John Curry to Governor's aide: A lesson to be learned from Pennsylvania

From John Curry, January 10, 2009

Subject: Fw: Governor Reply re. STRS investment associates bonuses

Mr. Rakes II,

In viewing your reply (copied below [see Tom Curtis: Letter to Governor Strickland, posted 1/8/09]) to STRS retiree Thomas Curtis I sense that neither you nor the Governor wish to address the concept of investment bonuses paid at STRS but rather you suggest possible points of contact for Mr. Curtis's disagreement with the STRS's policy of paying performance bonuses when our retirement system lost approximately 30 billion dollars in investments this past year. This stance insulates you from the responsibility of "taking a stand" on this issue....something you (and the Governor) apparently feel comfortable by doing.

Correct me if I am wrong but..... hasn't Governor Strickland said that a cut in the state budget is necessary as hundreds of millions of dollars need to be removed from Ohio's current state budget so that a balanced budget can be presented to the Legislature? With this mind, consider the bold (and praiseworthy) stance the Governor of Pennsylvania (Ed Rendell-D) has taken (yes, he had the courage)..... a position re. performance bonuses paid to investment associates at Ohio STRS's comparable agency in Pennsylvania, the Pennsylvania Public School Employees' Retirement System. Below is an article relating to not only the Governor of Pennsylvania's political courage to speak out against their bonuses but also his fellow Democratic Auditor General's position statement re. bonuses paid by their state teachers retirement system. Also, you'll notice that 3 GOP lawmakers also have had the political courage to speak out re. the bonuses.

Mr. Rakes.... governmental leaders on both sides of the aisle in the Keystone State have the political courage to speak out on this issue. It appears as if their counterparts in the Buckeye State have developed a serious case of lockjaw on this same issue, doesn't it?

Below is an article re. the Pennsylvania bipartisan opposition to the payment of performance bonuses by the Pennsylvania's teachers retirement system. Speaking as a retired Ohio educator, I strongly feel that Ohio's governmental leaders could and should learn a lesson from their neighbors to the east.

Thank you for your consideration.

John Curry
An Ohio STRS benefits recipient

3 GOP lawmakers urge PSERS to rescind bonuses

Saturday, December 20, 2008 BY JAN MURPHY
Of The Patriot-News

Three Republican senators are calling for the rescission of bonuses being paid to the investment staff at the school employees' pension system in a year when the fund lost $1.8 billion in value.

"In our opinion, this is an indefensible position and a gross miscalculation on your part," states a letter sent this week to the Public School Employees' Retirement System Executive Director Jeffrey Clay.

The letter from Sens. Jane Orie of Allegheny County, John Rafferty of Montgomery County and John Eichelberger of Blair County urges the board to reconsider its position on the bonus awards.

The system's board last week voted to end the bonus program as of Dec. 31 because of market conditions. But that decision does not impact the $854,113 in bonuses being awarded to 21 members of the system's investment staff.

The bonuses range from $9,720 to $106,223, with the average being $40,672. That is slightly less than the $46,259 median household income in Pennsylvania.

"In a year when the General Assembly and the governor are cutting funds from budgeted programs; in a year when [legislative and top executive branch officials'] cost of living increases are being returned to the state treasury; in a year when the governor is seeking givebacks from state employees, why should you be any different?" the senators said.

Clay said this week that the system was contractually obligated to pay the bonuses for the past fiscal year since they were provided for in board policy. He said the bonus amounts are based on objective criteria that are independently verified, and that no staff member received the maximum bonus they were eligible to receive.

A spokeswoman for the pension system on Friday declined to comment about the senators' reaction.

Earlier in the week, state Auditor General Jack Wagner also said he was appalled by the bonuses. Wagner, a Democrat, called on the board to recover the bonus money that had been paid to employees.

"A public pension system that lost $1.8 billion has no business awarding bonuses to employees," Wagner said.

Pension system officials pointed out that while the retirement fund lost 2.8 percent of its value in the 2007-08 fiscal year, the in-house investors outperformed their peers nationally. Their peers' median return was a negative 4.56 percent for the same period.

They also noted that the bonuses are intended to supplement the investment staff's base salaries that are below the going rate for professional investors in hopes of encouraging them to get a better investment return.

Gov. Ed Rendell in November urged the system's board to not award bonuses, saying it would be inappropriate in these economic times.

On Friday, Rendell spokesman Chuck Ardo was pleased to learn that the Senate Republicans, who often take counter positions to ones advocated by the Democratic governor, shared the administration's outrage over the Public School Employees' Retirement System bonuses.

"We would hope that the PSERS board gets the message," Ardo said.

Congress Needs to Act Now to Prevent a Health Care Disaster

From RH Jones, January 10, 2009
Subject: Some dire information---sharing

To all:

WE need to get this message out to all our people. Please share the info below.
RHJones, retired teacher

ProtectSeniors.Org
January 6, 2009

CONGRESS NEEDS TO ACT NOW TO PREVENT A HEALTH CARE DISASTER

Corporate Claims That Retirees are a Liability to Business is “Morally Offensive” says Retiree Leader

Lately economists, talk show hosts, journalists and even politicians are blaming America’s retirees and union workers for the economic downturn, labeling their earned retirement health coverage as “legacy costs” and calling them too burdensome. “I and tens of millions of retirees like me worked decades to earn those benefits,” said C. William Jones, a retiree from Verizon Communications and President of the 100,000 member Association of BellTel Retirees. “For companies to now imply that retirees are a liability to them and America is morally offensive and absolutely inaccurate.”

Mr. Jones is just one of the retirees calling on the 111th Congress to act immediately towards passage of a bipartisan bill, titled The Emergency Retiree Health Benefits Protection Act (in the 110th Congress), which would prohibit employers from making post-retirement cancellations or reductions of health benefits that retirees were entitled to, without placing mandates on the employers as to what health plans they provide or monetary ceilings on the amount of health benefits.

According to Paul Miller, Executive Director of the national retiree group ProtectSeniors.Org, the situation is as dire as the bailout for the automakers, banking industry and Wall Street. Working the halls of Capitol Hill, the rapidly growing coalition has already garnered the support of retirees from 285 companies, 36 unions, 14 retiree associations and 76 governmental retiree groups.

“There are currently an estimated 18.5 million American retirees and baby boomers with their health benefits being significantly threatened. If cancelled by the corporations they once worked for, most would be dumped into the federal and state healthcare systems. In effect this means their former employers would be getting an additional back door federal bailout at the expense of the taxpayer.”

The health care coverage Miller is referring to is earned retiree benefits that tens of millions of Americans earned and paid for during their working years. He says that for whatever reason, many corporations never socked that money aside and are using the current financial turmoil to threaten further cancellations and reductions. Miller estimates, “if just half of these people (over 9 million) see their earned retiree health care benefits cancelled or significantly cut, it would overwhelm an already overburdened government health care system.”

Retirees say companies used the promise of post-employment health care to induce employees to stay with that employer or, in some cases, to take early retirement. Companies did not agree to pay retiree benefits out of the goodness of their hearts or social well-being; there were significant financial benefits and tax breaks for them.

Employers benefited financially by not having to pay Social Security and payroll taxes on these benefits and funding these benefits could be deferred by companies in years when earnings were low, unlike payroll that must be paid on time. Since pensions are based on a percentage of wages, companies also saved on long-term pension costs.

This past September 25, the House Committee on Education and the Workforce held its first hearing on the legislation. At the time University Of Alabama School Of Law professor Dr. Norman Stein, an expert on the nation’s ERISA pension law testified in favor of the bill, saying Congress should pass legislation “that would make it difficult or perhaps impossible for an employer to terminate retiree health benefits after an employee has retired.” The long time advisor to AARP and the Pension Rights Center advocated Congress to “level the playing field for employees with clear, reasonable, and consistent rules.”

Without action from Congress to protect America’s retirees during the worst economic climate since the Great Depression, a nightmare scenario looms for older Americans that has already claimed retirees of several large corporations. “America’s retirees are not here asking for a handout or a bailout,” said Mr. Miller. “We merely want companies to live up to the promises they made. Give us the health benefits we earned and paid for over decades of loyal service.”

From CORE President Dave Parshall, January 13, 2009

A reminder to CORE members and supporters that while you can sign more than one STRS Board candidacy petition, it will better serve the objectives of CORE if we all back one candidate. The election is on the agenda for our next CORE meeting on January 16, 2009.

Tom Curtis: Letter to Governor Strickland

The Honorable Ted Strickland, Governor of Ohio
State Capitol
77 South High Street
Columbus, OH 43215-6117
January 4, 2009
Dear Governor Strickland,
My name is Thomas Curtis. I am a 62-year-old retired technology teacher and a beneficiary of the State Teachers Retirement System of Ohio. Born and raised in Stark County, I taught there for nearly all my teaching career.
I'm sure you find it very disheartening to make the many budget cuts you have been forced to make during your tenure as Governor thus far, and especially to realize you may need to make many more in the coming year.
As you well know, the loss of accountability by those who run many of our major financial institutions and other organizations has been devastating to our economy, yet few are being held accountable for their wrongdoings.
In my opinion, the management of STRS is no exception. At a time when the STRS had lost $30 billion (in the past year), they still awarded a whopping $6 million to their investment staff. Ten of the STRS bonus employees are receiving more than $200,000 above their salaries this year, which start at a base of $149,565.
Governor, my reason for writing you is to request that you personally write to STRS executive director, Mr. Michael Nehf, and request that he seriously look at the many avenues he has at substantially reducing the cost of operation of the STRS. Recently, he stated there is no need for staff reduction, elimination of the outrageous bonuses, a pay freeze or any other recommendations made by the stakeholders and one enlightened STRS board member, Dr. Dennis Leone. This is just plain wrong!
If there is to be a viable retirement system for future retirees, budget reductions and a revision of current spending policies must occur NOW. The STRS management staff that has allowed for these unreasonably high operational costs should instead be making drastic cuts in expenses, as thousands of STRS retirees are being forced to do.
Thank you for your consideration. I do hope you will personally support this request, as I feel I speak for many STRS retirees.
Thomas Curtis
STRS retiree and stakeholder
North Canton, OH
-----
From: Governor Reply
To: Thomas Curtis
Sent: Wednesday, January 07, 2009 9:58 AM
Dear Mr. Curtis:
Thank you for your correspondence regarding State Teachers Retirement System. The Governor has asked that I respond on his behalf. Unfortunately, the concerns you expressed have to do with an issue that is outside the jurisdiction of the Governor’s Office. Each of the pension systems in Ohio, STRS, Public Employees Retirement System (OPERS), School Employees Retirement System (SERS), the Police and Fire Pension Fund (OP&F), and the State Highway Patrol Retirement System are governed by independent boards or trustees who are responsible for the management of their respective system. If you are unable to resolve your concern with your system’s board you may wish to consider the following two options to find resolution to your concern:
Ohio Retirement Study Council (ORSC)
88 East Broad Street, Suite 1175 Columbus, OH 43215
(614) 228-1346
The ORSC was created in 1968 and is one of the oldest public oversight councils in the country. The Council may “request that the auditor of state perform or contract for the performance of a financial or special audit of a state retirement system.” Ohio Revised Code Section 171.03
Office of the Attorney General
30 East Broad Street, 17th Floor Columbus, OH 43215
(614) 466-4320
“If a member of a state retirement board breaches the member’s fiduciary duty to the retirement system, the attorney general may maintain a civil action against the board member for harm resulting from that breach.” Ohio Revised Code Section 109.98
Again, thank you for contacting Governor Strickland’s Office.
Sincerely,
Wade A. Rakes II
Director of Public Liaison

Wanna see what they're making over at OSU?

From John Curry, January 6, 2009
Subject: I don't agree with them on most issues but....

....on this one - I DO!

Below are 4 links that I think you'll be very interested in...especially if you have a loved one or a family friend who is attending my alma mater - Ohio State. By now, those of you who have read the thousands of emails that I have forwarded and/or composed have realized that I am definitely not "conservative" in most of my views. On this one issue, I will just have to part company with the "old John" and give kudos to an organization that I definitely have many issues with...the Buckeye Institute for Public Policy Solutions. Why, you ask?

Well.....this issue is one of transparency in government......an issue that should be apolitical and one that both sides of the aisle should strive for in a democracy. The Buckeye Institute for Public Policy Solutions has taken the time to reference and catalogue a list of annual salaries in excess of $250,000 at OSU. They are grouped (below) into four categories...a click on each will take you to a listing of the job titles of those OSU employees and their respective salaries....listings that will "open your eyes" to salaries that public school educators (both active and retired) will find to be hard to conceive. Is it any wonder why this state university (and other Ohio public universities, I'm sure) has a tuition that would make even an elderly school marm cuss like a sailor? Click on each of the four links below and I think you'll see what I am talking about! I'm willing to "cut some slack" to those who are MD's....but the rest?

You might want to share this link with family and friends who have students attending OSU.

John

administrative staff
sports staff
professors (non-medical)
medical staff

P.S. Now...if I could just get the Buckeye Institute to do an accurate annual salary listing of all the charter school CEO's in this state I think we could call it "even!" Of course, don't hold your breath on this one! I know that my salary, when I was an active educator, was public information and....I'll bet yours was also.

FLASHBACK -- 5 years ago this month -- "Catcher of Thieves" title bestowed upon....well....you know who, don't you?

From John Curry, January 7, 2009

Catcher of Thieves

Dennis Leone, Chillicothe (Ohio) School District

By Steven Scarpa January 2004

DistrictAdministration.com

Dennis Leone didn't initially intend to play Robin Hood when he heard rumors of excessive spending at the State Teachers Retirement System office in early 2003. But once this Ohio superintendent realized the extent of the pension board's decadence on the backs of retirees, he gladly accepted the role.

Expensive business trips, parties and large bonuses were all paid for using the ever-diminishing assets earmarked for teacher retirement. At the same time in his district of Chillicothe, Leone was forced to slash $1.7 million from the 2003 budget. Gut-wrenching decisions resulted in the closure of three schools and the layoff of 45 staff members.

Meanwhile, whispers about the retirement system continued. While health-care costs skyrocketed and pension assets took a plunge, the system's leaders were still treating themselves like royalty. "Frankly, I didn't believe it," says Leone, who has been a superintendent for more than 20 years.

He wrote a letter in February 2003 asking questions about the spending practices. "In my school district, when we have declining assets, we take steps to cut costs," Leone told the pension board. He got no answer.

Dennis Leone Superintendent, Chillicothe (Ohio) School District Age: 53 Tenure in district: 7 years Educational inspiration: His father's work as a professor and administrator at the University of Kansas Favorite pastimes: Fishing, reading Current reading focus: World War II history (his father landed in Normandy on D-Day). Right now, Leone is reading Tom Brokaw's The Greatest Generation (Random House, 1998). Magazine he's hooked on: National Geographic After 10 weeks of research, Leone confronted the STRS and demanded answers. "I felt like they were trying to get rid of me," he says.

According to information gathered by Leone and released to the Ohio press, administrative costs at the STRS increased 17 percent during a six-year period. Thirty-four employees received bonuses of more than $40,000 in 2002. More than $480,000 a year was going toward child care for STRS employees. Leone's advocacy made him something of a celebrity among teachers in Ohio, where he has spent his entire educational career. The state-level work was a far cry from the personal interactions he was used to having in his own district, where he makes a point to work closely with both teachers and students.

By his own count, he received 400-plus letters and e-mails from throughout the state about his efforts to uncover the truth. After devoting their lives to the children of Ohio, teachers were being betrayed. "Everyone was outraged. We had all been naïve. We had been too trusting, sleepy and ignorant. We thought we were sending our pensions to a bank in Switzerland," Leone says.

The superintendent has pushed the Ohio legislature to put in extra safeguards to prevent his level of malfeasance from happening again. "Dennis has been very outspoken in his frustration," says state Sen. Kirk Schuring. "He has been a tenacious crusader." Schuring has helped devise legislation to provide internal auditing of the pension fund's spending practice. "I think the legislature will respond in a positive way to the measure," he notes.

Moral of the story
Chillicothe's Joyce Atwood, an assistant superintendent, says that the moral stand Leone took in this situation is emblematic of his management style.Devoted to children and his district, he would never take a step to compromise them, she says. For instance, he makes

a point to be at all of the schools' important events and to be a constant presence in students' lives.

It might make for 80-hour work weeks, but it does have its rewards. Last year's high school graduating class dedicated their yearbook to him, an honor he points to with pride.

Atwood says her boss "has a sense of what is right. He feels he has an obligation to help individuals. Projects and issues are handled with justice."

When the day is done, Leone wishes he never had to be in a position to take on the pension board. Although not a naysayer by nature, he says he finds himself being more skeptical, especially about what goes on at the state level. Perhaps he should keep that Robin Hood hat on hand, just in case.

Steven Scarpa is a reporter and freelance writer based in Shelton, Conn.

http://www.districtadministration.com/viewarticle.aspx?articleid=1062

STRS Board meeting January 14 - 16, 2009

From STRS, January 7, 2009

PUBLIC MEETING NOTICE

The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:

Wednesday, January 14, 2009

...Noon -- Staff Benefits Committee

Thursday, January 15, 2009

...11:00 a.m. Disability Review Panel (Executive Session)

.....1:00 p.m. Retirement Board Meeting

Friday, January 16, 2009

.....9:00 a.m. Resumption of the Retirement Board Meeting

The Retirement Board meeting will come to order at 1 p.m. on Thurs., Jan. 15, and begin with a review of the member survey results, followed by a portion of the report from the Investment Department. (Note that the balance of the report from the Investment Department will be presented Friday afternoon.) The Retirement Board meeting will resume at 9 a.m. on Friday, Jan. 16, and begin with a report from the Member Benefits Department regarding pension benefits, followed by a report from the Staff Benefits Committee. The Executive Director's Report is scheduled to begin at approximately 1 p.m. on Friday, followed by public participation, routine matters, old business, new business, the balance of the report from the Investment Department, and any other issues that require the Board's attention.

January, 2009 CORE meeting changed to Friday, January 16

Due to a change in the STRS Board meeting schedule, CORE will meet on Friday, January 16, instead of Thursday, January 15, as previously announced. Details below.

From CORE, January 7, 2009

The CORE meeting will be held on Friday, January 16th at the STRS building at 275 East Broad Street in Columbus. Parking is free in the STRS parking garage behind the building.[Map/directions to STRS, 275 E. Broad St. Columbus, OH 43215] The schedule for the STRS meetings follows below. We encourage you to attend any of the STRS meetings that you can. The STRS meetings are held on the 6th floor. At 11:30 on Friday, CORE meeting attendees can leave the STRS meeting to go to the cafeteria on the 2nd floor to eat lunch. We take our lunches to the small cafeteria room behind the Sublett Rm on the 2nd floor where the CORE meeting will begin promptly at 11:45. A candidate for the STRS Board election (Bob Stein) will visit with CORE and share his perspectives with us.

Please note on the STRS agenda below that part of the Investment Department report will finish on Friday as well as the Executive Director's report and Public Participation which usually are scheduled on Thursday. Also please note that an item of great interest to retirees is the Investment Department's report on domestic equity operational review and asset allocation study WHICH IS SCHEDULED TO OCCUR FROM 2:45 TO 4:15 p.m. . . . . as late as possible and the most inconvenient time for retirees leaving to drive home. Please also note that if you plan to attend the Thursday STRS meeting, it does not begin until 1:00 p.m.

Ginny Hoehne to STRS Board: PBI BLUES HAIKU

From: Ginny Hoehne, January 2, 2009
PBI BLUES HAIKU

EXCUSES MUST END
MONEY SQUANDERING MUST STOP!
BLOODLETTING ENDS NOW!

An angered retiree,
Ginny Hoehne
Ft. Loramie, Ohio

Giving retirees their due...

From John Curry, January 6, 2009

Give retirees their due

Older Americans' health care benefits aren't a 'legacy,' they were earned — and should be honored

baltimoresun.com
By C. William Jones
January 6, 2009

As the U.S. economy continues its meltdown, it is unthinkable that the retirees who fought wars and built our nation through decades of labor, earning post-employment pensions and medical benefits, are among those being faulted for America's economic problems.

Lately, economists, talk-show hosts, journalists and even politicians have been echoing the corporate-speak by tagging baby boomers and retirees' earned pensions and health benefits as "legacy costs" dragging our nation down.

The Miriam-Webster dictionary defines legacy as a "gift by will, especially of money or other personal property; bequest; something transmitted or received from an ancestor or predecessor."

But benefits received by corporate and municipal retirees such as health insurance coverage and pensions aren't gifts, bequests or something inherited. These were earned by employees during their working years in exchange for accepting lower wages and/or fewer paid days off. To suggest that this deferred compensation is a legacy benefit - or the real reason for a faltering American economy - is nonsense.

Federal law protects retirees from having their earned and promised pensions cut after retirement. Earned and promised health care benefits deserve the same protections.

Why? Because, over many years, companies used the promise of post-employment health care coverage to induce many employees to stay with that employer or, in some cases, used that promise to induce them to take early retirement. Companies did not agree to pay retiree benefits out of the goodness of their hearts or social well-being; there were significant financial benefits and tax breaks for them. Employers didn't have to pay Social Security and payroll taxes on these benefits.

Funding these benefits could be deferred by companies in years when earnings were low, unlike payroll that must be paid on time. Since pensions are based on a percentage of wages, companies also saved on long-term pension costs.

The responsible course would have been for employers to set aside those funds to pay for the future benefits that they knew were earned by employees, and that they as employers had a fiduciary responsibility to pay. Instead, corporations shoveled billions in bonuses and incentives into CEOs' pockets and now are using tough economic times as an excuse to run away from their financial commitments, figuring the American taxpayer will pick up the tab.

What happens to the estimated 18.5 million American retirees who have experienced cutbacks or the elimination of their earned health care benefits?

A bipartisan proposal to be considered by the 111th Congress, the Emergency Retiree Health Benefits Protection Act, would prohibit employers from making post-retirement cancellations or reductions of health benefits that retirees were entitled to. Companies would be required to live up to the financial commitments made to their employees and retirees, without placing mandates on the employers as to what health plans they provide or monetary ceilings on the amount of health benefits.

It's simple, really. If a company makes a commitment to provide health care, it has an obligation to fund that commitment. After all, the company has other ways to increase revenue or cut expenses; the retiree does not.

Moreover, many retirees, while too young for Medicare, are too old for a realistic shot at the vanishing number of jobs with decent benefits. Individual health care insurance policies are prohibitively expensive. Medicare alone isn't enough to cover all health care needs, and supplemental policies are a financial burden for someone on a fixed income.

Wall Street, banks and automakers got their bailout; now others are lined up to feed at the trough. Retirees, our children and our grandchildren will be left with the tab, all while being forced onto an already overburdened government health care system.

Taxpayers and retirees are likely to be harmed once again - unless our elected officials take action and consider true protection for American retirees.

C. William Jones is the chairman of ProtectSeniors.org, a retiree and a resident of Easton. His e-mail is cwilliam@goeaston.net.

RH Jones: 2009 brings a smaller STRS check

From RH Jones, January 6, 2009

To all:

As a retired career teacher, my annual income in 2009, from my Ohio STRS, will be less than that of 2008. I would like to remind our STRS board, it’s employees, and the state’s politicians that the majority of retired educators live and spend their checks all across the state. This represents a positively considerable impact on Ohio’s economy. Personally, I have done without an inflation fighting a 13th “Supplemental Check” for over 10-years while my STRS “out-of-pocket” health care (HC), for my spouse and me, has increased my costs. There are thousands of retired teachers in similar, if not worse, situations. Therefore, is it no wonder that Ohio is hurting too?

Also, is it no wonder then that fewer and fewer males are choosing the education profession? Both male and female students are suffering a loss of the male image at a time when so many families do not have a male in the home. A happy and productively healthy society is dependent on a happy and productively healthy teacher in the classrooms. Part of it is a teacher in the classroom knowing that he or she will have a decent retirement situation. In that aspect, the future looks bleak; Society will fail without this just reward. It is now a necessary cost to citizens not caring in the past for those who gave so much of themselves to the public’s youngsters.

On the federal level, although I paid 20 points or so into Social Security (SS), I do not qualify for that income. In order to get the remaining points to qualify for SS, I was too “burned out”, after 33-years of public service, to work a job that pays into it; And due to the federal so-called “Windfall” Elimination, I cannot collect spousal SS. All this lost income not only hurts both my faithful spouse, it hurts me and those establishments where this income denied us would have been spent!

Educators have been slighted financially long enough. This retired public school teacher is not asking for welfare. We were, and are, part of the cost of educating a civilized society dependent upon one another for survival in a competitive new world order. Without professional educators, and a decent retirement for them, society will fail to compete.

One educator’s opinion,

RHJones, retired

Real Estate Market Collapse Hits Hitler

Hitler falls victim to sub-prime lending, housing collapse

His 401Ks don't look so hot, either.

http://www.brokeragentsocial.com/BrokerAgent/video/19

2009 New Year’s Resolutions for STRS*

..1. Resolve that the STRS Board, Retirees, Active, OEA, AFT, State Legislature, and Governor will find a way to make health care affordable to the retirees and spouse.
..2. Resolve that the STRS can improve their communications regarding the financial assets so that the retirees can easily see the monthly gain or loss without driving to Columbus to acquire this information.

..3. Resolve that the STRS Investment Staff will win the Ohio Lottery so that the PBIs are not necessary to maintain their lifestyle.

..4. Resolve that Dennis Leone will seek another term on the STRS Board representing the retirees who depend on his information regarding the activities of STRS.

..5. Resolve that "Black Friday" becomes a normal work day for the entire STRS Staff.

..6. Resolve that Mr. Nehf becomes more aware that the older retirees are hurting with lower interest income, lower investment assets, loss of 13th check, and will re-evaluate the 88% and 35 year retirement plan.

..7. Resolve that STRS reduces their dependency on consultants that 'Say" what the STRS Staff "Requests" them to say.

..8. Resolve that the STRS Board becomes a visible group that will discuss their opinions in public rather than stifle multiple opinions.

..9. Resolve that the need for CORE is eliminated due to rapid changes in the STRS Board and STRS Associates.

10. We resolve to find funds to pay for the medical care of spouses who were homemakers and can not afford the STRS insurance.

11. We resolve to find methods that prevent the board from "gag" actions to keep other board members quiet.

12. The STRS Board vows to stabilize the health care fund. It hands out free cigarettes to retirees (historical note: each smoker saves Medicare $100,000 by dying early).

13. Investment Associate: I promise not to smirk when they hand me my $70,000 bonus check after I lost $210,000,000 million on my investments.

14. We resolve to stop referring to the building immediately east of the OEA building as "the clubhouse."

* Some of these are tongue-in-cheek and should be taken with a grain of salt.

Alonzo Hathaway to STRS Board: Your investment return goals encourage higher risk investments and an unbalanced portfolio

From Alonzo Hathaway, January 5, 2009
Subject: PBI

To Whom It may Concern:

I find it unacceptable that STRS continues to use my money to pay bonuses to investment associates while we are losing unprecedented amounts of money. The average bonus of $70,000 is more than I ever made as a 35 year veteran teacher with a Masters degree! Your investment return goals encourage higher risk investments and an unbalanced portfolio. Your job is to protect our retirement with steady and sure returns.

Alonzo Hathaway
Retiree

Calvin and Hobbes on the financial crisis....15 years ago

Click image to enlarge.
See any resemblance to the situation with today's auto industry?

Greenville principal to STRS Board: Time to restructure PBI

From Krista Stump, January 4, 2009
Subject: change

Dear STRS BOARD,

It is time to restructure the PBI now! It seems unfathomable to me that a person would receive a $70,000 bonus while the STRS assets are declining at an alarming rate. Anyone in the public school business does not receive a Christmas bonus or any other kind of bonus. That's our life! The only bonus I've ever know during my 23 years in education is a box of cookies or nice note concerning what I've done for someone's child. $70,000 is more than what most teachers make as their salary for an entire year. If more people knew about this practice, they'd storm Columbus. Please restructure this before it's too late.

Sincerely,
Krista Stump
Principal
Greenville City Schools

NYT Revealed True Cause of Fannie Mae Crisis -- in 1999!

From RH Jones, January 4, 2009
Subject: One page from the NY Times.....10 years ago

John & Kathie,

I guess the highly paid folks who run our STRS investment department and board members never read the New York Times.

RHJones

Fannie Mae Eases Credit To Aid Mortgage Lending

New York Times
September 30, 1999
By Steven A. Holmes

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in
15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

"Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements," said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

- New York Times, September 30, 1999

30 Billion!

STRS has lost $30 Billion recently. Gee, that sounds like a lot of money. Let's see how much that is in practical terms. A million sounds like a lot of money, too; a billion must be more, so let's ask: "How much more?" A million seconds is a long time, isn't it? Well, not as much as you would think. A million seconds is only about 11 days and 11 hours. OK, then, how long is a billion seconds? It's a lot longer; to be exact, a billion seconds is more than 31 years. It's hard to comprehend how much bigger a billion is compared to a million, so let's get some more examples. If the $30 billion dollars STRS has lost were 30 billion seconds, it would stretch from today until the year 2959 A.D., roughly 47 generations into the future. $30 billion is, in short, a lot of money. It is, in fact, incomprehensibly large. Since what STRS lost is money, let's talk about money. Let's see what 30 billion one dollar bills does for us. We shall lay them out, one by one, and see how much ground they cover. This is, of course, a mind-experiment since, as mentioned above, if we laid one bill every second it would take us 950 years to lay them all down. You can probably figure out you could cover your yard with them, and you'd be right. Ah, but would it cover your entire city? Yes, it will probably will. "Wait a minute," you exclaim, "how do you know that since you don't know what city I live in?" Well, actually, that's pretty easy to answer. Follow along with me here. Again, it's almost disappointing how little a million is. A million bucks would probably cover all your yard, with a bit left over; that's 2.55 acres but, if you had a large lot, you might have some bare spots. Ah, but a billion bucks goes much farther; it will cover 4 square miles. Now, that's a lovely sight…4 square miles covered with dollar bills. "Gotcha!" you exclaim. "My city is much bigger than 4 square miles." Yes, that's probably true, but STRS didn't lose a mere 1 billion dollars, it lost 30 billion dollars and that's almost exactly 120 square miles. Columbus, Ohio, is 210 square miles so, if you live in Columbus, it'd only cover a little more than half. The next largest city in land area is Cleveland, a diminutive 76 square miles, and you'd have enough dollar bills to cover almost all of it two bills deep. The next time you drive over the innerbelt bridge, take a look around and visualize everything you see covered in dollar bills, two deep. That, my friend, is a lot of cash. If area isn't your cup of tea, let's talk about solid stuff. I bet you think 30 billion nickels is pretty heavy. You'd be right. A million nickels weighs about as much three cars. Big piles, but easily visualized. However, 30 billion nickels would form a pile the size of three Titanic-sized ocean liners (the Titanic only displaced a mere 46,328 gross tons, a measly 8.4 billion nickels). Keep in mind 30 billion nickels is only worth 1½ billion dollars. In terms of pennies, 30 billion dollars worth of pennies would form a pile the size of twenty Titanics bunched together. If the earth and the sun were 30 billion times closer, the sun would be hovering 1,500 feet in the air above our heads. That would certainly make solar panels more efficient, assuming we wouldn't be bothered by the 5,000 degree temperature (we would be), or not sucked by gravity onto its surface (we would be). If you were a light ray, traveling at 186,282 miles per second (note: miles per SECOND; that's 670,616,700 mph), it would take you almost two days (44.44 hours) to go 30 billion miles. Well, you catch my drift. STRS has lost a lot of money, an inconceivably large amount. I do not appreciate that amount being trivialized by individuals acting as cheerleaders for the investment department. Yes, many other institutions have lost funds in the recent market downturn; other cars skidding off the road neither excuses my poor driving technique, nor my ignoring hazardous road conditions. There seem to be no consequences whatsoever, to anybody, for this $30 billion loss of assets, and that, in light of the gargantuan losses we have suffered, is very disturbing. Like the old saying goes, "If you continue to do things the same way, why would you expect different results?"
Richard A. DeColibus
1/4/09