Kathie Bracy to the STRS Board: Don't touch our COLA

From Kathie Bracy, January 16, 2011
Subject: Some thoughts to ponder as you work on that proposal

To the members of the STRS Board:

As you work to put together a proposal to present to the state legislature to bring our pension's funding period down to 30 years, a daunting task by any stretch of the imagination when you consider the fund’s current position, I wish to implore you not to recommend cutting the retirees' COLA. If you already support this recommendation, you have my sincere appreciation for your understanding and compassion. If you do not support it, please read on.

You were not here when the STRS Board was allowing -- no, designing and encouraging -- unchecked wild, reckless spending of retiree funds. I do not need to go into the details; chances are you already know them, and are well aware that no one at STRS at that time had any intention of putting a stop to it till Dennis Leone and John Lazares investigated and exposed what was going on.

If you are a relative "newbie" to the Board and need to know more details, you can find them easily by visiting my blog (www.kathiebracy.blogspot.com) and clicking on a number of links I keep in the top section. If you have never read Dennis Leone's investigative report of May 16, 2003 to the STRS Board, you need to start there. If you do not find its contents shocking and reprehensible, then you need to begin considering ways to make use of your time other than as a member of the STRS Board.

I know there are those who tired long ago of hearing rehashings of what happened back in the days of partying, fancy trips and monstrous bonuses handed out right and left. Those are the people most closely connected to the group behind it all and to those who eventually met with convictions on ethics charges. That group has not gone away; it has merely exchanged one set of sheep’s clothing for another, and continues to seek ways to benefit their own at the expense of those who have little (if any) power to stop it: the retirees.

I'm wondering how many STRS Board members have ever visited a Nazi concentration camp. If you have, you know firsthand it's a very sobering experience. I have visited Dachau many times. I have also visited Auschwitz, Birkenau, Terezin, Bergen-Belsen and Buchenwald. My point is this: millions of people suffered untold atrocities at the hands of Nazi perpetrators. While historically that period is behind us, morally it is not. It is not enough simply to say "Never again", as admonished in bold lettering in five languages on a stone memorial in Dachau. Constant vigilance and actions to protect future generations are imperative. If you reread that last sentence, I hope you will see a parallel to your moral responsibility as a member of the STRS Board.

Thousands of retirees have taken draconian hits at the hands of the STRS Board, and you probably weren’t around when they occurred. Nor were you around when those concentration camps were carrying out those atrocities (though many of us were), but that doesn’t mean their effects are no longer felt 70 years later. It is the same with the inequities that have filtered down to the current time from those “salad days” of the STRS Board in the early 2000s.

Overall, retirees’ incomes are far less than what educators are earning today. There are some, particularly the most elderly among us, who are struggling to make ends meet on pensions less than $20,000 while their healthcare costs continue to escalate out of control. Many are having to choose between medical care and food on the table. Those people are particularly dependent on their COLA. Would you reduce or take this away from them?

If you stop to think about it, our COLA has never been a real COLA. Because of the way it was designed, it does not begin to keep up with the cost of living since it is a simple COLA, not compounded, as it should have been all along. “Cost of Living Adjustment” is a misnomer; it should either have been done right or never have been called a COLA in the first place.

It is my understanding that a reduction in our COLA is not only recommended as a means of rescuing our pension fund, but it is also recommended to take effect as soon as the legislative bill is passed, while at the same time changes affecting non-retirees are not to take effect for several more years. Again, retirees are told, in effect “You don’t matter – we’ll take your money any time and any way we can, just because we can.” Remember, it is too late for the vast majority of retirees to make plans to improve or even stabilize their financial situations.

They were not given the benefit of “grandfathering” when the 13^th check was unceremoniously dropped, with no warning whatsoever. They were not “grandfathered” when the STRS Board decided to push their healthcare premiums to astronomical heights. “Grandfathering” is not even being considered for the hits the Board is currently considering for their COLAs: immediate action in the way of reduction or elimination altogether. While this is draconian and insulting in itself, in view of previous hits retirees have already taken, it does not even begin to compare with the ultimate insult: recommendations for a generous “grandfathering” timeline for those whose incomes are far greater than ours, and who still have time to make plans for their financial futures.

You are going to be remembered for your actions, just as previous STRS boards are remembered for theirs. It is entirely up to you to determine what you want those actions to be. It is my fervent hope they will be compassionate ones. You have the power; retirees do not. Please – let our COLA alone.

Kathie Bracy
STRS retiree