Lloyd Knudsen's prepared speech for STRS Board meeting

From Lloyd Knudsen, April 20, 2009
Subject: STRS speech
Hi CORE leaders!

As many of you already know I didn't get to fully deliver my "prepared" speech today at the STRS meeting. Due to the Board's already published COLA recommendations, I decided it was more important to use my 3-minute speech time to ad lib some comments about our COLA. I did take

the opportunity to read the first two paragraphs of my speech praising Dennis for all his STRS contributions. Here is the speech I planned to give.

Lloyd

My name is Lloyd Knudsen. I was a 30-year teacher in the Woodridge Local Schools of Summit County. I am currently the President of the Medina County Retired Teacher’s Association.

I would first like to commend Dr. Dennis Leone for the all the positive changes he helped bring to STRS. But perhaps Dr. Leone’s greatest STRS legacy will be receiving that OEA label of “dissident” board member. Thank God we had one board member who had the insight and backbone to disagree with STRS management. Every active and retired teacher owes Dennis Leone a debt of gratitude for being their “true” representative to this board.

Maybe, if we had had a dissident on past STRS boards, our health care program might not now be on life support. For 20 plus years the employer’s 14% contribution rate has not been increased. Maybe another dissident would have pushed for an increase in that employer percentage. And just maybe, if we had done it when times were good (like when we built this beautiful building) the legislature would have passed it. Sadly, our health care fund limps along on a 1% employer contribution and retirees continue to pay for the STRS management and board’s lack of proactive planning.

Maybe, if we had had a dissident on our board earlier this decade when the recession cost STRS $20 billion in stock losses, our pension program might not now be on life support. STRS’s reaction back then to those losses was--it’s “only a paper loss” and we’ll earn it back. Now our current recession has cost STRS another $40 billion—and suddenly we realize we’ve got a financial crisis on our hands. Other states (one I’m familiar with is Minnesota) years ago enacted minimum retirement age requirements for actives as well as other changes to combat their pension problems. Sadly, our pension system is now in crisis and BOTH retirees AND actives will pay for the STRS management and board’s lack of proactive planning.

So who will pay to get our STRS financial ship back on course? Certainly not STRS itself. They plan no cuts or reductions for themselves. This leaves the financial burden up to the active and retired teachers.

In fact, the current debate seems to pit the benefits of actives vs retirees. I find this rather ironic. For 30 years I was an active teacher. And for 30 years I paid my “dues” annually to OEA, NEA, as well as to my local association. But once you retire, you are no longer part of their team. Also, for those 30 years I paid my dues to STRS in the form of the employee pension deduction taken out of my paycheck every 2 weeks. I believe retirees have paid their dues to OEA and STRS in full!

When this board is deciding what pension changes you will make, I hope you will consider most retirees have few, if any real financial options at this point in their lives.

As retirees, our contributions to our retirement system have been devalued by STRS comments like-- retirees are “just living too long” and the retirees’ COLA is STRS’s “largest expense”. I hope you will remember that STRS was built by and made successful by active teachers who grew up to become retired teachers. WE ARE THE REASON THIS SYSTEM WAS CREATED AND STILL EXISTS TODAY!

Thank you for listening.