Letters from/to Tom Curtis and others

Tom Curtis to Mike Nehf & Board, August 21, 2009
Subject: 082109 Curtis To Nehf, STRS Staff Cost Reductions

Hello Mike,

Now that we the stakeholders have seen what recommendations you and the board are recommending to the ORSC, it is time to see what reductions you will be making concerning the STRS staff.

In a recent email, you indicated to me that all of the possible cuts I had recommended were being considered.

So, what cuts have you and the board authorized for the staff? Please be specific and include the dates when they will take place.

I look forward to a timely response.

Tom Curtis - 1998 retiree

Tom Curtis to Michelle Jump, August 22, 2009
Subject: 082209 Curtis To Jump, Re Budget Reductions

Hello Michelle,

After reading your response below, with all due respect, what you listed as budget reductions means very little in true savings. I do not know what position you hold at the STRS, but you really do not understand how little what you stated as reductions actually means.

During this decade, the STRS management and staff has lost $42+ billion dollars of the funds we need to provide our pension and benefits. That money is gone! That is huge, and yet, the STRS administration and staff has made few reductions, to my knowledge, that appear to save anything compared to the amount of reductions that we your employers have had to endure.

It would seem that many STRS employees simply do not get it. Your only job as our employees is to provide us with a guaranteed pesnion and benefits we were promised all of our careers, while paying into the STRS.

I retired in 1998. Just look at how many of the pension benefits I was promised at that time have been reduced or eliminated? If my benefits are going to take such a huge reduction, then the employees should receive the same reductions, because you have not given us value for our dollar placed in your hands.

Tom Curtis - 1998 retiree

Michelle Jump to Donald Hyatt (date ?)

STRS Ohio has taken steps to reduce the operating budget. This includes freezing salaries for all STRS Ohio associates through June 30, 2010; implementing a 40-hour work week as of January 1, 2010, with no additional pay provided to associates currently working 37.5 hours per week; eliminating the payment of Performance-Based Incentives to eligible Investment Department associates whenever the total investment return is negative for 2010 and beyond; and putting a cap on the number of STRS Ohio associates.

Sincerely, Michelle Jump
STRS Ohio

From Donald Hyatt, Thursday, August 20, 2009
To: HCQuestions
Subject: COLA

I would think that you would do what the public is asking many of our state teachers to do. Refuse to take raises. Many of the retired Ohio teachers are in a precarious position. You should do everything to help them. Many of them have served the public for many years and have relied on the STRS for their existence. I would guess that the age of all the people working at the STRS office may adjust to the harsh environment than people who are living on their STRS benefits. Perhaps you could cut back on staff. Perhaps you could cut back on bonuses and raises. Perhaps you could cut back on perks.

Teachers, STRS employees and administrators, are much more marketable than some 70+ retired teacher. Perhaps it is time to downsize at STRS.

Donald Hyatt
Retired teacher (Ashland, Upper Arlington, and Worthington Public Schools)

Tom Curtis to Bob Stein, August 23, 2009
Subject: 082309 Curtis To Stein, The Same Tired Old Excuses

Hello Bob,

Once again, I wish to thank you for becoming a board member. I feel you have the necessary background and experience needed to make the many decisions that will be placed before you in the next four years. If you do not, I feel you probably have enough contacts in the financial world to obtain a balanced view of the situation or direction you will be asked to vote on. I cannot think of a more contentious time to be coming onto the STRS board. I sincerely wish you the best!

I have been reading some of the written responses that you have been making to STRS stakeholders. I highly commend you for your efforts and hope that you will continue to respond to stakeholders throughout your term. This practice is something that would be expected of a board member, but has been ignored by most currently on the board. That shows just how unqualified those board members truly are. They cannot offer explanation for their actions, because they really do not have a clue about what they are doing there.

Your statement to one person, "Thanks for writing. Responding to questions sometimes helps me think more clearly," is very admirable, but in my mind is very true. I hope that continues to generate positive thinking for you, because you will continue to respond to your stakeholders.

Bob, that one statement gives me great hope that you will ask many questions of the STRS administration and require them to justify their recommendations far more closely then your fellow board members ever have, with the exception of Dennis Leone and John Lazares.

What troubles me, is that I continue to hear the same old tired reasons for making payment to the investment employees that I have heard since 2003. I do not for one minute believe many of them.

First, the STRS would not be in the financial situation they are currently in, if they had listened to the very people that have been trying to bring about reform concerning the mismanagement and misspending that has been the mainstay of operation at the STRS since the OEA and Herb Dyer went to bed with one another in 1992. That improper association has been the downfall of our retirement system. To my knowledge, none of the other four retirement systems have such a relationship with the union and management, as does the STRS. This must be stopped!

Now, I realize that the investment industry, outside of the retirement systems, has a well-established method of payment to its employees. In my opinion, that really should not apply to those at the STRS. We are not comparing apples to apples. Do any of those outside investors have a guaranteed defined benefit pension plan like the OPERS? Do any of them offer a fully vested 30-year retirement plan? I seriously doubt it. It is a known fact that Herb Dyers' salary was based in part on the number and amount of bonuses paid to his employees. That is just plain wrong! This kind of culture still exists at the STRS, because of the management team that existed during Dyers' tenure; the vast majority still remains. So, how do you change their way of viewing this? That is going to be tough.

I also continue to hear that the STRS investment team has faired better than the Wall Street investors have. Jim McGreevy stated yesterday in a response to an active stakeholder that, "Our investment staff generally out-performs the big Wall Street firms while being compensated at about 21% of those New York investors' salaries." That may be true, but again we are not comparing apples to apples. If our investment people could leave the STRS and make that much more money, they would be gone and I do not believe that has been the case. Ask them to document the loss of investment people to the big firms, or to other retirement systems. Besides that, the STRS investors have not out-performed the investment people of the other four retirement systems in many years.

Bob, the bottom line is this, we the stakeholders continue to be given reasons for the failure of our management to pay the benefits we were promised throughout our careers, that are truly not the case.

Since 1920, when the STRS was founded, management's only responsibility has been to satisfy the needs of the retiree for the rest of their life. What is so darn difficult about that premise? They do not and never have been responsible for making a product to satisfy those needs, as does industry. Management has always had a substantial flow of dedicated income to work with, until recent years. So, why have we the stakeholder paid so many individuals so much more money then we ever were paid, to be such failures at their jobs? I do not want excuses I want results!

As in industry or any other enterprise, if the desired results are not garnered, then the people in charge are replaced. Few have been replaced at the STRS. They simply get to retiree, as did Herb Dyer, with a $550,000 dollar parachute. If it were not for Dennis Leone, Damon Asbury would have received payment off of our backs, for 200 sick days that Herb Dyer allowed him to bring with him from his last position. 200 days that was not eligible for payment in that position. This is the kind of greed and mismanagement that has plagued the STRS since Herb Dyer became the CEO in 1992. Just think of the thousands of other corrupt deals that have taken place while the very same administration that we now have has been in control of our funds. This whole situation disgusts me and angers me beyond all reason. Please know that you will have a strong contingency of stakeholders behind you, if you can make any inroads concerning the reform of the policies and practices that have taken our retirement system into a downward spiral since 1992.

Tom Curtis- 1998 retiree

Michele Hahn to Tom Curtis, August 22, 2009
Subject: RE: Tentative STRS Plan as proposed by the STRS Administration

You are very knowledgeable about the whole retirement system and how it works. Being only 12 years into my career, I am not as well informed. I was wondering between my husband and myself we put around $1,200 dollars a month in the system. I was wondering if it would be more beneficial to remove the money and place it in our own investments? I do worry about health care and so forth. I also don't know if we have to pay into this system--is it a choice? Thanks, Michele

Tom Curtis to Michele Hahn, August 23, 2009
Subject: 082309 Curtis To Hahn, Re: Tentative STRS Plan as proposed by the STRS Administration

Hello Michele,

I am sorry to say that was not at all informed about our retirement system when I was an active teacher. I didn't have time to be informed, nor was there a need to be until 1992, when Herb Dyer became the new executive director. I am sure the lack of time to become aware has continued to be the number one reason for many actives today.

However, with the many changes that have occurred since I retired in 1998, I have had to be concerned, or risk the chance that things will get even worse. My greatest fear is that I will eventually see the reduction of my guaranteed pension.

Since January of 2004, when the spousal and dependant children subsidy was removed from the retiree's benefits, it has cost me in excess of one third of my pension to pay for HC for my non-teaching spouse and I. That amounts to approx. $14,000 per year for us, compared to the $30 per month for a 90-10 plan when I retired. Talk about a rude awakening! Besides the huge increase in cost, the coverage is nothing like it was when I retired. We were always promised a "Cadillac" HC plan. That promise had to be broken, due to the improper management of our retirement system, the lack of leadership within the OEA and the way HC is now delivered in the US. Thank heaven that we live within the six counties that AultCare covers in this state. Their costs are far more reasonable then Aetna or Medical Mutual, which the vast majority of retirees are mandated to accept, if they keep their STRS plan. Those two plans cost in excess of $1000 per month for those under the age of 65. That is just the cost of the plan. That does not cover co-payments and out-of-pocket expenses.

Michele, I assure you, that had it not been for Dr. Dennis Leone and CORE getting involved in 2003, things would be much, much worse today. The management of the STRS and the OEA has seen to it that they are paid well and clearly think of themselves first, beginning in 1992. The salaries paid to the management of these two organizations today is sickening, compared to that of the majority of those they represent. I can show you documentation of the figures that would do little but make you upset, to say the least. In 2008, the top two investment people at the STRS where paid in excess of $500,000 dollars. The STRS had already lost several billion dollars at that time and showed a loss for the year.

To answer your questions, you already had the opportunity to place your retirement investment in a defined contribution fund with the STRS, but that has certainly not faired better then the defined benefit plan since it's inception. So, if you are in the DB plan, your money is better off, at this point in time. I do not know this for sure, but I doubt that you have the choice to not contribute to the STRS. That is an interesting question though. I just attempted to contact the deputy director of benefits at the STRS, Sandra Knoesel and left a message for her to call me. I hope to find out the true status of your question.

It is my hope that the HC issue will be solved soon by our government. The HCSF at the STRS is in a death spiral today. That means no matter what they do with those funds, they will not be there for you when you retire. That fund is expected to run out of money within the next decade. However, actives still are donating 1% of your contribution to the STRS to the HCSF today. The OEA continues to make it look as though they are doing so much for the active teacher, when in fact, they are the reason for the failure to provide HC for us for life in the first place. They never made HC funding a top priority. They never found a dedicated flow of income to properly fund it and knew well in advance in the early 90's that the cost of such was going to be increasing drastically.

It is my opinion that whatever the OEA has gained for us in collective bargaining, while I was an active teacher, they have advocated it being taken away as a retiree. The OEA is a double agent. They promise you all kinds of things while you are an active and pay them the huge amount of dues you are required to pay, but once you retire, they will no longer represent you. That was a shocking revelation to me. No one thinks about that when they are an active. No one would think they would simply kick you to the curb when you retire. Yes, they have a retiree leg, OEA-R, but they have little to no say- so in the operation of the OEA.

It is my sincere hope that you and other actives will stop paying into the OEA, because they really do not serve the teacher as they once did. In my eyes today, they have become irrelevant! The people in charge, such as Bill Leibensperger, are social climbers and little else.
Tom Curtis