This time 'round it wasn't STRS who felt they were "entitled," it was SERS! A "raise" for "meeting goals?" Spare Me!

From John Curry, May 13, 2010

School Employees' Pension System Scolded for Proposing 2 Percent Raises

With unemployment still high and a major public pension overhaul in the works, the School Employees Retirement System came in for much scorn Wednesday on its proposal to bump up workers' pay in its next budget. "I think this is a great example of how the public sector lives in a Cinderella world," said Rep. Lynn Wachtmann (RNapoleon), a member of the Ohio Retirement Study Council, which heard the budget proposal Wednesday.

The school employees' pension draft budget proposes a $29.3 million operating budget, a 4.2 percent increase above FY10. Included in that budget is a 2 percent merit raise for pension fund employees. The pension fund's board of directors is set to take up the draft budget next week.

Virginia Brizendine, the chief financial officer for SERS, described the raises as a "minimal amount" to reward employees for meeting goals, and said it was lower than the raises most of the pension systems' members saw in the past year. But Sen. Kirk Schuring (R-Canton) said school employees' raises are probably attributable to local union contracts that are on a different cycle than the state budget. "I, for one, am very disappointed in that 2 percent increase. I recommend you take that back to the board and see if you can make an adjustment," he said.

Carol Morris, interim director or SERS, said granting small raises to experienced employees to keep them around costs less than hiring and training new staff, prompting Schuring to say, "I didn't realize there was enough of a job market out there that people would leave in the blink of an eye."

Sen. Keith Faber (R-Celina) said the proposal was out of step with the state's financial situation and would not play well when state lawmakers go on a "listening tour" this summer to shop around potential pension funding and benefit changes needed as a result of the economic collapse. "If you guys haven't got the message in the plans yet ... you should be in a state of austerity that should make our heads spin," Faber said. "If you don't get that message now, I don't know how else to send it." "We hear you, and we will take that into advisement," Brizendine said.

The State Teachers Retirement System also presented its draft budget Wednesday, proposing a $90.1 million operating budget, a 2 percent increase above the previous year. Though personnel costs are up in the draft, it does not include any merit or cost-of-living pay increases.

Rep. Todd Book (D-McDermott), the committee chairman, asked the pension funds to explain the effects of Thursday's market shock. "Do we have things in place to keep us from getting caught up in that kind of situation?" Book asked.

(Note from John...gee, remember Dr. Leone repeatedly trying to pass a safety mechanism to protect us against a sudden and serious drop in the price of a stock or stocks? Of course, that request fell on deaf ears at STRS, didn't it?)

Chris DeRose, executive director of the Public Employees Retirement System, said while different outside asset managers reacted differently, the pension's long-term allocation strategy preempted quick panic.

"Our mandates and our guidelines and policies protect us ... we did take a hit like everyone else, but we recovered that," said William Estabrook, executive director of the Police and Fire Pension Fund.