Should STRS employees be paying into STRS retirement instead of OPERS? Discussion: Duke Snider, Bob Jones and John Curry
Subject: Re: Ponder (FYI)
Subject: Re: Ponder (FYI)
Subject: Ponder (FYI)
A forum for Ohio educators, sharing thoughts regarding their health care and pension system (STRS Ohio). Researcher John Curry manages a clearinghouse of related e-mails, articles, announcements, etc. His daily mailings include many items that do not make it to this blog. Contact John (email@example.com) if you wish to be on his e-mail list. Kathie Bracy: firstname.lastname@example.org.
If neither courts nor the keepers of public records will stand up for the public's right to see those records, then lawmakers must step in.
When the Ohio Education Association, the state's largest teachers union, sued to block an attempt by the Ohio Republican Party to get a list of teachers' names, addresses and other contact information from the State Board of Education, the state initially fought the lawsuit, arguing correctly that nothing in state law shields this information from public view.
Now that Franklin County Common Pleas Judge Daniel T. Hogan has ruled in favor of the teachers union, granting an injunction forbidding the education department from releasing the records, the department has decided to let the ruling stand unchallenged.
That's one more in a series of steps down the road toward a secret and unaccountable government.
Hogan's decision rests on an unfortunate 2005 ruling in which the Ohio Supreme Court held that the home addresses of state employees are not a public record. The ruling came after The Dispatch sued the Department of Administrative Services for withholding employees' information.
Separately, lawmakers passed a measure in 2007 forbidding cities to release home addresses of police officers, prosecutors, prison guards and others in law enforcement.
In the most recent case, involving teachers' addresses, Hogan wrote, "There is no good reason for treating the personal contact information of these two different, but overlapping, groups of people differently."
If that's true, it's all the more reason for lawmakers to revisit and reaffirm the principle of open government: People have a right to know who is working for their tax dollars, how much they're paid and where they live.
Police officers and other law-enforcement employees typically justify their desire for secrecy by claiming that criminals or disgruntled individuals could use a public directory of public-safety workers' addresses to do physical harm to someone. But no one arguing that point ever provides much in the way of examples of that happening.
The harm that could be done by secret government, on the other hand, is clear.
Many public employees are required to live in the political subdivisions they serve; how can the public be sure that they do if their addresses are secret?
In the late 1980s, a Dispatch investigation found that two rental properties owned by Columbus police officers had been the target of narcotics raids. The questions prompted by those stories would have gone unraised and unanswered if the owners' names on those property records had been closed to public scrutiny.
Employees' addresses aren't the only area of public-records retrenchment. The state Supreme Court issued an especially troubling ruling a year ago, when, citing attorney-client privilege, it held that a government agency needn't make public a fact-finding report if the report was prepared by a private lawyer. In the underlying case, the Toledo-Lucas County Port Authority sought an investigation of allegations that the authority's president was having an affair with a lobbyist who worked at the authority, funneling public money to her and using his influence to help her.
The authority board eventually fired the president but kept the fact-finding report secret. With that precedent, public bodies could hide all manner of wrongdoing by using private attorneys to investigate it.
Open records make public employees uncomfortable, but that's part of the price of public employment in an open society.
Good government requires that citizens be able to serve as watchdogs, and that requires open records.
Ohio lawmakers should make sure that state law enshrines those principles more clearly, so that those who would draw the curtain over democracy will have less luck with the courts when they try to do so.
The purpose of the temporary $5 billion program, authorized by the new health care law, is to reverse the erosion of employer-sponsored insurance.
In announcing the initiative, the White House tried to win broader support for President Obama’s overhaul of the health care system. Opinion polls suggest that the public remains deeply divided over the merits of the final legislation, passed by Congress without Republican votes.
Republicans hope to win control of Congress by running against the new law, while Democrats hope voters will reward them for passing it.
The administration said its goal was to provide “as much relief as possible as soon as possible” to employer-sponsored health plans.
Under the program, the federal government can reimburse employers for 80 percent of the cost of claims from $15,000 to $90,000 a year for a retired worker who is 55 or older and not eligible for Medicare.
The program will run from June 1 of this year to Jan. 1, 2014, when many early retirees, like millions of other Americans, will be able to enroll in health plans offered through new state-based markets known as insurance exchanges.
Valerie Jarrett, a senior adviser to Mr. Obama, said many retirees now “pay exorbitant premiums or simply go without health insurance.”
“In 1988,” Ms. Jarrett said, “66 percent of large firms provided health care coverage to their retirees. Twenty years later, in 2008, the percent of firms offering coverage to retirees plummeted to 31 percent.”
John J. Castellani, president of the Business Roundtable, which represents large employers, welcomed the new program, saying it would make health benefits “more affordable for employers and early retirees and their families.”
Kathleen Sebelius, the secretary of health and human services, predicted that 4,500 employers — 3,000 private entities and 1,500 state and local governments — would seek federal aid under the program.
Ms. Sebelius issued rules to carry out the program on Tuesday. Employers can apply through her department. Applications will be available by the end of June.
Early retirees “often face difficulties obtaining insurance in the individual market because of advanced age or chronic conditions that make coverage unaffordable,” Ms. Sebelius said.
The federal aid will be available to private employers, state and local governments, nonprofit and religious organizations and labor unions that sponsor health benefit plans. It will be available to employers who pay premiums to insure early retirees, as well as to employers who assume the risk themselves and pay claims with their own assets.
The government said it would help defray the cost of medical claims paid by employer-sponsored plans for early retirees and their spouses, surviving spouses and dependents.
Under the new law, Ms. Sebelius said, employers must use the federal money to reduce “health benefit costs” for themselves or their retirees — for example, by reducing premiums, deductibles or co-payments.
As a condition receiving federal aid, employers must maintain their current contributions to the cost of retiree health benefits.
In addition, to qualify for federal aid, Ms. Sebelius said, health plans must have “programs and procedures” to save money for people with chronic and high-cost conditions like diabetes and cancer.
In a preamble to the new rules, Ms. Sebelius said the government could deny or stop accepting applications if it appeared that the $5 billion would run out before 2014.
Many companies expected to apply for the new program already receive federal subsidies, under a 2003 law, to help offset the cost of providing prescription drug benefits to retirees, Ms. Sebelius said.
Teachers in Ohio can start their careers right out of college and retire 30 years later, when they’re just entering their 50s, and begin collecting two-thirds of their salary in the form of a pension check.
But that formula could change.
Ohio’s five public pension systems have collectively lost $63.6 billion in value, and they pay out more than $2 billion a year for health care coverage — a benefit that isn’t mandated but has been offered traditionally.
The pension funds for teachers, police, firefighters, state troopers and other government workers are crunching the numbers on how various changes would help keep the five funds solvent.
Options under consideration include increasing minimum retirement ages, decreasing cost of living allowances, requiring retirees or their spouses to pay more for health care, and changing how the pensions are calculated.
“I have a problem with all of that,” said Pat Lynch, a Dayton teacher with 35 years of service. “Don’t change midstream on us. I’m very close to retirement.”
She predicted that teachers would fight those changes “big time.”
Scott Maney, a junior high school social studies teacher in Springboro, agreed.
“One of the most important parts of the whole benefits package is retirement,” said Maney, who has been a teacher for seven years. “It’s important for all the teachers across the state to be really aware of what’s going on. It’s easy to give benefits away. It’s real hard to get them back.”
Another scenario would be asking taxpayers to chip in more toward what is set aside for workers’ retirement. School districts, cities and other governments already contribute between 14 percent and 26.5 percent of every paycheck toward pensions.
Bill Estabrook, former Dayton city manager and now director of the Ohio Police & Fire Pension Fund, said he doesn’t think local governments are able to pay more.
Over the last 40 years, Ohio’s public pension systems sweetened the pot with more and more generous offerings: 3 percent per year cost of living adjustments, subsidized health care, higher multipliers used to calculate the monthly pension check, and a chance for police and firefighters to retire as young as 48.
In 1996, however, a legislative study recommended ratcheting back on some of the benefits as a way to shore up the systems. For example, the study said, troopers, police and firefighters should be able to retire at 52, not 48.
Extraordinary investment returns over the past decade allowed pension officials and lawmakers to put off such politically unpopular decisions, said Aris Hutras, director of the Ohio Retirement Study Council, a bipartisan oversight board.
Hutras said he expects lawmakers to consider a pension reform bill sometime this year or next.
“Our job is to look out for the next generation, not the next election,” he said. “Change could be unpopular, but it’s change for the good.”
Contact this reporter at (614)224-1624 or lbischoff@DaytonDailyNews.com.
States can't print money, and they have limits on borrowing. Much of their shortfall, moreover, is the result of pension obligations that are binding contracts, not just political promises. The looming shortfalls were hidden in recent years through a combination of outright deceit and overly rosy projections for annual investment returns. But the truth is now emerging.
Last month, a panel from Stanford University concluded that California's public employee pensions were underfunded by $500 billion. That's about $35,700 per California household. Nationally, the American Enterprise Institute estimates that state pension funds are more than $3 trillion short.
The problem is twofold. Many states have lavish programs that allow workers to retire in their 50s with ample pensions — and health insurance to cover them until Medicare kicks in. Second, regardless of how generous their benefits, some states have simply failed to put away adequate funds to cover them.
These lavish programs are a good deal for public employees and politicians seeking their votes. But the deal is a bitter pill for taxpayers, most of whom are private sector workers without the types of benefits that state and local workers see as their right.
The first thing that must be done is to acknowledge the colossal irresponsibility of lawmakers who have engineered a massive transfer of wealth from non-unionized workers to unionized ones.
The next thing to do is to take steps to limit the damage. One good idea is to move new state and local government employees to 401(k)-type programs. This won't solve the problem of current workers and retirees, but it will keep the problem from getting worse. Alaska and Michigan have already moved broadly in this direction, while several other states have 401(k)s for certain types of employees.
The ability to rein in spending for current workers and retirees varies from state to state. In about a third of the states, pensions are not the result of collective bargaining agreements and can be adjusted within the confines of what is politically possible. Health benefits are often easier to trim, at least from a legal standpoint.
Without dramatic action, it is not difficult to see states such as Illinois and New Jersey falling into downward spirals of tax hikes and service cuts to finance their unaffordable promises.
In New Jersey, recently elected Gov. Chris Christie is finding out how tough the issue is. His state faces massive deficits even though it has some of the highest taxes in the country. With little ability to trim pensions, he is demanding that the teachers' unions agree to pay freezes or layoffs. For his efforts, Christie is being portrayed as a Scrooge-like character who is anti-education. Many other states will soon be forced into the same type of contentious fights.
The story of state pension shortfalls isn't as well known as the national debt. But given the severity of their problems, that probably won't be true for long.