Saturday, January 09, 2010

Linda Meinelt asks Mike Nehf re: cost cutting at STRS

From Linda Meinelt, January 9, 2010
Subject: Fw: Springfield News-Sunday
Mr. Nehf and Bd. Members: In case you haven't seen the article in the Springfield News-Sunday by Megan Gildow, I wanted to share a few quotes from it.
When asked about the STRS financial situation and the possible request for more money from the school districts, Springfield School Treasurer Chris Mohr is quoted, "the point is they (meaning STRS) need to suck it up and look for ways to cut costs and not pass that on to schools."
Later in the article, it states that "Mohr favors cost reductions for STRS, including cutting salaries and bonuses for investment staff."
The article concludes on this quote from Mohr, "those other retirement systems aren't paying over-the-top bonuses. They need to reel it in and get serious about cutting their administrative costs."
So, Mr. Nehf and Bd. Members, it is not just a few cranky retirees who feel changes need to be made at STRS headquarters.
Cutting bonuses, reducing staff, finding ways to raise revenue by leasing part of the building, making the employee health care plans on a par with that of the retirees they serve are just a few ways to get costs back in line. I'm sure you've had many others make suggestions for cost-cutting.
We, retirees, are still waiting and watching to see what you will do to bring your costs down and quit cutting the benefits of retirees, who, in case you have forgotten, are the ones you are serving.
Linda Meinelt

Friday, January 08, 2010

Dispatch: Letter to the Editor re: STRS

Columbus Dispatch, January 8, 2010
Teachers are drawn to retirement plan
The Sunday Dispatch articles "Good as gold," on the Ohio public-pension systems, are thorough and try to give both sides of the argument. I'm a retired teacher and going through my second year of retirement. My wife still teaches, and we were digesting your facts and figures.
Here are some of our thoughts. The State Teachers Retirement System is one of the bright spots in choosing a teaching career. If STRS is changed by the legislature to mirror corporate America, it will cause some teachers to rethink their commitment and seek employment elsewhere. Both of our safety forces are asking for a larger tax outlay from collected taxes than the STRS. What makes them more special or more deserving than teachers?
Teaching is not the safe job it used to be. Why can't there be more than one way to retire? Does the establishment always have to jump on board and do the cheapest thing possible? One way school systems could save taxpayers' money is to have their administrators pay for their own retirement.
In our systems in Perry County, often the administrator's part of his retirement is paid by the board of education as a part of his contract. Administrators should pay their percentage of their own retirement just as the teachers and bus drivers do.
So far, the discussion on pensions in the public-service sector is good, and I'm sure through our democratic processes a good solution will make itself known. We need to keep the channels of communication open among all layers of the tax-paying public.

Jim Conard to STRS Board and legislators: Where's my COLA?

From Jim Conard, January 8, 2010
Subject: Where's My COLA
Hey Everyone,
I wanted to let you know that I retired on January 1st a few years ago. Therefore, I receive my COLA (cost of living allowance) each January 1st. Just received my Medicare Part B bill and it went up $56.40. There goes my COLA. Any more good news? Happy New Year!!!!
Jim Conard

RH Jones: Letter published in the Akron Beacon Journal

From RH Jones, January 8, 2010
Subject: My "Letter to the Editor" & , also, paying $14 more per month for Medicare

John, Kathie and all:

Today, 01-08-2010, I have a “Letter to the Editor” in the Akron Beacon Journal, Pg. A8, entitled: “Teachers pensions are well earned”.

The purpose of this email is to alert on our web all who may have read it that the editor left out -- and that is the editor’s privilege to do so -- where I wrote our COLA is only on each individuals’ base, and it does not compound each year.

With that not in, we will probably get some flak from those uninformed individuals who may envy this 3%. Also, I would like to remind folks that Social Security for many, with the exception of this year and next that for many, long years Social Security awarded compounded COLAs twice per year.

By the way, believe me, I am not being a crybaby; but, I am complaining. However, having a very modest OH STRS monthly check, with President Obama’s new Medicare program (Which was approved by Congress); I am now hit with a new $14 per month increase!

My case in point: I did work and paid into it for 20 years, but one must work thirty to be eligible as a primary recipient. Now, realistically, at age 78, I am not likely to be hired for employment. And, I would get hurt with the Ronald Reagan’s GPO/WEP anyway. My wife, having worked 30 years, does get an extremely modest check and has no Medicare increase, and I thank whomever for that; however, but with me being her spouse, I am fortunately eligible for Medicare, and unfortunately get the $14 cost increase.

As a registered Democrat, may I ask: Is the Democratic Party for the common man? If so, why did I get this $14 cost increase that amounts to $168 per year? And, I wonder also, will my Democratic Ohio Governor help me maintain my non-compounded 3% COLA so that I can pay for an increasingly even greater cost of living? Or perhaps, should I be looking for a third political party? Neither the GOP nor the Dems, so far, have not been much help to this retired teacher.

RHJones, a common man who just happens to be a retired Ohio teacher.

Letter in the Beacon Journal, 1/8/10:

Teachers' pensions are well earned

I can only speak as a retired Akron teacher. I must say that ''pension envy'' is not good for Akron, or Ohio.

We teachers taught students to read, and we taught them basic skills to serve in the private sector. When comparing pensions, there are too many variations between private and public employment for envy to be a factor.

For instance, in the private sector, there are numerous wealthy individuals who do not even need a pension.

During the Great Depression, when I attended the Lincoln Elementary School, the wonderful teachers there taught students who have become highly productive citizens. In my class, two classmates earned millions in the real estate business, one was a highly successful automobile dealer, two became medical doctors, one became a lawyer and another became a judge.

One became an Army lieutenant colonel, and one even became Akron's police chief. There are too many who became outstanding citizens to mention in this letter.

Those wonderful educators who taught us are on pension now, and some are in nursing homes. We ex-students know they certainly earned their pensions. Fortunately for Akron's citizens, they do have a pension, limited health care and prescription insurance and a cost-of-living allowance.

If they were not offered this modest pension, they might have chosen another profession. Then we would all have been losers.

Once again, to all those truly wonderful educators who taught my classmates and me, I give my deepest, heartfelt thanks.

Robert H. Jones

Thursday, January 07, 2010

Columbus Dispatch editorial slams Ohio public service employees

Editorial: Reform pensions
Financially and politically, public retirement systems have become unsustainable
Columbus Dispatch, January 7, 2010

hose in control of Ohio's generous public pensions must take steps to bring them in line with the private-sector retirement plans on which most taxpayers rely; otherwise expect a taxpayer revolt.

The work of Ohio's eight largest newspapers, published Sunday, makes the need for action clear. The "Good as Gold" package of stories produced by the Ohio News Organization outlined the stark realities of the state's public-pension systems.

Already, local governments spend $4.1 billion per year to pay for pensions, yet some public-pension systems are headed for insolvency and want taxpayers to contribute more.

The four major systems include more than 708,000 current state employees, teachers, police and firefighters, plus about 631,000 who no longer are in those jobs but still have money in the system. The plans pay benefits to about 384,000 retirees and beneficiaries. Collectively, they suffered $32 billion in investment losses in 2008, with the largest hit, $22.8 billion, from the Public Employees Retirement System.

The Ohio Retirement Study Council recommends that school districts, which now are required to pay 14 percent of teachers' salaries to the State Teachers Retirement System, increase that by half a percentage point per year, starting in 2016, until the contribution reaches 16.5 percent in 2020. The council suggests that cities and townships, which now pay 19.5 percent of police salaries and 24 percent of firefighters' salaries to the Ohio Police & Fire Pension Fund, raise the contribution for police to match that of firefighters and then raise both to 25 percent.

These changes could raise the taxpayers' tab for public pensions to $5 billion per year.

The council also recommends asking more of public employees, such as higher contributions from them as well as later retirement ages and slightly reduced payouts, but public employees will fight those remedies.

They should understand that workers throughout the private sector already are facing those very measures.

Moreover, most private-sector workers rely on defined-contribution plans, in which the eventual retirement payout depends on how well their investments perform over the years. Public pensions, also known as defined-benefit plans, guarantee a set amount of income to retirees. Public pensions now face shortfalls because their investments have not grown enough to support promised pension payouts.

Of course public employees prefer the security of a defined-benefit pension, but it's unfair to expect taxpayers to make up the difference when economic conditions don't support such guarantees. Especially when most taxpayers do not enjoy such security themselves. At some point, public pensions should move to the defined-contribution model.

Another factor squeezing public plans stems from the plans' voluntary decisions in the 1970s to provide health-care coverage for retirees too young to qualify for Medicare. The pensions have no legal obligation to pay for health care, but public-pension managers say they're determined to maintain it, even though the cost is becoming crippling.

But if public employees weren't allowed to retire so much earlier than everyone else, they wouldn't need pension-provided health care.

To cover increasing health costs, public pension plans have dramatically increased retirees' health-care premiums, so much that some retirees have gone back to work in other jobs in order to get affordable health-care coverage.

The public-pension model no longer is sustainable. In an earlier time, the relatively rich public benefits -- some employees paid little or nothing toward their pensions, and some could retire as young as 48 -- were justified by the idea that government workers were paid less than private-sector employees. But that hasn't been the case for a long time, and yet the generous pensions remain.

Expecting hard-pressed taxpayers to shell out more to prop up the status quo is unreasonable and politically dangerous. Reform is overdue.

You know now!

Did You Know????? That any Ohio elected official can purchase one year of service for every 4 years of elected service in PERS. This means that if a county commissioner is elected for two 4-year terms, he can purchase an additional 2 years and qualify for a 10 year pension. Every one of the elected officials that have been quoted in the recent newspaper articles will be able to improve their pension by a substantial amount. 24 years of service, 6 years of purchase allows them to retire with 30 years of service. All elected service counts included township trustee. They may also purchase military service which will count as time actually worked.
STRS Ohio Retirees that Struggle to Survive (SORTSTS)

RH Jones: Rebuttal to Dispatch editorial

From RH Jones, January 7, 2010
Subject: A rebuttal of the Jan. 7, 2010 Columbus Dispatch editorial slams Ohio public service employees, retirees and their retirement systems
To the Columbus Dispatch, John Curry and all:
The Columbus Dispatch must be getting desperate to gain readership; when, in fact, they may be causing a loss in readership. The negativism against Ohio's public service system retirees, and especially due to its unfounded and severe attack on the defined benefit plan, may be causing many retired public servants to stop reading a newspaper that inaccurately puts a successful long term public retirement systems in jeopardy. A reasonable person would expect many will now cancel their subscriptions, and will refrain from purchasing the newspaper --some already have.
And to mention a tax payer revolt is totally irresponsible. That would bring about calamity in the state. Can anyone imagine no teachers in the classrooms, no police/firefighters, public health workers, road crews, water/sewer workers, etc. etc, not on the job?
Retired public servants pay taxes too. And their monthly checks are overwhelmingly spent in Ohio, as is pension their health care. Cutting any of the moderate benefits such as the only partial health care/Rx, or the non-compounding 3% COLA , will impact all the private -- and, yes, even public sector jobs -- created by all their spending. Without the economic "smoothing" of defined benefits being spent in Ohio's economy, the state would experience even more "ups and downs". The defined contribution plan would do that as well. Market fluctuations in Ohio would be even more severe than they are now.
Rather than even considering cutting into public pensions, If anything, the Dispatch should be encouraging a state income tax break for public servants. This could bring in an immediate "shot-in-the-arm" to the state economy that would bring on more private sector jobs and business. States that have already done that have even had a larger percentage of public sector retirees spending, staying, and living here in their states. After all, they would then be paying sales, property taxes, and even hidden taxes such as car license plates, drivers license fees, and so forth. If Ohio did not tax pensions, yes, even then, more would die and be buried here, and their relatives would be even spending on newspaper obituaries, thusly creating Dispatch income. That is terrible to say but it is the truth.
Please, Dispatch, attacking defined benefits of public servants helps no one, not the public or, especially businesses that depend on the steady profits and the jobs that are created in the public sector for the private sector. Pension envy has never benefited anyone. To each other, public servants and the private sector are too mutually beneficial. Therefore, for the Dispatch to even mention a tax revolt is a revolting idea.
That is my opinion,
Robert H. Jones, a professional retired public school teacher STRS member

Tom Curtis to James Nash: The other side of the story

From Tom Curtis, January 7, 2010
Subject: 010610 Curtis To Nash, Article, Good As Gold
Hello Mr. Nash,
Would you kindly publish another article that would show the public/taxpayer another side of one of the five pension systems, the STRS?
My name is Tom Curtis. I am a retired educator (1998) and have been very actively involved in attempting to bring about reform at the STRS, beginning in February 2003.
Let me start by saying, that in my opinion, there is much needed reform at the STRS. Reform due to the mismanagement and misspending of our funds. This has greatly helped to increase the STRS unfunded liability to where it stands today, at infinity.
During the past decade, the STRS has lost in excess of $42 billion dollars, because of poor investment performance, yet the investment department has until this past year (they lost 5/12ths of the year; they were paid for 7/12ths) received millions in bonuses each year. This should not be news to you, for there have been hundreds of newspaper articles written about the financial problems of the STRS during the past 10 years.
Back to the point. Over the past week, I have been reading all of the very negative comments about the 5 pension systems. Though there is much concern to go around, there are favorable issues that neither you or others in the media seemingly reviewed.
Many statements in the newspaper articles would lead the taxpayer to believe that pension costs have continually risen. That is simply not the case for educators. This is a point that each of the papers that collaborated on their research and writting of these articles should have included, otherwise, you are simply causing pension envy that is not warranted.
The educator pension contribution made by the 600+ schools in Ohio is currently at 14% and has not changed since 1984.
The only increases in STRS pension amounts since 1984 has been those increases made by the educators themselves. The last increase educators were asked to make by teh STRS was in 2003. The educator contribution rose from 9.3% to 10%, which is the current cap. Those increases had nothing to do with what the taxpayer is forced to contribute. Our HC is payed for by a contribution percentage taken from our own contribution.
I hope you will verify my information by viewing the ORSC Website, because once you do, you will realize that educators have not seen an increase in pension spending to the taxpayer for over 25 years, so I find accusations of continued pension increases to be unfounded.
Jim, don't you think the taxpayer should know both sides of this information? Considering that Ohio taxpayer's have not seen an increase in cost for STRS pensions since 1984, I would think the taxpayer would be very appreciative for us holding the line for such a long period of time. Comparing pension systems is like comparing, as they say, apples and oranges. Yet, the press seems to place them all in one basket. That is not right! Each one has a different story.
The teachers have always performed their duty and paid into their retirement system faithfully, since 1920. We are not the bad guys here. The STRS administration, Wall Street and the Banks have led to this huge underfunding problem, not the stakeholders.
Since the STRS has not increased the pension contribution rate since 1984, when do you think it might be appropriate for an increase to occur? Do we not ever deserve such?
A reply would be greatly appreciated. Thank you for your consideration.
Thomas Curtis
North Canton, Oh

Jim Conard to STRS Board: Do you have it planned out that you will retire under the 35 years and 88% deal?

From Jim Conard, January 6, 2010
Subject: Common Sense??
STRS Board Members,
Some of the decisions that you made recently and have turned into the ORSC concerning the solvency of the STRS retirement fund were lacking in common sense. You have said if the staff took no money at all, it couldn't solve the requirement that there would be enough funds to cover pension obligations for 30 years. Any idiot would know that!
What you fail to address, however, is the amount of money that could help the situation. That would be, if there were changes made in the ranks of the employment staff, also, in the area of benefits, salaries and bonuses. One example is.....eighty-one investors average $150,000 annually, plus they average $70,000 in bonuses. Figuring the amount for just the investors alone totals $17,800,000. I wonder how many retired teacher pensions that would pay? Why has there been no discussion given to changes in the employment staff and STRS director to aid in the solvency issue?
Another example.....why are there thousands of dollars spent each year on service awards? Ask teachers about any monetary service award gifts that they have received throughout their careers. I'm afraid they would be laughing at that one. Common sense? Where is it? Why do you think thousands of people around the state are giving accolades and gifts to Dr. Leone for his contribution to the retired teachers? Do you think you will receive a gift when you are voted out of office for a job well done?
When those of you that are active board members retire, will you retire under STRS? Do you have it planned out that you will retire under the 35 years and 88% deal? Is that why the date to end that plan is in 2015, so it gives you enough time for your planned retirement?
That plan should be ended now! As we have heard time and time again that it was not a good plan in the beginning and was only put in place to help a certain group of people. It is not too late for the portion of the retirement fund that is poured into the employees salaries, benefits, bonuses, etc. to be reduced to help the huge deficit in our retirement fund.
Jim Conard,
Shelby County Retired Teacher

Jim Conard to Jim McGreevy re: Management of STRS pension fund and 'savings at every level'

From Jim Conard, January 6, 2010
Subject: Thanks for Responding
Mr. McGreevy,
Thank you for responding and addressing many of my concerns. The main point that I was trying to make is still not being addressed, and that is the employment staff of the STRS needs more and as many changes as the active and retired teachers are facing. It would show a "good faith" effort on the part of the board, that the board is trying very hard to do all that is necessary to reduce the deficit in every way possible. "Every little bit helps" as the saying goes.
The "substantial staff reductions over the past few years" is commendable, but it only shows that no one has been let go recently due to the current financial problems. Staffing levels could still be reduced, the employees' medical benefits, as I understand it, costs the employees less and it has better coverage than the retired teachers. Why can't that be changed to be more in line with the retired teachers?
If the director, Michael Nehf, "has directed his managers to look for savings at every level", more pressure needs to be placed on the managers to work a little harder at finding areas where staff could be reduced. Addressing the issue of the number of employees at the present in many schools and places of business, jobs have been combined and more work has been placed on the employees that are still working and have not lost their jobs in the present economy, so more staff needs to be let go and remaining employees take their work load. I cannot believe that there is not a way that it could be done. After seeing what is happening in some schools, teachers let go, which has created larger class sizes and teachers taking on more responsibility in now teaching music, art and physical education.
Yes, we tend to look at the huge bonuses that are received by the investment staff, but how did any bonus plan reach the possibility of 125% of a base salary. That's outrageous in a retirement plan system! About the "service awards".....the longevity raises are based on bachelor degrees, masters degrees and continuing education. I wonder what the percentage is for taxpayers who have that much education for their job?
The point about the 35 years/88% is that if it turned out to be a mistake in the first place, then it should be dropped sooner than 2015. The number of teacher positions that would be left vacant would not be vacant for long, due to the job loss picture today.
As far as the point of an "empty gesture", that "empty gesture" would show just how concerned the board is to look everywhere for chances to increase the 30 year obligation, reduce the fund deficit and show concern for the active and retired teachers.
We helped get you elected, along with Bob Stein. We hoped you two would be the ones that could help improve the welfare as well as quality of life for retired teachers. But to us the only ones that have shown an improvement or status quo for their welfare and quality of life are the administrators and staff of STRS, because they have lost nothing. The fact that it is all paid from money that teachers have contributed in the first place is always forgotten.
As we battle back and forth with our own opinions about the financial mess that the pension fund is in, I want you to know that I really appreciate the fact that both you and Bob Stein take time to reply and address my concerns. I can't always say the same for most of the board members.
Jim Conard,
Shelby County Retired Teacher

Ken Ruth: Response from Senator Faber

From Ken Ruth, January 7, 2010
Subject: Fw: State Teachers Retirement System
Senator Faber: Thank you for your reply (see below). I could not disagree more! Public employees took their jobs because we wanted to positively impact society. We did so often at a lower pay than we could have gotten in the private sector with comparable education. To compensate we were promised a stable retirement with top of the line health care. The fiscal impact of those in Ohio's retirement plans is huge. WE VOTE!
Ken Ruth
From Senator Keith Faber, January 7, 2010
Subject: State Teachers Retirement System
Mr. Ruth,
Thank you for contacting my office. I always enjoy hearing from my constituents.
As we move into the New Year we must confront the reality of the five public pension systems head-on. All retirement systems have been forced to reevaluate their future and the State Teachers Retirement System is no exception. This is not matter of cutting spending or attacking educators; it is a matter of addressing a prolonged economic downturn and its affect on all retirement systems. As an elected official, and a member of the Ohio Retirement Study Council, I am tasked with being a part of the solution, no matter how uncomfortable it may be. This situation has left the legislature with two choices: make adjustments to the benefit plan or increase state contributions. The latter will pass the funding responsibility on to the taxpayers and we cannot in good conscience do this.
I have family and friends who are members of the public pension systems and education community, including my wife who teaches at Rhodes State Community College. The path that the General Assembly chooses will undoubtedly affect many proud public servants, but we must practice due diligence and we must do so in the interest of all Ohioans.
Again, thank you for your email. Please do not hesitate to contact our office if you have any questions in the future.
Keith Faber
State Senator
District 12


From Mario Iacone, January 7, 2010

The recent public pension articles are one sided and not totally accurate regarding PUBLIC PENSION COSTS vs PRIVATE SECTOR COSTS.

For example this excerpt from one of the articles in the Springfield News-Sun.

"The contribution to STRS is 24 percent of an employee’s salary — 10 percent
from the employee and 14 percent from the board — compared to 15.65 percent,
including Medicare, in the private sector, he said

“It’s almost double so you would think that perhaps the message for STRS and
all five Ohio public pension systems is live within your means,” Mohr said."

The comparison is distorted in two ways:

First, almost double is quite a stretch as 15.65 doubled would be 31.3
That is a lot more than 24 percent.

Second, the private sector amount is only for Social Security and Medicare
It does not take into account the additional cost of private sector entities for Defined Benefit company pension plans and/or matching contributions to employee 401K plans which would raise private sector contributions well above 15.65%.

Furthermore, I am not well versed on private sector costs, but, I would speculate that private sector entities incur additional costs that are not incurred by public sector employers due to the structure of the public pension plans.

Wednesday, January 06, 2010

Donald Hyatt: Letter to Representative Lynn Wachtmann

From Donald Hyatt, January 5, 2010
Subject: STRS
State Representative Lynn Wachtmann,
You possibly don't know of the history of teaching in Ohio. I first taught in Ashland, Ohio and made approximately $4200 in 1965. I coached (assistant) 7th grade football even though I had not played football, but it added another $150 to my income. As a teacher in those days you accepted low pay because the Retirement system offered a fair retirement. Most teachers at that time worked second jobs in the summer or went back to school for additional work. Teachers with masters degrees made much less money than those in private sector with the same education. We did it, because we thought education was important. Policemen, firemen, and others in government did the same. One of the few benefits was a good retirement program. I now think that you think that is not important. When a Ohio State Representative discounts our service I am very ashamed of such actions.
I guess if you were in charge of the VA you would vote for cutting their benefits.
What ever happens, I know I served the people in Ohio by trying to educate our young in the best possible way.
Donald Hyatt
Retired teacher-Ashland City Schools, Upper Arlington City Schools, and Worthington Public Schools

STRS Board meeting schedule for January 2010

From STRS, January 6, 2010
The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:
Wednesday, January 13, 2010
...10:00 a.m. Disability Review Panel (Executive Session)
Thursday, January 14, 2010
...9:00 a.m. Retirement Board Meeting
Friday, January 15, 2010
...9:00 a.m. Resumption of the Retirement Board Meeting
The Retirement Board meeting will come to order at 9:00 a.m. on Thursday, Jan. 14, 2010, and begin with a report from the Finance Dept., followed by Long-Term Fiduciary and Financial Contingency Planning, the Executive Director's Report, public participation and a report from Member Benefits regarding health care. The Retirement Board meeting will resume at 9:00 a.m. on Friday, Jan. 15, and begin with a report from Communication Services, followed by a report from the Investment Dept., routine matters, old business, new business or other matters requiring attention.
Next CORE meeting: January 14, 2010
Details here
Best source of information on 2010 healthcare plans:

Tom Curtis: Letter to Representative Wachtmann

From Tom Curtis, January 6, 2010
Subject: 010610 Rep Lynn Wachtmann, Re State Pension Issues

Hello Representative Wachtmann,
I am a retired educator (1998) and have been very actively involved in attempting to bring about reform at the STRS, beginning in February 2003. Representing STRS retirees, I spoke before you and the rest of the committee when SB133 was signed into law in 2004.
In my opinion, there is much needed reform concerning the mismanagement and misspending that has helped to increase the STRS unfunded liability to where it is today, infinity. I have yet to see any negative comments by you or anyone else on the ORSC concerning the gross misspending and mismanagement at the STRS during the last decade, and I know you have been made aware of such.
Over the past few days, I have been reading all of the very negative articles being written across the state about the 5 pension systems. Though there is much concern to go around, there are many favorable issues the neither you or the media chose to present. I will address one at this time. You seemingly are not aware of this and attack the system for being overly gracious.
Again, many statements in the newspaper articles and those coming from you personally would lead one to believe that pension costs have continually risen, and that is simply not the case for educators. This is a point that none of the newspapers and you have been willing to report to the taxpayer.
The educator pension contribution made by the 600+ schools in Ohio is currently at 14% and has not changed since 1984.
The only increases in STRS pension amounts since 1984 has been those increases made by the educators themselves. The last increase educators were asked to make was in 2003. The educator contribution rose from 9.3% to 10%, which is the current cap. Those increases had nothing to do with what the taxpayer is forced to contribute, though your comments would seemingly indicate otherwise.
Rep. Wachtmann, I hope you will verify my information by viewing the ORSC Website, because once you do, you will realize that educators have not seen an increase in pension spending to the taxpayer for over 25 years, so I find some of your comments to be way out of perspective.
Don't you think the taxpayers should know both sides of this information? Considering that Ohio taxpayer's have not seen an increase in cost for STRS pensions since 1984, I would think the taxpayer would be very appreciative for us holding the line for such a long period of time. Pension envy is like comparing, as they say, apples and oranges. Yet, you seem to place them all in one basket. That is not right!
A reply would be greatly appreciated. Thank you for your consideration.
Thomas Curtis
N. Canton, OH

Linda Meinelt: Letter to Representative Wachtmann

From Linda Meinelt, January 6, 2010
Subject: Article in Columbus Dispatch (Sunday, 1/03/10)
Rep. Wachtmann,
After reading your comments in Sunday's paper, I would say it is safe to assume that you do not have a bumper sticker on your car that says, "If you can read this, thank a teacher."
I also noticed that on the Ohio House of Representatives website page, you have nothing listed under the EDUCATION category. Obviously, you do not consider education a priority.
I know the teachers, past and present, in your congressional district will remember your name when election time rolls around. Since they are able to read, I feel confident they will not push the button next to your name for re-election. I would assume that since you are so "down" on public pensions that you will forego your public pension and live off the income from the Maumee Valley Bottling and Culligan Water Conditioning.
Linda Meinelt
STRS Retiree

Tuesday, January 05, 2010

Tom Curtis: Correcting some misinformation for Tom Troy

From Tom Curtis, January 5, 2009
Subject: 010510 Tom Troy, Re, Pensions Put Toledo Area Budgets Under Strain
Hello Tom Troy,
I am a retired educator (1998) and have been very actively involved in attempting to bring about reform at the STRS, beginning in February 2003. In my opinion, reform concerning the mismanagement and misspending that has helped to increase the STRS unfunded liability to where it is today, infinity.
Over the past few days, I have been reading all of the very negative articles being written across the state about the 5 pension systems. Though there is much concern to go around, but there are many favorable issues the media did not clearly represent.
In reading your article today, you stated:
Together, government units and school districts in Lucas County spent $168 million in 2008 to satisfy their pension obligations to their employees.
That's an increase of 15 percent from four years ago, when pension costs were $145.2 million.
These two statements would lead one to believe that pension costs have risen over the past four years and that is simply not the case for educators. This is a point that none of the newspapers that have run articles about pension issues has reported properly.
The educator pension contribution made by the 600+ schools in Ohio is currently at 14% and has not changed since 1984. You may check this by looking on the ORSC Website. You will find the contribution rates for the other four systems as well.
The only increases in STRS pension amounts since 1984 have been those increases made by the educators themselves. I believe the last increase educators were asked to make was in 2004. The educator contribution rose from 9-1/2% to 10%, which is the current cap. Those increases had nothing to do with what the taxpayers were forced to contribute.
Tom, I hope you will verify my information, because once you do, the second of your statements above cannot be true. If it is true that there was a 13% increase, then the increase was due to an increase in employees and not because the contributions have increased.
Don't you think the taxpayers should know both sides of this information? Considering that Ohio taxpayers have not seen an increase in cost for STRS pensions since 1984, I would think the taxpayer would be very appreciative for us holding the line for such a long period of time. Pension envy is like comparing, as they say, apples and oranges.
A reply would be greatly appreciated. Thank you for your consideration.
Thomas Curtis

Linda Conard to Senator Faber: If Nehf doesn't have the intestinal fortitude to make the necessary changes, then get rid of him!

From Linda Conard, January 5, 2010
Subject: Why Not the STRS Employees Too!
Senator Faber, I am a retired teacher in your district. It is necessary that I share with you my feelings concerning decisions that you, as a member of the ORSC, will be making soon. I know that things have to change. I know that I, as a retired teacher, will be seeing a change in my benefits. It is necessary that I will be losing out on some of what I have taken for granted over my career as a teacher to help make the retirement system solvent.
What I don't understand is why the STRS Director and Staff have not really lost anything! Yes, they froze the investment staff's bonuses for a certain length of time, They didn't get rid of or even reduce the bonuses; they only froze them for awhile and they will receive the bonuses later. The number of employees is entirely too large. With school districts, companies, government offices, etc. reducing the number of employees, why has the STRS not reduced the size of their staff. Yes, the number of investment staff, they say, has been reduced to 81, due to the financial problems that we're in the middle of, but it was reduced before these problems became so bad. The benefits of the staff should not be any better than the retired teachers.
This financial mess the STRS pension system is in would not have been so catastrophic if our investors would not have had so many high risk investments.
If we, the retired teachers, are taking losses concerning our medical coverage and cost of living allowance, then why, why, why have the STRS employees not taken any losses at all. Aren't they being paid by taxpayers? Why are they better than everyone else and feel that there should not be any changes in their lifestyle? If our director, Mike Nehf, does not have the intestinal fortitude to make the necessary changes to the staff numbers and benefits......then get rid of him and get someone in there that understands the problems we're facing. It is up to you, the legislators, to put pressure on the STRS to do what is right and make changes throughout the STRS retirement system......the retired teachers, the active teachers......and the STRS employees!!
Linda Conard, Shelby County Retired Teacher
Sidney, OH

John Curry: You forgot to tell them something, Representative Wachtmann

From John Curry, January 5, 2010
Representative Wachtmann,
I have attached an article from the Sidney Daily News which was featured on page 4A. In the article entitled, "Taxpayers asked to cover rising pension costs," you state, "The taxpayers of Ohio who are footing the bill for all of this in the end need to realize how generous the public-pension systems - all of them - are compared to private-sector retirement plans." You also go on to state, "Most of our private-sector employers would go bankrupt if they had to pay the kind of money into employee retirements that our public-sector employers do."
Mr. Wachtmann, by your statements it is very apparent that you are no friend of public educators, policemen, firemen, municipal employees, school employees, state employees, county employees, city employees, village and township employees all across this great state. They have chosen their professions, in part, because of the retirement systems that they are retired in or will retire in because of the defined benefits retirement that they were offered at the time they became employed. They were looking out for their future then and they are looking out for their futures now.
(Click image to enlarge)
Many of them chose their jobs at a time when the private sector paid a more handsome salary and had better benefits. They gave up both monetary remunerations and benefits to work at their governmental jobs when the economy was much better than it is now. They also, Mr. Wachtmann, will (if eligible) see a severely reduced Social Security retirement check should they have earned enough quarters in Social Security, due to the Government Pension Offset provision (law) that penalizes them because they are a resident of a state that created state employee pensions.
Mr. Wachtmann, there is one thing that somehow the Sidney Daily News didn't seem to quote you on and that is that you are a governmental employee and a professional politician who has held elected office in this state for approximately 20 years now. You, Mr. Wachtmann, forgot to tell the readers that you also will be eligible for the same OPERS state retirement system benefits that you speak unkindly of in the attached article.
Mr. Wachtmann, politicians who live in glass houses shouldn't throw stones at public employees...somehow, they will notice this and will tend to forget you the next time they see your name on a ballot....they should and so should their friends and families. Mr. Wachtmann, we are now looking at millions of Ohioans who see that you spoke one thing out of one side of your mouth and (down the road) will extend your hand out to receive the very benefits that you criticize. Instead of trying to solve the funding problems of the respective public retirement systems, you, Mr. Wachtmann, are trying to destroy them.
John Curry
P.S. Below is a brief outline of your professional political history as taken from the Ohio House of Representatives website. You only have a few more years to go before you can be an OPERS benefits recipient, don't you? Will you give your pension back to the State of Ohio because, as you say, "most of our private-sector employers would go bankrupt if they had to pay the kind of money into employee retirements that our public-sector employers do?"
"State Representative Lynn Wachtmann is currently serving his second term in the Ohio House of Representatives. He previously served as a state representative from 1985 to 1998 and as a state senator from 1999 to 2006. He represents the 75th House District, which encompasses Henry, Paulding, Putnam and Van Wert counties as well as Adams Township in Defiance County."

At least the Beacon Journal gets it -- thank you, BJ!

From John Curry, January 5, 2010
Subject: The Beacon Journal is a whole lot kinder to educators, police and fire than the Columbus Dispatch has been! Thank you, Beacon Journal!
"One temptation may be to follow the path of private pensions........."
"Such an approach would save money in the public sector. It also would be unwise."
Note from John....let's watch for kind words for educators, fire and policemen and their retirement sytems coming from a Columbus Dispatch editorial like you see coming from a Beacon Journal editorial below. Please don't hold your breath in waiting as I predict it will never appear!
Pension protection

Ohio lawmakers must act quickly to ensure that modest steps will be enough to bolster the state's retirement systems

The state's largest newspapers devoted their front pages on Sunday to the challenges facing public pension plans in Ohio. They did so because of the substantial amount of public money in play, local governments tapped for $4.1 billion in pension costs last year, and now looking at the prospect of having to reach deeper to cover pension shortfalls totaling $400 million by 2020. Pensions have become one of many competing priorities in a recession-battered era of scarce resources, cities and schools, among others, slashing budgets to make ends meet.

Thus, the theme emerged in the reporting: Local officials wonder how they can afford to bolster pension funds. Soon, state lawmakers will have the task of devising the rescue plan. None of the five largest public pension plans faces an immediate crisis. Rather, each must act to ensure that it meets the requirement of having enough money to cover obligations for 30 years. As it is, the State Teachers Retirement System and the Ohio Police & Fire Pension Fund fall short of complying with the standard.

One temptation may be to follow the path of private pensions. As the reporting revealing, in the 1970s, 71 percent of private pensions were defined-benefit plans. Today, the share is 24 percent, companies moving employees into 401(k)s or defined contribution programs. Such an approach would save money in the public sector. It also would be unwise.

Defined benefit plans are efficient and effective, if properly managed. It is true that the pay of public employees now matches roughly the private sector. But that isn't the whole story. Teachers remain underpaid, in view of their responsibility and contribution. A strong pension serves as a necessary component in bringing promising men and women into the classroom. Firefighters and police officers take uncommon risks on the job, guaranteed pensions serving as appropriate compensation.

Remember, too, that public workers in Ohio do not pay into the Social Security system, and thus do not receive the program's benefits.

All of this isn't an argument for doing nothing. The state must move to ensure the financial stability of the funds. It might begin by addressing what annoys many Ohioans, the practice of ''double-dipping,'' retiring from a public job and then returning to the position, collecting a pension check and a pay check. In addition, sound health-care reform could make a considerable difference, health costs becoming an increasing burden for pension plans.

And here resides further reason for shrinking the size of overgrown local government.

Most telling, modest steps taken now can reap big rewards in the long run — without harming current or soon-to-be retirees. The eligibility requirements involving age and years of service could be adjusted gradually. Similar changes could be made to the benefit formula, say, basing the ''final average salary'' on additional years. Done smartly, Ohio can meet the needs of financially pressed communities and those who have devoted their working lives to public service. Act now, and any pain will be minimized.

RH Jones: Thank you, Beacon Journal, and keep my subscription going

From RH Jones, January 5, 2010
Subject: Fw: This public service retiree has had enough! Bracy to the Columbus Dispatch
To all:
I sent my Akron Beacon Journal a "thank you" for their supportive comments in their editorial: "Pension protection". I will keep my life-long subscription with them.
From John Curry, January 4, 2010
Subject: This public service retiree has had enough! Bracy to the Columbus Dispatch!
[View letter here:]
Now....if all public servants would do that same and "cc" their friendly local state legislators of their intent as Kathie did....we would get some attention, wouldn't we? But then...educators don't want to make waves, do they?'s about time they did! We have over a million retired/active public servants in this state. Just think what we could do if we all banded together and sent a message to our legislators (and news media)! Will we soon have be screaming, "Take Back Our Pensions?"
Please pass this email on to a retired or active firefighter, state patrolman, county employee, public school educator, public school employee, municipal employee, township employee or anybody else you know who contributes to Ohio's five public pension plans: Ohio Public Employees Retirement System, State Teachers Retirement System, State Employees Retirement System, Police and Fire Retirement System and the Ohio Highway Patrol Retirement System. Together, our voices will be heard! We cannot afford to stand idly by and watch our retirement systems be trashed.

Ken Ruth: letter to Representative Keith Faber

From Ken Ruth, January 5, 2010
Senator Faber: As a retired educator, I DID NOT appreciate your remarks in yesterday's State wide attack on the public retirement systems. Don't tell me you were misquoted! Nothing less than "going public" with a call for reform and votes that helps current and future retirees will do.
Ken Ruth
Sidney, OH

Tom Curtis: Letter to Senator Wachtmann

From Tom Curtis, January 5, 2010
Subject: 010510 Curtis To Wachtmann, Public Pension Funds
Senator Wachtmann,
You seem to be so negative about defined benefit plans, when in fact, you pay into the OPERS? Do you realize the OPERS has every employee of all five pension systems paying into the OPERS? That is an inequity that I find alarming. The employees of the other four essentially have no loyalty to that system, because they do not pay into that retirement system, they pay into the OPERS. Therefore, the system you belong to has an added benefit that the other four do not have. Have you ever raised this question amongst your associates?
The STRS offers a choice for all stakeholders, a DB, DC or a combination of both. What does the OPERS offer? Which plan are you paying into?
Thank you in advance for a timely response.
Thomas Curtis, STRS stakeholder
N. Canton, OH

Monday, January 04, 2010

To those who doubted that OPERS planned ahead while STRS did not re: healthcare...

From John Curry, January 4, 2010 might want to read this chart from the Dayton Daily News:
(Click image to enlarge)
Let's see...OPERS has less than twice the number of retirees as does STRS (209,000 vs. 115,590) but has almost 4 times the monies set aside for healthcare for their retirees as does STRS ($11.2 billion vs. STRS's 2.9 billion) for their respective retirees. Of course, STRS was busy funding the 35/88% payout (that no other system could afford) while OPERS took care of health care for future retirees, didn't they? Well, look where we are now!

Kathie Bracy: Letter to the Columbus Dispatch

January 4, 2010
To the Columbus Dispatch:
It was with great concern that I read James Nash’s report on Ohio’s five pension systems, one of which (STRS) I paid into for nearly 40 years. As a highly educated public school teacher (now retired) who traded a higher salary for the promise of a secure retirement (i.e., the trade-off for what is actually a deferred compensation instead of the taxpayer rip-off Mr. Nash might imply), I now feel it is time to begin tightening my belt in anticipation of having my retirement pension reduced.
(Click image to enlarge.)
I regret that the group of reporters around the state who chose to trash the pensions of their teachers, firefighters, law enforcement officers, highway patrol and thousands of other Ohio workers, all of whom helped in some way to educate, serve and protect them all their lives, chose to do this at a time when retirees are struggling more than ever with a floundering economy, skyrocketing healthcare costs, inflation and other threats to their pensions. These reporters are young; someday they will understand what they have done. I just hope they don’t have to find out the hard way. I’m sure, too, that the media blitz trashing the pension systems will sell more newspapers at a time when they are struggling for their very survival.
I have subscribed to the Dispatch for over 40 years, but in order to preserve what income I still have, I am requesting that you terminate my subscription, effective immediately.
Katherine B. Bracy
Columbus, OH

Toledo Blade:

Sunday, January 03, 2010

Ohio reporters begin 2010 by showing their appreciation for their teachers, law enforcement officers, firefighters, highway patrol and the state's public employees
(Ooooh, click THIS baby!)
Gee, if you counted all the members of the pension systems represented above, and maybe their families and relatives, they seem to be trashing an awful lot of good people in the wink of an eye. I sure hope they do the rest of their homework before they do any more reporting. It's probably a good thing they aren't running for office.
(See articles posted 1/3/10 and after)
kbb 1/3/10

Rich DeColibus: Where's the beef?

Rich DeColibus to Mario Iacone, January 3, 2010
Subject: Media Attack

Hi Mario,

My 32-bit QBasic program won't run on my 64-bit computer so I'm hoping you've got functioning primitive progamming ability. The newspapers in Ohio have launched a concerted attack on public pension plans and the best response is facts and figures. More to the point, social security taxes are 6.2% (there's also a 1.46% Medicare tax, but everyone pays that so there's no difference) while teachers pay 10% to STRS. The relevant question, I believe, is how much will the 3.8% difference generate over a lifetime of work (say 35 years). Obviously, what salary assumption you make will make a huge difference in the final answer so I would suggest (if you can do this easily) three averages of $30k, $45k, and $60k with an average rate of return of 5% compounded. The goal is to prove teachers have funded their own retirements by paying a significantly greater percent of their salary over their lifetimes.

(Click image to enlarge)
On a little sidebar in my paper (the Plain Dealer), Nash from the Dispatch noted the average government retiree in Ohio receives $25,763, while the average private sector individual gets $13,326 from pensions and annuities and $12,699 from social security, for a total of $26,025. Let's see now, in the old math $25,763 was less than $26,025. Hmmm. Where's the beef? Teachers do better, of course, because we pay more every month of the year, year after year.

Rich D.

Dennis Leone: Comments

From Dennis Leone, January 3, 2010
Subject: Increases for Pension Systems Hit Hard: Dispatch
Everything I read suggests to me, as I tried to tell my fellow STRS Board members and the STRS Staff, that the Ohio Legislature may ultimately go after all of our COLA as a substitute to having school boards pay anything more. In other words, instead of seeking a higher contribution rate from active teachers (above the proposed 2.5% phased-in increase), and instead of seeking a 5-year Final Average Salary rule for new retirees in 2011 (the same year our COLA will be reduced) instead of waiting until the teacher-preferred delay in 2015, it will be far easier for to have us – retirees – solve the pension solvency problem.
And like always – when this happens – OEA will look the other way, ORTA will sit quiet, and retirees will get screwed.

Columbus Dispatch: Lotsa slick captions in this link.....

Taxpayers asked to cover rising pension costs for government employees
Some are balking, given the state of the economy and the escalating costs of their less-generous private-sector benefits.
Sunday, January 3, 2010
By James Nash
Ohio Newspapers Investigation

At a time when budget cuts are forcing Ohio schools to lay off teachers and cities to raise taxes, eliminate jobs or both, one expense government leaders have not cut is pensions for their workers. The pension cost to local governments in Ohio now stands at $4.1 billion a year. If current trends continue, pension costs will grow by $604 million to $768 million during the next five years, according to a Dispatch computer analysis. The costs are directly related to the size of government payrolls, which continue to grow across Ohio.

On top of that, two of the five public-pension systems are asking taxpayers to dig deeper to cover funding shortfalls, potentially adding $400 million to the tally by 2020. All told, the taxpayer tab easily could top $5 billion a year by the middle of the decade.

Those tax dollars will help ensure that retired teachers, police officers, state workers and other government employees receive retirement benefits that many of their private-sector counterparts can only envy -- although direct comparisons are difficult.

Retirement incomes for the most experienced government employees top out at 88 percent of their active-duty pay. Unlike most private-sector workers, whose retirement is driven by the strength of the stock market and 401(k) plans, government employees' pensions are guaranteed.

In addition to higher average retirement incomes, government retirees in Ohio also enjoy government-sponsored health care, can retire as young as 48 for police officers and firefighters, and have the opportunity to "retire" and collect a full pension while going back to work, often at full pay for doing the same job. Such "double-dippers" were paid more than $741 million by the State Teachers Retirement System last year and $240 million by the Public Employees Retirement System, records show.

In Toledo, even the mayor is a double-dipper.

Since starting his current term in January 2006, Mayor Carty Finkbeiner has drawn his annual salary of $136,000 in addition to a state pension he qualified for after two decades in elected and unelected positions. He leaves office Monday.

Because he already is receiving a Public Employees Retirement System pension, Toledo taxpayers have paid $75,221 into an annuity as an additional retirement fund for Finkbeiner. Some are questioning whether the budgets of local governments can handle higher premiums, given that libraries, schools and cities are receiving less tax revenue.

Increases in pension costs will mean cuts elsewhere, warned John Mahoney, executive director of the Ohio Municipal League, which represents cities.

"I can't pay that and still employ 1,700 police officers," he said. "I can't do it. The money's just not there."

Historic shift

For decades, nearly all government workers have been in traditional pension plans that pay fixed amounts at retirement -- usually calculated as a percentage of their highest annual salaries multiplied by years of service.

At the same time, private employers have moved away from such defined-benefit plans. In 1974, 71 percent of private retirement-plan assets were in defined-benefit plans. By 2008, that number had decreased to 24 percent, according to the nonpartisan Employee Benefit Research Institute, although some private employers still offer a combination of defined-benefit and 401(k)-type plans. Despite that historic shift in the private sector, many government leaders say the public pensions are all but untouchable.

"The goal should be to continue the defined-benefit plan," said state Rep. Todd Book, a Portsmouth Democrat who leads the Ohio Retirement Study Council. "It's good for the employees of the state. It's also good for the economy of the state. You have retirees pouring billions of dollars into the economy."

But with pension-plan investments faltering in a rough economy and costs increasing because Ohio's pension funds also pay for retirees' health care -- a benefit not mandated by state law -- taxpayers might have to pour millions more into the retirement systems just to keep them afloat.

The State Teachers Retirement System and the Ohio Police & Fire Pension Fund currently are in violation of state law requiring them to have enough money to cover their pension obligations for 30 years. Thus, they are asking school districts, cities, counties and other local units of government to contribute more toward employee retirements. (They are asking more of the employees, too.)

Under the proposed changes, a full 29 percent of teacher salaries -- 16.5 percent from school districts and 12.5 percent from teachers -- would go toward pensions. And 37 percent of police and fire employee salaries -- 25 percent from municipalities and 12 percent from employees -- would be earmarked for retirement income.

The increase doesn't sit well with some private-sector retirees, who have watched their own plans all but vanish.

"I think it's ridiculous," said Larry Rausch, 71, of Lancaster, who retired from a sales job at Sears in 1998, before the owner of Kmart bought the retailer and slashed retirement benefits.

"I don't know how they can expect guys like me to pay their retirement."

Many government retirees say pensions are part of their compact with their employers and, by extension, the public.

"We're trying to get away from calling it taxpayer money to calling it deferred compensation," said David Parshall, a retired Southwest Licking Schools science and math educator who heads a statewide group of retired teachers.

Donna Seaman, who retired in 2002 from a 30-year career as a teacher and elementary principal in Shelby City Schools in northern Richland County, sees both sides of the issue. School districts are hard-pressed to absorb increases in retirement costs without harming educational quality, yet teachers have come to rely on their pensions, said Seaman, whose daughter is a teacher.

"I don't expect that they will be able to have the same comfortable retirement that we have now -- not that it's that comfortable," she said. "I'm very concerned about the stability of the system."

In some parts of Ohio, cities and schools pick up part or all of their employees' share of retirement costs, increasing the cost to taxpayers.

Columbus, for example, absorbs the full 10 percent city-employee share of retirements -- at a cost of $43 million a year to the city. Faced with a budget crunch, Columbus officials are attempting to scale back that benefit.

Cities and the state might not have a clear path to reduce retirement benefits, however. In late December, a group of retired Cincinnati employees sued to block the city from reducing health benefits.

Cincinnati, which maintains a municipal pension system separate from the state's, said that even its reduced health benefits would be better than those of most private employers.

Status quo a no-go

The requests for more money from local governments by the State Teachers Retirement System and the Ohio Police & Fire Pension Fund are expected to go before state lawmakers early this year.

But there's already resistance to sacrificing textbooks, police cars and staffing levels today for the long-term security of retirees tomorrow. For some, it's politically unpalatable to benefit government pensions by heaping additional taxes onto people who have seen their own private-sector retirement plans slashed.

"Does the public-sector pension plan meet the expectations of the taxpayers who pay the bills?" asked Sen. Keith L. Faber, R-Celina, also a member of the Ohio Retirement Study Council. "I think it's very difficult to ask the taxpayers to pay more money to support the systems."

Rep. Lynn Wachtmann, a Napoleon Republican who also is on the panel, dismissed as outdated the argument that government employees deserve better retirement packages than their private-sector peers because they earn less pay.

"The taxpayers of Ohio who are footing the bill for all of this in the end need to realize how generous the public-pension systems -- all of them -- are compared to private-sector retirement plans," Wachtmann said. "Most of our private-sector employers would go bankrupt if they had to pay the kind of money into employee retirements that our public-sector employers do."

Wachtmann is one of nine voting members of the Retirement Study Council, which is composed of three state senators, three representatives and three appointees of the governor. It considers changes to the state's five public-pension systems and makes recommendations to the legislature.

So far, the panel is not discussing the idea of following the private sector into 401(k)-type plans. But Tom Ash, lobbyist for the Buckeye Association of School Administrators, said the idea is being floated informally in some circles. He labels it a non-starter.

"Our goal is going to be to preserve the defined-benefit plan because, as a matter of public policy, we think it makes sense," Ash said. "How do we do that is the question."

House Speaker Armond Budish, D-Beachwood, acknowledged that the pension systems have "significant issues" with funding but said the state should strive to protect benefits for retirees.

Few local government officials are chafing at how much they already contribute to employee pensions, but they're not thrilled with the prospect of an increase.

For example, Parma Superintendent Sarah Zatik said her school district could ill afford raising payments for retirees. The largest suburban system in the Cleveland area has cut $6.5 million from its $150 million budget and slashed 50 high-school teachers since voters rejected four tax-increase requests in a row, most recently in November.

But underscoring the political sensitivity of the issue, Zatik wouldn't say whether existing retirement costs are too high. If she backs the pension plans, a district spokesman explained, the district would take heat from residents angry about the costs. If she suggests trimming the plans, she would alienate teachers already facing cuts.

The Municipal League's Mahoney said his group will fight the proposed increases in pension costs.

"They want to take both police and fire up to 25 percent of payroll," he said. "In these times, well, good luck with that. There will be a prolonged and interesting discussion about all the changes everyone is talking about."

Indeed, politically powerful labor unions representing government workers figure to be influential players in the debate. They reject the idea of a fundamental crisis in the pension funds, saying the funding shortfalls can be remedied with a few tweaks -- raising retirement ages here, boosting contributions from employers and employees there -- and by counting on investment markets to rebound.

Ohio pension systems are relying on year-over-year investment growth of 7.5 percent to 8.5 percent.

"All classes of investors suffered during the market decline of 2008 -- the largest downturn in 70 years," five unions representing the majority of government workers in Ohio said in a joint statement. "The long-term strategy and design of our retirement systems smoothes gains and losses over a longer period of time, so (defined-benefit) plans are better able to reduce volatility. The same cannot be said of (defined-contribution) plans."

But the assumption of average 8 percent investment growth -- without which the pensions might have to come back and ask for more tax money or slash benefits -- seems overly rosy, said Leo Kolivakis, a pension consultant and writer.

"They're trying to inflate their way out of this problem," Kolivakis said.

AFSCME Ohio Council 8, OCSEA AFSCME Local 11, the Ohio Education Association, the Ohio Federation of Teachers and Service Employees International Union District 1199 say it would be folly for government employers to follow the lead of private companies into less-secure 401(k)-type retirement plans.

The unions cited statistics from the National Institute on Retirement Security that 357,234 retired government workers in Ohio received a total of $8.41 billion in benefits from state and local pension plans in 2006, with most of that sum going back into the state's economy via purchases of medications, cars and other products and services.

"These dollars are vital to fuel Ohio's economic engine," the unions said.

That argument is less persuasive among private employers. In 1996, investments in 401(k)-type defined-contribution plans overtook traditional pensions, and the trend has accelerated since then, according to the Employee Benefit Research Institute.

The consulting firm Watson Wyatt reported in October that the value of retirement benefits as a proportion of income had declined from 7.8 percent in 2002 to 6.9 percent in 2008 among the 183 corporations it surveyed. Much of that decline was attributed to companies switching from guaranteed pensions to defined-contribution plans.

In contrast, retirement benefits account for at least 14 percent of payroll for all of Ohio's locally funded public pensions -- topping out at 24 percent for firefighters in the Ohio Police & Fire Pension Fund.

Book and other defenders of public pensions say that government employees trade lower wages for more generous retirement plans.

But that's not necessarily the case. According to U.S. Labor Department statistics, there is virtually no difference between private-sector and public-sector pay in Ohio.

But there is a difference in the willingness of private employers to take on the risk of having to bail out pension plans if investments go sour or costs increase sharply, said Alan Glickstein, a senior retirement consultant for Watson Wyatt.

Still, traditional pension plans actually generate more bang per investment buck because of the economies of scale of handling billions of dollars in retirement assets for tens of thousands of retirees, Glickstein said. Traditional pensions can offer the same level of benefits at 30 percent less cost than 401(k)-type plans, he said.

"It's almost impossible for a pension plan to be less efficient," Glickstein said.

Leaders of all five state pension systems say they're committed to maintaining retiree health care and full pension benefits over the long haul, even if some of the terms become less generous.

Michael Nehf, head of the State Teachers Retirement System, said keeping pensions for teachers is "extremely important." The alternative is welfare for some of his retirees.

The other major school pension system is taking a different approach. The School Employees Retirement System, which represents nonteaching employees such as bus drivers and cooks, is not asking school districts to contribute more toward its employees' retirements, which average $879 a month -- far lower than their counterparts in the other state pension systems and below the federal poverty level. Some of the nonteaching employees are part-time workers.

Forcing school districts to boost their contributions invariably would mean cutbacks elsewhere, such as eliminating busing, said James Winfree, executive director of the School Employees Retirement System.

"We understand the financial stress that school districts are under," he said.

Dispatch reporter Doug Caruso, (Cleveland) Plain Dealer reporter Patrick O'Donnell, and (Toledo) Blade reporter Tom Troy contributed to this story. Dispatch Public Affairs Editor Darrel Rowland performed the data analysis.

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