STRS Flashback -- 1 year ago, the Lima meeting and Dennis Leone addresses the potential COLA cut

From John Curry, June 10, 2010

"I also have said to many that taking away more from retirees cannot be the solution of the pension solvency problem."

Dennis Leone

From Dennis Leone, June 10, 2009
Subject: Re: STRS Town Meeting at Apollo Career Center: Allen Co. RTA

Yes, you are correct. In fact, what I actually said in Lima (it's on tape) was that if active teachers are "grandfathered" in such a way that they will be allowed to take advantage of current retirement arrangements (i.e. 35-year/88% rule) -- which will help them for life -- then retirees should be likewise grandfathered with their COLAs. The reporter was a little mixed up on this issue. I also have said to many that taking away more from retirees cannot be the solution of the pension solvency problem.

Dennis Leone

From RH Jones, June 10, 2009
Subject: STRS Town Meeting at Apollo Career Center: Allen Co. RTA

To all:

I am quite sure that Dr. Leone wants any COLA cuts to take place for those active educators not now "grandfathered". We "grandfathered" retirees have given up enough already.

RHJones, retired

Bonuses hot topic at STRS forum

http://www.limaohio.com/news/bonuses-38208-board-year.html

Beth L. Jokinen
Lima News, June 9, 2009

LIMA - The head of the State Teachers Retirement System had little good news for educators Tuesday. And he said little about performance-based incentives that many wanted to hear.

"Most of what I tell you tonight is not going to make you very pleased," Michael Nehf said during a town hall meeting hosted by the Allen County Retired Teachers Association. "Unless we make some changes to the system we will be unable to pay all the benefits."

While current retiree pensions are safe, there are shortfalls when looking long term, he told about 150 people.

The current financial downturn is hurting the system's assets, just as it is for retirement systems around the country, Nehf said. The board is studying the situation.

Dennis Leone, STRS board member from Chillicothe, criticized STRS staff for not making the public aware of the problems sooner. Options the board is looking at, including raising the age requirement and reducing cost of living allowance, should have happened years ago, he said.

Discussions quickly turned to the bonuses paid to investment staff. Nehf said the system is saving money by having its own investment staff, the system has to compete for the employees, and the staff is doing well for the fund. Leone is an opponent of the bonuses.

"I said a year ago we need to stop giving out bonus checks when we are losing billions and billions of dollars," Leone said. Many applauded Leone and others speaking against the bonuses.

The retirement fund lost $33.2 billion during the past 16 months. The fund sits at about $50 billion.

The board voted last month to cut the bonuses beginning in fiscal year 2011 if the retirement fund sees a negative overall return. The decision falls in line with what Rep. Matt Huffman, R-Lima, has proposed with legislation. He also spoke against the bonuses.

Leone wanted the board to not pay bonuses owed from the first half of fiscal year 2009, which ends June 30. The board suspended the bonus program for the second half of the year, meaning the payments are based on just the first half of the fiscal year.

The board will vote in September to approve the bonus amounts. Preliminary reports show they will total nearly $3.4 million. The payments are already 50 percent of what they would have been, Nehf said.