A Dispatch column on pension reform and comments from retirees

From RH Jones, April 19, 2010
Subject: Reject cutting retired educators!

To OH Leg. Educ. Chair, Brian Williams and all:

It's time that the HPA, STRS officials, and the others in power over our STRS retired educators, to stop cutting, and trying to cut, our retiree delayed compensations. We who are already retired, and have already experienced cuts to provide seed money for investments and sometimes even for imprudent "investments", need subsidized -- not cuts! It is noted that those of us who have been retired for many years are unemployable; and we cannot endure STRS cuts any longer. Further, those recent retirees have experienced tremendous HC/Rx costs, as well, and cannot they afford cuts either. This is fact, not fiction.

Brian, my friend, will you please respond to this message. I know that you are a fellow retired Akron educator, and as such, may have a legislator's "conflict of interest" but you are the Legislative Education Chair of Ohio and have a position of power to help fend off these insensitive attacks to our fixed income. Can you help us? And, if so, how?

RHJones, a Summit County retired teacher

From John Curry, April 18, 2010
Subject: Re: $6- billion in savings has already been done

Bob, Jim and others,

I can offer a suggestion for an approach that the majority of the other state retirement sytsems have and are going to....a two-tiered approach. One in which the current retirees and actives won't be affected (or only slightly affected) and one in which the most significant burden will fall on those not-yet-hired. They are the ones who have a lifetime to adjust to such a system's changed benefits or....to choose not to enter the teaching profession if they feel that the benefits are not suitable.

This approach will now be used by the Illinois public retirement systems(all 3 of them) that are in far worse shape than Ohio STRS. Do we have time to go that route? Well, according to a quote from Laura Ecklar in the Columbus Dispatch yesterday, it appears we do:

"State Teachers Retirement System spokeswoman Laura Ecklar said the delay isn't likely to harm the system. It isn't planning for any of its changes to take effect until July 2011, which would mark the first phase of an increase in employee contributions, so there's no urgency just yet, Ecklar said."

Sometimes, one has to think "outside the box." The two-tiered approach would be more "friendly" to Ohio's legislators as they would offend far fewer voters if we did go this route. Then again, while our legislators have been "kicking the can down the road," the other states' legislators have been legislating.

John

From RH Jones, April 18, 2010
Subject: $6- billion in savings has already been done

STRS Ohio Board Member, Jim McGreevy:

The new STRS investment department's incentives has helped bring our assists now reach $61-billion. In addition to the incentives, however, the investment staff is now growing the STRS assets in the large part due to the 3% seed money that the STRS board took away from us retired educator's HC/Rx 4% fund -- leaving just 1% left to support it ; and, then, transferring those dollars to provide seed money for the general investment fund. As you can clearly see, since that retiree HC/Rx cut, they certainly could have made up the $6- billion. I know, for that change has cost me personally around $1,300 per year(one out of the thousands of others who were now not getting spousal HC/Rx). Multiply that by others in that "same boat", plus the HC/Rx cuts for all retired members, one can see that $6-bil goal has been achieved.

RHJones

On Apr 17, 2010, at 1:31 PM, Bob Jones wrote:

To all ORTA members:

Every ORTA member needs to get on the phone, or the computer, to protest ORTA's support of the 1% cut in our fixed, flat, COLA. Never, should the ORTA Director Ann Hanning and the leadership of ORTA set back and say, and do, nothing when retired educators are being threatened with any type of cut. If ORTA does not aggressively defend our interests at the STRS, or else, they are doing the members a disservice that will in the long-term hurt membership when it is most sorely needed.

Note: Some of us can not attend meeting ORTA meetings for a variety of reasons, but that does not mean that we should not have a voice in ORTA do nothing policy. Traveling around the state means nothing. Monitoring our STRS means everything!

RHJones, PUFL ORTA member

From John Curry, April 17, 2010 12:08 PM
Subject: Dennis speaks..........................

Yes, Dennis....ORTA sat there and did their usual thing....."silence." It sure doesn't do anything for their membership nor retirees, does it?

John

Election delaying pension reform
Bill on funding of state workers’ retirements expected after Nov. 2

Saturday, April 17, 2010
By James Nash
THE COLUMBUS DISPATCH

Election-year politics are holding up a solution to the funding woes faced by Ohio's public pension systems, the state's second-largest retirement plan said yesterday.

A bill that would stabilize funding for retirement systems for hundreds of thousands of retired teachers, police officers, school custodians, budget analysts and other government employees probably won't be introduced until after the November elections, according to the State Teachers Retirement System.

State pension leaders had hoped to have the bill on the floor early this year.

"This is a correction to the pension systems that is going to have some implications for current retirees, future pensioners, current taxpayers and future taxpayers," said state Rep. Todd Book, D-Portsmouth, who plans to sponsor the bill. "When it gets introduced, my goal is to get it right."

The economic downturn that began in 2008 battered the bottom lines of the state's five public pension systems. Even before that, some of the pension systems were struggling to keep up with costs related to the retirement of baby boomers, increased life expectancies and health care. Three of the pension systems - the State Teachers Retirement System, the Highway Patrol Retirement System and the Ohio Police and Fire Pension Fund - are out of compliance with the state law requiring them to have enough assets to cover their obligations for 30 years.

The legislation is supposed to ensure the long-term solvency of the retirement plans through a variety of measures, some unpopular. Existing teachers and school districts would be required to pay more toward teacher pensions. Cities and counties would pay more toward police and firefighter retirements, as would the employees. Retirement ages would be raised for nearly all public employees.

The proposed changes have been approved by pension-system boards but have drawn opposition from some Republican lawmakers and the Ohio Municipal League. They object to squeezing cities and school districts for higher contributions.

In a regular update to members, the State Teachers Retirement System said the pension fixes likely will be delayed for months.

"Because of the politics surrounding the November elections, it is becoming more and more unlikely a bill will be introduced before November," the message said.

Book, who must leave the House because of term limits, said he's unaware of any specific political holdups. But he acknowledged that the pension fixes could be held hostage as the governor and other statewide officeholders are up for re-election.

State Teachers Retirement System spokeswoman Laura Ecklar said the delay isn't likely to harm the system. It isn't planning for any of its changes to take effect until July 2011, which would mark the first phase of an increase in employee contributions, so there's no urgency just yet, Ecklar said.

The Ohio Police and Fire Pension Fund, on the other hand, had planned for the first phase of the increase in employee contributions to kick in this year.

Aristotle L. Hutras, director of the Ohio Retirement Study Council, which advises the state and public officials, said the pension systems remain in solid fiscal health, boosted by the recent upturn in the stock market.

"Eventually, this is going to happen," he said. "This is the prudent and necessary thing to do. Is there an emergency? No."

jnash@dispatch.com