RH Jones: Past raids on OH STRS seed investment funds
From RH Jones, December 29, 2009
To the new STRS board and the new STRS key employees,
Re: past raids on OH STRS seed investment funds
It may not be generally known or recognized by the new STRS board, the new STRS key employees, our present union officials, or even some of the active and the retired educators younger than I, that: in the past both political parties here in Ohio (OH) have raided our the STRS funding. These lost funds were necessary to multiply our investment assets. The culprits were the 60th Gov. of OH, Michael Di Salle (D), 01-12-59 thru 01-14-63 and, later on the 63rd Gov. of OH, James Rhodes (R), 01-13-75 thru 01-10-83. Thinking that our STRS had surplus funds, they used our STRS money to prop up the OH general fund. Yes, they eventually paid the principal back, but not the lost interest income. Our STRS is still smiting from that loss of that investment interest revenue. Our STRS is our PENSION system to serve us educators in our retirement; it is to serve no one else.
After the 2nd raid happened, in order to best use our money (that politicians thought was excessive) was for the STRS to spend it in the form of the very fairly calculated 13th check. So, since that time, to keep our surplus seed funds away from greedy politicians, the astute and informed STRS officials went about issuing it for at least 25 years. This was the result of intelligent investment decisions leading to doing the right thing: serving our educator’s pension system. Also, the Ad Hoc increases in our base about every 10-years served to distribute our accumulated pension funds were it should be: in the pockets of the pensioners, not in Ohio’s general fund.
The conclusion, therefore, is that it is sad that STRS must spend down seed money to keep it away from those politicians or STRS officials who may wrongly think it is theirs to spend, not ours. Helping those of us retired did not create the funding shortage, the past unethical, usurping, removal out of our seed funding pool did. That misuse, created the need for a raise in the employer/employee contribution to STRS. Back when Gov. DiSalle and Gov. Rhodes were dipping into STRS funds, where were the OEA and ORTA? Where were they in the year of unethical exploits at the STRS in 2000? Where are they now when we need them?
In particular, the promises made to retired generations must be kept. As educators complete their professional careers and go into retirement, they must realize that in 15 years or so, they too will need their simple 3% COLA, ad hoc raises in the base, and due to their age will need more HC/Rx. To keep future retired members off Medicaid, periodic upgraded enhancements are a necessity, and this is not ignorant misuse of the STRS seed funds.
By the way, I was way wrong if when I mentioned taxpayers had a 25% stake in our STRS. They do not. On several previous emails I have always correctly contended that the employer/employee contributions are taken from the school board budget that goes directly to the cost of professional personnel. Therefore, active/retired STRS members are the sole stakeholders. I am sorry that I failed to remember that.
RHJones, Life Member of OEA, OEA-R, ORTA and proud CORE member
To the new STRS board and the new STRS key employees,
Re: past raids on OH STRS seed investment funds
It may not be generally known or recognized by the new STRS board, the new STRS key employees, our present union officials, or even some of the active and the retired educators younger than I, that: in the past both political parties here in Ohio (OH) have raided our the STRS funding. These lost funds were necessary to multiply our investment assets. The culprits were the 60th Gov. of OH, Michael Di Salle (D), 01-12-59 thru 01-14-63 and, later on the 63rd Gov. of OH, James Rhodes (R), 01-13-75 thru 01-10-83. Thinking that our STRS had surplus funds, they used our STRS money to prop up the OH general fund. Yes, they eventually paid the principal back, but not the lost interest income. Our STRS is still smiting from that loss of that investment interest revenue. Our STRS is our PENSION system to serve us educators in our retirement; it is to serve no one else.
After the 2nd raid happened, in order to best use our money (that politicians thought was excessive) was for the STRS to spend it in the form of the very fairly calculated 13th check. So, since that time, to keep our surplus seed funds away from greedy politicians, the astute and informed STRS officials went about issuing it for at least 25 years. This was the result of intelligent investment decisions leading to doing the right thing: serving our educator’s pension system. Also, the Ad Hoc increases in our base about every 10-years served to distribute our accumulated pension funds were it should be: in the pockets of the pensioners, not in Ohio’s general fund.
The conclusion, therefore, is that it is sad that STRS must spend down seed money to keep it away from those politicians or STRS officials who may wrongly think it is theirs to spend, not ours. Helping those of us retired did not create the funding shortage, the past unethical, usurping, removal out of our seed funding pool did. That misuse, created the need for a raise in the employer/employee contribution to STRS. Back when Gov. DiSalle and Gov. Rhodes were dipping into STRS funds, where were the OEA and ORTA? Where were they in the year of unethical exploits at the STRS in 2000? Where are they now when we need them?
In particular, the promises made to retired generations must be kept. As educators complete their professional careers and go into retirement, they must realize that in 15 years or so, they too will need their simple 3% COLA, ad hoc raises in the base, and due to their age will need more HC/Rx. To keep future retired members off Medicaid, periodic upgraded enhancements are a necessity, and this is not ignorant misuse of the STRS seed funds.
By the way, I was way wrong if when I mentioned taxpayers had a 25% stake in our STRS. They do not. On several previous emails I have always correctly contended that the employer/employee contributions are taken from the school board budget that goes directly to the cost of professional personnel. Therefore, active/retired STRS members are the sole stakeholders. I am sorry that I failed to remember that.
RHJones, Life Member of OEA, OEA-R, ORTA and proud CORE member
posted by Kathie Bracy at 3:49 PM
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