Ralph Roshong's speech to the STRS Board, December 10, 2009

Goldman Sachs is going to be paying out $23 billion in bonuses to their "investment staffs" after having the federal government, that is "we taxpayers", bail them and other Wall Street firms out of bankruptcy. There are many other firms operating the same way. I am sure that these same investors and top management leaders were an integral part of the whole Wall Street Gang who played loose and wild with investors' funds and caused the worst financial dilemma this country has witnessed since 1927. I am a firm believer in our capitalistic form of economy, but this scenario is absolutely appalling to me and, I believe, 99% of our country's citizens.

And you, the Board, and our investment department want to pattern our staff's pay packages after that obscene example, as the "salary consultant," I believe, now wants to use the 50%ile of Wall Street as a benchmark instead of the current 25%ile.

Last month you heard from a Salary Consultant you employed to provide his and/or his firm's opinions on how much our investment personnel should be compensated. If I recall correctly, he said their base salaries should be increased ONLY 2-3%. Has the consultant read anything about what raises are being given other wage earners in our state our country and where the CPI has been lately? You do know that a salary consultant's task is to keep all their clients' wages spiraling upward, or they are out of a job. After he gets our salaries and bonuses increased, he then goes back to the Wall Street firms and says, "Look where the STRS personnel are and we have to get yours higher now." He then talked about bonus percentages and, I believe, recommended a scale of only 17.5% to 90% bonus rates for staff. I THINK THIS IS ABSOLUTELY ABSURD! First, the investment staff's base salaries are already highly differentiated, I presume, by responsibility. Why would we want to apply a highly differentiated scale of bonuses to their highly differentiated base salary, a monumentally disproportionate amount? If any bonus is paid at all, apply the same appropriate percentage to all of their already differentiated salaries.

I believe your stated annual goal for our fund's growth is approximately 8%, and I am not sure if this is accomplishable in light of the fact that we have not even averaged that amount over the previous ten years in a much better economic climate. Now look at the disparity in the percentages, 8% growth for our pension fund, but the bonus percentages are anticipated to range from 17.5% to 90%. I assume I missed something somewhere in relevancy. Why not establish a bonus program, that if the fund reaches their stated goal of 8% for the year, the investment personnel each get an 8% bonus?

Then I believe you reinstituted the bonus program, but "deferred" payment. What is that move all about? They either earned it, in which case, pay it; OR they did not earn it, in which case, don't pay it. Defer appears to me to be a political term and move that says, "this will allow the membership to forget it for a while and the topic will cool down."

On another point, I would hope the staff is giving some thought to assessing our building space and whether there might be any feasibility in attempting to lease space to other tenants, possibly the other pension funds, ORSC, or similar organizations. Would a staff member please be kind enough to provide me the number of square feet in our building that is useable as office space?

On still another note, I hope the changeover of software for the staff is progressing well.

Thank you very much for providing myself and others the opportunity to express our opinions to the Board. We are in fact very appreciative of your efforts on our behalf.