Board is now and always has been run by the OEA by a majority seat vote. The OEA has always purchased the STRS Board seats. Not until Jeff Chapman and Mary Ann Cervantes were elected in 2005, did the OFT come into play. The OFT provided the funds for them to be elected. Few of those on the Board would EVER be elected if their knowledge of what they are asked to make decision on were considered. I feel qualified to make this statement because most have absolutely no background or education in business and finance. So ask yourself, why would I want those people handling my future? I don't, but the unions make that decision. And further, they make it using another dedicated flow of income that comes directly from educators. In essence, we are screwing ourselves. Isn't that ironic?

I welcome any correspondence that can prove any of my statements to be incorrect.

Tom Curtis
STRS Stakeholder