Donna Seaman to Mansfield News Journal

From John Curry, August 13, 2010

http://www.mansfieldnewsjournal.com/article/20100813/OPINION03/8130310

Pension system's belt-tightening confined to retired teachers

August 13, 2010

The articles in the July 25 News Journal about Ohio's five retirement systems explained many similarities and differences between the public pension systems and potential problems faced by the systems, their retirees and Ohio taxpayers.

First, the full page chart outlining eligibility, membership and other facts includes the proposals submitted by the pension systems to the Ohio Retirement Study Council last September. These proposals haven't yet been approved by state Legislature and aren't in effect currently.

Second, while State Teachers Retirement System is the second largest retirement system after the Ohio Public Employees Retirement System (which lost $24 billion in value during this recession), STRS losses in portfolio asset value were $42 billion, nearly half its total value before the recession, losses that were far higher than losses experienced by other systems.

Third, STRS maintains its own in-house investment staff. Even while in the throes of major losses in asset value, those 90 plus individuals continued to receive a total of $3 million to $6 million bonuses annually. (STRS management calls bonuses performance-based incentives.) Until this calendar year, STRS did little if anything to reduce operating costs or reduce staff. It did, however, make significant reductions in health benefits for retirees. Co-pays were raised, deductibles and monthly premiums were increased and the health insurance provider was changed.

Finally, if you read the letter to the editor by Michael Nehf (STRS executive director) he states: "Our plan was developed working side by side with individuals representing both active and retired educators. ..." The public reading his statement would believe retirees were consulted about these reductions/changes. We were not. I repeatedly asked Nehf, during board meetings and in face to face meetings, to reduce the tremendously inflated operating budget ($10-plus million annually) of this particular pension system. The answer is always the same: STRS must pay those six-figure salaries to STRS staff to retain the "best and brightest," -- all while losing billions of dollars in the value of the fund. No belt-tightening for the STRS staff, just belt-tightening for its retirees.

This additional information, most of which relates specifically to STRS only, was not included in the article's overview.

Donna Seaman
Shelby