STRS FLASHBACK - 5 Years Ago - Just how much more can one become appalled?

From John Curry, October 10, 2009

As I made my morning coffee I decided to check out an old STRS article disk and, to my surprise, I found an STRS article from exactly 5 years ago. I'm glad I did!

Some things have changed....some haven't. I know one that has significantly changed.... the health care monthly insurance premium that STRS wants to insure my spouse and myself. As the article states, back then (2004) STRS wanted $562 per month for an 80/20 PPO to insure my wife and myself. That figure was after STRS "trashed spouses," which means that they dropped paying any subsidy toward the spousal insurance premium. Today, that same 80/20 PPO through STRS is $976 (of course with some higher deductibles)! Let's see, that's a $414 increase in just 5 short years! Put another way, that's a 74% increase on top of an already ungodly high insurance premium. A reality check with a friend, who also retired from a public service job with Auglaize County government, revealed that he still pays only an $80 per month premium for an 80/20 PPO under OPERS to cover himself and his spouse....the same that he did back in 2004! My, my...OPERS must be doing something right!!

Anyway...you get the drift, don't you? I am still "appalled" after 5 years and, after you read this flashback, I think you will be appalled also.

John

P.S. I wonder what STRS has spent for "tuition reimbursements" since 2004? I wonder if it is still "double" what Ohio's four other pension systems have spent combined from 1999 to 2004? That would be a good question for an investigative reporter, wouldn't it? Now...to finish my coffee.

Retirees appalled by pension fund perks

Workers enjoy tuition, child-care benefits

Cleveland Plain Dealer
Sunday, October 10, 2004
Ted Wendling
Plain Dealer Bureau

Columbus -- The State Teachers Retirement System has shelled out more than $2 million in tuition reimbursements to its employees since 1999, double what Ohio's four other pension systems have spent combined.

While STRS' commitment to continuing education may mean the 634-employee retirement system has the best-educated pension fund work force in the state, retired Chillicothe schools Superintendent Dennis Leone is convinced the disparity is further evidence that STRS administrators "don't have a lick of sense."

Noting that STRS employees also have a 37½-hour workweek and receive up to $5,000 a year for each child they adopt, Leone said the educational stipends "seem to fit with the other examples of employee perks that STRS has generously provided to its employees using pension money."

"I don't think that's right, nor do hordes of retirees in this state," he said.

STRS Executive Director Damon Asbury responded that he and the board have gone to great lengths to withdraw or reduce some of the employee benefits that have left retirees steaming as they have watched their healthcare costs soar. But he defended the tuition reimbursement policy, noting that employees must take courses to improve or acquire skills necessary to perform their jobs.

"If you look at most school districts, there is reinforcement and recognition for continuing education and training, and I think our organization reflects the same need," Asbury said.

"The business that we're in, while it's not education, requires a high level of education and ongoing training," Asbury said.

Ohio's other large pension system, the Public Employees Retirement System, has spent about $812,000 since 1999 on tuition reimbursements. Two smaller pension funds - the State Employees Retirement System and the Ohio Police & Fire Pension Fund - have spent a combined total of about $231,000. The State Highway Patrol Retirement System doesn't pay tuition reimbursement.

Critics of the tuition policy and other employee benefits are particularly incensed by the perks because they come at a time when retirees' healthcare premiums have soared and their spousal coverage has disappeared. While skyrocketing healthcare costs are a national trend by no means limited to Ohio's pension funds, STRS has been targeted for criticism by many retirees because of past spending practices.

STRS has been under fire since summer 2003, when The Plain Dealer reported that the fund had paid out $14 million in employee bonuses while it was losing $12.3 billion - 21 percent of its investment assets.

Since then, a large number of retired teachers, calling themselves Concerned Ohio Retired Educators and attired in red, black and white "CORE" T-shirts, have attended the board's monthly meetings in Columbus to criticize employee perks and complain about their own healthcare bills.

John Curry, 56, a retired elementary school teacher from Wapakoneta, took a job as a security officer last year after STRS informed him that healthcare coverage for him and his wife was jumping from $344 to $562 a month.

Curry said the couple now pays $112 a month for the same coverage that, under the STRS plan, would cost them $676 next year.

"I went back to work so that I could afford healthcare," he said. "I'm lucky enough to be able to go back to work, but I feel sorry for my brothers and sisters in the teaching profession who might not be able to do so."

Asbury agrees that healthcare and good stewardship of the pension fund's $54.2 billion investment portfolio are "the major issues" for STRS. But he said it was unfair for older retirees to compare their healthcare costs to those of STRS' younger, and presumably healthier, work force.

Asbury disputed the contentions of some CORE members that STRS employees have seen no increase in their healthcare premiums in recent years.

"Our associates have stepped up and increased their premium costs," he said. "They went from paying essentially nothing to almost 20 percent of the premium."

Leone and Tom Curtis, a retired industrial technology teacher from Canton, also chafe at other benefits STRS provides to employees. They include the 37½-hour work week, the adoption stipend and subsidized child care.

Before retirees raised a ruckus, STRS paid about $500,000 a year to defray employees' childcare costs. Administrators have whittled that benefit to about $190,000, which the 56 employees who use the on-site childcare facility are "repaying" by giving up two vacation days and working two hours a week of uncompensated overtime.

That arrangement flabbergasts Leone.

"That's like saying I'm going to have my son plant a bush in front of my house. I wasn't going to have that bush there to begin with, but I'm not going to pay him, and that's the way I'm going to save 40 bucks an hour," he said. "It's just crazy."

Asbury said STRS began offering the adoption subsidy in 1997 at the request of the late R. David Thomas, an adoptee who later founded the Wendy's hamburger chain. STRS spokeswoman Laura Ecklar said four employees have received a total of $16,073 in adoption payments since then.

As for the 37½-hour workweek, Asbury said it's "a practice that goes back for many years. I'm not sure of the genesis of it, but that will be looked at" in a comprehensive audit that state lawmakers have asked the Ohio Retirement Study Council to do on the five pension systems.

The audit is expected to be completed early next year.

State Sen. Kirk Schuring, a Canton Republican who has been critical of some of STRS' employee perks, said he wants to read the audit before urging further reforms.

"It appears that there are still some things that are happening there that are above and beyond the industry standards," he said. "The issue, however, is once you offer certain benefits . . . it makes it difficult to make wholesale changes."

Asbury said he has worked hard to earn retirees' trust by meeting regularly with CORE members and responding to their many requests for public records. He also pointed to numerous policy changes the board has made, including:

Reducing expenditures for 2003-04 to $74.4 million, $7.9 million less than budgeted.

Ending the bonus program for noninvestment staff.

Limiting board travel reimbursement to $6,000 a year per member, with no member being allowed to take more than three trips a year.

Taking away STRS vehicles that the fund had allowed eight executives and their family members to drive.

Reducing the payroll from 735 employees in 2002 to 634 today.

"I understand that our first priority is to make sure that our expenditures are reasonable," Asbury said. "I'm committed to that."