Saturday, September 26, 2009

Debbie Roush on bonuses

Debbie Roush to John Curry, September 26, 2009
Subject:
Note to Swartenberg: STRS Differed Bonuses
John,
I sent the note below to Steve Swartenberg; I think I read, at one time, that some employees in OPERS receive employer contributions of 17%. But even if the rate is 14%, that's still a large contribution coming from our STRS fund. Bonuses would be considered income and receive an employer (STRS) contribution unless the investment staff agreed it was miscellaneous income....received a 1099, and paid their own $$ toward retirement.....NOT! ; )
Does anyone know the rate paid for the investment staff.....
I received a card today inviting area retirees under 65 to attend the healthcare meeting in Athens...why??? What could they possibly tell me? We know what we're getting, how much it will cost in 2010, etc...more wasted money...travel expenses, paper, postage, renting OU Inn, meals, passing out junk pens, bottled water with STRS logo, and other "do-dads".
At my last RTA meeting, I told the membership I wouldn't believe a thing that STRS puts in the newsletter...there's still so much that I just can't understand about the deceitfulness of not just this STRS board, but of the previous one also; their corruption and the later punishments (not nearly strong enough) should have sent a message to this STRS board that their entitlement attitude, their flagrant dishonesty with our group, their wasteful spending, and how about not taking a risk with retiree money...was not going to be tolerated....and where did I read that investments were to be prudent. Well, they are still doing exactly as in the past, and are our hands tied?
The sad thing about it is they know they can make their own rules and nothing will be done. What are we able to do about it...nothing unless we change the law... Surely, the membership has to know that the board is not really working for them. Sociopathic tendencies...feel no emotional connections to others and have zero regard for the rules and regulations of society; they know the rules, but they just choose to break them; they are egocentric, callous and as manipulative as any criminal; their intelligence allows them to construct a facade of normalcy to get what they want; corporate sociopaths have the ability to present themselves as the dream employee...sound like anyone we know??
OK, too much anger on my part, but think about it...these people learned early how to take advantage of others and have passed these terrible attributes on to their families...a vicious circle. We've all had a few students with these characteristics. Debbie
From Debbie Roush, September 20, 2009
Subject: STRS Differed Bonuses
Steve Wartenberg,
After STRS has voted to award $3.4 million in bonuses to the investment associates, I wonder if anyone has questioned how much STRS will have to pay to the OPERS retirement fund for these employees. I believe that some OPERS rate is 17% vs 14% teacher contributions to STRS from school systems. If so, when the STRS investment staff receives $100,000++ in salary, that sum must receive a 17% contribution to OPERS. This is worth checking out...so if the employee receives $100,000 in salary and $100,000 in bonus then, STRS must pay 17% on $200.000.
At one time it was mentioned that in order to raise the contribution rate from 14% to 16.5% for a teacher, the Legislature would have to vote on it and pass it as law. But there seems to be no problem for STRS Board to suggest to the legislature to cut the 3% COLA. This would also call for a vote and passage to change the ORC which states 3%. Did anyone ever think about the salary difference in the state?
Teachers in southeastern Ohio do not and have never made the salary that other sections of the state has made. The starting salary today in Southern Local School District is about $21,000. Can the retiree in this district afford to lose the COLA? How about the cost of health care...it is the same if the retiree makes $30,000 or $60,000. I, personally, make around $29,340 from retirement after taxes, and many teachers in this area make less, I am sure. This is based on 32 years...with a master's degree ++. My COLA is $75.15, and this amount does not change from year to year. STRS has wasted more than this just trying to convince us that decreasing this amount will save our benefits. The $100,000 @ 17% can't compare to my $75.15.
How about their health care that STRS provides to them and their families? How about the 37.5 hour work week that is paid at 40 hours? How about the reply from the STRS Board, "in order to keep a good investment staff"; I am tired of that lame excuse...Wall Street is full of unemployed investment staff that could do the same job...and probably with just the same conscience.
I think we need to change the ORC that states how and who will make up the STRS Board. The composition should be retired teachers and only two active teacher seats...instead of the OEA-filled seats of active teachers and only 2 retired teacher seats. Who would better look out for our retirement system than the retiree?
I suggested once to an ORTA VP that STRS sell the building, move to southeastern Ohio into one of our old school buildings without AC, hire people from our population who has never received $100,000 and try asking for money to spend foolishly......
Thank you,
Debbie Roush
--------
Steve Wartenberg's reply:
Thanks … whether STRS has to pay the 14% to OPERS on the bonuses is an interesting question – I will check it out.
Steve Wartenberg
Business reporter, Columbus Dispatch
34 S. Third St.
Columbus, OH 43215
614-461-5518
614-461-5107 (fax)
swartenberg@dispatch.com

Molly Janczyk to Treasurer Kevin Boyce re: STRS appointee

From Molly Janczyk, September 26, 2009
Subject: Treasurer: 092409 Appointment Of STRS Board Member
Treasurer:
Have you even contacted Prof Tom Hall whose contact info was sent to you? He has all the expertise and background needed and is a published author on investments, market trends, business cycles, economics as well as having a vested interest in STRS as an educator. I have NEVER so much as gotten a response from you.
Molly Janczyk
STRS Retiree
[Click here to view Tom Hall's 2006 vitae.]

Friday, September 25, 2009

Tom Curtis to State Treasurer Kevin Boyce re: Appointment of STRS Board member

From Tom Curtis, September 24, 2009
Subject: 092409 Appointment Of STRS Board Member
Treasurer Boyce,
On 8.1.09 I received correspondence from your office indicating that you would be appointing someone to the STRS board with an investment background, other then Dr. Dennis Leone, as many others and I requested.
It is nearly 2 months since that correspondence, yet I have not heard of any such appointment to date.
Our pension system is in the worst situation of all 5 systems in Ohio. Why have you not found it necessary to make such an appointment to date?
I look forward to a timely response.
Tom Curtis - 1998 STRS Retiree
N. Canton, OH

Wednesday, September 23, 2009

Kathie Bracy and Molly Janczyk: Questions for the Board

From Molly Janczyk, September 23, 2009
Subject: Re: The PBI vote last week
I, too, welcome open dialogue on this.
Please explain:
1. Can the staff sue? Wasn't this time period one of such poor returns making a suit unreasonable and legally improbable ?
What justifies bonuses as a result?
2. Isn't it true that investment staff are not contractual and can't STRS plead extreme economic loss stating no bonus as a result as corporations have done across America?
These are legitimate questions from membership to STRS Board members.
Membership has the right to hear reasoning for voting on their behalf.
It is lack of duty to ignore membership and that is a reason why it builds anger.
Molly J.

From Kathie Bracy, September 23, 2009
Subject: The PBI vote last week
To the STRS Board:
This message is directed at the seven Board members who voted last week in favor of paying $3.4 million in bonuses to the investment staff.
To date I have seen no sign of an explanation from any of you as to why you voted the way you did. If no one has asked for such an explanation, I am respectfully asking now. [Correction: I inadvertantly included Bob Stein in "The Seven" in this paragraph, when I had actually spoken with him earlier and he went to great lengths to explain his position (basically what Molly Janczyk had related in an earlier post); I still hope he will submit a statement that I can pass on to you. KBB]
As you know, there has been a huge furor over the outcome of that vote, mainly from the retirees since most of the actives are not kept well informed on what's really going on. From what I see in my e-mail, that furor does not show signs of letting up any time soon.
There's a lot that I have NOT posted on my blog, as I prefer to give you a chance to explain and defend yourselves. Open communication with the members of STRS could go a long way toward establishing trust and support for you. Right now it's deja vu -- people are saying we've got the "old board" back. I'm sure you know what I mean; it is not a compliment. Many are also wondering if there is an element of intimidation that caused you to vote as you did. Fear of lawsuit. What is your take on that?
I hope I receive explanations from all seven of you to pass on to the membership. They are stunned at the outcome of the vote and deserve to know what's going on.
Thank you.
Kathie Bracy

Jim Stoll: A judgement

From Jim Stoll, September 23, 2009
Subject: Re: Fw: Bob Stein: PBI Vote
To: All From: Jim Stoll
Re: Bob Stein's Vote on PBI
Since Molly won't pass judgement I certainly will. In my opinion Bob's vote was a travesty for all STRS Members and another example of the status quo of entitlement at STRS.
How about making a statement and support the "members" who ELECTED you. His vote is a total lack of leadership. Who told Mr. Stein that STRS investment staffers would have grounds to sue and be successful? Probably an STRS staffer himself, in legal counsel Bill Neville?
Did Mr. Stein take the time to lay out the facts to independent lawyers or some retired judges and get their opinion. I think not! If he had, he would have been told that according to Board Policies, the investment staff, if the Bonuses were terminated or rescinded, don't have the law on their side. (I for one, would have welcomed a legal challenge from the staff - that would have shown their true color of greed.)
This is simply an extreme disappointment and I trust all current and future retirees will ALWAYS remember this vote. Mr. Stein, regardless of your explanation - and Trust me - your FEAR of a lawsuit doesn't fly out here with the members - you have disappointed us all, BUT even worse, you have lost our vote.
Jim Stoll
Director of Athletics
Sycamore H.S.
Cincinnati, Ohio 45242

John Curry re: Suing over bonuses

From John Curry, September 23, 2009
Subject: Bob Stein - PBI's

Molly and others..we have been here before (5 years ago). Same topic (bonuses) same situation (threat to sue). Paul Kostyu also addressed this situation at that time. Please read what Kostyu said back then and contemplate it. Anyone can sue anybody for any reason.....but winning, especially considering our financial difficulties, will weigh heavily upon the minds of the jurors or, should it go to a panel of judges, on their minds also! Being kowtowed is becoming to be a national sport, isn't it?
STRS employees should sue
By PAUL E. KOSTYU
Copley Columbus Bureau chief
Canton Repository, May 28, 2004
COLUMBUS -- The noninvestment employees of the State Teachers Retirement System should sue the pension fund. Doing so would tell us something about them.
Last week, the pension board rejected paying bonuses to 268 employees despite the recommendations of Executive Director Damon Asbury and Assistant Attorney General John E. Patterson. Both said the pension fund risked a lawsuit that it would likely lose. The employees should sue.
Asbury said the board had a legal obligation to pay the employees for completing their “stretch goals” in the 2002-2003 fiscal year. It wasn’t a stretch to see that those goals were really little more than what many considered the employees’ regular duties.
Paying the bonuses would perpetuate an STRS culture of entitlement, which flourished under former Executive Director Herbert L. Dyer. His undoing came from publicly proclaiming that the money flowing into STRS from members and investments was the board’s money to spend as it wished.
But the culture enveloped more than employees. The so-called 13th benefit check was sent to retirees for years while investments were good. They depended on the extra monthly payment, which they felt they deserved and had been promised. That entitlement ended when investments soured in the early 2000s. Nobody sued the system.
Health care is another STRS entitlement. The system is not obligated by law to provide health care coverage, but it does. Asbury has said there is no retirement without affordable health care. Sounds like a promise. But the care is no longer affordable for many retirees and their spouses. Nobody sued the system.
The bonus plan for noninvestment employees was abolished last week in the wake of questionable spending at STRS for travel, artwork, expenses and salaries. Surely employees are entitled to just one more bonus. They should sue.
STRS culture fits with an American culture based on greed. That’s the only way to explain why employees would sue. All those eligible for a bonus are the most highly paid STRS employees. We’re not talking about the janitors, secretaries, security guards or any of the hundreds of other dedicated STRS workers.
We’re talking about their bosses, those who rake in high five- and six-figure salaries annually. We’re talking about many bonuses in the neighborhood of $30,000 and $40,000. The irony shouldn’t be lost on anyone that the person eligible for the lowest bonus — less than $200 — is a teacher.
The staff members receive regular compliments from the board about how wonderful they are, how hard they work, how dedicated they are to retirees, actives and the system.
The employees should sue. Let’s see how dedicated they really are. Do they work for a more-than-decent paycheck and the satisfaction of being STRS employees, or are they in it for every dollar they can grab in bonuses, even if they haven't done much to earn them?
Let’s not be too surprised if greed is the answer. We’re living in an era of corporate greed — Enron, Martha Stewart, Tyco and others. It’s a long list.
There was a time when people were satisfied with having a job. There was a time when people took pride in their work. There was a time when “nice job” was a sufficient bonus. Not anymore.
The employees should sue.
They need to do so soon, before tort reform kicks in and limits the amount they can recover. It’s hard to see how employees could collect punitive damages. There was no purposeful intent to harm them. They’ll ask for damages any way — attorney fees, too. They’re entitled.
Here’s what employees ought to do. If they really are dedicated to STRS and not driven by greed, prove it. Do they want the system to escape the scandalous morass of the last year and move forward? Stipulate in their lawsuit that if they win or settle, all the money received — the bonuses, attorney fees and punitive damages — goes into the STRS Health Stabilization Fund for retirees. If employees want to show they deserve the bonuses, then the money shouldn’t matter. Why punish the employer they supposedly love just to prove a point? Or is it really about greed?
Employees should sue so we can find out.
I got a big bonus at the board’s meeting last week for doing my job. Several retirees, whom I’d never met before but who had been reading my stories about STRS, shook my hand.
“Thank you,” they said.

Molly Janczyk: conversation with Bob Stein on 9/18 PBI vote

From Molly Janczyk, September 23, 2009
Subject: Bob Stein: PBI Vote
Bob Stein called today. He still has his website just FYI which may in the future have points of interest. www.bobstein.us
Per our conversation: My impression of why he voted as he did.
Bob felt paying the PBIs as stated in the minutes was saving retirees money in the long run. A court action was likely if not paid which would have cost STRS much more than paying the past PBIs.
He felt his vote saved the system more money and allowed looking to the future for areas of improvement for membership. He knew he could have voted NO and looked good to the retirees because his vote did not change the outcome. But, he would not have voted what he felt was correct resulting in what he believes to be overall cost saving for retiree best interests.
I am merely sharing the bottom line of our talk as I understand what he told me.
I am not offering opinion.
If you wish to comment

Tuesday, September 22, 2009

STRS: Mission and Vision

Mission and Vision
The mission of STRS Ohio is: To partner with STRS Ohio members in providing financial performance and member service that assures financial security for current and future retirees.
The vision of STRS Ohio is: To be a premier retirement system as evidenced by:
Comprehensive member benefits: Providing retirement planning, benefits and health care coverage to enhance the quality of life for members, and
Quality service: Striving to exceed the service expectations of members, employers and associates,
through
Fiduciary responsibility: Safeguarding members’ financial retirement security using ethical and professional business practices, and
Financial performance: Improving funding through prudent investments and resource management,
by
Empowerment of associates: Enabling associates to act through the delegation of authority and the acceptance of accountability, and
Organizational renewal: Enhancing STRS Ohio’s future by continually acquiring, sharing and implementing new knowledge.
Guiding Principles
To achieve our mission and vision, we will:
1. Make decisions that produce the greatest possible net benefit for members.
2. Be proactive rather than reactive by anticipating and dealing with change and growth.
3. Attract, develop and retain a highly competent and motivated workforce.
4. Build an organizational culture that inspires a high level of professionalism and performance — distinguishing STRS Ohio as a workplace now and in the future.
5. Provide an open environment for associates to generate new methods or practices to achieve our vision.
6. Provide associates with authority commensurate with their responsibilities for efficiency in decision-making and leadership development.
7. Continually improve through research, development and evaluation.

~ROTFL~

Some people probably haven't read this one yet.....

From John Curry, September 22, 2009

From STRS:
News Items & Reports
Originally posted June 23, 2009

Correction to June Board News

http://www.strsoh.org/past_news/09_June_Board_News-1.html

The June Board News contains an article titled “Health Care Program Changes Approved for 2010.” There is a typographical error in the story. The maximum annual out-of-pocket costs for the Aetna Medicare Advantage Plan will be $1,500 per individual versus the $500 stated in the article. This $1,500 includes all copayments, the $500 deductible and coinsurance. We apologize for any confusion this may have caused and regret this error.

Monday, September 21, 2009

Lloyd Knudsen (after the dust has settled): Winners and Losers

From Lloyd Knudsen, September 21, 2009
Subject:
STRS Winners and Losers
CORE leaders,
Now that the dust has settled on the STRS Board's decision to "overpay" our investment staff and their ORSC recommendations, let's examine the Winners and Losers in all this.
The Winners, it's the same old, same old. The BIGGEST, BIGGEST winner is the STRS management and staff itself. They cut little or nothing from their magical kingdom. In fact, I would not be surprised if within a year or two of our most recent "catastrophic investment losses", STRS wage freezes, employee head count freezes, longer work week, no PBI's for investment losses, etc., etc., etc. will be a thing of the past. The good times will most surely return for the STRS management and staff. I think our OEA-backed Board will make sure of it.
The second BIGGEST winner is the OEA. They saved some face with their membership by preserving for their 30 year plus teachers the sacred "35-year/88%" golden parachute until 2015. However, they sold out their younger actives to achieve it. Attempting to quell the anger from younger active teachers, OEA leader Bill L. has the nerve to say OEA did not support STRS's recommendations. OEA was not only actively involved in helping craft the ORSC package but his OEA-majority Board insured its passage. I don't think actives are going to buy Bill's attempt at the "innocent bystander" defense. If I were an active today, OEA would have received its last dollar from me.
Mr. Brooks suggested that IF "time was of the essence" in STRS's financial crisis that perhaps the changes for actives should not wait until 2015. That plea fell on deaf ears. My pessimistic side believes that the STRS staffs' "gift" of the 2015 implementation date coincides conveniently with the OEA-backed Board's lack of demanding STRS staff cuts and approving PBI payments. Just my opinion.
And now for the losers. The BIGGEST, BIGGEST loser is any active teacher who can't retire before 2015. They are going to have to teach longer, pay in more and get less for their service than their "grandfathered" brethen. Unlike retirees, their problem is not that they "lived too long", their problem is they started teaching too late!
The second BIGGEST loser is the already retired teacher who loses 1% of his annual COLA and the accumulated earnings that represents. Our STRS Board in their wisdom didn't "grandfather" retirees did they? Also, the STRS Board made no financial safety provision for the older retiree or the retiree with the least income. That truly is a slap in the face to the teachers who helped build our STRS system.
Lloyd Knudsen

June Hughes: Suggestions of How Bonuses Could be Given

From June Hughes, September 21, 2009
Subject: Suggestions of How Bonuses Could be Given
............They are designed to reward employees for fulfilling their responsibilities and for delivering superior results........
Range of bonus payouts
Annual incentive bonuses are meant to be motivational. They are designed to reward employees for fulfilling their responsibilities and for delivering superior results. Bonus targets and their associated payouts reflect a range of expected levels of performance. Just think of a star baseball pitcher who has an incentive clause in his contract based on the number of games he wins. For winning 15 games, he will get $1 million; for 20 games he will get $3 million; and for 23 games he will get $7 million. This is what an annual incentive bonus plan looks like. As a bonus plan participant, you are that star athlete who is rewarded for performing at a level appropriate to your ability. You are also rewarded for having a great year. If the goals given to you are unrealistic, you and your boss can be in for disappointment and trouble. Annual incentive programs are built around the expectations that the company has of itself and of you. Bonus plan participants can expect to achieve minimum acceptable performance (i.e., for their boss to remain happy with it) and receive a bonus payment 90 percent of the time and achieve target level of performance or better at least 60 percent of the time.
Expected performance level Level of difficulty Likelihood of achievement Payout as a percentage of target opportunity Minimum (acceptable) 80% of target 90% 50% Target -- 60% 100% Maximum 120% of target 15% 200%
Source: Salary.com.
Suppose that your target bonus is 20 percent of a base salary of $100,000 and you performed at the maximum performance level. That means you would earn 200 percent of that 20 percent bonus, or 40 percent. This would result in a $40,000 check ($100,000 x 20%(your target bonus) X 200% (payout level)). In most industries, the target bonus percentages are similar, and depend on salary. Exceptions include the high-technology and investment banking industries. In nonprofit organizations and healthcare, bonuses remain rare.
Typical bonus levels as a percentage of salary (Click image to enlarge.)
*Bonuses for this range are not typical, and if rewarded, are usually discretionary.
- Dwight Ueda, Salary.com Contributor

September Board News

From STRS, September 21, 2009
Subject: [News] September Board News Details Retirement Board Actions and Discussions
Last week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The September report follows.

SEPTEMBER BOARD NEWS

OHIO'S FIVE PENSION SYSTEMS PRESENT THEIR PLANS TO THE ORSC
On Sept. 9, all five Ohio public pension systems - STRS Ohio, Ohio Public Employees Retirement System, School Employees Retirement System, Ohio Police & Fire Pension Fund and the Highway Patrol Retirement System - presented their plans for achieving or maintaining a 30-year funding period to the Ohio Retirement Study Council (ORSC). This council serves as the legislative oversight body for the five systems.
At the beginning of the ORSC meeting, Rep. Todd Book (D-Portsmouth), who is chair of the council, noted that it was clear that none of the systems would be able to "invest" their way out of future funding challenges. The systems' plans call for changes in contributions and/or pension plan design to strengthen their funds. This month's Legislative News, developed by STRS Ohio's Governmental Relations Department, includes a chart detailing the major components of each system's plan. (The newsletter can be accessed via STRS Ohio's Web site (http://www.strsoh.org/quicklinks/legislative.html); a paper copy can be obtained by calling 614-227-2913.)
Because of the differences in each system's funding situation, demographics and current plan design, there was wide divergence among the five proposed plans. Several council members expressed their distaste for proposed increases in employer contributions, citing the burden this puts on taxpayers. This sentiment was echoed in a major daily newspaper editorial that morning. This same editorial called for the public sector to move to defined contribution plans and away from defined benefit plans.
In the coming weeks, ORSC staff will be working with the systems to assess the five reports. It is anticipated that eventually legislation will be drafted and introduced; then the normal legislative process will begin. Almost all the changes proposed by the systems require legislative action by the Ohio General Assembly and the governor before they can be implemented. ORSC is scheduled to meet on Oct. 14, where additional details of the next steps are expected to be presented.

RETIREMENT BOARD DEFERS PAYMENT OF PBI PAYMENTS
Earlier this year, in January 2009, the Retirement Board voted to suspend the Performance-Based Incentive (PBI) Program for eligible Investment Department associates as of Feb. 1, 2009. With that suspension, it was noted that any earned PBIs for that fiscal year would be limited to 7/12 of the performance results for July 1, 2008-Jan. 31, 2009. PBI payments are calculated on the performance of various portfolios and asset classes against their respective benchmarks for multiple-year periods, total fund performance and absolute return. While the value of STRS Ohio's investment fund has dropped significantly during the recession, the net value added from active management over the total fund benchmark return for the time period of July 1, 2004, through June 30, 2009, was more than $1 billion. This means that investment assets were higher at June 30, 2009, by $1 billion than if STRS Ohio had invested only in index funds. This number takes into account all direct investment costs , including earned PBIs, during that period. The benchmark annualized rate of return over the five-year period was 2.30%; the return on STRS Ohio's total investment fund was 2.69%.
At its September meeting, the board voted to not pay the earned $3.39 million in PBIs for fiscal year 2009 in fiscal 2010, but instead, defer their payment as well as spread the payment over future fiscal years. One-half of the payment, or about $1.7 million, will be paid only when: (1) STRS Ohio investment assets total $60 billion or higher at the fiscal year-end; and (2) the total investment fund has a positive return. This latter provision is in keeping with an earlier board action that stated no PBIs would be paid in the future (beginning July 1, 2009) when the total investment fund has a negative return - regardless of the performance of individual investment associates against their respective benchmarks. The first payment of $1.7 million cannot be made before July 1, 2010.
The remaining $1.7 million in PBIs can only be paid when: (1) STRS Ohio investment assets total $65 billion or more at the fiscal year-end; and (2) the total fund has a positive return. This second payment cannot be made until at least July 1, 2011.
As of Aug. 31, 2009, STRS Ohio's total investment fund has a preliminary market value of $56.8 billion.
In related action, the board approved a compensation study for investment associates. Currently, total compensation - base pay plus maximum PBI - for most STRS Ohio Investment Department associates is targeted at the bottom 25th percentile of total compensation levels in the private market. STRS Ohio benefits from the lower cost of internal management by STRS Ohio associates compared to paying fees to external money managers. The savings from internal management totaled more than $100 million in calendar year 2007 alone. The compensation study will include public and private sector data and will include a recommendation for the mix and amount of base pay versus variable pay for all professional Investment Department positions. The study will be completed in November.

RETIREMENTS APPROVED
The Retirement Board approved 502 active members and 141 inactive members for service retirement benefits.

ADDITIONAL ITEMS REPORTED AT THE MEETING BY EXECUTIVE DIRECTOR MICHAEL J. NEHF
IMPLEMENTATION OF 2010 HEALTH CARE PROGRAM UNDER WAY STRS
Ohio staff members continue to work collaboratively among all departments to prepare for the 2010 health care program. Open-enrollment packets are scheduled to begin mailing on Oct. 23. Targeted postcards are being mailed this month to enrollees, advising them of the "Health Care Program Highlights Meetings" being held in their area. These meetings are scheduled to begin Oct. 19 and will run through Nov. 13. The meetings will be tailored to the differing needs of enrollees; Medicare and non-Medicare enrollees will attend different meetings. Additional information about the meetings, as well as registration information, can be found on the STRS Ohio Web site (http://www.strsoh.org/resources/2k.html), or by calling toll-free 1-888-227-7877. Advance registration is required.
BENEFIT COUNSELORS RETURN TO THE ROAD STRS
Ohio benefit counselors are on the road for fall counseling. The fall season includes 28 locations around the state. Scheduling for the available appointments began in July with nearly 1,000 members setting appointments at one of the first seven locations. Internet scheduling is still popular, with half of the appointments scheduled through the STRS Ohio Web site. Counselors will meet with more than 4,000 members at various locations in Ohio during the next three months.

Rich DeColibus challenges STRS Board to poll the membership re: the PBI program

From Rich DeColibus, September 21, 2009
Subject: A Challenge

Dear Board Members,

Well, you just had a highly controversial vote on the PBI program. I, and a lot of other activists, believe you have made a huge loss-of-confidence and financial error in continuing a program destined for the dustbin of history, for the simple reason it now fails any reasonable test of rationality (and, for STRS, probably always did). Y'all believe you're acting in the best behalf of us doddering old fools, despite our stubborn refusal to acknowledge your superior wisdom.

But, it's our money, not yours. You're only supposed to be the fund administrators, charged with preservation of capital; you are not supposed to be the Royal Court of France, totally unresponsive and totally uninterested in the hoi polloi. If we activists are a small, insignificant group of whiners, why don't you find out? It's as simple as it can be. You poll the membership (active and retired) to see what EVERYBODY thinks of your PBI program. Then, you'll know for sure if we're just a tiny group of malcontents, or whether y'all are so far out of touch with the majority of contributors you should resign in shame. And, make it a real referendum; opposing views presented equally for all to see.


Don't want to spend a million for a real vote? Excuse me. You just threw away three million on an investment incentive program whose major outcome is to encourage investment counselors to take excessive risks with our money to maximize their performance bonuses. One does not whimsically conduct referendums; they should be reserved for very important issues. But, if there is one supremely controversial program STRS runs, it is surely the PBI. If you do not know what the majority of your members think about it, and you don't care to know because you are so much wiser than the rest of us, then you don't have to do a thing. If you're serious about representing the STRS membership, then make an effort to find out what the people you are supposed to represent think about what you propose. If, GASP!, our current FINANCIAL CRISIS just COULDN'T allow STRS to SQUANDER funds for a referendum vote, tell you what, just wait until the next STRS election and include it in the ballot envelope. I'm willing to bet the furor the PBI program creates will be even more controversial by then.


Rich DeColibus
[Former president, Cleveland Teachers Union]

RH Jones and Linda Meinelt re: Covering STRS employees under STRS retirement

From RH Jones, September 21, 2009
Subject: An ORC crafted to change STRS employee retirement
Linda & my OH Rep. Brian Williams:
I cannot speak for CORE, but as I recall, we have been trying for years to get the legislature to pass an OH Revised Code (ORC) that would switch the OH STRS employees' retirement to our STRS. The problem is: the legislators get their retirement checks from the OPERS; so, they are not about to send the lucrative STRS employee/employer retirement contributions back to the STRS. We can only hope that the Honorable OH Legislators would be statespersons -- who would be unselfish enough to craft a ORC -- and subsequently pass it into law. Can this happen? I doubt it.
Note: in the past, as far as I know, the ORTA, nor OEA-R has never aggressively tried to get our legislators to craft such a law.
As a retired teacher & a long time monitor of my OH STRS, respectfully,
RHJones
From Linda Meinelt, September 20, 2009
Subject: Re: Decision to pay bonuses a bad one
I wish there were a way to have STRS employees covered by STRS for their retirement-- then, they would really be concerned about their futures. Right now, they have the best of both worlds -- OPERS for retirement and STRS benefits..
Linda

Minutes of CORE meeting September 17, 2009

CORE MINUTES ~ 9/17/09
The CORE meeting came to order @ 11:45 am during the STRS board meeting lunch break. 16 were in attendance.
Old Business:
• No minutes to be read from the August meeting.
• Treasurer (Herm Fisher) reported a total of $1338 collected to date for Dennis Leone’s parting gift. Contributions continue to come in along with membership checks. The CORE treasury total was reported.
• Donna Seaman made a motion to send a card and CORE check by registered mail to Dr. Leone. Motion was 2nd by Mary Ellen Angeletti. Motion passed unanimously. Dave Parshall will take care of this action with a check presented by the treasurer.
• No need for election of officers and trustees at this time.
New Business:
• Dave reported on the ORSC meeting which both he and Kathie Bracy attended. Though the fashion trend was black and the seating was most uncomfortable, Dave gave Michael Nehf kudos for a strong presentation compared to those of the other 4 pension funds. STRS has formulated a detailed and complete plan.
• Dave suggested that CORE’s next step should be formulating the “Talking Points” for the collaborative plan and resulting legislation to be developed by ORSC. Discussion followed Dave’s suggestion with several comments encouraging clear “Language” in describing our pension plan relative to 401K plans of the general public. We will need to carefully educate our legislators and community as well as our active and retired teachers.
• Jill Fetters offered a motion to form a committee to develop these “Talking Points / Position Paper” to be used by members in work with local legislators, in the writing to newspapers, and in conversations with active and retired teachers. Motion was 2nd by Mary Ellen and passed unanimously.
• Dave agreed to serve as advisor of this committee. Lou DiOrio and Carol DePaulo agreed to edit along the way. Other writing committee volunteers (so far) include Jill Fetters, Kathie Bracy, Mary Ellen Angeletti, and George Justice. Dave will invite additional CORE members to join in this process.
• The next ORSC meeting is scheduled for October 14th and legislation will hopefully be introduced before the year ends. This time frame gives CORE time to work on this position paper as a committee.
• Dave adjourned the meeting @ 12:30 to return to the afternoon Board session.
Respectfully submitted by Jill Fetters
(for Marie Fetters, who was unable to attend)

Tom Curtis to Aristotle Hutras re: Lack of response from Mike Nehf

From Tom Curtis, September 20, 2009
Subject: 092009 Request For STRS Employee Cutbacks
Mr. Hutras,
As a retiree stakeholder of the STRS, I am angered that Mr. Nehf has repeatedly failed to respond to my request for information concerning employee cutbacks at the STRS. This is unacceptable and rude on his part. We have a right to know just what the staff that supposedly represents us, is doing to share in the burden of reducing costs. Freezing salaries and not hiring any new staff means little to us. We want to see the staff share in the same burden that has been forced on the retirees backs since 2004.
I have written Mr. Nehf on 4 different dates, about 1 week apart and have received absolutely no response from him.
Since you are the head of the ORSC, the only oversight for the five pension systems in Ohio, I am asking you to kindly contact Mr. Nehf and ask him to make his cutbacks known to the stakeholders by responding to my email request.
The STRS has lost in excess of $42 billion dollars in this decade, but continues business as usual, as would be indicated by the vote to award $3 million in bonuses to the investment staff on 19th of this month. The spending of our funds is becoming absurd, to say the very least.
Sincerely,
Thomas Curtis

Sunday, September 20, 2009

An STRS FLASHBACK DOUBLEHEADER - 5 years ago

From John Curry, September 20, 2009
The recent STRS board bonus vote, proceeded yet again by a lengthy "executive session," brings to mind what happened once before in the history of the STRS concerning "another" bonus issue. The following two articles were authored by (former Copley Columbus Bureau chief) Paul Kostyu back in May of 2004. Many who will read these moments in STRS history will be doing so for the first time as we now have many more actives and retirees who have suddenly become interested in the current and past actions of "our" retirement system.
John
STRS employees should sue
By PAUL E. KOSTYU
Copley Columbus Bureau chief
Canton Repository, May 28, 2004
COLUMBUS -- The noninvestment employees of the State Teachers Retirement System should sue the pension fund. Doing so would tell us something about them.
Last week, the pension board rejected paying bonuses to 268 employees despite the recommendations of Executive Director Damon Asbury and Assistant Attorney General John E. Patterson. Both said the pension fund risked a lawsuit that it would likely lose. The employees should sue.
Asbury said the board had a legal obligation to pay the employees for completing their “stretch goals” in the 2002-2003 fiscal year. It wasn’t a stretch to see that those goals were really little more than what many considered the employees’ regular duties.
Paying the bonuses would perpetuate an STRS culture of entitlement, which flourished under former Executive Director Herbert L. Dyer. His undoing came from publicly proclaiming that the money flowing into STRS from members and investments was the board’s money to spend as it wished.
But the culture enveloped more than employees. The so-called 13th benefit check was sent to retirees for years while investments were good. They depended on the extra monthly payment, which they felt they deserved and had been promised. That entitlement ended when investments soured in the early 2000s. Nobody sued the system.
Health care is another STRS entitlement. The system is not obligated by law to provide health care coverage, but it does. Asbury has said there is no retirement without affordable health care. Sounds like a promise. But the care is no longer affordable for many retirees and their spouses. Nobody sued the system.
The bonus plan for noninvestment employees was abolished last week in the wake of questionable spending at STRS for travel, artwork, expenses and salaries. Surely employees are entitled to just one more bonus. They should sue.
STRS culture fits with an American culture based on greed. That’s the only way to explain why employees would sue. All those eligible for a bonus are the most highly paid STRS employees. We’re not talking about the janitors, secretaries, security guards or any of the hundreds of other dedicated STRS workers.
We’re talking about their bosses, those who rake in high five- and six-figure salaries annually. We’re talking about many bonuses in the neighborhood of $30,000 and $40,000. The irony shouldn’t be lost on anyone that the person eligible for the lowest bonus — less than $200 — is a teacher.
The staff members receive regular compliments from the board about how wonderful they are, how hard they work, how dedicated they are to retirees, actives and the system.
The employees should sue. Let’s see how dedicated they really are. Do they work for a more-than-decent paycheck and the satisfaction of being STRS employees, or are they in it for every dollar they can grab in bonuses, even if they haven't done much to earn them?
Let’s not be too surprised if greed is the answer. We’re living in an era of corporate greed — Enron, Martha Stewart, Tyco and others. It’s a long list.
There was a time when people were satisfied with having a job. There was a time when people took pride in their work. There was a time when “nice job” was a sufficient bonus. Not anymore.
The employees should sue.
They need to do so soon, before tort reform kicks in and limits the amount they can recover. It’s hard to see how employees could collect punitive damages. There was no purposeful intent to harm them. They’ll ask for damages any way — attorney fees, too. They’re entitled.
Here’s what employees ought to do. If they really are dedicated to STRS and not driven by greed, prove it. Do they want the system to escape the scandalous morass of the last year and move forward? Stipulate in their lawsuit that if they win or settle, all the money received — the bonuses, attorney fees and punitive damages — goes into the STRS Health Stabilization Fund for retirees. If employees want to show they deserve the bonuses, then the money shouldn’t matter. Why punish the employer they supposedly love just to prove a point? Or is it really about greed?
Employees should sue so we can find out.
I got a big bonus at the board’s meeting last week for doing my job. Several retirees, whom I’d never met before but who had been reading my stories about STRS, shook my hand.
“Thank you,” they said.
Five STRS employees sue to get back their bonuses
By PAUL E. KOSTYU
Copley Columbus Bureau chief
Canton Repository, May 29, 2004
COLUMBUS — Five employees have sued the State Teachers Retirement System seeking the bonuses they were denied by the pension board last week.
The employees filed the suit in Franklin County Common Pleas Court late Friday asking for class-action status for 268 noninvestment staff eligible for the $1.8 million in bonuses ranging from $416 to $46,574.
The documents filed by Columbus attorney Michael R. Szolosi Sr. appear to ignore Cassandra Hill, a teacher in the STRS Day Care Center whose bonus was to be $174, even though she appears in the appendix filed with the lawsuit. In fact, the appendix lists investment staff and the bonuses they received even though they are not a party to the suit.
Included among the 268 employees are two deputy executive directors, Robert A. Slater, with a bonus worth $46,573, and Sandra L. Knoesel, $43,324, and the board’s executive assistant, Eileen Boles, $6,427.
Repeated attempts to reach retirement system spokeswoman Laura Ecklar for comment about whether she and others would join the suit were not returned. Her bonus was listed at $15,204.
The suit asks for an unspecified amount of punitive damages and attorney fees. The suit seeks temporary and permanent injunctions to prevent the retirement system from using the money set aside for the bonuses for other purposes.
Reached in Chicago, Executive Director Damon Asbury said he knew some employees were talking about filing a lawsuit.
“This was not unexpected,” he said. “We will turn it over to the attorney general to look at and advise us on our next step.”
Kim Norris, a spokeswoman for Attorney General Jim Petro, said the case “is winnable because of the financial condition of the funds” at the time the bonus plan was in effect.
The bonuses were to be awarded to noninvestment employees for work done in the 2002-03 fiscal year. In the aftermath of media reports about questionable spending at the retirement system, the bonuses were suspended last year. The retirement system board voted 5-4 on May 20 not to pay the bonuses to noninvestment employees and unanimously terminated the program. Bonuses were awarded to investment staff, however.
At the meeting, Asbury and Assistant Attorney General John E. Patterson, who is the board’s attorney, recommended that the bonuses be paid. Both predicted a lawsuit would be filed and that the retirement system would lose if the bonuses were not paid.
Petro, however, instructed his representative on the board to vote against the bonus plan because he said it wasn’t in the best interest of the pension system.
The employees bringing the suit are Thomas P. Scott of Mount Vernon, Marvin L. Moore of Columbus, Donald E. Van Loon Jr. of Delaware, Dwayne T. Lane of Canal Winchester and Carmen Fenton of West Jefferson.
Scott, who works in the information technology section at the retirement system according to Asbury, has an annual salary of $98,310. He was scheduled to receive a $15,729 bonus.
The annual salary, job and bonus of the other four are: Moore, a retired computer specialist, $60,560 and $5,632; Van Loon, Web developer, $81,610 and $12,155; Lane, Web developer, $79,420 and $7,433; and Fenton, tax coordinator, $52,150 and $2,033.
The suit accuses the board of acting arbitrarily and in bad faith by giving bonuses to some employees and not others when many of those receiving the money had similar jobs to those who did not. It also said lack of the bonus will affect employee retirement benefits, which are based on the average of the final three years of pay.
The suit also accuses the system and board of arbitrarily setting a lower figure for calculating how much the bonuses should be. The maximum bonus was set at 80 percent instead of 100 percent. The plaintiffs said the retirement system broke its contract with employees because a performance-based incentive plan was in place in 2002-03, which was to be paid in September 2003.

Mario Iacone: BONUS IMPACT ON THIRTY YEAR FUNDING PERIOD

From Mario Iacone, September 20, 2009

The STRS PBI PROGRAM may cost more than ONE BILLION DOLLARS over the NEXT 30 YEARS!

RETIREMENT BENEFIT CUTS submitted to ORSC by STRS may save over SEVEN BILLION DOLLARS!

The BONUS PROGRAM may consume up to 15% of the savings of the RETIREMENT BENEFIT CUTS!

STRS, the ORSC, and the LEGISLATURE must include future ELIMINATION OF PBI as part of any changes to make the STRS Fund solvent.

NOTE: The above PBI estimate is based on paying out an average of 10 million per year in bonuses over the next thirty years. The return is based on STRS actuarial return of 8%.

I would sincerely hope that STRS can objectively prove the above figures incorrect.

Shown below is a year by year calculation of the PBI estimate.

(Click images to enlarge.)


'Duke' and Jane Snider: A few words for STRS

From Ken ("Duke") and Jane Snider, September 20, 2009
Subject: Malcontents again
STRS Board Members:
The seven board members who voted for giving bonuses and M. Nehf should resign immediately. Dennis Leone and John Lazares are icons in the state of Ohio, because they stood up for retirees and active teachers. They exposed people, which resulted in indictments. Are people still angry, because this happened? Retirees aren't. Are STRS employees angry? Do STRS employees RUN the STRS board?
Please explain the following. STRS retirees lost their 13th check, BECAUSE investments weren't doing well. YOU want to give bonuses when STRS has lost billions of dollars!!!! Where is the common sense? One thing for sure, we retirees could say it's daylight at noon, and you probably would say it's night. The second thing for sure is you don't care what retirees think. If you're worried the investment people would quit, well there would be dozens standing in line for their job.
Ms Eckler -- Hello, since you stated at our RTA meeting that you read everything that is emailed, we hope you pass this on. Also, we still think you were wrong to state to all the retirees at our RTA meeting that it's good for retirees that they live longer, but it's bad for STRS. You're supposed to be a diplomat? That was uncalled for especially from a person representing STRS. You were out of line.
Mr. Stein, we're extremely disappointed with you. We had you "pegged" at first, but when we received emails, we faltered and thought you might be a Dennis Leone or John Lazares. You certainly proved us wrong. Mr. Stein, you should turn in your CORE card.
Mr. Brooks, a great big vote of thanks to you for using common sense!
Mr. McGreevy, we were completely wrong about you. We should have supported you and not Mr. Stein. We certainly want to apologize to you. With your decision you make us feel proud, even though we were wrong at first. Keep up the good work Mr. McGreevy.
Duke and Jane Snider (A former board member referred to some of us from southern Ohio as "Malcontents;" well we believe in standing up for what is right.)
Sardinia, Ohio

A Worthington Schools retiree: Some words for the STRS Board

From Donald Hyatt, September 20, 2009
Subject: Bonus
Perhaps you should ask all the people who are going to get their bonus to turn it down like the teachers in Worthington City Schools did this week. They don't get a bonus for receiving a high rating in their performance. They get a step increase based upon years of service. It had nothing to do with performance. I agree that experience does not mean better teachers, but they turned down something that their contract said they should receive.
They had a good report card, and turned down the money. STRS employees did not. Perhaps they might turn down their bonus. Schools are cutting back for the good of the community, maybe the people who work for STRS would do the same if given the opportunity.
If the Worthington City School Board had turned down the offer to refuse their annual raise, how do you think the community would react?
We are the community who you represent. How do you think we feel when you grant a bonus to a person making 6 figures? In this economy, do you really think these people can not be replaced with equally competent people?
Donald Hyatt
Retired Ashland, Upper Arlington, and Worthington City School teacher

Donna Seaman to Nehf & Board: You just don't get it

From Donna Seaman, September 20, 2009
Subject: vote
Board members and Mr. Nehf: You let retirees down once again. Your vote to go ahead and approve bonuses for investment staff, even though delayed, shows your total lack of consideration for retirees and yes, the general public, who is scrutinizing your decisions. You just don't get it, do you? You disappoint me!
Donna Seaman

I second Ms Seaman's disappointment, and add, "Shame on you."
Helena Pieratt
9/21/09

RH Jones: The Board's decision will come back to haunt us

From RH Jones, September 20, 2009
Subject: Decision to pay bonuses a bad one
To all:
Linda is correct. And, I think the Board's decision to pay the bonuses will probably cause an uproar from the ultra-conservatives who want to destroy our OH STRS Defined Benefit Pension System. How shortsighted of those who voted for the bonuses; this mal-judgment will come to haunt us in the future. If the employees and the board continue to make such ill advised demands on the system, they must realize that it will hurt their retirement perhaps even worse than ours.
That is my opinion,
RHJones

Linda Meinelt's interpretion of STRS Board rationale: 'We value our employees more than our stakeholders'

From Linda Meinelt, September 20, 2009
Subject: Decision to pay bonuses
Thank you Mr. Brooks and Mr. McGreevy for exhibiting common sense in voting "no" on the motion to pay bonuses to the Investment staff. Mr. Nehf and those Board members who voted in favor of the motion obviously do not believe in carrying out their fiduciary responsibility to the STRS stakeholders. Considering the state of the economy, the groundswell of the nation is against the payment of bonuses. By voting for them, you chose to place the value of the Investment staff over the security of the STRS pension fund. You are giving our money (yes, it is our money, not yours) away with total disregard for the retirees and future retirees who face COLA cuts, high health premiums and increased contributions.
What is your rationale for paying the bonuses? Surely you aren't still playing the fiddle that the staff will leave for greener pastures. STRS is the GREENEST PASTURE -- they aren't going anywhere! It is plainly stated in Board policy that you can suspend or terminate the bonuses at any time. The Investment Staff understood that when they were hired; so, they have no leg to stand on for a lawsuit. So, I ask again, what is your rationale? From where I stand, it is a statement of "we value our employees more than our stakeholders."
Linda Meinelt
Retiree

Tom Curtis responds to Bill Bush (Dispatch)

From Tom Curtis, September 20, 2009
Subject: 092009 Re School Employees Get Paid Twice

Hello Bill Bush,
As a retired teacher and activist for reform at the STRS since 2003, I thank you for your article, but Mr. Asbury fails to acknowledge one most important point.
The rehiring of these chief administrators across Ohio has completely stalled the natural progression of those in the teaching ranks and those in lower administrative ranks from moving forward. Because of such, many school systems lose people that are good administrators, because they see no possibility of advancement in that system and move on. This whole process is nothing but a good old boys club.
Larry Morgan, the Supt. of Stark County Schools is a classic example of this abuse of power. He retired and then rehired a number of years ago with probably enough years to gain 100% of his 3 best years for his pension. I do not know his FAS when he retired, but it was in excess of $100K. The last time I noticed his current salary, it was $151K. My guess is that he is currently taking home in around $300K per year. Mr. Morgan has encouraged many other administrators in Stark and neighboring Summit County to retire and rehire. At last count I knew of, 65 other Stark County administrators had retired and rehired.
As stated above, this retire/rehire scheme completely stalls the natural progression of those desiring advancement in the educational community. These greedy people do not care one bit about that, because they feel they can run things better then anyone else and have developed the rhetoric to back it up.
Damon Asbury will always give you all the reasons why something like this is advantageous, without ever citing the negative reasons for doing such. I have experienced this first hand while attempting, with little success I might add; to bring about much needed reform at the STRS when Damon Asbury was the executive director. Damon Asbury could sell a snake a pair of shoes, and make him think he needed them!
Ask Damon Asbury why he felt it was proper for him to attempt to move 200 sick days from his prior employment as the Supt. of Worthington Schools to the STRS in 2001 and have the STRS funds pay for those days. If they were not eligible to be paid by the Worthington School system, then why would he believe it was right to have the STRS funds pay for them? Oh, that's right, Herb Dyer probably made a deal with him to do just that, so he could be paid based on a greater income then when he left Worthington.
Had it not been for Dr. Dennis Leone, former STRS board member, Damon Asbury would have been paid for those 200 sick days when he left the STRS in 2008. It is my understanding that he did not receive payment for such, but I have no way of knowing that for sure. I know one thing for sure, if Damon Asbury could be paid for them in anyway, he received that compensation.
To top it all off, these greedy individuals, like Damon Asbury simply slide into another top position so they can continue to game the system.
Disgusted in North Canton,
Tom Curtis
STRS retiree since 1998
RETIRED, REHIRED
School employees can get paid twice
Sunday, September 20, 2009
By Bill Bush
THE COLUMBUS DISPATCH
When South-Western schools' personnel director retired on June 30, 2003, the district expressed in a letter its "thanks and appreciation for your past service."
But the district already was banking on her future service, too, because it had decided to rehire Janice Collette the month before she retired.
Today, Collette, 58, continues to work for South-Western schools, making $107,000 a year and collecting a pension probably equal to two-thirds of her $86,000 annual salary at "retirement."
Across the state, Ohio's State Teachers Retirement System paid out more than $741 million in pension benefits last school year to 15,857 faculty and staff members who were still working for school systems and building up a second retirement plan. That's an average of almost $46,800 in annual pension payments per retired-rehired worker -- more than Ohio's median household income in 2007.
Almost 1,100 employees statewide were receiving an average pension payment last school year of $67,100 while simultaneously earning from $70,000 to more than $100,000 working for a school district.
Of that group, 299 went back to work earning more than $100,000 a year while earning pensions averaging $80,500, according to the system's records.
The number of retired rehirees has grown steadily by between 5 percent and 12 percent a year since lawmakers allowed the practice in 2000. At this rate, by next year there will be about twice as many as there were in 1999.
To retire, an employee must either be 55 years old or have 30 years of service.
But the State Teachers Retirement System doesn't think that allowing workers to be rehired after retiring causes them to retire earlier on average, or costs the system any more money, said spokeswoman Laura Ecklar.
"We aren't allowing anybody anything -- this is in state statute," Ecklar said. "We're just following the law."
The vast majority of the state's retired rehirees -- 11,239 of them -- returned to jobs that earn $20,000 or less a year, meaning they are likely part-time substitute teachers, Ecklar said.
Despite that, some school districts, and their residents, have been questioning the practice.
Scrutiny is likely to grow now that the cash-strapped retirement system is asking school districts to pay more into it to make up for declining investments. The teachers' pension fund is asking districts to increase their contribution to 16.5 percent, from the current 14 percent, during five years starting in 2016.
"Every time it comes up, members of the community are often outraged by the perception of double-dipping," said Worthington school board member Marc Schare, at whose urging the district held a public meeting on the issue several weeks ago.
Schare said it would be one thing to offer such generous benefits if districts faced a tight labor market because of an overheated economy.
"But we don't," he said. "We have a teacher glut."
South-Western recently changed its policy and no longer allows the practice, mainly because the State Teachers Retirement System stopped paying for retirees' health care, said spokeswoman Sandy Nekoloff. Before then, districts had an incentive to dump the employee's health-care costs onto the system.
School employees haven't always been able to retire then walk back into another job. Before a 2000 change to state law, retirees covered by the state retirement system had to wait 18 months before working again if they wanted to collect full pensions.
Some districts pay both the district's and employee's contributions into the system for managers. That means the taxpayer is completely on the hook for paying for the rehired administrator's second retirement plan -- an annuity that functions similar to a 401(k) that the employee can collect when he really retires.
The 10 or so retired- rehired employees at Worthington schools are mostly managers, meaning the district pays their pension contributions, said Treasurer Jeff McCuen.
Worthington administrators get rehired at between 85 percent and 90 percent of their former salary, depending on whether they immediately cash out accumulated sick leave that can equal tens of thousands of dollars in severance pay, he said.
"So there's a savings there," McCuen said.
But even if the district saves, does the public?
The Ohio School Boards Association thinks the practice is "relatively cost-neutral," said Damon Asbury, director of legislative services for the group and the former head of the State Teachers Retirement System.
"The person is not earning any additional benefit than another person in that same position," Asbury said.
bbush@dispatch.com

John Bos: Letters to Jim McGreevy and Bob Stein

From John Bos, September 19, 2009
Subject: Thank You for Your Vote
Jim,
Thank you for voting against the bonus incentives at the recent STRS Meeting. Unfortunately, the actives,retirees, and the public have lost confidence in the entire STRS operation because of the investment staff greed.
Thanks again for your effort. I realize that you are only one and can not steer the ship.
John Bos
From John Bos, September 19, 2009
Subject: Re: Good Morning Mr. Stein
It is with a heavy heart that I send this email to you. There must have been MAJOR reasons that you voted to award the bonus at a time that the public, retirees, and actives have lost confidence in STRS.
Please share with me how you arrived at this disastrous vote.
I am very disappointed.
John Bos
Larry KehresMount Union Collge
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