Ralph Roshong's speech (outline) to STRS Board, May 14, 2009

May 14, 2009
To: STRS Board Members
Fr: Ralph Roshong, Retiree
Re: Comments

Both our pension fund and healthcare fund are in extremely poor positions. Ironically, our Social Security and Medicare Funds are both in the same or worse condition. Our two funds need immediate attention with changes that will improve the life of the funds and the type of changes that the Legislature will support immediately. It can be done if the Board and Staff make the HARD DECISIONS promptly.

1. Thoughts on Pension criteria changes:

a. A minimal retirement age must be established, 60 would be prudent. Rule of 90 would not be prudent, as it would allow retirement at 57 with 35 years. No savings.

b. Establish FAS over at least 5 years.

c. Reduced COLA to 2%

d. Retirement formula must be changed to straight 2.2 %

e. Additional revenues must come from teachers not boards of education. Additional funds should be split between healthcare and pension.

2. It is extremely unfortunate that the Board has failed to put in place an investment bonus program that is appropriate. Now the Legislature is involved.

3. Bonus program must be modernized. No bonuses awarded if the annual goal for the pension fund is not met, currently 8%. Then a very simplified formula should be devised if the goal is exceeded, again currently 8%.

4. You must review staff benefits, and provide the same healthcare coverages that are going to be imposed on the retirees, higher deductibles, increased premiums, etc.

5. When and if the pension fund is healthy, the 13th check program should be reinstituted to provide a boost to retirees.

6. If there is one area that should be protected, in my opinion, it is those retirees whose benefit might be below the government’s Self Sufficient income level, which I understand to be about $20,000. I also understand there might be approximately 769 of such retirees. For those, I propose they be protected from any further increases in their healthcare premium costs.

7. If at all possible, I would propose consideration be given to making Medical Spending Accounts available to retirees. This tax protections would certainly assist many in cushioning their out of pocket medical expenses.

8. Most all of these drastic changes must be approved by the Legislature. We know they do not move quickly. Consequently, you must move quickly and without delay, and recommend changes the Legislature will promptly support.

XC: State Legislators