Saturday, January 02, 2010

Tom Curtis re: America the Traumatized and STRS management

From Tom Curtis, January 2, 2010
Subject: 010210 Curtis To Neff & Staff, America The Traumatized
Hello Mr. Nehf,
I trust you and all of the employees of the STRS had a wonderful holiday season. Heck, why wouldn't you?
Each of you has a job where everything is simply wonderful, isn't it? The STRS facility is beyond grand, includes free parking and so many other benefits that we the stakeholders never even dreamed of having during our employment. You live in Columbus, Ohio, but feel you should be paid according to Wall Street in New York. You spend our funds to hire accounting and consulting firms to validate that you are underpaid according to some scale these firms brew up. I could go on, but what is the sense of it, you all obviously feel entitled to such for the wonderful job you do for your stakeholders. Right!
You might take the time to read the following article, because it clearly identifies why so many of your stakeholders are so angry with the STRS management. We have PTSD! This was brought on by the greedy and uncaring likes of the STRS management during the past decade.
Thomas Curtis
STRS Stakeholder & Retiree
America the Traumatized: How 13 Events of the Decade Made Us the PTSD Nation
By Adele M. Stan
Posted on December 30, 2009
It's been one helluva decade, even though we've reached the end without knowing what to call it. Some have tried "the aughts," others the "double-Os." I'm content to simply call it over. To mark its location in the great march of history, I've taken to calling it the millennial decade, after the great numerological transition it heralded. Yet for describing its character, nothing comes closer than the Decade of Trauma -- American trauma, that is.
Here in the home of the brave, we've endured a decade that shattered nearly every notion of what it meant to be an American, whether you live on the left or the right. And so we shout. Or hide. Or startle too easily.
In America today, it seems we all have a touch of post-traumatic stress disorder, as evidenced by our increasingly vitriolic political environment, where reality is denied and histrionics run riot. Anger, we're told, is the natural reaction to trauma; in people with PTSD, the anger is out of control. By that measure, the millennial decade has brought us 10 years of PTSD politics -- with no end in sight.

(Click here to view the rest of the article)

Friday, January 01, 2010

STRS Assets as of December 1, 2009

Click image to enlarge.
On 12/31/09 the total fund assets stood at $59.82 billion.
[Special thanks to John Bos for providing updated info each month and to Amy Crow for creating the graphs]
Link for the current STRS Overall Asset Mix and Portfolio Performance Report: https://www.strsoh.org/pdfs/Investments.pdf

Wednesday, December 30, 2009

MI legislators urge public employees to contribute more for healthcare

Michigan lawmakers push for public employees to contribute more for health insurance costs
By Monica Scott
The Grand Rapids Press
December 30, 2009
(Click images to enlarge.)
West Michigan lawmakers say it is time for public employees to pay more for health care.GRAND RAPIDS -- Local lawmakers, eager to adopt reforms before the 2010 election season heats up, are pushing for changes that would have public employees chip in more for their health insurance.
They would mandate public employees contribute 15 or 20 percent toward the cost of their benefits, which they see as a key item to help schools and local governments reeling from state budget cuts.
State Sen. Mark Jansen (photo), R-Gaines Township, introduced legislation that would limit the portion public employers pay to no more than 80 percent of the premium cost or 85 percent if the benefits include wellness incentives and a health savings account.
The measure would also cover elected officials.
"I believe we have to do this given the times we live in," Jansen said.
"These reform measures will help all public employers, like local governments and schools, manage skyrocketing costs of health care benefits and any savings will stay with the public employers."
Jansen said the Senate Fiscal Agency has not completed a cost analysis on the measure yet.
"Lawmakers should deal with the root of the problem --the state's outdated tax structure and funding system," said Doug Pratt, spokesman for the Michigan Education Association that represents teachers.
Pratt said Jansen's legislation and a similar measure in the House does not take into account the $700 million in concessions, such as higher co-payments and deductibles, employees have already made in recent years.
The legislation would apply to those groups as their contracts expire.
Earlier this month, Reps. David Hildenbrand, R-Lowell, and David Agema, R-Grandville, introduced legislation mandating at least a 15 percent contribution but it does not include the incentives in Jansen's measure.
Local city and school leaders, including Grand Rapids Mayor George Heartwell, expressed support at that time for a mandate, but Grand Rapids' largest union objected.
"The health care reform proposals are definitely something we should be looking at as a cost-saving measure," said Rep. Roy Schmidt, D-Grand Rapids. "We want to get some important reforms, like the tax structure and health care, accomplished before the war of politics and things get bogged down."
Jansen is also co-sponsoring a bill introduced by Sen. Alan Sanborn, R-Richmond Township, that would allow local governments to offer employees the same insurance benefits available to state employees.
From John Curry, December 30, 2009

RH Jones: Re: Longevity of OH STRS male retired educators unequal to females

From RH Jones, December 30, 2009

To OH Rep. Brian Williams and all:

Today, 12-30-09, in the “NEA MorningUpdate”, OpeningBell@nea.custombreifings.com NEA mentions: “Award-Winning Teacher Calls For More Men To Enter Profession”.

What better initiative to fulfill the urgent need for men to enter the teaching profession than to recognize that men are being discriminated against in providing the STRS male retirees with an equal pension income with women for an equal contribution?

Traditionally, since the inception of our STRS, men have been “short changed” when compared to the amount of income derived from the STRS over the male’s shorter than women’s life span. As everyone is aware, statistically, men simply do not live as long as women. During our working career in the same professional classification of employment, we men paid into the retirement system the same amount of money that the female professional paid; therefore, due to men not living as long as women, we men are due monetary credit for this longevity difference. We simply die sooner and therefore draw out less over our retirement period. According to <www.livescience.com/health/050228_life_expectancy.html> “the American longevity in men and women (who live longer) closed from 5.4 years in 2002 to 5.3 years in 2003 for women”. A major goal of our STRS is for fair treatment for all stakeholders. This 5.3 disparity should be monetarily made right.

With this in mind, our STRS should quietly correct the disparity before having to pay out greater amounts of dollars due to any possible liabilities of punitive damages brought about by the court system. A case in point, in today’s Beacon, pg. B7, 12-30-2009, “Restaurant settles discrimination suit” states: “Outback Steakhouse agreed to pay $19 million to female workers and take other steps, including hiring a new human resources executive, to settle a sex discrimination suit.” In our case, it may be determined that men indeed are not treated as well as women when it comes to the amount of pension drawn from the common male/female pool of STRS retiree recompenses. Men are owed this consideration.

As all America has recognized the equally of the sexes, this disparity for retired male teachers is long overdue for correction. Our STRS should move on this without delay. This should not need legislation to speed quickly forward.

The above is a fact not an opinion,

Robert Hudson Jones, an individual STRS retired teacher member


Some things you may not know.........

December 30, 2009

1. Did you know???? that STRS has 3 registered lobbyists. MIKE NEHF, Terri Bierdeman, and the assistant to Ms. Bierdeman. Two of these associates are FULL TIME LOBBYISTS!!!


2. Did you know????
that STRS has a branch office at 44 Montgomery St., San Francisco. This office has a small group of investment personnel and support staff. Their telephone number is 415-434-8003. This can be confirmed on Mapquest. They receive a higher "bonus" than the Columbus staff due to their "cost of living". I wonder if Cleveland retirees have a higher retirement than Vinton County???


3. Did you know????
that Ohio Treasurer Kevin Boyce has not named his representative to the STRS Board even though there have been many qualified recommendations including Dr. Dennis Leone, former STRS Board Member, and Dr. Tom Hall, economics professor at Miami University. Both are participants of the STRS system and qualified to serve as an appointed representative.

4. Did you know????
that the 13th check to retirees was eliminated many years ago, but the performance based incentives (we call them a bonus) have been paid continuously to the STRS Investment Staff Personnel without interruption. Isn't there something missing here?


5. Did you know????
that the STRS associates have a far different medical insurance plan than the retirees. They pay a lower premium and have much better benefits.


6. Did You Know????
On January 1, 2010, the STRS Associates will finally start to work a 40 hour week without additional compensation. Every retiree will understand that they are still working about 15 hours a week less than the typical educator in Ohio. This is the Michael Nehf's "reduction" in operating expenses?????


From STRS Ohio Retirees that Struggle to Survive (SORTSTS)

Tuesday, December 29, 2009

CalPERS rapped for its new website that ’spins’ information

http://www.californiapensionreform.com/?p=504
Click image to enlarge.
December 28, 2009

In a hard-hitting editorial, the authoritative Pensions & Investments magazine has criticized CalPERS for its new website CalPERS Responds and says the site “represents an effort to ’spin’ information on issues regarding its oversight of public employee benefits and pension benefit finance.”

“It is a self-serving rhetorical device. There is no balance,” says the editorial. “There is no full disclosure; actually, there is virtually no disclosure. CalPERS selectively presents only a few issues and then in only a limited way to its benefit, and it provides no significant data to back up its claims … if this were the financial disclosure website of a corporation, it certainly wouldn’t pass any minimum acceptable disclosure standard at the Securities and Exchange Commission. This is ironic in that CalPERS would certainly take issue with any corporation in its portfolio that maintained a similar one-sided website focusing on its financial or corporate governance performance.”

Since the Pensions & Investments website is accessible by subscription only, we are including the complete text of the editorial below:

The CalPERS myths

December 28, 2009

CalPERS Responds, a new website created by the California Public Employees’ Retirement System, represents an effort to “spin” information on issues regarding its oversight of public employee benefits and pension benefit finance.

CalPERS created the website, www.calpersresponds.com, as it states “to educate — and separate fact from fiction — about issues and our response related to pensions, investments and national health care reform … We hope this information provides education, insight and clarity.”

The website falls far short on all of those objectives. It is a self-serving rhetorical device. There is no balance. There is no full disclosure; actually, there is virtually no disclosure. CalPERS selectively presents only a few issues and then in only a limited way to its benefit, and it provides no significant data to back up its claims.

In fact, if this were the financial disclosure website of a corporation, it certainly wouldn’t pass any minimum acceptable disclosure standard at the Securities and Exchange Commission. This is ironic in that CalPERS would certainly take issue with any corporation in its portfolio that maintained a similar one-sided website focusing on its financial or corporate governance performance.

Presented in the form of a series of “myths and facts,” CalPERS examines such issues as: it “cannot come back from billions in losses.”

The website responds: “At the market’s lowest point in 2008, CalPERS assets had dropped by $100 billion. Today CalPERS has regained $40 billion in five months, and in September, its market value of assets returned to the $200 billion mark …” It doesn’t tell the reader what the high-water mark was. In fact, CalPERS still hasn’t returned to its peak asset value of $248 billion as of June 30, 2007.

The site also doesn’t discuss the impact of the financial crisis on CalPERS’ actuarial funding level. The five state plans in CalPERS, for instance, were funded at between 79% and 91% as of June 30, 2008, according to CalPERS’ main website, http://www.calpers.ca.gov, and those figures don’t account for the overall market plunge since mid-2008, which would have worsened the funding level, even though the market has rebounded somewhat.

Like a lot of pension funds, CalPERS attempted to invest its way out of the dot-com crash and 9/11 market plunge. It may have been that drive to recover losses and build assets that led it to seek alternative investments. But they haven’t yet paid off.

In another “myth,” CalPERS responds to the charge that its uses “risky investment strategies and assumptions.”

In fact, CalPERS responds by saying, “Our consultants affirmed the soundness of our risk position in June 2009 … Our biggest on-paper losses, by far, were in public stocks that historically aren’t considered as risky as private equity and real estate, two asset classes that have outperformed stocks the past decade… In fact, the board’s new asset allocations slightly lowered the risk of the overall portfolio. It raised the target for private equity from 10 to 14 percent of the portfolio, and reduced the proportion of stocks in the portfolio.”

The website provides no information on CalPERS’ placement agent scandal that arose when it was revealed that money managers had paid CalPERS-connected placement agents to market their firms to the fund, or the losses associated with the private equity investments associated they made.

CalPERS has lost about $420 million in its investment in Apollo Global Management, a private equity firm, with the system’s $600 million investment recently valued at $180 million, according to a Pensions & Investments Dec. 14 story, which noted in addition CalPERS has more than 11% of its private equity exposure in Apollo-related investments.

The website fails to mention that Apollo and other private equity firms paid Alfred Villalobos, a former CalPERS trustee, and his placement agent firm, ARVCO Financial Ventures LLC, more than $70 million for successfully marketing investments to the system. CalPERS has disclosed this elsewhere.

CalPERS Responds doesn’t disclose specific reasons for the investment losses, basically attributing them to the general misfortune of market decline, rather than any specific investment decision. There is a lack of accounting and accountability in its myths-and-facts series.

The website’s home page has a link to the main CalPERS website, which has detailed information about the system and its investments, but no specific link for any of the myth and facts to promote a fuller understanding of the selective issues CalPERS raises.

The CalPERS Responds site is virtually useless. Instead of a separate website on selective issues, CalPERS should bolster its main website to make sure all the information about its investments and problems is as full and complete and timely as it could be. As a fiduciary, that is its obligation.

From John Curry, December 29, 2009

RH Jones: Past raids on OH STRS seed investment funds

From RH Jones, December 29, 2009

To the new STRS board and the new STRS key employees,
Re: past raids on OH STRS seed investment funds


It may not be generally known or recognized by the new STRS board, the new STRS key employees, our present union officials, or even some of the active and the retired educators younger than I, that: in the past both political parties here in Ohio (OH) have raided our the STRS funding. These lost funds were necessary to multiply our investment assets. The culprits were the 60th Gov. of OH, Michael Di Salle (D), 01-12-59 thru 01-14-63 and, later on the 63rd Gov. of OH, James Rhodes (R), 01-13-75 thru 01-10-83. Thinking that our STRS had surplus funds, they used our STRS money to prop up the OH general fund. Yes, they eventually paid the principal back, but not the lost interest income. Our STRS is still smiting from that loss of that investment interest revenue. Our STRS is our PENSION system to serve us educators in our retirement; it is to serve no one else.


After the 2nd raid happened, in order to best use our money (that politicians thought was excessive) was for the STRS to spend it in the form of the very fairly calculated 13th check. So, since that time, to keep our surplus seed funds away from greedy politicians, the astute and informed STRS officials went about issuing it for at least 25 years. This was the result of intelligent investment decisions leading to doing the right thing: serving our educator’s pension system. Also, the Ad Hoc increases in our base about every 10-years served to distribute our accumulated pension funds were it should be: in the pockets of the pensioners, not in Ohio’s general fund.


The conclusion, therefore, is that it is sad that STRS must spend down seed money to keep it away from those politicians or STRS officials who may wrongly think it is theirs to spend, not ours. Helping those of us retired did not create the funding shortage, the past unethical, usurping, removal out of our seed funding pool did. That misuse, created the need for a raise in the employer/employee contribution to STRS. Back when Gov. DiSalle and Gov. Rhodes were dipping into STRS funds, where were the OEA and ORTA? Where were they in the year of unethical exploits at the STRS in 2000? Where are they now when we need them?


In particular, the promises made to retired generations must be kept. As educators complete their professional careers and go into retirement, they must realize that in 15 years or so, they too will need their simple 3% COLA, ad hoc raises in the base, and due to their age will need more HC/Rx. To keep future retired members off Medicaid, periodic upgraded enhancements are a necessity, and this is not ignorant misuse of the STRS seed funds.


By the way, I was way wrong if when I mentioned taxpayers had a 25% stake in our STRS. They do not. On several previous emails I have always correctly contended that the employer/employee contributions are taken from the school board budget that goes directly to the cost of professional personnel. Therefore, active/retired STRS members are the sole stakeholders. I am sorry that I failed to remember that.


RHJones, Life Member of OEA, OEA-R, ORTA and proud CORE member

Monday, December 28, 2009

'Memba them?

Some familiar names here in this old press release that surfaced recently......

Now Hazel, now Jack, now Eugene and Mike; on Debbie, on Joe, on Herbie and all.....to the top of the Board room, to the top of the wall, now fly away, fly away, fly away all......and they did just that, with a little help from the Ohio Ethics Commission and a judge or two at the Franklin County Court House. Most of them were the darlings of that big teacher's union you hear about all the time, the Ohio Education Association (they know how to pick 'em). You can read it here; just click on the image below.

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

RH Jones: No Ohio income tax for retired educators

Re: No Ohio income tax for retired educators

From RH Jones, December 28, 2009

To all:

The questions is: How can Ohio (OH) in the coming years grow its economy while at the same time helping its retired teachers from further economic losses? Backing up the need to answer this question is an article published today, 12-27-2009, by the Beacon. It reports in an article “Decade of unemployment might loom for Americans” that: “They (Feds) note that a healing economy will cause more people to stream back in the labor force, vying for too-few jobs.” In other words, can OH create more jobs without raising taxes? Sure, with a legislative grant to exempt retired teachers income from all state income tax would help do it.

States are generally free from federal control in deciding how to tax pensions. Currently, there are ten of the 50-states that offer retired teacher exemptions. These include Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania. (Source: Retirement Living Information Center) You will notice OH is not one of them.out of the top ten states taxing retired teachers OH at 10.4% puts OH in 4th. Place! Only Maryland (10.8%), Hawaii (10.6%) California (10.5%), lead our Ohio (10.4%). To continue -- according to the Tax Foundation -- the nation as a whole paid an average of 9.7%, down from 9.9% in 2007. This was primarily because income grew faster that tax collections between 2007 and 2008. Therefore, friends, is it no wonder then that retired teachers are having trouble keeping up with those who are employed? Sadly, this source states that

Further, you may ask, why do retired educators need an exemption from Ohio (OH) state income tax? This is because retired educators are not “well to do” and taxing us is burdensome in our senior years when inflationary pressures, particularly of health care/prescription costs, increased local taxes and escalating energy costs, have greatly diminished our limited purchasing power. For the foreseeable future, it may be difficult for us to secure an effective COLA, our supplemental “catch-up” (13th) check, or an Ad Hoc raise in our base. Without a hedge against inflation, an income tax break is therefore the right thing for the legislature to do at the moment.

Exempting retired teachers is a positive benefit for OH as a way for economic development. To innumerate this: 1) All things being equal, having a lower tax burden for us makes OH a more attractive place for teachers to retire and live in than in state with a higher income tax rate. 2) More retiree money being spent at home in OH makes more OH private sector jobs that, therefore, brings in additional tax money into state coffers. 3) Relatives or friends living with retired educators will also spend, and if employed, will be paying OH income taxes and all other state an local taxes; all-the-while, helping to create both OH private and public employment as well. 4) In periods of heavy demand, residing retired teachers fulfill substitute-teaching and tutoring positions. 5) OH residing retired teachers provide universities and school systems with master teachers that supervise student teachers. 6) Retired teachers choosing to live in OH pay rent and property taxes here, as well as sales taxes. 7) We spend our health care and prescription (HC/Rx) dollars in OH employing HC/Rx workers. 8) Too numerous to list here, retired teachers in OH provide a host of employment for the numerous retail businesses. 8) Not to be ignored is the large number of retired teachers who for no pay volunteer in any number of service industries such as schools, hospitals, nursing homes, religious intuitions, juvenile centers, all of which save the state monies that would have to be paid to hire people to do this OH service work. Of course, OH teachers retired to other states enrich that those states with their OH dollars. As every taxpayer should know, 25% of retired teacher income comes from them; and, therefore, the OH legislature owes the taxpayer the effort to keep this tax money here in OH. In spending, what goes around comes around or we lose it to other states. 9) Without this tax break to entice retired teachers to stay here with family and friends, and without hope of Ad Hocs, the 13th check, and the threat of a reduced simple COLA, many resident retired teachers will be forced into Medicaid and other state welfare subsidies. 10) Forcing active teachers into defined contributions, rather than the tried and time tested defined benefit system, will further weaken the income of those educators who are already retired. This will force many to migrate to state that do, at least, give them a state tax break greater than Ohio’s. Any out migration of OH retired educators weakens OH, which is already losing population, and risking losing, some say, two U.S. Congressional seats! That means less federal income tax dollars coming back to OH. Therefore, the need to keep retired teachers here in their home state is real. 11) Increasing resident OH retired teachers has been a goal of teacher unions for many years. Any legislators that sponsor a retired teacher income tax exemption bill will be well remembered by the active as well as retired teachers, and their unions. Everyone benefits. Even being of southern heritage, to me, OH offers the best in fulfilling my retirement needs and I would like to continue to live here and spend here where I was employed as a career OH teacher. 12) With their vote, resident retired educators have traditionally backed public education that has been the catalyst that has made OH great and successful in the competition for an educated work force for businesses. OH residing retired teachers provide universities and school systems with master teachers that supervise student teachers.

As a reasonable conclusion, one must conclude that in these modern times, in order for OH to move forward economically, this tax exemption for retired educators will be a catalyst that brings OH out of this economic recession.

Respectfully submitted,

Robert Hudson Jones, an OEA, OEA-R, NEOEA-R, ORTA, SummitCRTA, and proud member of the CORE

Top 10 Things Not To Worry About in 2010

In the New Year, you know you won't have to worry about...
10. ...getting a notice from STRS that, thanks to the sharp decline in health care costs and superb plan management by STRS administrators, you will be getting a $1,500 rebate check for overpaying your health care premiums.
..9. ...hearing that the US House and Senate have reconciled on a public option health care insurance plan that will, with no deductibles or copays, completely cover you and your spouse and not add to the National Debt.
..8. ...the Fox News Network ever saying anything good about Obama and the current administration.
..7. ...MSNBC ever saying anything bad about Obama and the current administration.
..6. ...CNN ever hiring a woman reporter who wasn't beautiful, even if she couldn't really understand any of that stuff she reads off the teleprompter.
(Click images to enlarge)
..5. ...STRS management ever saying anything bad about the STRS Board, the STRS Board ever saying anything bad about the STRS management, or either of them ever saying anything bad about the STRS Investment Associates who lost us thirty billion dollars.
..4. ...understanding how a Democratic health care plan which cost $850 Billion actually will reduce the deficit by $120 Billion.
..3. ...understanding how every Republican estimate of the health care reform package is always triple what the Congressional Budget Office estimates.
..2. ...how to spend all that money when the 13th check comes back.
..1. ...ever hearing anyone on the STRS payroll saying our losing thirty billion dollars wasn't just "bad luck."

Rich DeColibus, 12/28/09
Larry KehresMount Union Collge
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