Dave Parshall reports on the special January 21, 2011 STRS Board meeting

From Dave Parshall, January 21, 2011
Subject: Notes about today's STRS meeting

Today the STRS Board met and discussed 3 Plan Scenarios presented by Bob Slater and his staff. The bottom line is that no decision was made concerning a final plan to send on to the Statehouse.

Two of the plans offered a 30 year or below unfunded liability. The below 30 plan was at the cost of our COLA (1.5 %); John Curry is sending scanned copies of the various scenarios.

Points of contention are still the COLA and length of service and age for retirement eligibility, and the percentage increase from actives. Several additional Scenarios were requested by the board to be presented next Wednesday, January 26th.

One surprising request and one which was followed by much discussion was to take the 1 % contribution from school boards that is paid into the Health Care Stabilization Fund and add it annually into the general pension fund so actives teach one less year. This idea was suggested and pushed for by Mr. Myers. If all things stay the same, this would cost the healthcare fund “One Year”. In other words the fund would be bankrupted by 2020 instead of 2021.

The reasoning behind this idea is not really not clear. Actives would still need healthcare, even if they retired at 59 instead of 60. The average retirement age is now 59 years, so this may have been much discussion about nothing. To go after our health care fund at this time cannot be justified.

On the bright side, more reasoned comments and suggestions were made by Mr. McGreevy, Mr. Stein and Mr. Price. In short, the saga goes on another week. I will let you know how things go next Wednesday.

At the end of the meeting Mr. Myers closed by reminding the board that what we send over to the legislature may not be recognizable in the final bill. This is, of course, the political reality.

Dave Parshall