Saturday, August 22, 2009
Patricia Miller's speech to STRS Board, August 20, 2009
From John Curry, August 21, 2009
PwZ Zapped in $97.5 Million Settlement
The auditor, accused by Ohio of violating securities laws in its work with AIG, will pay one of the highest amounts ever for an accounting firm in a class action.
Alan Rappeport, CFO.com | US
October 6, 2008
PricewaterhouseCoopers agreed to pay $97.5 million to the state of Ohio to settle a class-action lawsuit on behalf of investors in troubled insurer American International Group, which uses PwC as its independent auditor.
The "partial" settlement, on Friday, came after the Ohio Public Employees Retirement System, the State Teachers Retirement System, and the Ohio Police and Pension Fund filed a lawsuit seeking damages for investors who bought AIG securities from 1999 to 2005. In the complaint, PwC was accused of violating securities laws relating to a market division scheme allegedly involving AIG that was disclosed in 2004 and improper accounting for reinsurance and other transactions..........
Darlene Rusicka: Memo to STRS Board August 20, 2009
Tentative STRS Plan as proposed by the STRS Administration
Click image to enlarge.STRS held their August meetings on Thursday, August 20th and Friday, August 21st. The STRS Investment Department reported a positive 6.1% return for the month of July. The current value of the pension fund at the end of July was $55.5 billion dollars market value which is up from $52. billion dollars in May.The STRS staff shared their recommended plan of proposed changes to meet the Ohio Retirement Study Commission (ORSC) deadline of September 9th for each of Ohio's five public pension systems to come up with a plan for achieving a 30 year funding period. Note that the plan (below) is recommended by the STRS administration. For this reason, STRS Board members viewed it for the first time at the Thursday meeting. Upon further study of the 5 levers of the plan, the Board members and the Health Pension Advocates had many questions and the discussions were continued into the Friday meeting. Following the report from the Investment Dept. on Friday, there were unexpected interruptions in the agenda by urgent litigation issues which required lengthy executive sessions for the Board. When the Board returned to discussions of the plan below, it was decided that four scenarios of changes to the plan would be run by Chief Financial Officer Bob Slater's accounting department to determine the effects and savings of each. At this point, it was also determined that another Board meeting would be required to finalize a plan, and a date of Tuesday, September 1st at 9:00 a.m. was set. Due to the fact that this meeting will occur in September, Board member Jeff Chapman will be off the Board as his term will have expired, and the three newly elected members will join the STRS Board. They are Carol Correthers (active teacher member), Bob Stein, and James McGreevy (both retired teacher members).
Thursday, August 20, 2009
Lloyd Knudsen's prepared speech for STRS Board meeting
Subject: STRS speech
Hi CORE leaders!
My name is Lloyd Knudsen. I was a 30-year teacher in the Woodridge Local Schools of
I would first like to commend Dr. Dennis Leone for the all the positive changes he helped bring to STRS. But perhaps Dr. Leone’s greatest STRS legacy will be receiving that OEA label of “dissident” board member. Thank God we had one board member who had the insight and backbone to disagree with STRS management. Every active and retired teacher owes Dennis Leone a debt of gratitude for being their “true” representative to this board.
Maybe, if we had had a dissident on past STRS boards, our health care program might not now be on life support. For 20 plus years the employer’s 14% contribution rate has not been increased. Maybe another dissident would have pushed for an increase in that employer percentage. And just maybe, if we had done it when times were good (like when we built this beautiful building) the legislature would have passed it. Sadly, our health care fund limps along on a 1% employer contribution and retirees continue to pay for the STRS management and board’s lack of proactive planning.
Maybe, if we had had a dissident on our board earlier this decade when the recession cost STRS $20 billion in stock losses, our pension program might not now be on life support. STRS’s reaction back then to those losses was--it’s “only a paper loss” and we’ll earn it back. Now our current recession has cost STRS another $40 billion—and suddenly we realize we’ve got a financial crisis on our hands. Other states (one I’m familiar with is
So who will pay to get our STRS financial ship back on course? Certainly not STRS itself. They plan no cuts or reductions for themselves. This leaves the financial burden up to the active and retired teachers.
In fact, the current debate seems to pit the benefits of actives vs retirees. I find this rather ironic. For 30 years I was an active teacher. And for 30 years I paid my “dues” annually to OEA, NEA, as well as to my local association. But once you retire, you are no longer part of their team. Also, for those 30 years I paid my dues to STRS in the form of the employee pension deduction taken out of my paycheck every 2 weeks. I believe retirees have paid their dues to OEA and STRS in full!
When this board is deciding what pension changes you will make, I hope you will consider most retirees have few, if any real financial options at this point in their lives.
As retirees, our contributions to our retirement system have been devalued by STRS comments like-- retirees are “just living too long” and the retirees’ COLA is STRS’s “largest expense”. I hope you will remember that STRS was built by and made successful by active teachers who grew up to become retired teachers. WE ARE THE REASON THIS SYSTEM WAS CREATED AND STILL EXISTS TODAY!
Thank you for listening.
Shirlee Zerkel: Message for retirees over 65 with Medicare A & B
Subject: To all STRS retirees over 65 with both Medicare A and B
Wednesday, August 19, 2009
Donna and Dean Seaman to Nehf & Board: Ready to listen to your excuses and justifications for your ill-advised decisions
Subject: Board meeting
You have continued the practice of paying performance based incentives (bonuses!) to already overpaid investment staff. You should not even be considering paying out an additional $3 million plus to them for the first seven months of 2008-9 fiscal year, yet the word is out that you plan to do just that at your September meeting! How can you look retirees in the face when you have received so much negative input from us about paying bonuses! There is absolutely no reason (including possible litigation) for such a move! The board has always had the power and authority to make changes in performance based incentives, and you should not continue paying them in any circumstances.
Already the 90 plus investment staff are paid (notice I did not say earn) as much as Ohio's governor, and some of them are paid more than twice what our governor earns! And they continue to be paid these salaries even when the funds are down $30 to $40 billion. I wonder, how many highly paid investment staff does it take to lose $30 billion? I do not agree that those people are your "best and brightest!"
While your decisions have negatively impacted, financially, my husband and me, for years, now I find that you are adding my daughter's financial well-being to the mix! She is a teacher with 20 plus years who is carefully making retirement plans for year 30 and you plan to jump the retirement age to age 60! I understand your need to make STRS "solvent," but again, you do not even discuss cutting STRS staff (long overdue) or making other internal cutbacks. Always it is the retirees, and now the actives, who suffer at your decisions.
I plan to attend the Thursday STRS board meeting and listen carefully, as I always do, to your excuses and justifications for the ill-advised decisions you continue to make.
Donna Seaman, 2002 retiree and Dean Seaman, 1986 retiree
Shirlee Zerkel to Mike Nehf and STRS Board: Others are making cuts; why isn't STRS?
Subject: A plea for fairness in your recommendations to the legislature for STRS changes
Monday, August 17, 2009
RH Jones re: COLA cuts
Subject: No COLA cuts for any OH retirement system
To all, especially the ORSC & ORTA:
Re: No COLA cuts for any Ohio retirement system
The Ohio (OH) Substitute House Bill 155, effective 02/01/2002, according to retired educator Dr. K. Fluke, was to establish the 3% COLA for all of the Ohio retirement systems. If the Ohio Retirement Study Council (ORSC) recommends doing away with the 3% COLA only for the STRS, would not the intent of this bill be violated? I think, yes, it would; and, by singling out only the STRS, and not the OPERS, SERS, Highway Patrol, and Police/Fire, would certainly be showing partiality. The best way for all is to not cut any of the retirement system’s COLAs.
As legislators pay into OPERS, if any new legislation was passed to cut any of the 3% COLA only for the STRS, it would seem to indicate the legislators would want to keep their own nest protected; but, yet, allow ours to go unprotected. This would be totally unreasonable to the average person. As everyone probably knows, the legislators and the STRS employees pay into OPERS. It would seem to me that this is a conflict of interest. In other words, they would want us to be cut, but not themselves. And, further, how could the STRS Director, Mr. Mike Nehf, recommend cutting our 3% COLA when his could be cut, as well? This whole thing just does not make any sense.
Another reason SHB 155 was established was to do away with the COLA “bank” that was so hard for the accounting departments to calculate for so many different retired individuals. The simple 3% COLA corrected that, and was less time consuming for the accounting employees; and, because of that, less expensive to calculate.
Also, of note -- as Dr. Fluke stated to me -- is that the active teacher STRS newsletter mentioned that there has not been any asset re-allocation change for retired teachers. He said this fails to mention our cuts in health care. Is this the STRS officials just being absent minded? I do not think so.
RHJones, retired teacher STRS member
Sunday, August 16, 2009
STRS forgot the other half of the story!
From John Curry, August 10, 2009
Benjamin Franklin once said, "Half a truth is a great lie."
Click images to enlarge.
Opinions re: NO cutting of retired STRS benefits
Subject: RE: NO cutting of retired STRS benefits
I MUST DISAGREE WITH YOU ON CUTTING ADM. SALARIES. THEY DO NOT WORK HARDER AND ARE UNDER NO GREATER PRESSURE THAN CLASSROOM TEACHERS. THEY DO WORK LONGER HOURS AND DAYS BUT NOT ENOUGH TO WARRANT A $100,000 SALARY COMPARED TO MY $30,000. CHUCK WAS A PROFESSOR OF EDUCATIONAL ADMINISTRATION AT.A.U. SO WE KNOW OF WHICH WE SPEAK. HE ALWAYS TOOK THE PART OF CLASSROOM TEACHERS IN HIS CLASSES OF FUTURE PRINCIPALS. AND JUST AS EDUC. ADMINISTRATORS EARN LESS THAN THOSE IN THE BUSINESS WORLD SO TOO DO TEACHERS WHO SPEND 6 (OR 8 YEARS IN OUR CASES) EARNING OUR DEGREES. THERE WAS A TIME WHEN NURSES EARNED LESS BUT NOT ANY MORE. ANOTHER THING, ADMINISTRATORS ALWAYS FOUGHT AGAINST US WHEN WE WERE BARGAINING FOR THE TEACHERS. I WAS V.P. ELEM. AT A.E.A. AND SERVED ON NEGOTIATING TEAMS FOR A NUMBER OF YEARS. IT WAS ESPECIALLY DIFFICULT AFTER REAGAN BROKE THE AIR TRAFFIC CONTROLLERS' UNION. WE LOST BARGAINING POWER AFTER THAT. JUST ASK WALT BENDER OR JACKIE HAINES.
WE SHOULD RATHER SPEAK OUT ON THE RECENT PLAN WHERE NEWLY RETIRED TEACHERS RECEIVE NEARLY 100% OF THEIR LAST YEAR'S SALARIES. AND THERE IS ALSO A DISCREPANCY IN RETIREES' PENSIONS WHO LEFT AFTER OUR 1996 AND 1989 RETIREMENT DATES. THERE SHOULD BE A LIMIT INTO HOW MUCH ONE CAN PAY IN AND HOW MUCH ONE CAN TAKE OUT.
I AGREE WITH YOU ON SOCIAL SECURITY. I FALL UNDER THE WEP CLAUSE AND SEE NO HOPE OF THE GOVT. CHANGING THE LAW SINCE THERE IS NO MONEY FOR IT.
I don't want STRS to go down either. However, everyone knows who is responsible for this: the bungling of the OEA/OFT, OEA-R, and especially to the ORTA, who in the past 20-years have not recognized that it is their responsibility to monitor their STRS. I wonder: Have they been too busy selling insurance to be bothered. The STRS board and the employees must also recognize they are, in part, at fault for our STRS being in this bad situation. The past excesses of board perks spending, and the past/ present excessive employee perks, has lead us to this problem. Over the years this negative drain on the fund has finally caught up with them. The STRS officials are supposed to serve us, not themselves.Not to recognize the cumulative effects over the years of this thoughtless drain of funding, that could have been compounding in STRS fund investments, is outright irresponsible.This has given the OSBA, and the some of Ohio's miserly business community "leaders", the excuses they have been looking for to keep from properly funding local school districts. Services to STRS members, like trying to keep us up with inflation, and providing good HC/Rx, is what STRS was founded to do. It is OUR pension system. It was not intended to be a fund to provide extraordinary benefits for anyone but us. A healthy STRS is good for union membership as well as a guarantee that there will be good teachers in the classrooms to move Ohio forward. An educated public is the key to the financial security of our beloved State of Ohio.Desiring honorable, thoughtful and reasonable STRS officials to serve us should not be regarded as irrational. It is now the obligation of each of us STRS members to monitor the STRS officials. Educated educators cannot afford not to do otherwise.By the way, the STRS seems to be playing games with the COLA discussions by having the COLA issues presented at both the Thursday and Friday meetings. It should be on Thursday only. They know a lot of us will not stay overnight and will not be able to attend both days.Since they announced this, it is necessary that large numbers of retired educators attend either both days, or one day, or the other. Nevertheless, numbers of us need to be there. To say the least, no future COLAs, 13th checks, and HC/Rx is not in our best interest.This is my opinion,RHJones, retired teacher STRS memberFrom Kathy Kienle, August 14, 2009
Subject: Re: Future COLA & other taboo cutsBob, I agree with you, but it looks like changes are needed to keep the fund solvent. I do not like what has gone on, but I do not want the STRS to go down. I will try to make the August 20 meeting, but I do not feel our presence will change the situation. I have written each STRS member and the Retirement Council plus Mike Nehf. I only hope things turn out well. I have many retiree teacher friends who do not seem worried. I pray and hope God will be in control.Kathy Kienle
Dennis Leone, August 16, 2009: Everything is NOT really "on the table"
Subject: Everything is NOT really "on the table"
1. The staff has refused to recommend --- and the board has refused to take action -- to require that STRS employees pay more for their health insurance which is provided by pension system funds.2. The staff has refused to recommend – and the board has refused to require – that STRS employees receive a base wage reduction. Yes, a few months ago the board finally and reluctantly took action (with split votes) to implement a wage freeze, to require a 40-hour work week (changing the long-standing 37 ½-hour work week), to suspend bonuses for the second half of fiscal year 2009, to eliminate bonuses completely in future years when STRS experiences a stock market loss, to require a minimum asset threshold of $65 billion for investment staff members to be eligible to achieve their bonus potential, and to remove certain staff positions (i.e. real estate attorney) from the bonus plan completely . It deserves noting that ALL of these were initially rejected by both the STRS staff and the STRS board majority when they were first recommend many months earlier. The staff and the board felt they knew better, and the changes that finally occurred only after much ugliness and blood on the sidewalk. But don’t talk about anyone getting a possible wage reduction. After all, the staff and OEA-dominated board majority continue to believe that STRS won’t be able to attract the “best and the brightest” at STRS if we reduce wages or if we fail to give bonuses to investment staff. Never mind that the average BASE compensation for the STRS investment staff in fiscal year 2009 was $156,000. Bonuses come into play on top of that, even though the STRS Board provides staff with spectacular fringe benefits and a wonderful pension plan (through PERS) which are not the norm in the private sector.3. The staff has refused to recommend – and the board has refused to implement – a true hiring freeze. Yes, the board has approved a “head count” freeze, but his is not the same as a hiring freeze. A “head count” freeze does not ensure savings. While I do not believe that the staff will be attempting to “beat the system,” it is a fact that two half-time employees can cost more than one full-time employee -- with the FTE “head count” remaining constant. The STRS executive director has pledged to reduce staff, but the board has rejected the notion that formal action is needed to require it. I made such a motion and it failed. Everything seems to be built on trust, even though the staff and board members personally and collectively violated this trust in past years by wasting pension system money in many, many different ways.4. The staff has refused to recommend – and the board has refused to require – that STRS employees have an unpaid furlough of any kind. Bowling Green State University announced on August 14 that 500 employees there will be receiving an unpaid furlough during the 2009-10 academic year. Many state offices in Columbus are currently doing the same. Not at STRS however. In fact, there even are employees at STRS who still receive additional compensation yearly with “service awards” as well as annual cash reimbursements for unused sick leave.5. The board flat-out rejected a motion I made a few months ago to place a moratorium on board member out-of-state travel. In other words, it is okay to reduce things for the membership, but not for the board members themselves. This will cause happiness for board member Tim Myers, who spent thousands and thousands of dollars on out-of-state travel “for training” during fiscal year 2009. Myers is the reincarnation of Jack Chapman on the STRS Board. Myers also publicly stated that the board “broke a promise” when bonus checks were suspended for the investment staff in January (Myers voted no), even though the STRS employees do not have individual contracts, and even though said employees were told very clearly a year in advance, in writing, that the board could suspend or modify the bonus plan at any time for any reason. At the June board meeting, Myers even made a motion (which failed 5-4) to stop me from discussing the bonus question for fiscal year 2009. This provides a snapshot for what STRS is facing in the future with the OEA-dominated board.
STRS Retiree Board Member
August 16, 2009