ORSC Flashback - (yes, you read it correctly, ORSC!) 6 years ago......oversight that was no more than a review of legislation

From John Curry, July 27, 2009
Of course, when you have ORSC board staffed by politicians who like bonuses paid to SRS investment associates....what do you expect! Some things never change, do they? Paul Kostyu's wisdom is eternal, isn't it?

John

“There was no reason for us to believe the pension funds were being misused until the STRS fiasco,” she said. “We thought there was oversight by the individual (pension) boards. Now, we’re taking a hard look at it.”

-former ORSC board member and former State Representative, Michelle Schneider

Note from John...now, do you see why we should be writing letters to the STRS board and especially to the ORSC demanding that STRS not touch our COLA?

Kathie Bracy's blog contains a listing of the ORSC members and their individual email addresses. Some of them are up for reelection soon and ....they will be more likely to listen to you, won't they?

July 26, 2003

Report intended to critique STRS pensions
By PAUL E. KOSTYU

Copley Columbus Bureau chief

COLUMBUS — An annual report by the Ohio Retirement Study Council is supposed to examine Ohio’s five public retirement systems.

But it actually does no more than review legislation that came before the General Assembly in the past year.

According to Ohio law, the council must file the report with the governor and the Legislature “covering its evaluation and recommendations with respect to the operations” of the pension funds.

The most recent report was submitted on Jan. 30. Similar to past reports, it simply recaps new bills that have to do with the pension funds; it says nothing about the operations of the funds.

The State Teachers Retirement System has been criticized during the past two months following news reports of excessive spending on staff bonuses, artwork and travel.

A flurry of legislative initiatives call for improved accountability and oversight of the five funds. The proposals include:

• Requiring a performance audit of each fund;

• Giving power to the Ohio inspector general to investigate;

• Requiring employees with any role in deciding how funds are invested to file financial disclosure forms with the Ohio Ethics Commission.

• Changing the make up of pension boards and providing a way to remove members.

Some people, including Gov. Bob Taft, argue that the proper oversight already exists with the study council, which includes six lawmakers and three appointees by the governor. Taft vetoed a measure in the state’s budget bill that would have given the inspector general some oversight authority.

A number of state lawmakers, including members of Taft’s party, have vowed to overturn that veto.

But the study council’s annual report says nothing about bonuses, travel or any other policies affecting employees and their work at the funds.

Sen. Kirk Schuring, R-Jackson Township, has been a council member since 1999 and served two years as its chairman. He’s also been a strong critic this year of STRS.

He contended the annual report is what it should be — “straightforward” — and argued that the statute is “ambiguous” about how much power the council has to look at day-to-day operations.

“We have followed the spirit of the law,” he said. “We review and study. That should not be confused with the responsibility of the inspector general.”

When lawmakers question the intent of existing law, they can go to the Legislative Services Commission. It writes proposed legislation at lawmakers’ requests.

Schuring said he is not aware of any request to the commission to research the intent of those who created the study council.

Rep. Michelle G. Schneider, a Cincinnati Republican and the council’s vice chairman, said the flap over STRS illustrates the weakness of the current law and the need to give the council more oversight power.

“There was no reason for us to believe the pension funds were being misused until the STRS fiasco,” she said. “We thought there was oversight by the individual (pension) boards. Now, we’re taking a hard look at it.”

STRS FLASHBACK - 4 years ago - The OEC drops the hammer on Herbie after a hair-brained e-mail to a retiree!

From John Curry, July 25, 2009
Dyer was pressured to resign from his $153,000-a-year post in the summer of 2003 after he defiantly declared in an e-mail to a retired teacher that the retirement system was the board’s money "to distribute as they see fit."

"I only wish there would be some way that restitution could be secured for STRS and the retirees," said Dennis Leone, the former superintendent of the Chillicothe school system whose private investigation into the system’s spending helped bring down Dyer.

The culture of accepting expensive gifts with the retirement system "involves all levels of staff in the investment sections," Paul Nick, chief investigative attorney for the Ohio Ethics Commission, said at the time."

Agency’s ex-chief charged in gift probe

Food, travel among items man who led retirement fund is now accused of accepting

Thursday, August 04, 2005

Bill Bush

THE COLUMBUS DISPATCH

Herb Dyer resigned from the State Teachers Retirement System in 2003.

The former head of the State Teachers Retirement System, who resigned in 2003 amid accusations of extravagant spending by his agency, was charged yesterday with taking gifts from contractors.

Herb Dyer is charged with four counts of conflict of interest. Authorities say he received items of value between 1998 and 2003 from the Frank Russell Corp., a real-estate adviser under contract with the teachers’ retirement system.

Dyer accepted meals, golf outings, travel and tickets to the Broadway musical Hairspray, according to the Columbus city attorney’s office, which brought the charges.

Dyer also is accused of not disclosing the source of the gifts on his state-mandated ethics statements.

Dyer did not return a telephone call left at his home in Powell yesterday evening.

The violations are first-degree misdemeanors punishable by up to six months in jail and a $1,000 fine. Dyer is scheduled to be arraigned Sept. 8.

"The law prohibits public officials, whether trustees of the retirement system or not, of receiving things of value from those they do business with," said David Freel, director of the Ohio Ethics Commission, which investigated Dyer and referred charges in April.

The law also requires officials to report any gifts of more than $75.

According to the charges, Dyer received and did not report:

• A golf outing, including transportation, valued at $169.

• Meals at Mitchell’s, Downtown, and Barcelona, in German Village, totaling $125.

• Tickets to Hairspray in New York City, valued at $550.

• Other assorted meals, drinks, lodging and entertainment for himself and his wife, totaling hundreds of dollars.

In June, former State Teachers Retirement System board member Hazel Sidaway, 61, of Canton, was charged with seven ethics-law violations accusing her of receiving free meals, gifts, travel and outings from businesses and people doing business with her agency.

At the time, officials said that dozens of other board and staff members of the State Teachers Retirement System could face similar charges.

The culture of accepting expensive gifts with the retirement system "involves all levels of staff in the investment sections," Paul Nick, chief investigative attorney for the Ohio Ethics Commission, said at the time.

Dyer was pressured to resign from his $153,000-a-year post in the summer of 2003 after he defiantly declared in an e-mail to a retired teacher that the retirement system was the board’s money "to distribute as they see fit."

His comments came as teachers were complaining that the system had taken a $12 billion-dollar bath when the stock-market bubble burst; was cutting retiree health benefits; and was opening a new $94.2 million stone and glass Downtown office building.

"I only wish there would be some way that restitution could be secured for STRS and the retirees," said Dennis Leone, the former superintendent of the Chillicothe school system whose private investigation into the system’s spending helped bring down Dyer.

He has been elected to the retirement system’s board and is to be seated this fall.

The gifts that were routinely accepted were "symptomatic of a culture of entitlement that had developed over a number of years," Leone said. "I hope it will never happen again."

bbush@dispatch.com

Click image to enlarge.

STRS FLASHBACK - 5 YEARS AGO - a letter from the Plain Dealer about a rubber stamp board - Please click on the link below YOUR sculpture!

INTEGRITY

...guiding all that we do at STRS Ohio, from Retirement Board actions to counseling members and investing money.

Sculpture: "Integrity" purchased by STRS for $100,000
..............................................................

.................................................................................

http://www.capitolbeat.org/contest/2004/04winningentries/Single%2075%2B.pdf

From John Curry, July 30, 2009

STRS FLASHBACK - 6 Years Ago - Laura called it a "success" because board members were using it!

From John Curry, August 5, 2009
"Ecklar called the form a success because board members are using it."

Oh really?

In 2002, State Teachers Retirement System board members made 49 trips to conferences for which they were urged to file voluntary evaluations.

• Michael Billirakis spent $5,932 on four trips, filed no reports.

• Jack Chapman spent $14,684 on 12 trips, filed seven reports.

• Joe Endry spent $9,030 on six trips, filed two reports.

• Gloria Gaylord spent $3,803 on four trips, filed no reports.

• Paul Marshall spent $1,224 on one trip, filed no report.

• Rick Moore spent $2,735 on three trips, filed no reports.

• Eugene Norris spent $14,308 on seven trips, filed no reports.

• Deborah Scott spent $6,167 on six trips, filed one report.

• Hazel Sidaway spent $12,535 on seven trips, filed three reports.

Canton Repository, August 9, 2003

STRS paid $70,418 for trips in 2002

By PAUL E. KOSTYU
Copley Columbus Bureau chief

COLUMBUS — The State Teachers Retirement System board created an online form to evaluate the conferences its members attend.

The electronic form was created because a paper one wasn’t being used, said Laura Ecklar, a spokeswoman for STRS.

But few board members use the electronic version, either, and those who do almost always say the seminars are “excellent.”

Critics of the pension fund say out-of-state travel by board members is indicative of STRS’s excessive spending habits.

In 2002, the first year evaluations were filed, nine current and former board members made a total of 49 trips to conferences, costing STRS $70,418. They filed 13 evaluations.

The top traveler that year was Jack Chapman of Reynoldsburg, who spent $14,684 on 12 trips. He was followed closely by vice chairman Eugene Norris of Columbus, who spent $14,573 on seven trips. Norris’ per trip cost, however, was higher at $2,044. Chapman filed seven evaluations, the most by any board member. Norris didn’t file any evaluations.

In June 2001, the board’s Committee on Board Orientation and Development asked the STRS staff to create a mechanism so members could file reports of their trips online. The evaluations were intended to help current and future board members decide whether it was worthwhile — in terms of education and cost — to attend similar seminars sponsored by the same organizations.

Ecklar, director of Communication Services, said there was no cost involved. Her office developed the wording and appearance of the form, while the fund’s Information Technology Services programmed it for the internal Intranet. She said several months were required to develop and test a program. The form became available in January 2002.

Ecklar called the form a success because board members are using it.

Hazel Sidaway of Plain Township, a former board member and now-retired Canton teacher, chaired the committee that initiated the electronic form. In the committee’s last report that was presented at the board’s June meeting, seven meetings were recommended “as beneficial.”

Three of those seven meetings were sponsored by the International Foundation of Employee Benefit Plans. Yet, two evaluations comment on the organization’s seminars. The annual meeting of the National Council on Teacher Retirement is recommended based on two evaluations, one that said it was “good” and the other said it was “excellent.” The recommendation of the annual meeting of the National Conference on Public Employee Retirement Systems is based on one evaluation.

Chapman was the first to use the electronic form in February 2002 and, is the most frequent user of the program. According to STRS documents, Chapman is the only board member to file evaluations in 2003.

Chairwoman Deborah Scott, who at the June board meeting urged members to file evaluations, submitted one from the six trips she took.

None of the seminars were panned. In fact, 10 of the 13 evaluations said the meetings were excellent and others were said to be good, but still were recommended for other board members to attend.

Joseph Endry rated a convention in Anchorage, Alaska, as excellent “because of very current information about retirement system concerns.”

Chapman recommended the same meeting “based solely on the opportunity this convention provides for trustees to network with peers.” One of the sessions he attended discussed “the loss of faith in corporate America.”

In 2002, State Teachers Retirement System board members made 49 trips to conferences for which they were urged to file voluntary evaluations.

• Michael Billirakis spent $5,932 on four trips, filed no reports.

• Jack Chapman spent $14,684 on 12 trips, filed seven reports.

• Joe Endry spent $9,030 on six trips, filed two reports.

• Gloria Gaylord spent $3,803 on four trips, filed no reports.

• Paul Marshall spent $1,224 on one trip, filed no report.

• Rick Moore spent $2,735 on three trips, filed no reports.

• Eugene Norris spent $14,308 on seven trips, filed no reports.

• Deborah Scott spent $6,167 on six trips, filed one report.

• Hazel Sidaway spent $12,535 on seven trips, filed three reports.

STRS FLASHBACK - 6 years ago - The days when STRS board members were flying high....and flying expensive...

.....and Laura comes to their rescue!

From John Curry, August 6, 2009

Deborah Scott, chairwoman of the STRS board and one of those targeted by Childers, said she had “no idea what this person is talking about.” Laura Ecklar, a spokeswoman for STRS, said, “We have not purchased upgraded coach tickets. We do not do this. We do not allow it.”

STRS travel policy, however, allows frequent-flier coupons to be used to upgrade seats, she said. The policy applies to the board and staff.

Canton Repository, August 9, 2003

Travel agent: STRS board enjoyed frills

By PAUL E. KOSTYU
Copley Columbus Bureau chief

COLUMBUS — Coach airline seats turned into first-class travel in a legal scheme used by members of the board of the State Teachers Retirement System, according to a Chillicothe travel agent.

After analyzing travel receipts turned in by board members from 2000 through 2002, Terry Childers, a travel agent for the past eight years, said it was clear to him that board members manipulated the system so they could fly in “cushy front seats.”

Deborah Scott, chairwoman of the STRS board and one of those targeted by Childers, said she had “no idea what this person is talking about.”

Laura Ecklar, a spokeswoman for STRS, said, “We have not purchased upgraded coach tickets. We do not do this. We do not allow it.”

STRS travel policy, however, allows frequent-flier coupons to be used to upgrade seats, she said. The policy applies to the board and staff.

The board spent $221,236 on out-of-state travel from 2000 to 2002, according pension fund reports. By law, board members must book coach class, but there are multiple fees for coach seats. More expensive seats in that fee structure gives a person a better shot at first-class seats if any are available.

With an expensive coach seat in hand, a traveler can upgrade to first class by either using a complimentary system offered by some airlines or by using frequent flier miles. Because frequent flier points cannot be assigned to a business, when STRS board members travel, they accumulate those miles on their individual accounts.

Scott said she always flies coach and has never been in a first-class seat on a board-related trip. She said she could only speak for herself and not the rest of the board.

Scott said she sometimes has to fly out of Cincinnati, where she lives and where Delta Airlines has a hub. Both she and Childers said Delta flights there are more expensive than those from Columbus or Dayton.

Connie Hahn, the owner of En Route Travel Services, a Columbus agency that books most of the travel for STRS, refused to talk about STRS travel. After checking with her attorney, she said the information was privileged.

“I don’t want anything to be misconstrued,” she said. “They’re going through an audit. I don’t want to talk about it.”

The Ohio Retirement Study Council has approved an audit of STRS, but it has yet to begin.

Hahn and Childers agreed that ticket pricing is based on airline capacity, advanced purchase, length of stay, time of travel, length of trip and availability of seats. Fees and coach class designations vary from airline to airline.

Childers, a retired educator who started with Garaway Local Schools in Tuscarawas County, said he believes board members purposely booked the more expensive coach seats. He said records indicate some seats reserved weeks in advance were more expensive than they should have been.

He also said some tickets were bought just days before a flight when the event being attended was scheduled months in advance. That makes the seat more expensive.

“It bothers me greatly that waste is going on,” he said. “There’s too much at stake here. These people blatantly abuse the public’s money. It’s my money and the public’s money and it’s got to stop.”

Chillicothe Superintendent Dennis Leone, who provided Childers with the travel documents that he obtained from STRS, said it was “a shameful practice to deliberately and consciously pay more than necessary for air fare.”

“This by itself represents ground for some board members to step down,” Leone said.

He said Childers’ findings were “absolute, undeniable fact” that coach tickets costing “four or five times more than the coach tickets the rest of the world buys, have frequently been purchased.”

Childers said he could save STRS money.

“The objective of our agency is to get the very lowest fair,” he said. “If the board is sincere about regaining trust, our agency is willing to do their ticketing.”

Tom Curtis to Joy Silverhart: Why STRS wants to cut our COLAs

From Tom Curtis, August 8, 2009
Subject: Re: LCRTA Pension Information

[Joy had sent out a message to retirees urging them to contact STRS Board members re: possible COLA cuts]

Hello Joy,

How are you doing? I hope you are doing well.

Thank you for sending along the email below. I am encouraged to see that more and more retirees are "possibly" getting involved. However, few have taken the time to really understand how poorly the STRS/OEA/ OFT/ ORTA have represented us in the past two decades. ORTA has become totally irrelevant in my mind. The leadership of that organization just sits on their hands and keeps their mouth closed. The current executive director of ORTA sits in many, many meetings month after month and says absolutely nothing about the mismanagement and misspending by the STRS. How can that be? Well, it is because the majority of the RTA organizations that are close to ORTA are simply luncheon or dinner associations. The membership attend only for social purposes. They have little to no desire to hear any bad news about their retirement pension. When those of us that have been attempting to spread the word (CORE) have attempted to contact these groups, most have simply not replied. I guess they are waiting for ORTA to provide some direction, but that is not going to happen.

I have personally found that far too many retirees just do not desire to hear any bad information about any of the organizations I listed above. They are far more comfortable with their heads in the sand. That is very sad considering the education they possess. They are certainly NOT pro-active.

In my opinion, the leadership of the organizations listed above is really more concerned about the dedicated flow of income, which is the life blood for each of them. None of them truly care about retirees as they claim they do, or they each would have been much stronger advocates then they ever have been. I could cite many examples that would verify my opinion, but few listen.

Individually, we have been on the short end of the expenditures of these organizations for many years now. STRS benefit recipients have paid the investment staff some of the top salaries within the industry, then millions of dollars in bonuses on top of that. All the leadership of the STRS has done is make the investment people feel very entitled. We are told either we pay them that much or they will leave the STRS. Do you really think that is the case? No, it is not and statistics prove such. However, collectively, the STRS investment staff has lost a whopping $42+ billion dollars in this decade. This is why they desire to cut our COLAs.

I do not know if my many statements above are far too strong for most retirees, but this is what I have experienced since my involvement beginning in 2003. If you choose, please pass my comments onto the LCRTA.

Tom Curtis

STRS Flashback -5 Yrs Ago; An unanswered letter sent to OEA's Gary Allen on 8-9-04...some things don't change (except the HC premiums), do they?

From John Curry, August 9, 2004

Dear Mr. Allen,

Your most recent edition of "Ohio Schools" contains an article critical of S.B. 133 that doesn't put into proper perspective how your organization (OEA) failed over 100,000 retiree members of Ohio STRS.

The current OEA dominated(not for long) and affiliated STRS board lacked the foresight to ensure that current and future retirees do and will have quality and affordable health care. I realize that health care benefits are not guaranteed by any state retirement system, but how can you justify the PERS premium of $80 per month for a retiree and spouse vs. the STRS premium of $562 per month for employees who also spent 30 years in public service? The influential and progressive(?) thinking OEA didn't put pressure on our legislature to increase the current 1% contribution rate by STRS into health care funding. The next lowest state retirement system health care contribution rate is more than double this 1%. OEA couldn't muster up the courage to press for this increase years ago when it was known that 1% was not enough, didn't want to ruffle feathers!

The Ohio Schools article seems to villify the passage of S.B. 133 as a bad omen for teachers. Both of us know that the passage of S.B. 133 eliminates your organization's future ability to maintain control over a current blind and "out of tune with reality" STRS board that has floundered with your organization's blessings and endorsements. This same board also enjoyed misspending millions of dollars on a 90 plus million dollar building, globetrotting, Kings Island tickets, alcohol, and the list goes on and on without consideration of the Ohio Revised Code and its requirement of fiduciary responsibilities to ONLY its retirees.

I know that your OEA agenda demands an OEA majority on the STRS board - sorry, Gary, it's not in the cards now. You can use your OEA magazine to strike fear into the lives of active teachers' minds as to how your organization's teachers have been ill served by the passage of S.B. 133. You fail, however, to inform your membership of the above mentioned spending of millions of dollars by this OEA dominated board who for years never saw a board motion that they didn't like. It WAS an age of rubber-stamping at its golden best.

Gary, no longer are you and your organization able to spoon-feed active teachers on how to think and act. With the advent of the electronic media, Dr. Dennis Leone (STRS whistle blower), John Lazares (newest "reform" STRS board electee), the Canton Repository, and the Plain Dealer- your organization's iron grip on active teachers' minds is finally being realized for what it currently is- a gradually loosening grip.

If it hadn't been for the lack of insight by your organization, S.B. 133 and its competing house bill wouldn't have been necessary. The OEA's generous "pac" donations to politicians on both sides of the aisle didn't bail you out this time. These politicians respect for ethics and/or fear of not being reelected took a priority over your campaign contributions. STRS retirees have found that, "with friends like the OEA, who needs enemies?"

Both the STRS and your organization need to reexamine your concerns for the retired teachers of Ohio. STRS has an O.R.C. mandate- your organization should have a mandate of care and concern for your former dues paying members.

For the OEA, forking out over $150,000 for your salary, $50,000 to $60,000 for secretarial salaries, and salaries of over $100,000 for labor relation consultants- you and your organization could and should have taken serious measures to "clean-up" the STRS organization if for no other reason than to show your dues paying members that they were getting the best bang for their bucks. The OEA's lack of action has contributed to some of my fellow retirees having to make the decision of whether it will be food or medicine.

With winter coming on, the reality of home heating bills will compound this situation. OEA's lack of care, leadership, and compassion will now be realized by its former dues paying members. Fool the active teachers once, shame on you; fool them twice, shame on them. Throughout modern history, many companies and most trade unions have looked out for the health and welfare of their employees AND retirees. The OEA has sorely abandoned the latter. You now have reached a point in time to reform your organization's concern for its retirees, will you heed the call?

You have questioned Dennis Leone's "motives" upon reading his 13 page report about the mismanagement and spending fiasco at STRS. Once Dr. Leone's facts were presented, they were not disputed-not even by you. You never apologized to Dr. Leone. If you wish to question my motives for writing this letter to you - please do. In fact, I'll even save you the time and trouble by supplying you with my motives. I wish to see the rape of retirees by the OEA controlled STRS board stop immediately. I wish to see the STRS return to the Cadillac of retirement systems that it once was. I wish to see STRS retirees live out their lives without being one major illness away from becoming bankrupt thanks to the miserable and expensive health insurance coverage that STRS offers. I don't expect an apology either- I expect action and not the cancellation of two health care advocates meetings in a row. The next time you or the OEA complains about S.B. 133, you should now understand why this bill became law. Every day more and more current and retired educators are becoming cognizant of why this baby was born.

John Curry

30 year teacher retiree -a PROUD CORE (Concerned Ohio Retired Teachers)

Holderman to Curry...."We must do it for ourselves"

From Ryan Holderman, August 7, 2009

Subject: Re: Dennis re.....Fw: What the ORC has to say about our STRS COLA!

Dear John:

Based on what Dennis had to say about ORC 3307.67 (copied below), it would appear that we're apt to see some political shenanigans with the COLA matter.

Laura Ecklar may be correct in stating that elimination of the COLA has never been discussed by the STRS Board. They have, however, discussed reducing the COLA and restricting access to it until later in retirement.

All this may be moot once a bill recommended by the ORSC and, as Dr. Leone mentions, likely co-sponsored by Representatives Lynn Wachtmann and Todd Book moves to the Ohio House. There are no guarantees about the nature of that bill. The amount our COLA is reduced will be determined by the authors of the bill. Elimination of the COLA is still on the table at that point. That would provide STRS and any of the other retirement systems a reverse version of plausible deniability. They would be able to pass the buck for severe cuts or elimination of the COLA on to the legislature.

We must monitor the situation very carefully. While letters, calls, etc. to STRS board members are still very important, we also need to be prepared to speak loudly and with one voice to our legislators once a bill has been put forth. Now is not the time for retirees to remain complacent. We need to speak loudly and militantly against any attempts to further negatively impact or pension income. Neither OEA nor ORTA is speaking out against the reduction of the benefits of retirees or for the "grandfathering" of the COLA for those already retired, especially those who retired pre-1999. It it is going to be done, we must do it for ourselves.

Later,

Ryan

Dennis Leone on your COLA: ORC likely to be revised

Dennis Leone to Ryan Holderman, August 7, 2009
Subject: Re: What the ORC has to say about our STRS COLA!

Yes, Ryan, ORC 3307.67 likely will be revised. Here is how I believe the matter will play out: All 5 pension systems have been instructed to present recommended plans to the Ohio Retirement Study Council (ORSC) by September 9 to address future pension system solvency. While there will be different components for each pension system in the 5 recommendations, all will be rolled into one bill -- likely co-sponsored by Lynn Wachtmann and Todd (both members of the ORSC). For sure, a new bill WILL pass and it will amend
3307.67. It would not surprise me if the final version of the bill will have identical language for all 5 pension systems pertaining to certain thins, like the COLA and the future purchase of out-of-state service credit. The bill may have different language, however, for each pension system for things like a minimum retirement age, required active contributions, and required employer contributions.

What concerns me to the most if that the STRS plan most definitely will contain OEA-desired language to raise the school board contribution rate by
2.5%. Every lawmaker I have talked with is willing to raise the active contribution rate -- even by as much as 3% -- but they are totally opposed to raising the employer contribution rate. OEA, stupidly, has taken posture that the active rate should not go up unless the school board rate goes up too. So what might this mean? It will mean that order to achieve the total dollars needed to ensure pension solvency in the future, the Legislature will have to cut more in another area. And where do you think that will be? My guess is the COLA. OEA will be just as naive about this as was about the true cost associated with the 35-year/88% rule, which has been a ridiculous
9-year, $1 billion failure. Craig Brooks is the only board member who understands the potential down side to STRS insisting on a 2.5% school board contribution rate increase, and how such -- when rejected by the Legislature -- will translate into other areas (like the COLA) being hit harder.

Dennis Leone STRS Retiree Board Member

From Ryan Holderman (no date)

Dear Dr. Leone:

I recently sent the information below to several CORE constituents. Several have asked if this bit of the ORC has been revised, amended or repealed. I, frankly, do not know the answer to that question and have not been able to find information about it on the web. Can you shed some light on it?

Would ORC 3307.67 have to be repealed or amended by the legislature before STRS could reduce the COLA?

Sincerely, Ryan

Blowing smoke...........

From: John Curry
Subject: Collective Embarrassment - An OPERS LE (law enforcement) retiree says Laura ia "blowing smoke."
Date: Thu, 6 Aug 2009 13:29:28 -0700

Brent...I agree wholeheartedly!

Of course, if I got over 120K per year and my spouse was an MD I really wouldn't be able to understand the plight of the retiree, now would I?

John

----- Original Message -----

From Brent Henschen
Sent: Thursday, August 06, 2009 10:07 AM

Subject: Re: Collective Embarrassment

John, I can't really agree with that Laura's comments on how COLA affects current retirees. She makes it sound like those who have been retired and received COLAs are ahead of current or future retirees and that is just not so. Number one, the cost of living has increased since we retired and our COLAs have been used for that and number two, employees who continued working and are retiring now or in the future, probably received pay increases at their jobs which will make their monthly pension amounts higher when they begin retirement. I think she is just "blowing smoke" ! Brent

From: John Curry

Sent: Thursday, August 06, 2009 1:50 AM

Subject: Fw: Collective Embarrassment

----- Original Message -----
From: Dennis Leone
To John Curry and Sharon Dyke
Sent: Wednesday, August 05, 2009 7:41 PM
Subject: Collective Embarrassment

Yes, this is the company-line STRS response to everyone who expresses concern about the COLA. It is rather amazing to read the next-to-the-last paragraph about the concern that STRS says it now has for the future, given that I repeatedly (and publicly) begged the board and the staff last September, October, November, December and January to stop implying to the STRS membership that everything was fine and that pensions were secure. My pleas were ignored, then the bubble burst in February – after we had lost $30 billion in assets (which was 40% of everything STRS has). It was plainly naïve and stupid that the staff and my fellow board members were unable to see how bad things were getting and what a public relations nightmare the staff bonus checks were becoming. They really thought they knew better. They fought against suspending the bonus checks and they fought freezing salaries, because – the majority said – we need to attract the “best and the brightest” and we need to provide “an incentive for staff to perform at the highest level.” While bonuses finally were suspended and while wages were finally frozen (only after much ugliness), staff still resists having a hiring freeze, there still is no board support for having STRS staff members pay more for THEIR health insurance, and the board even rejected my motion to place a moratorium on board member out-of-state travel. The whole matter is rather sad. Collectively, OEA, OFT, and ORTA have been an embarrassment on STRS issues. They really haven’t helped one bit in these issues. They’d rather look the other way and not make waves. Ultimately, retirees lose.

The board members will be one big happy family in the months ahead, patting each other on the back, with little dissension. Board members will smile at each other and express how nice it is work collaboratively and without friction. There will be a euphoric high for all. OEA will be happy, OFT will be happy, ORTA will be happy, and the STRS staff will be happy. CORE and knowledgeable STRS members will be unhappy. As was the case for Herb Dyer, the board will become a rubber stamp for the executive director. Board members will not be suspicious of staff recommendations, and probing questions will no longer be asked. In part, this will be because – due to the board members’ lack of experience in management and governance – they really don’t know what questions to ask or what to be suspicious about. On multiple occasions in the immediate past, I have warned executive director Mike Nehf about concluding – in the future – that the likes of Myers, Ramser, and Meuser have the pulse of the STRS membership. They are out-of-touch with the membership and with reality. It is a scary situation, very similar to when we had the regime of Hazel Sidaway, Jack Chapman, and Eugene Norris running the board. OEA is “in charge” once again.

Dennis Leone

STRS Retiree Board Member
From John Curry

Sent: Thursday, August 06, 2009 12:13 AM
To: Sharon Dyke
Subject: Re: Response to E-Mail

Sharon,

This is a new one on me. I am not sure that this is a form letter. I have copied Dennis and Dave on this one.

John

----- Original Message -----

From Sharon Dyke
To: John Curry

Sent: Wednesday, August 05, 2009 5:35 PM

Subject: Fw: Response to E-Mail

John,

Is this the same letter that everyone gets when they contact Laura Ecklar.

Be well,

Sharon

----- Original Message -----

From: Ecklar, Laura

Sent: Wednesday, August 05, 2009 4:11 PM

Subject: Response to E-Mail

Dear Ms. Dyke,

Our executive director, Michael Nehf, has asked that I respond to your recent e-mail regarding the COLA. We understand the concern you and your husband have about the future of the COLA and appreciate you expressing your position with us. Please note that in the board’s discussions to date, the complete elimination of the COLA has not been discussed; only a reduction in it and/or a delayed start date (e.g., begin COLA payments at age 65).

As you have probably read in our STRS Ohio communications to members, the Retirement Board faces a significant challenge. Its focus is on strengthening the solvency of the pension fund in a reasonable amount of time, while also allowing additional employer contributions to go to the Health Care Stabilization Fund and extend the life of the STRS Ohio Health Care Program for retired and disabled teachers.

The Retirement Board is reviewing a number of options affecting future pension plan design and/or contributions. STRS Ohio, along with pension plans around the country, has been severely impacted by the historic downturn in the markets and the accompanying recession. But before the economic downturn, STRS Ohio was already being impacted by other economic and demographic factors. For example, while the life expectancy of STRS Ohio members has increased over time, age and service requirements have not changed since 1976, resulting in pension benefits being paid for longer periods of time. Additionally, there has been steady growth in the benefit formula (including the enhanced 35-year benefit) over the years. Finally, improvements to already granted retiree benefits, such as ad hoc increases to various groups of retirees in 1984, 1988, 1990, 1997 and 1999, as well as supplemental payments (often called 13th checks) from 1980 through 2000, have increased the system’s liabilities over time.

Looking long term, the board knows that the reduced level of investment assets, coupled with future expected investment earnings and current contributions levels, will result in a funding shortfall. Unless changes are made, STRS Ohio will eventually be unable to pay members’ projected benefits.

In looking at its options, the board has said “everything is on the table.” Changes under consideration that would impact current and future teachers include:

• Increasing contributions;

• Instituting a minimum retirement age of 60;

• Increasing the number of years used to calculate final average salary to five from three;

• Changing the formula for calculating pensions that has the enhanced benefit for 35 years of service; and

• Changing the COLA.

A change to the COLA would also affect current retirees; however, a change in the COLA going forward has a much greater monetary impact on future retirees than current retirees because current retirees have already been receiving an annual COLA throughout retirement. Those increases would not be taken away. A change in the COLA would affect only future COLA payments.

STRS Ohio staff has been presenting sample scenarios to the board at its monthly meetings that are designed to give some sense of the cumulative effect various combinations of benefit and contribution changes can have on reducing the liabilities of the pension fund and also possibly allow additional contributions to go toward the health care fund.

Please understand that the board and STRS Ohio staff know there are no easy solutions to the funding challenge STRS Ohio faces. For probably the first time in its 89-year history, STRS Ohio is talking about reducing benefits. Future retirees could end up paying more in contributions for a longer period of time for a smaller pension benefit; current retirees’ pensions won’t change, but future COLAs could be reduced. However, if no changes are made, there is a very real probability that there will be no defined benefit pension plan for Ohio’s public educators within 30 years.

We will continue to share the board’s discussions with our members via our newsletters, e-mail news service and Web site. In addition, once future changes are more defined, STRS Ohio will be holding meetings around the state to provide additional information to active and retired educators. Again, we appreciate you sharing your position with us; it will be shared with the board.

Laura Ecklar

Director, Communication Services

RH Jones: In God we trust; all others we monitor

From RH Jones, August 6, 2009
Subject: In God we trust, others we monitor
Re: accountability for cutting retired STRS members' benefits.

To the STRS board and the management employees:

In part of my July 2009 speech before the STRS board I said this: The Bill of Rights as interpreted by West's Encyclopedia of American Law, 2008, states: '"The term grand-father clause, in its current application, refers to a legislative provision that permits an exemption based upon a preexisting condition. For example, through the application of grand-father clauses, certain prerogatives are extended to those regularly engaged in a particular profession, occupation, or business that is regulated by statute or ordinance".(End Quote) Ladies and gentlemen, a reasonable person could conclude that this can apply to the STRS retired educator benefits.

I have not contacted an attorney on this. However, I did study school law while working toward my Masters Degree in Education. I expect that it should be the job of the ORTA, OEA-R or CORE. Will they do so? I think they should, if they truly want to represent retired educators.

The grand-father clause comes under the same part of the Bill of Rights that protects the African American's right to vote. They were found to be grand-fathered because after their voting rights were taken away by some of the southern states "good 'ole boys" --Immediately after the Civil War many blacks had been elected to seats of power and the "good 'ole boys were worried that they were losing political power. So they created the "Jim Crow" laws to put blacks "in their place". -- The amendment to the U.S. Constitution, I believe that effects professionals like us, is the Bill of Rights, Amendment 15, which was passed to protect their grand-fathered, and now our grand-fathered legislated codes of state law. Around 1915, I believe the Supreme Court passed the our federal amendment which I cited, in part, from the prestigious law book that I quoted just above.

Some agencies which may be interested if "take always"become Ohio law, as they are currently being considered by our STRS, could be: the Attorney General of the United States who performs the important function of challenges to the constitution from legislative or administrative functions. Or, the American Civil Liberties Union (ACLU) could, also, probably be very interested.

I ,also, further believe that any Ohio official that would risk "cutting" STRS retired member benefits, in any way, is on shaky ground. The 127th General Assembly in (2007 - 2008) enacted S.B.3, effective May 2008 states: "If a public employee pleads guilty to, or is convicted of, certain felonies while serving in a position of 'honor, trust, or profit' the employee forfeits the right to a retirement allowance or disability benefits or any other right earned by being a member except for members accumulated contributions. This applies to the following felonies: bribery, pattern of corrupt activity, theft-in-office, or a conspiracy to commit, or complicity in committing any of these offenses."

It is serious business for public employees to consider cutting back any of retired educator STRS benefits. The risk is way too great. Heaping more hurt onto retired teachers is no solution to the STRS pension solvency issue. Educators on the Board, as well as certain STRS associates are public employees and need to back away from any consideration of reducing retired educator pensions and benefits. To do so is in the best interest of everyone.

Lastly, employed teacher officials of OEA/OFT, OEA-R, and ORTA, also need to think about backing away from supporting any idea of cutting STRS retired educators. A peaceful exit from all threats of "take aways" is probably the most lawful, the most honorable, and it is the right thing to do.

RHJones, a retired STRS teacher member's opinion

STRS FLASHBACK - 6 Years Ago - Laura called it a "success" because board members were using it!

From John Curry, August 5, 2009

"Ecklar called the form a success because board members are using it."