Lima News....'Local retired teachers supporting bill'

From John Curry, May 12, 2009
Huffman bill would cut STRS bonuses
Local retired teachers supporting bill
Lima News, May 12, 2009
Beth L. Jokinen
COLUMBUS -When the State Teacher Retirement System (STRS) is losing money, local retired teachers and one local state representative believe it is no time to be handing out bonuses.
Ohio Rep. Matt Huffman, R-Lima, introduced legislation this week that would ban STRS performance-based incentives when the retirement fund is not making money.
The board suspended its existing bonus program for the second half of fiscal year 2009, which ends June 30. The suspension means the payments are based on just the first half of fiscal year 2009. Preliminary reports show bonuses likley paid for fiscal year 2009 to about 90 employees total nearly $3.4 million, Huffman said.
"All of these employees who are to receive these bonuses are already compensated for the work they perform, with some earning a six-figure salary," he said. "When many Ohio citizens are losing their retirement investments in this economy, how can STRS of Ohio justify giving these bonuses?"
The STRS board is scheduled to vote on the preliminary 2009 bonuses in September, but it could occur sooner. STRS spokeswoman Laura Ecklar said it is standard procedure for the board to vote on the bonuses after the fiscal year ends. The bonus plan for fiscal year 2010 is still under discussion. Possible changes are being discussed, Ecklar said.
"They are very aware of the issue of compensating investment professionals in times of significant market downturn," she said.
The bonuses are for investment staff. They range from $162,488 to $480. The top salary exceeds $300,000, according to George Doyle, president of the Allen County Retired Teachers Association. The average salary is $156,000. While the bonuses were suspended, Doyle said, employees received raises.
"In business and industry, when they are losing money, they certainly do not take on more employees and give them bonuses. They cut back," he said.
The retirement fund lost $33.2 billion over the past 16 months, Doyle said. It now sits at $47 billion. The stock market lost $33.3 billion. A March newsletter sent to STRS members maintained the bonuses were justified because the fund could have lost more than it did, Doyle said.
Huffman's bill specifically says that in any year with a net negative return, no bonuses will be paid.
"My big issue is I don't think there should be bonuses paid when what is paid out to the teacher could be potentially damaged or less," Huffman said.
John Bos, of the local retirement group, said some states eliminated the bonuses. The group is lobbying Ohio Gov. Ted Strickland to intervene.
http://www.limaohio.com/news/bonuses-37288-huffman-bill.html