OEA...does this sound familiar?

From John Curry, April 25, 2009

"Unions vs. Reforms: Fix it or lose it. Powerful public employee unions have made it hard for public employers and retirement systems to clean up their act because the labor organizations have interjected themselves into the process. The resultant rules that become embedded in public plans enable abusers to find opportunities to exploit the systems. This is not to advocate the overturning of labor groups, but to remind them that they need to look in a mirror sometimes when we talk about reforms — and become partners in progressive change rather than obstacles. The retirement-advocacy groups need to honestly address the financial shenanigans some unions have played — and the resultant harm to their systems. That's a tall order when times are tough like they are now, but if we are to preserve the core values of retirement security, then the unions have to get on board as well."

Repairing Pension Plans

Governing.com, April 23, 2009
By GIRARD MILLER

Girard Miller
Questions, success stories or
anecdotes about benefit issues in
government? Girard Miller
wants to hear from you.
E-mail him

Reform — don't destroy — public retirement systems.

Readership of these columns in Governing on retirement systems has grown significantly in the two years since we started. In addition to trustees and practitioners who are looking for technical and strategic information that rarely appears elsewhere, we enjoy a public-policy following — the pension geeks — which consists of both advocates and critics of public pension systems. Then there are the financial services vendors who are looking for an edge somewhere to help them compete in this marketplace. Rounding out the readership are employees, union leaders and retirees keeping watch on what management is up to, or just simply interested in new developments in the benefits field. It's a vibrant community, and one lesson I've learned from reader feedback is to avoid broad generalizations about state and local government retirement plans.

About 90 percent of the workers in this sector have a defined benefit pension plan, and some 2/3 of the states have dominant, consolidated state pension systems, so there are some commonalities in those systems. Moreover, the aggregate unfunded liabilities of the pension and OPEB systems now exceed $2.5 trillion with investment assets of less. That's about all one can say in general. Benefits formulas, eligibility requirements, investment and funding practices and supplemental systems are richly diverse across the country. In the retiree medical benefits area known as OPEB ("other post-employment benefits"), the variations are even more dramatic. There are very few statewide plans of any type at this embryonic time in the evolution of those plans, and each public employer has crafted a different and often unique benefit structure.

In the face of this broad variation, there is a natural tendency to generalize whenever we see an abuse of these systems. Sometimes this is justified when, say, there is a statewide plan that permits individuals to game the system on a broad basis (as with pension-spiking in certain states). Oftentimes, however, the problems are isolated to a specific employer. When the abuses are isolated, it makes for great headlines, but the criticism and finger-pointing doesn't help us build better systems. And that's the spirit of this column. I want to identify a series of constructive reforms for public sector retirement systems — both the high-profile defined benefit pension plans and cradle-to-grave OPEB plans — hoping to achieve a sustainable balance in the long run.

Public service and public abuses. Most public employees are indeed public servants. Some are professionals who joined the government workforce with high aspirations to make a difference in this world; others frankly took the best job they could get. But most public workers do understand that they have a responsibility to the public and the taxpayers they serve, and they understand the concepts of accountability and fairness. Thus, it's the small minority who draw media attention and the ire of taxpayer groups when they game the system. We need to remember the ratio of good to evil when we discuss retirement reform.

Unions vs. Reforms: Fix it or lose it. Powerful public employee unions have made it hard for public employers and retirement systems to clean up their act because the labor organizations have interjected themselves into the process. The resultant rules that become embedded in public plans enable abusers to find opportunities to exploit the systems. This is not to advocate the overturning of labor groups, but to remind them that they need to look in a mirror sometimes when we talk about reforms — and become partners in progressive change rather than obstacles. The retirement-advocacy groups need to honestly address the financial shenanigans some unions have played — and the resultant harm to their systems. That's a tall order when times are tough like they are now, but if we are to preserve the core values of retirement security, then the unions have to get on board as well.

Sufficiency and sustainability. There's growing talk in governmental finance circles about "sustainability," and the lack thereof in retirement benefits. According to the Government Accountability Office, in fewer than 30 years the federal government will consume all of its future tax revenues for interest payments and entitlement programs including Social Security and Medicare. Meanwhile state and local governments have run up pension deficits of $1 trillion and OPEB deficits of $1.5 trillion. Thus, it is becoming more doubtful that the tax revenues of some municipalities will ever grow enough to pay for the benefits already promised. The average adult working taxpayer is now on the hook for $20,000 of state and local retirement deficits. In many cases, structural changes are absolutely necessary in order to preserve the benefits. Otherwise, we will find ourselves literally running out of money, and younger workers may never receive what we're now promising them.

Thus, it's essential that state and local leaders, union leaders and retirement plan officials begin working now to make sure that the level of benefits now promised is actually sustainable. I have referred to the concept of a "sustainability audit" or assessment in a prior column, and that would be a worthwhile place to start. Knowing now that most pension plans are facing the prospect of employer contributions rising 20 to30 percent in the next three or four years if not sooner, this issue has now risen to front-and-center.

In many cases, a sustainability analysis will show that the employer-paid share of the overall retirement package will never be sufficient to pay all the benefits now promised. In many cases, that means that employees will have to begin paying a greater share of contributions into these systems in order to achieve a benefit level that will provide them sufficient savings and benefits when they retire. As we all know, the level of savings in this country is abysmally lower than most others, and part of the system-wide reforms of public retirement systems will need to involve greater employee participation through increased contributions. Whether these moneys go into a defined benefit plan, a defined contribution system of some type, a deferred compensation arrangement, or a hybrid blend of all three, is less important now than the idea of increased employee contributions and savings. In many cases this means mandatory payroll withholding in order to achieve the best tax advantages for the employees.

Meanwhile, public officials must also perform an analysis of the level of benefits their reformed systems will provide to new employees. With health care costs rising, a meager employer contribution to the overall retirement and benefits plans will leave employees well short of the amount they will need in order to avoid eating cat food when they retire. If so, then the plan must include features to encourage employee savings so that they can actually afford to retire if they follow the plan.

Getting real about benefits. In a recent column on retirement eligibility ages, I outlined a series of measures that will need to be implemented by many plans in order to achieve sustainable benefits levels. None of these reforms would reduce the sufficiency of retirement benefits. But they are virtually unavoidable, especially in light of the impact that the market meltdown has had on the taxpayers who contribute a majority of the funds that pay for these benefits. As one reader wrote me last week, "a public pension system cannot be sustainable if its retirees live far better off than the taxpayers who support them." That's like welfare in reverse. Although the vast majority of public employee pensions are modest, the early retirement benefits will likely draw increased attention, just like the high-profile benefits received by some public officials who find ways to double-dip.

Anti-abuse reforms. In addition to these more general structural reforms in plan design and financing, the public pension community needs to step up and fix the fatal flaws in those systems which presently allow employees to suck money from their coffers. I suspect that if some of these changes are not made voluntarily, they will be included in a future landmark ballot initiative somewhere, and provide fodder to the political campaigns of pension critics. So I would urge a proactive approach to rapid reform, rather than playing defense down the line.

Here's a shortlist of three anti-abuse reforms that every public plan should enact in order to eliminate the highly publicized and justifiable criticisms that inevitably arise when games are played with public funds.

1. Stop spiking. As I've written before, there are few abuses of the defined benefit pension system as outlandish as the payment of lifetime benefits to workers whose lifetime average earnings are far lower than their final compensation because they spike their pay at the end of their career. It's even worse when seniority practices institutionalize this nonsense, as recently reported as official practice in Buffalo, New York, with an actual formula that demonstrates the actuarial folly of these practices. When overtime and special pay are included in the pension benefits, it's an invitation to abuse. For more on this issue, and the strategies of a Pennsylvania retirement board and the City of New York fire department, see today's companion column. My November 2008 column on pension spiking provides a viable solution.

Here's a new concept that could change the future of pension plans and collective bargaining: If unions want overtime included in the pension calculation, let the employees pay half the costs of a separate, actuarially determined employee contribution on their overtime. My guess is that for police and fire, their share will work out to 10 to 20 percent of their OT pay. That way the younger union members can help subsidize their elders — and we'll see how long that lasts.

2. Ban unfunded retroactive increases. This abuse needs to be on the list of permanent reforms, although it is too late to fix the many cases where retiree groups and unions already persuaded public officials to award them unsustainable benefits increases retroactively, without funding them. Giving workers a benefits increase for past service, and then charging future taxpayers for the cost, is a clear abuse of power. When elected officials approve these deals, often behind closed doors, they do a great disservice to their taxpayers. If they want to grant benefits increases, full payment should be made in the year awarded.

3.Prohibit ad hoc COLAs in underfunded plans. For several decades, public pension plans granted cost of living allowances and pension benefits increases without building the costs into their actuarial assumptions. Each time, the award was treated as if it would never happen again. And each time, it happened again. Meanwhile, the funding ratios of public pension funds have dropped as their liabilities increased. Even plans that systematically include COLAs in their actuarial formulas should look in a mirror and ask if their real returns have come anywhere close to what they projected. If not, maybe it's time for a rule that embedded COLAs can be awarded only when 10-year investment returns have actually met the actuarial assumptions, and the plan is at least 85 percent funded. And for those that don't even bother to reduce their assumed "real" investment returns to account for ad hoc COLAs, or project them in their liabilities, the requirements must be much stiffer: full funding and provisions for revocation in the event of subsequent market losses.

In addition to these reasonably obvious reforms, several others are equally important for long-run sustainability:

Pre-announce reform of your 'dirty' amortization schedules. This abuse is mathematical and thus, less visible to the public. Presently, many pension and OPEB plans are sweeping their dirt under the rug by amortizing their funding deficits beyond 2035. The accounting rules now allow that. So, when they suffer stock market losses or award new benefits increases for today's workers and retirees, many plans instruct the actuary to amortize that deficit over the next 25 to 30 years. Again, we can't generalize about everybody, and some plans use a shorter schedule. But the majority of public retirement plans today are using amortization schedules that are far longer than their corporate counterparts, and far longer than the remaining lives of their retirees and the remaining service lives of their employees. The result is that costs are transferred to future taxpayers — our children and grandchildren — for services provided to our parents by employees who will die before the benefits are fully funded.

The Governmental Accounting Standards Board is now revisiting this issue, and may have something to say about these practices in 2010. Regardless of what GASB allows, pension plans need to achieve intergenerational equity by tightening up their amortization schedules. The problem now is that if everybody cleaned up their act tomorrow, the costs of pension plans would skyrocket as these amortizations would boost the annual costs of unfunded liabilities. There is a phased solution, however: Do the actuarial analysis and determine the annual impact of a realistic, actuarially based amortization. Then tell the employer today what that cost will be in three years when you actually begin to implement it. That will give the employer sufficient lead time to make budget adjustments. The smart ones can then take that information to the bargaining table and begin to demand that employees share a portion of these costs going forward (see below).

Restructuring retiree medical benefits. Some municipalities offer lifetime medical benefits to early retirees; others pay only a supplement to Medicare after age 65. Many simply allow the employees to participate in the employer's group plan (implicit rate subsidy). Schools, cities, counties, special districts and states all have different deals. So when I write of cradle-to-grave benefits, it's not a universal problem. What we do know is that for those employers who permit 40- or 50-year-old retirees to receive full medical benefits at taxpayer expense, the plans are likely to be unsustainable going forward without significant restructuring. Except for OPEB plans that offer only the implicit rate subsidy, cost caps need to be installed in order to prevent runaway medical inflation from hitting future taxpayers.

Sharing the costs and risks. Sustainability will require genuine cost-sharing and risk-sharing between employers and employees for the entire spectrum of retirement benefits. I introduced this theme in a column on "gain-sharing and pain-sharing" last month, and I want to underscore its importance. In the past, public employers typically bore the majority of the cost of contributing and bore all investment risks. Again, there are exceptions: some systems require employees to make hefty contributions and already share a fair level of the costs. And a few systems even share investment risks. But nationally, the course-change most needed in the public retirement world is a shift toward an equal burden of costs and risks.

On the contribution side, this would mean employees pay half of the total contributions costs. That may take a decade to achieve in some cases, but a good place to start would be with the upcoming pension contribution increases that most plans will be sending to employers as a result of the recent market meltdown. If employees were to share half of those cost increases, that would be a good start. Likewise, as public employers begin to pre-fund their OPEB plans actuarially, it makes common sense to start sharing the normal service cost equally with employees. (Employers should bear the full costs of unfunded OPEB liabilities in my view, as they were the ones asleep at the switch here, not the employees.)

On the risks side, I would favor a hybrid DB-DC (defined benefit-defined contribution) arrangement where feasible, especially for OPEB but even for some pension hybrids. In Washington State, they have done this already with their pension plan, with half the benefits in the form of a fixed pension and the other half an individual DC account. Whether the DC component is an individual account or a collective defined contribution trust as I described in my previous column on ways to fix OPEB funding, the point is the same. If taxpayers and public employees share equal exposure to stock market risks and the contribution costs, they will develop a mutual respect for each others' interests.

"Pension holidays": A new twist. One reader has suggested to me that legislatures and public employers will need to consider several new forms of "pension holidays." In the past, this always meant that the employer would suspend contributions and take a payment holiday. That just makes the pension deficit grow larger and increases the long-term costs to taxpayers. But this idea has now taken on new life on the benefits side of the equation, and includes also the concept of COLA holidays (no cost of living allowances) and service-accrual holidays. A service-accrual holiday is when employees are granted no pension credit or fractional service credits for work during financial emergency periods. It is the governmental equivalent of private companies suspending their 401(k) match during unprofitable periods. In Florida, for example, there is legislative talk about suspending public sector labor agreements statewide in order to work out the budget crises. By combining all three forms of pension holidays, there would be an immediate budget savings but also a reduction of long-term liabilities so that the ultimate costs to taxpayers remain stable.

Is legislation necessary? Ideally, the public pension community will achieve these reforms on its own. I'd love to see the various conferences include this topic as a regular feature for trustees to consider, and for the National Conference of State Legislatures to monitor. Right now, the taxpayers' advocacy groups are focusing on bigger fish in the national financial crisis, so pension reform has taken a back seat to other issues. In California, we already have radio ads sponsored by the Howard Jarvis taxpayers group that initiated Prop 13 — and their focus for now is taxes, not pensions. But eventually the "pension envy" scenario is likely to return in legislative proposals and possibly ballot initiatives. Or, it could get wrapped into a tax limit initiative. Such proposals could mandate equal employee contributions, higher retirement ages, anti-abuse rules and other provisions that reasonable people would approve and frustrated taxpayer groups will demand.

My advice to all those who support public retirement systems is this: Start making these reforms proactively before another wave of unrest begins to foment. Begin with the anti-abuse suggestions, while working toward employer-employee partnership agreements and structural reforms. Then we might actually make it through the next decade, with retirement plans that can afford to pay for what's been promised.

http://www.governing.com/articles/0904gmillerd.htm

~ ~ ~

Girard Miller, a senior strategist for retirement plans and investments at the PFM Group, has 30 years of experience in the public, private and nonprofit sectors. His general market observations and institutional investment strategies are his own and should not be construed as investment advice or recommendations concerning specific securities. He can be reached at millerg@pfm.com. More biographical information

Shirlee Zerkel & Mary Ann Cervantes re: PBIs, bonuses, retention money

Shirlee Zerkel to Mary Ann Cervantes, April 8, 2009
Subject: PBIs, bonuses, retention money!

Dear Ms. Cerventes: At a time in our economy when bonuses that corporations give are frowned upon by all, STRS is still discussing and giving bonuses and raises to some staff members with the reasons being given as value -added, exceeding the benchmark, or retention. I am puzzled and angry by your opposition to the suspension of investment staff BPI's in the present economic climate. You only changed your vote after Mr. Nehf said that he could live with it. This tells me that you are more interested in taking care of the STRS staff than following the ORC and doing what is right for the retirement system and the retirees. I also noted that you voted 'no' to the motion that staff put in a 40 hour week at the same pay. Why aren't these suitable measures to take when other employers in the country are laying off staff, reducing wages, freezing bonuses in order to stay afloat, yet it appears that you and some other board members do not want the STRS staff touched in any way by this downturn. Get real! The system has lost 33 billion dollars of our total assets. We, according to the staff have to cut retiree health care by 81 million for the year 2010. Our pensions at this point in time are not secure1 But STRS staff and board hold many discussions about bonuses, raises, etc for the staff. But when the STRS staff presents cuts in benefits to the retirees, I hear no questions or discussion on the topic from you. It appears to be 'let's follow what the staff says is needed.' You were elected to the board to be the watch dog of the teacher's funds not give bonuses to the staff and watch the retirement system go down the tubes. By trying so hard to be a good board member to the staff, you are screwing yourself and your fellow educators out of benefits and maybe even a future pension. If the above is not the reason for your opposition, please explain your stand to me, other retirees and actives.

Sincerely,
Shirlee Zerkel

From Mary Ann Cervantes, April 17, 2009
Subject: STRS ZERKEL.doc

Dear Shirlee Zerkel:

Shirlee, I was interrupted while typing your response and perhaps, sent an unfinished letter. Here is my completed response:

In response to your email, I hope that this will answer your questions:

True, I did say that the Executive Director's remarks were compelling to cause a change in the vote. However, if you were there, you would know that Mr. Nehf made those remarks before the first vote. So what was the real reason for the change? In my mind, after 3 months of meetings, discussions, and revisions, we had to compromise and move on. The political tone did not indicate that the vote would ever change, yet we had to get to the long term planning issues before us. Issues such as health care and the future of the pension fund were front and center. That is the truth by me, but the other members may have other reasons.

Regarding your question on the 40 hour week, salaried employees may work that already. Speaking for myself, I work many hours beyond my required hours in the work-week and perhaps you did too. However, the $18 an hour person who now works an additional 2.5 hours without pay, sees a drop from $18 an hour to $15.75 after he/she gets no additional pay for that extra time. I wonder how you would react if this requirement were placed upon you? The hours change has been implemented at a time when a wage freeze has been put into effect. I have been a contract negotiator for my school district, where we usually try to trade off during economically hard times, either through contract language or through extra time. It is noteworthy that we have given nothing to these people. I seriously doubt that you would tolerate treatment like that. Case in point, Governor Strickland wants teachers to work 20 additional days each year. Is there any money associated with that? I have my doubts, but I can assure you that teachers are upset about it, and yet that is the very same thing that we did at STRS.

Finally, your statement about who I am trying to please deserves an answer. As I am a fiduciary of this fund, there is not a more real situation than that. Do not mistake kindness for weakness. All board members have to deal with their conscience and there is no personal agenda other than to do my job well for the benefit of all members.

One more piece of information Shirlee, as you have accused me of unfairness when I asked one speaker to conclude his remarks. Although I kept the time with my watch, I checked the tapes at STRS and confirmed that your information was incorrect. It was Mr. Stoll who spoke 5 minutes before I asked him to conclude his remarks, whereupon he spoke an additional 45 seconds. Mr. Leibensperger actually spoke 4 minutes 5 seconds. It is my goal to be fair but we do need to stay within the three minute policy.

Mary Ann

From Shirlee Zerkel, April 24, 2009
Subj: Your answer to me!

Dear Ms. Cervantes:

You asked me how I would react if this requirement were placed upon me. That requirement has been placed upon me and all other retirees at the current time and possibly in my future by the vote you give on the STRS Health Care program for retirees. My retirement benefit is an almost fixed amount yet the board continues to reduce the health care benefits and increasing the premiums thus reducing the income of all retirees. You state that it is noteworthy that you have given nothing to these people (the staff). What have you given to the retirees; NOTHING as we see it! You stated "... there is no agenda other than to do my job well for the benefit of all members." Please remember that the active and retired teachers are the ONLY members of of the system. I ask your kindness tomorrow or whenever you vote on the health care issues for the teachers, both retired and active.

Will be noticing your vote,
Shirlee Zerkel

STRS Board meeting April 22 - 24, 2009

From STRS, April 15, 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, April 22, 2009

...11:00 a.m. Disability Review Panel and Final Average Salary Committee (Executive Session)

Thursday, April 23, 2009

...9:00 a.m. Retirement Board Meeting

Friday, April 24, 2009

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

The Retirement Board meeting will come to order at 9:00 a.m. on Thurs., April 23, and begin with a report from the Finance Department, followed by a report from the Investment Department. The Executive Director's Report is expected directly after the lunch break, followed by public participation and the resumption of the report from the Investment Department. When the Retirement Board meeting resumes at 9:00 a.m. on Friday, April 24, the Board will receive a report on Long-Term Contingency and Financial Planning, as well as a report from the Member Benefits Department regarding health care. Routine matters, old business, new business and any other items requiring the Board's attention will be addressed before adjourning.

Jim Stoll's speech to STRS -- and a challenge to OEA -- April 23, 2009

STRS Board -- Jim Stoll, Member of STRS who has paid into the system for 23 years now.

I'd like to share an analogy or example with you….. Sycamore Schools, where I'm the athletic director, has a Catholic high school within our district called Moeller. Several years ago, my football coaches came to me and said "Jim, Moeller's recruiting all of our good football players"; they complained and said I should turn them into the OHSAA for recruiting violations.

I asked our coaches one question: Name for me the best five eighth grade football players that we have at Sycamore Jr. High….. They couldn't -- coaches couldn't give me the names of our best five players…..they weren't doing their job. Moeller wasn't violating rules, they were OUTWORKING US.

My question/challenge to ANY board member, and to the Executive Director is the same which I had for my coaches….. Name me one "INDEPENDENT" professor (expert) that any one of you took the Bonus plan to and asked them for an evaluation??? Mike, did you go down the street and walk into the Business School at Ohio State to ask someone to evaluate it? Tim, did you go up to Bowling Green or Toledo and ask for an independent evaluation or critique of it????..... If any of you, INDEPENDENTLY, took it to someone outside the confines of these walls, please be SPECIFIC and give us the person you took it to…

I did; I consulted with a professor at the prestigious Farmer School of Business at Miami University…

He/We are all flabbergasted and amazed that you would, ON THE FLY, BY THE SEAT OF YOUR PANTS, make changes, revisions, motions, and votes and approve things in a plan that make no sense to experts in the field. MY ADVICE is ELIMINATE the PROGRAM, TAKE a year to get independent compensation experts from 13 universities throughout OHIO and build some consensus for the program. That is what a leader would do, and a prudent board, but this group seems to be neither, so I'd suspect you'll continue down the same ill-fated path.

I hope you realize that the field you're playing on has changed. Last week I sent an email to only 25,000 STRS members, one-fourth of our list. Based on the feedback you and I've received -- there is little or NO support for your continuation of this ridiculous Bonus plan or your defense of the Bonus plan. Superintendents and school boards are now getting on board.

As a successful coach, having won an OHIO STATE BASKETBALL TITLE in 1985, I understand a few things about MOTIVATION. There are two kinds of motivation. Intrinsic and extrinsic.

Intrinsic is the kind every teacher in OHIO is motivated by -- doing a good job, inspiring kids to achieve. It's the best kind of motivation; it encourages integrity and provides achievement that makes a person's heart and soul feel great about accomplishment! It lasts forever.

Extrinsic is the kind you are motivating through these bonuses. Extrinsic motivation is corrupt and greedy; it is fraught with problems and rarely lasts. Extrinsic motivation is giving material things for doing a person's JOB!

You want to MOTIVATE your investment associates -- fire a couple! Jack Welch, CEO who led GE to its greatest heights, states in his book, Jack -- Straight from the GUT, that to keep a business on the cutting edge at the top of its game and to attract the best and brightest talent that he would fire the bottom 5-10 percent of his management team every year! In your case, Human Resources would make a list of their 90 investment associates and rate them from 1-90. Whoever was listed 85-90 is non-renewed, let go, and you hire in five more of the best and brightest to compete and keep everyone motivated. School districts do it all the time by non-renewing the contracts of sub-par teachers. Want to intrinsically motivate your staff and not cost the members a penny…..adopt Jack Welch's strategy.

If the emails you've received haven't convinced you and the Executive Director that YOU are out of touch with your constituency, then you ought to rethink your roles and positions.

Lastly, as a basketball coach of an inner city school in the 1980s and at the college level, I've been spit on, had racial epithets thrown my way and other things occur to me, so in a political campaign, to receive criticism is somewhat amusing to me…..

I would like to say one thing to the OEA and those board members who were endorsed by that group. I'm the one running for a seat on the board -- my name is James A. Stoll.

Any criticisms should be directed at me, not a current sitting board member. For OEA to write a memo to their members and/or district leaders calling Dennis Leone a "Dissident STRS Board member" is APPALLING… I'd only heard the word "dissident" used referring to someone in China, Russia, North Korea or Cuba.

I've got news for Mr. Mahoney and Mr. Leibensperger at OEA -- if you want to take someone on, you better come after me because DR. LEONE is way out of your league! Dr. Leone has done more to protect the Active and Retired Teachers from abuses and mismanagement of STRS than everyone at OEA and STRS combined. He's not a part of this race, but I certainly thank them for putting me anywhere in his category -- based on my email response -- it has garnered me more votes than you know.

Thank you for your time.

Jim Stoll

Dave Parshall's speech to STRS Board, April 23, 2009

Public Speaks Message April 23, 2009, by David Parshall, 41 year STRS member.

STRS Board Members and Director Nehf:

(The following words represent my views and are not necessarily those of CORE.) It has been many months since I have spoken to the board in this public manner. During this time I have attended all of the board meetings and other public meetings of the board. I listened to the speeches of the four OEA/OFT board members during the March 20 board meeting These speeches were just more evidence that they lack the ability and wisdom to sit on this board no matter how well-meaning they may be. I, along with thousands of your stakeholders, find ourselves on the edge of a cliff looking down into a very deep canyon, and feel that we can no longer remain silent in hopes that someday these board members will come to finally realize some common truths. I wonder even today if these board members fully understand just how close this board came to a total meltdown after the 5 to 5 vote. All stakeholders owe Mr. Nehf a huge amount of gratitude for stepping up and saving the day. I have personally thanked Mr. Nehf for his actions, and do so again.

Now let us back up a little and see what we can agree upon.

I fully understand:

...1. That our investment people here at STRS are fine, dedicated professionals who, through their personal actions since August of 2008, did not cause STRS to lose over 31 billion dollars.

...2. That having in-house fund managers actually saves us money.

...3. Because of the skill of our staff, STRS actually lost 0.3% less than most other pension funds.

...4. That we are in unique economic times far different than the historic 10 to 15 year recession cycles that have plagued our history since colonial times. The most similar historical economic event was the Great Depression. Changes in Wall Street were made afterwards that have kept us sound for fifty years.

So how did we get ourselves in this mess?

Well, the greatest single factor is that over a period of 3 or more decades greed was systematically allowed to trump principle. These words are not just mine, they are the words of Dr. Elizabeth Warren, chair of the Congressional Oversight Panel of the TARP.

Now, the big question -- how does this board fit into the current national and state situation?

Like it or not, you have become a part of this corrupt financial system. This industry has been allowed to set their own standards for far too long, and have sent out consultants to tell the public that these are the standards and that we have to follow. Willing Congressmen from both sides of the aisle were bribed to do away with regulation and break down the Chinese Wall that stood between Main Street banks and Wall Street since the 1930s. Alan Greenspan has publicly apologized for playing a major role in this mess by not realizing the depth of human greed. Keep in mind this is the industry that coined the phrase, "This stock is a pig, get on the phones and put lipstick on it". The compensation for our fund mangers is outrageous. Do you really think that anyone here at STRS is more valuable than the president of the United States?
You as board members have failed to realize that at last transparency is coming to the financial world. The discussions should not be about the 25th percentile, rather to pay bonuses when the fund grows back to 53 or 65 billion, or what floating benchmark should we use, but rather why are we paying any bonuses at all, considering the base salary and perks that STRS offers? We at least need to totally restructure our PBI program and be a leader for reform. If I hear one more time that we have to pay these salaries to keep the best and brightest, I will just scream. This has always bordered on extortion. Why would any of our investment staff want to leave a secure position today to go out into the mess that has become Wall Street, especially with more than 20 years in OPERS and a secure retirement in sight? CalPers is hiring Wall Street fund managers at bargain prices.

The bottom line is as long as we have union-controlled STRS board elections, especially for active seats, we will not get the truly qualified members on the board that we need. This must be overhauled so that the election process is totally open and allows for all candidates to have complete access to both actives and retirees. Change is coming with or without you. It is time to stand back and see the forest. These are serious times and we need qualified people making serious decisions for us. I thank you.

Will Ohio STRS also "tone-deaf" on bonuses?

From John Curry, April 23, 2009

"As governments cut vital services and trim salaries and lay off workers, the millions in bonuses paid out to retirement fund executives are difficult to defend."

Editorial: Pension funds go tone-deaf on bonuses

The Sacramento Bee, Apr. 23, 2009

The California Public Employees' Retirement System, CalPERS, and the California State Teachers Retirement System, CalSTRS, have already put state and local governments and school districts on notice. Public employer contributions to pension funds will rise by 2 to 5 percent of payroll over the next two years. That's a huge increase. It amounts to millions of dollars in increased costs from some local governments and billions more from the state annually, beginning next year.

The new higher retirement bills come due just as local and state governments are reeling from the economic downturn. And yet at the same time the retirement funds are demanding more from government employers, they are awarding big bonuses to their top executives, the same people who made the investment decisions and the earnings projections that turned out to be so wrong.

Together, CalPERS and CalSTRS have lost more than $100 billion in assets over the past 18 months. Nonetheless, they paid out nearly $7 million in bonuses to top employees last year. As The Bee's Jon Ortiz reported in a recent article, the biggest check, $322,953, went to Christopher Ailman, chief investment officer for CalSTRS. It almost doubled his $330,000 annual salary.

Webster's New World Dictionary defines bonus as "payment over and above salary given to an employee as an incentive or reward." What exactly is being rewarded here? Representatives for the retirement funds defend the bonuses, arguing that they are needed to attract top-flight talent. The public and local governments that will struggle to pay those bonuses have reason to be skeptical.

CalPERS and CalSTRS have been at the forefront of the shareholders' governance movement, raising tough questions about excessive executive compensation and other issues in recent years. Now they need to answer some tough questions of their own. As governments cut vital services and trim salaries and lay off workers, the millions in bonuses paid out to retirement fund executives are difficult to defend.

Donna Seaman to Mike Nehf and STRS Board re: Credibility, respect and trust

From Donna Seaman, April 22, 2009
Subject: Board mtg.

Board members and Mr. Nehf:
This month's board meeting continues to bring you challenges. Your recent STRS glowingly written newsletter reports that "89% of STRS retirees say you have earned their trust and confidence." In this "random sampling" of STRS recipients, my opinion has never been sought. But I do not trust or have confidence in you, my STRS board! Many of us have lost credibility, respect and trust because of your recent and past decisions! Your survey also showed an interesting statistic: much fewer of respondents believe you are managing operating expenses prudently (66%)!
You continue to ignore my concerns and frustrations, and those of many other writers. You do not respond, or direct Mr. Nehf to respond, to our suggestions. While Mr. Nehf claims he supports transparency and open communication with retirees, I see virtually no follow through on issues of highest importance to retirees.

You continue to allow OEA to be your puppeteers and to pull many of the strings for your decisions! You continue to permit OEA to criticize and put down board member Dr. Leone and candidate Jim Stoll, who strive to advocate for retirees.

As you meet again this week, and in the coming months, these issues must be resolved:

• Performance benefit incentives/bonuses must be totally eliminated. Not suspended with the likelihood of paying investment staff for 7/12 for FY 2009, but eliminated! PBI's should be reinstated only if and when the 13th check for retirees is reinstated. Your newsletter states "Total operating expenses are expected to be about $6 million lower than the budgeted amount of $98.8 million for this year," yet you are still discussing pbi payments of $3.3 million (or more) for this year. This is insane! Look at what is happening in neighboring states, such as Missouri, and the stand that governor has taken against public pension bonuses. He should have a phone conversation with Gov. Strickland about this! Benefits and fringes provided to STRS employees should never be better than those provided to your constituents, retirees.
  
• Health care coverage for retirees should be comparable with the coverage you provide for STRS employees, no better, no less!
• STRS staff must be cut to reflect the loss in portfolio assets value! Even one of your board members' school districts has had to lay off teachers and dramatically reduce staff because of decreasing revenue. Why is STRS staff exempt from reductions and cuts that are being made in virtually every segment of our economy? I applaud your decision to increase the work week to 40 hours and to place a wage freeze through 2010. That is a good start, but more cost-cutting measures must be taken.

These issues must be discussed and resolved now, not put on hold until Dr. Leone's board term ends, or until new, inexperienced board members are installed this fall.

You must begin to listen to us! Your credibility, trust and respect depends on it! I look forward to being there and hearing your discussions this week.

Donna Seaman, 2002 retiree
(These opinions are my own, and do not reflect those of any organization.)

Supt. John Scheu: These bonuses need to be eliminated -- not just suspended

From John Scheu, April 13, 2009

To All: As a contributing member to STRS, I am appalled by the actions of the STRS Board on your decision to pay 7/12 bonuses for 2009 to investment associates employed by STRS. Despite the vote to suspend the bonus plan in February, it is my understanding these bonuses will still be paid in September of 2009. Then when I read that $39,500 raises were given to two investment associates in 2009, I became even more upset. With our Pension Assets losing $33 billion - how can you even think about awarding such salary and bonus increases? These bonuses need to be eliminated -- not just suspended. And as a member of STRS -- I am one who wonders why STRS seems to be constantly in financial straits, and am concerned about STRS providing health care benefits for retirees in the future.

John Scheu
Superintendent
Hardin-Houston Local Schools (Shelby County)
5300 Houston Rd.
Houston, OH 45333
937-295-3010 ext. 224

Jim N. Reed: A letter of appreciation

From Jim N. Reed, April 21, 2009
Subject: Fwd: Dr. Leone challenges the OEA to a debate! "OEA can pick the date, the time, and location. I will be there."

Dear Dr. Leone,

You've done it again! Each time in the past four years that I have become so frustrated and disenchanted with STRS and become selfishly complacent you have provided a pep talk or letter that has restarted the juices. Where did you coach? I've been in that business for 45 years and never been around anyone who does it better!

Your invitation to OEA, Leibensperger in particular, to public debate is a much-awaited event. I believe we could sell tickets. I would be proud to be in your corner.

My thought is that neither OEA or Leibensperger will accept the challenge. I think they know they can't survive the factual data, as supplied by their own union and our retirement system, combined with your expertise and logic. Even though they can afford the costs of making any kind of arrangements, publicity, propaganda, etc., they cannot afford to be publicly exposed for their unethical, even fraudulent, behavior past and present. Such a public conversation would only lend itself to additional STRS/OEA condemnation among uninformed educators, board members, and taxpayers.

However, the rules have changed in our favor. Due to your tenure on the Board, the membership of OEA and STRS will never again be totally subservient to the brainwashing tactics stakeholders have been exposed to during their careers.

There is a growing number of OEA/STRS-literate actives and retirees who will no longer sit on their hands and play the role of the union-indoctrinated passive, apathetic educator. There are still too many who have not actively sought out available information but that number is shrinking as this letter is being written. I know because concerned educators have contacted me. And I know they have contacted others who have refused to look the other way, charter advocates like John Lazares, Kathie Bracy, Tom Curtis, John Curry, Molly Janczyk, and members of CORE. Especially encouraging are the new faces that have entered the fray, men like Jim Stoll, Bob Stein, Ralph Roshong, and Rich DeColibus.

Never again will OEA and STRS have a free pass.

Dennis, you cannot be replaced on the Board. You are a true pioneer in what you have accomplished. That ground had never been traversed. But you have been an inspiration to others who will strive to advocate, to educate, to question, to debate, to watchdog and to reform on behalf of 450,000 educators and their beneficiaries. No one will ever have your unique style but you have provided a template and produced proteges who have learned from a master mentor.

From a 45-year educator, I can not express adequately my sincere gratitude for what you have accomplished as an advocate for the security of families of Ohio's active and retired educators.

Jim N. Reed

Jim N. Reed: Some observations, revelations, musings, conclusions.....and guarded optimism

From Jim N. Reed, April 21, 2009
Subject: Blockhead Solidarity, Malcontents, Closed Elections, and the Renaissance

Kathie, I noticed in a recent posting of an excellent on-point letter from Rich DeColibus to Mark Meuser that the STRS Board member's mail box refused the e-mail.

Maybe that explains why Mr. Meuser and some other Board members claim they receive very few negative letters from membership regarding their embarrassing behavior as regards past and recent Board decisions. Maybe Mr. Meuser, Mr. Myers, Ms.Ramser, and Ms.Cervantes really believe there are few stakeholders who found their votes to reject PBI suspension disgustingly absurd even though their out-of-touch decisions flew in the face of official OEA mantra.

(The only OEA-endorsed member who had the knowledge, sensitivity and courage to stare down the PBI proponents was Ms. Tai Hayden. Her sensitivity and fortitude has not gone unnoticed.)

One way to avoid being critiqued is to shut off the critic. All good reviews. A gorgeous, glowing report from the STRS Bulletin on membership satisfaction (does anyone know anyone who's been surveyed?) keeps non-informed members in the dark.

This current e-mail refusal by a Board member's service re-touches a nerve from Dyer's Dirty Regime. Upon retirement and having some serious questions regarding the way mine was processed I had occasion to make several attempts to contact STRS Board members after Dyer provided nothing but condescension, patronizing, and blatant disregard.

As a constituent I expected the courtesy of being channeled to one of my representatives of my retirement system that I had paid into for 33 years.

Wrong. Letters and phone calls to Board members at STRS were never returned by those elected/appointed officials. There was recognition of having received my contact but with each call and letter a response came from the Chief himself, Herb Dyer. Dyer would then proceed to give me the STRS punch line as to why my case, along with 5,000 others, was mishandled the way it was.

Talk about solidarity! Blockhead solidarity! One way to keep the troops in line is to have one official mouth- piece.

I was able, finally, to reach one Board member at his home. I will always be grateful to him for being willing to speak with me privately. My sense of that phone call was that he was uneasy but felt it was the right thing to do.

We must never allow any excuses offered as to why any stakeholder does not have total access to anyone we seek a response from at STRS. With the amount of contributions made to our retirement system from educators, boards of education, and local taxpayers and with 450,000 stakeholders' and beneficiaries' security dependent on Board decisions, if anyone is "entitled" to anything in the system it's truthful and fair answers for the membership.

One way of diverting attention from the mismanagement of pension funds within our once proud retirement has been for STRS-OEA ( a hyphen is all that separates them) to go on the offensive and attack the messengers of the challengers.

The written legacy of the disloyal opposition includes allegations that those who have challenged STRS-OEA are "liars," "alarmists," "dissidents," "deceivers," "panderers" (to fear and emotion), "cynics," and "malcontents" (my favorite moniker as we were branded when Dr. Leone exposed the foxes in the hen house in 2003).

Those that have insisted on muckraking reform have been accused of being destructive, deceptive, misrepresentative, just to name a few of the allegations.

What is quite ironic is that some of these same accusers were (and may still be) the disciples of the "Malfeasant Seven," the infamously indicted Board members and Executive Director who were ethically challenged, convicted, and removed from their official duties by the court (or, in Dyer's case, golden- parachuted, with a half million dollars of our funds, by the rascals on the Board before corporate slum-lording was such a well-accepted national pastime).

Membership must insist on open elections in their districts. Once again in this April's Board election attempts were made to disparage, discredit and close-out non-union candidates for the active and retired seats. All's fair in politics, right? Sure, if all contestants are competing on a level playing field.

Why should any candidate not have equal access to the electorate? And the most embarrassing shame of this type of closed election? Can anyone think of a more disgraceful venue for this type of undemocratic process to take place than in the halls of an institution of learning? How can a teacher-candidate look into the faces of their students knowing that because their opponents would not walk nor talk the union label their message was stifled. Are open, free elections only for classroom promotion and democratic idealism.

Some four years ago Dr. Dennis Leone and Mr. John Lazares inspired me to believe that there was a badly needed Renaissance at STRS. Mr. Lazares paid his dues in several ways advocating for actives and retirees as a Board member. He gave of himself until it hurt. None of us who attended his Board meetings will soon forget what he accomplished, personally and professionally.

Dr. Leone has not succumbed to the insults, allegations and confrontations from less than informed colleagues on the Board. He has more than held his own due to his expertise in financial, legislative, and administrative matters. To his much deserved credit, Dr, Leone has provided more oversight, watch-dogging, practical reform, and educator advocacy than any member in the annals of the STRS Board.

Unfortunately for the active and retired educators in Ohio, Dr. Leone's tenure has about concluded. He can rest assured that he has garnered the admiration and respect of all of those educators whom he has taught the meaning of being STRS-literate.

What of the continuing Renaissance minus a Dr. Dennis Leone? First of all, though he may not be on the Board, my best estimate is that he will be in the Board room whenever he believes the decision makers at STRS are not respecting ORC 3307.15. Much to the chagrin of some Board members, administrators, and staff I doubt that Dr. Leone will ride quietly into the education sunset.

There is new reform blood on the horizon. Men like Jim Stoll, Bob Stein, Rich DeColibus, and Ralph Roshong will continue to challenge STRS to provide integrity, transparency, sensitivity and trust for its membership.

The days of unrestrained, out-of-touch mismanagement, and disregard for ORC 3305.17 leading to stakeholder insecurity are going to be closely monitored by a new generation of watchdogs, whistle blowers and reformers inside and outside STRS Ohio.

Jim N. Reed

Dr. Leone challenges the OEA to a debate! "OEA can pick the date, the time, and location. I will be there."

From Molly Janczyk, April 20, 2009
OEA hides behind closed doors when asked for open debate.

They have never even responded to requests.

Not their style which is to hurl accusations hoping something sticks with their loyalists regardless of truth-even when facts are proven correct by their opponents.

Silence is their modus operandi coupled with repeated attacks of any who may disagree with them. They haven't the nerve to debate. Bill L. literally shakes when directly aproached with facts, hangs his head and cannot come up with on the spot reasons for his behind the scenes letters. His way is to write letters without any resistance and put out inuendo.

HOW DO I KNOW? I have directly approached him, confronted him, met with him when he was in the room with those who politely do not support him. I and others have noticed his obvious discomfort in a 'live' venue. Easy to sit behind a desk and issue statements, tell others he will help them write letters and speak to supporters or to STRS behind a podium with no one able to question him.

He hasn't the courage for a real debate in a live setting.

My opinion based on years of communication with him.

-----
Dennis Leone: A bold challenge to Pat Frost-Brooks, Bill Leibensperger and Tim Myers

Think they're up to it?

From Dennis Leone, April 20, 2009

I remember several things very, very clearly about the statewide communication by OEA President Gary Allen in the summer of 2003. (It advised OEA members to contact Bill Leibensperger if they had further questions.) Allen described my 2003 findings of STRS board/staff wasteful spending (and this is verbatim) as “misrepresentations,” as “destructive” and “written with unclear motive.” These things I will never forget. He also wrote in this statewide email of how OEA supported Herb Dyer and the big spender STRS board members of that time period (six of whom – Jack Chapman, Hazel Sidaway, Eugene Norris, Debra Scott, Michael Billirakis, and Joe Endry – all were later convicted in court of ethics violations, along with Herb Dyer himself). Allen wrote this during the summer of 2003, after my 13-page report came out in May of that year. In the recent 2009 statewide email, OEA is now calling me a “dissident board member.” While I was the only board member who originally pushed for the suspension of bonus checks – which OEA now says it supports – OEA-backed board members Ramser, Meuser, and Myers did NOT vote in support of the bonus suspension. OEA writes that it is proud of these three STRS board members – but strangely did not say it is proud of STRS board member Tai Hayden, who also is an OEA member. Was this because she voted in favor of what I proposed, which was the bonus suspension? OEA has sunk to a new low, and apparently is not even aware that its own board members at STRS (except Tai Hayden) are voting against what OEA says it supports.

I would love to have the opportunity to debate the current STRS issues in a public forum with Patricia Frost-Brooks and Bill Leibensperger sitting across the table. Is there anyone out there who could arrange such a thing? OEA can pick the date, the time, and location. I will be there. Board member Tim Myers says the teachers he has spoken to in his district – Elida Local Schools – are NOT opposed to the current bonus checks. I’d love to have the opportunity to address them as well. Betcha Myers isn’t willing to set it up. I recall once asking for an audience with the Dublin City School District teachers after the Dublin teacher union president Dawn Leibensperger (does that name sound familiar?) gave her opinion of my 2003 report to the teachers there. My “equal time” request, of course, was denied by Mrs. Leibensperger. In fact, she expressed her distaste that I even asked for it.

There are emails, letters, and tapes that verify everything I have said above.

Dennis Leone

Election talk: Bill Leibensperger, Molly Janczyk and Kathy Russell

From Molly Janczyk, April 20, 2009
Subject: Double Talk, again!: KATHRYN, Vote for Carol Correthers

Interesting double talk AGAIN from OEA! The FACT IS: -STRS IS CONSIDERING RAISING THE AGE OF RETIREMENT AND AS BILL SAYS: ALL THINGS ARE ON THE TABLE! THAT IS ONE OF THOSE THINGS!!!! Source: STRS Board and OEA Candidate McGreevy who answered in the affirmative when I put this question out and he answered: All things are on the table to my asking if upping retirement age was being considered. -If anyone is naive enough to think that upping contributions IS NOT being considered, well, there is a bridge I 'd like to sell you as I need the money to pay for health care. -UPPING CONTRIBUTIONS DOES TAKE LEGISLATION! -UPPING RETIREMENT AGE TO MY KNOWLEDGE TAKES STRS BOARD APPROVAL AND DOES NOT NEED LEGISLATION: CORRECT ME IF I AM WRONG: I have been told for years that the STRS Board CAN do this themselves!!!!!

If anyone is using smoke and mirrors it is OEA/OEA-R! NOT JAMES STOLL who is trying to get facts out to actives! BILL L. HAS ALWAYS IN MY OPNION SKIRTED FACTS WITH RHETORIC AND USED ALARMIST' TACTICS TO SWAY VOTERS AWAY FROM FACTS! JAMES STOLL, LIKE DENNIS LEONE, USES STRS FIGURES NOT OEA SHROUDED ONES.

EDUCATORS: SHOULD YOUR STUDENTS PASS BECAUSE THEY DID BETTER THAN THE NEXT CLASS EVEN THO THEY UNDERPREFORMED? THAT IS BILL L./OEA/STRS LOGIC.

IT IS YOUR MONEY AWARDED STRS STAFF WHEN YOU CANNOT AFFORD YOUR MEDICAL BILLS IN THESE DIFFICULT TIMES! STRS EXISTS BECAUSE OF YOUR CONTRIBUTIONS AND YOU, THE SHAREHOLDER, SHOULD COME FIRST!!!! DO YOU?

IF ONLY STRS, OEA, OFT alarmed folks long ago of this impending crisis AND THEY KNEW IT WAS COMING SINCE THE EARLY 90's! JOE ENDRY advised them at that time change was needed and legislation was in the offing to mandate health care. OEA AND STRS said it was not necessary! Former Exec Direc and OEA's pick Dyer said he wanted out of the health care business and it seems that is just where we were headed-spend what's left and then say, we're out. WHAT STOPPED THIS??? A FEW RETIREES HEADED BY DENNIS LEONE AND JOHN LAZARES WHO BROUGHT THIS TO THE ATTENTION OF THE MEDIA MUCH TO OEA's DISMAY! OEA's reaction was to hurl accusations and untruths slandering Leone never to apologize even though Leone was proven correct on all counts and Dyer and his 5 ACTIVE STRS OEA BOARD MEMBERS AND ONE RETIREE FOLLOWER WERE ALL CONVICTED OF ETHICS VIOLATIONS! They chose to ride the wave of the market, spend on themselves and NOT act prudently on behalf of membership with long term planning to secure health care funding. You can deny bad behavior all you want BUT WHEN DOES I T BECOME PAINFULLY AND BLATANTLY CLEAR THAT STRS AND OEA DID NOT PROTECT MEMBERSHIP??

JAMES STOLL IS TRYING TO EDUCATE YOU AND PROTECT YOUR FUTURES! LEONE AND LAZARES WARNED FOR YEARS THAT PENSIONS MAY BE JEOPARDIZED IF STRS CONTINUED ITS PATH! HERE WE ARE! STRS IS CONCERNED ABOUT PENSIONS FOR ITS ACTIVES DOWN THE ROAD!

Head in the sand or research yourselves the real facts! Listening to Bill L. will only ease your minds short term but Leone, Stoll, Lazares try to inform and work towards long term solutions to protect you.

Jim Stoll: Active STRS Board Candidate Bob Stein: Retiree STRS Board Candidate

McGreevy is OEA-R prototype and though a nice man, I feel unable to leave his comfort zone to vote for real change against his comrades.

From Bill Leibensperger, April 9, 2009
Subject: RE: KATHRYN, Vote for Carol Correthers

Dear Ms. Russell,

I’m afraid someone has sold you a bill of goods, but I certainly respect your right to vote for the candidate of your choice.

There are two key reasons we did not endorse Mr. Stoll for this position: 1) he didn't screen, and 2) Carol Correthers is a superior candidate. She is the OEA-endorsed candidate, which means that she has passed a screening made up of knowledgeable members representing both active and retired teachers. The questions to which she responded required an in-depth knowledge of the issues, a commitment to serve all, and an understanding of the duty.

I20am guessing that your members are responding to the deceptive communication from her opponent. I have seen the chart that Mr. Stoll is sending around. Probably a majority of members are "frosted" over the whole bonus thing. Unfortunately, there are those (including a current Board member who is supporting Mr. Stoll) who would pander to members' emotions and fears in order to make themselves look good, rather than work collaboratively with others to protect the integrity of a very strong system that will take care of all of us for the rest of our lives.

Mr. Stoll's email has selected "facts." One of the important ones missing is that the Board did approve a new bonus policy without a dissenting vote after much deliberation and preliminary voting. Another fact that is difficult for many of us as teachers to understand is that bonuses are actually the way investment staff are paid throughout the industry. STRS investment staff have outperformed the industry, but the Board in their wisdom and in respect to the members they serve have passed a policy that curtails bonuses when there are losses (even when the losses are significantly less than the overall market).

Carol Correthers does support strong operational controls and understands that members expect STRS to run their operations in a prudent way. I think you can rest assured that Carol will always make go od decisions based on intelligent deliberation and a strong commitment to all members of the system. Certainly she will not try to alarm members with "the sky is falling" kinds of messages, as she understands the gravity of the position for which she is running. Members will find her very accessible.

It is important that we protect our retirement by electing intelligent, reflective, and hardworking representatives who will do their homework and never put any personal interests ahead of the well being of current and future retirees. I hope we can count on you to support OEA-endorsed candidate Carol Correthers. She has my vote.

Please let me know if I can be of any further assistance.

Bill Leibensperger
Vice President
Ohio Education Association

From Kathy Russell, April 6, 2009
Posted To: govtsrv Conversation: KATHRYN, Vote for Carol Correthers
Subject: Re: KATHRYN, Vote for Carol Correthers

Dear Mr. Leibensperger,

I hope you are aware that more and more people are becoming very upset about the policies of the OEA and particularly the way the OEA endorsed candidates who are elected to the STRS board have been wasting our hard earned retirement money. More and more active teachers are watching what is going on at STRS and are choosing to vote for the other candidates, NOT endorsed by the OEA. We would much rather elect people who have our best interests at heart like Dennis Leone. We are tired of the way the STRS board has wasted our money on extravagances for themselves when they should have been taking better care of OUR money. Thanks to your board members, retired teachers no longer get a 13th check, the health care fund is in serious danger of being completely depleted, and the retirement fund has lost many billions of dollars. We would rather elect someone who will actually be responsible to take care of OUR money, not just say they will, and then do whatever the OEA tells them to do with it. Furthermore, we are appalled by the way the OEA refuses to allow the other candidates to campaign in the public schools. EVERY candidate has a right to campaign and should be allowed to put fliers in any school they wish to. It is outrageous that the OEA representatives in many school districts will only allow campaigning for their own can didates. I, for one, will be voting for JIM STOLL, not Carol Carrethers.

Sincerely,
Kathryn Russell

From Bill Leibensperger, April 6, 2009
Subject: KATHRYN, Vote for Carol Correthers

Dear KATHRYN,

Those of you who are active teachers and contribute to STRS will be receiving a ballot in the mail in the next few days to elect a new member to the STRS Board. OEA has endorsed Carol Correthers for this position. Carol is a special education teacher in the Lorain City Schools. She has a wide range of experience, including service on the OEA Board of Directors and a local school board. She is committed to this important role and in her advocacy for our members.

The current state of our economy and the rapid decline in stock prices over the last 18 months has made the benefit of belonging to STRS even more valuable. I’m sure you all have friends or family members who have lost their jobs or lost their retirement savings. For Ohio’s teachers, the benefits provided by STRS represent our economic security in retirement, and OEA will continue to work to protect those benefits. This will not be easy. STRS has experienced more than $30 billion in market losses, and the STRS board and staff must work together to address policies on how to manage retirement and health care funds as we wait for the securities markets to recover. At times like these, we need strong, experienced members on the STRS Board to help ensure that we continue to have the pension and retiree health care benefits we need and deserve. Carol Correthers is just such a person.

Carol is a classroom teacher who has earned the endorsement of both OEA and the Ohio Federation of Teachers. Through her experience on other boards, she’s overseen budgets, set policy and dealt with personnel issues. She knows that collaboration and thoughtful judgments yield better results for our members than knee-jerk reactions, bombast and combativeness. However, make no mistake: Carol is a strong and decisive leader.

I noted with dismay that in a recent campaign email, Carol’s opponent implies that STRS might raise the retirement age, increase required contribution rates from members or make other changes to our pension benefits. The fact is the STRS Board does not have the power to do any of these things. Such changes require a change in state law. What is true is that the STRS Board is examining changes that they may recommend for legislation and that “everything is on the table.” Given the critical nature of these discussions, I feel it’s more important than ever to have Board members with the knowledge, experience and temperament to serve in this important role.

Please make the time to vote in the upcoming STRS Board election, and I encourage you to vote for Carol Correthers.

Retired members of STRS will be electing two new Board members. OEA has endorsed James McGreevy and David Preslan for these seats on the Board. Please do all that you can to get out the vote among retirees to get these two highly qualified gentlemen elected. More information on each of OEA’s endorsed candidates is available on www.ohea.org.

Sincerely, Bill Leibensperger
OEA Vice-President

Deja vu.....Sen. Wachtmann re: STRS in 2003 -- did he have a crystal ball and gaze 6 years into the future?

He must have!

From John Curry, April 20, 2009

Below is a letter I received (in 2003) from Sen. Wachtmann re. my letter to him regarding misspending, mismanagement, and the entitlement mentality at STRS. That was even before the bonus controversies (yes, there was more than one bonus controversy) , 6 criminal ethics convictions of former STRS Board members and a former Executive Director, and a host of other travesties brought to light by soon-to-be-retired STRS Board member Dr. Dennis Leone.

I take particular note in what Senator Wachtmann said in that letter (attached) concerning health care as, this week, the STRS Board will begin to discuss more cuts to benefits AND increased deductibles as well. Here is what he said on that cold February day back in 2003:

"STRS has not been as farsighted as other systems, such as the Public Employees Retirement System, on managing its portfolio and especially taking early steps to prevent more drastic measures to ensure health care benefits are there for all of the retirees in the future."

We have(n't) come a long way, baby!

John Curry

P.S. The OEA was also searching for that "dedicated stream of (healthcare) revenue" back then... they still haven't found it, have they?
Click image to enlarge
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