Bob Buerkle's speech to STRS board, May 20, 2010

Nationwide Pension Reforms

So far, I have identified at least 20 states that are making changes in their pension plans. These changes are increasing retirement age and service requirements, lowering pension formulas (also called multipliers), increasing the number of years used for FAS calculations, increasing contribution rates by the employees and employers and reducing COLAs. All of this has a familiar ring, to a point.

At least ten of the states have already passed legislation. Ten more are in the process. They all differ from Ohio in that all 10 already have legislation that will only apply to new hires. More states are planning similar legislation for new hires only. These states are: NY, TX, IL, LA, NJ, GA, NV, HI, VA, NM, KY, MO, PA, RI, FL, KS, IA, NE, MA and CA.

In at least four states, NY, VM, MI and MA, early retirement/severance incentives are also being offered to existing employees.

So far, Colorado, Rhode Island and Minnesota are the only three states that are making, or plan to make, any changes to the COLAs for retirees. All three states are already in class action lawsuits over the COLA reductions. Only these three states are changing the rules after the game is over for their retirees. Shame on them.

Twenty states are solving their financial problems in the right way, with "New Rules for New Hires." When you start playing the game (Ohio teachers under STRS), you play by the Ohio Laws codified on ORC 3307 and implemented by the STRS. To think that these laws can be changed during the time that you are playing the game, or worse yet, retroactively after you are through playing the game, is almost incomprehensible.

Think about this analogy:

If a person commits a crime that they must be tried for, they have to be tried under the laws that were in place at the time they committed the crime. If the law is changed later, even if it is because of the crime committed by this person, the punishment they receive cannot be based on the new law. Their punishment must be based on the law that was in effect when they committed the crime.

I am not saying STRS is not trying to protect the retirement system. I'm not saying you haven't worked hard on the solution you came up with. But to STRS retirees, this process makes us feel like we have less protection under the laws and guarantees we retired under than criminals have.

I hope you will redo your legislative proposals and have New Rules for New Hires.

Bob Buerkle

Cincinnati Public Schools Retiree