Retirees re: Why?

January 21, 2011

Bob Buerkle:

John,

If it didn't save money by only changing the rules for "New Hires" then 18 other states wouldn't be doing so. Look at Illinois, the state that every study has shown to be the state in the worst shape, if you think it won't save enough money. It can and is being done.

Your question "Why?" is well taken. The answer is that, at least so far, the STRS upper management team and the Board have been unwilling to request their actuaries to bring these projections public. They may have these actuarial projections but they have never been made public if they do have them. The explanation that I have been told for not doing this is that it would be too unfair for future teachers. I don't buy that because the experiences that thousands of Ohio Teachers had between 1965 and 2000 was a long list of pension improvements. I think it is reasonable to assume that future STRS Boards would try to provide improvements for new hires over their careers as well.

Another fact that will make pension improvements happen for these future "new hires" is that their "Normal Cost", as calculated by the actuary, would have a value worth less than their STRS Contributions. This would happen even under the most recent STRS Plans and the normal cost would drop from the current 14.3% to 11.79%. But as we have seen, the 11.79% normal cost was not enough to get us to a 30 year funding period. I think they could achieve the 30 year funding goal with a normal cost for new hires that was around 10.5%. If the employee contributions are raised to 12.5% over 5 years the new hires would be contributing about 2% more than their "normal cost" to provide their pensions. Hopefully by that time the STRS Investments will have sufficiently recovered to begin to make some improvements for the new hires.

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Nancy Hamant:

To All,

For years CORE requested the actuarial studies of the impact of the Enhanced Benefit
(88.5% calculation for 35 years) on the STRS Pension Fund. Damon Asbury kept replying that the studies would made available. Later, Bob Slater stated that a comprehensive actuarial study had not been completed on the Enhanced Benefit impact.

Warren County's Ohio legislator at the time of passage, indicated that the FY 1999 changes (including the Enhanced Benefit) was passed by legislators on the basis that it was necessary to have teachers work 35 years to counteract a "future" teacher shortage.

Many of us at the table stated to the legislator that the 35 year enhancement would do the opposite, it would limit the opportunity of new college graduates from entering the teaching field as there would be fewer openings, and that there was no information on the impact on the Pension Fund. The legislator said that they had been informed that the impact on the Pension Fund was a "wash". One Billion dollars later, we find out that is not true.

As stated below, actuarial data is again not being provided. This is astounding considering that the STRS Executive Director, the STRS Chief Financial Officer, and each member of the STRS Board has fiduciary responsibility for actions taken regarding the Pension Fund. So, are all STRS fiduciary members violating their obligations when actuarial data is not provided about actions? or when actuarial studies are not completed? Does this mean there are legal implications?

I do not know. However, I feel that such actions are morally and ethically wrong and do not address all STRS members fairly or equitably.

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RH Jones:

Bob Stein:

You have the authority to introduce a motion at the next OH STRS Bd meeting. If it is voted down, at least you can say you tried. If I were on the Bd, I would ask the STRS management to come up with a math computation. If they say no, I would expect that they are not responding in the best interest of retirees or all the members.

My reason for sending Mr. Curry's message out, was to inform those on the list of what Mr. Curry and I think is a legitimate concern. The laws on the books now were negotiated in good faith and should remain so. However, the "new hire" scenario should be a consideration. The income that we retired teachers are receiving now was passed into the law by Ohio's elected reps and any new laws should be considered only for those who will be hired in the future, or to improve on the retired STRS income along with a proper HC/Rx. Our fixed COLA of 3% definitely does not keep retirees up with inflation. As U.S. President Kennedy said at his inauguration: "Let us never negotiate out of fear, but let us never fear to negotiate". That, sir, is the civilized thing to do for both active and retired OH teachers. All the while, being civil to one another.

Just my thinking.

By the way, I am not attending the Special STRSmeeting today. Driving is to difficult for this retired teacher, and I suspect a lot more of us would be attending today, if it had not been for the snow storm. Really, the elderly should not be out in sub-zero wind chills. Besides, if we get sick, it costs our HC/Rx. We elderly do need to stay healthy.

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Tom Curtis:

WHY?........................ because the OEA (administrators) will never allow that to happen...

The OEA is today and has been in control of the STRS for 20 years, maybe more. They have held the majority of board seats for that long. Is it conceivable that the OEA may have forced past Executive Director C. James Grothaus to retire in December 1992? Did the OEA hold the majority of board seats then? If so, then it is plausible, isn't it?

Let's get real stakeholders! The OEA is in charge. Make no mistake about that! Further, until the OEA can no longer buy the majority of board seats, and/or influence the selection of the 3 consultant positions, they are going to rule for years to come.

Think about this! Who has held the majority of the STRS board seats for 20 years? Who has made the vast majority of all motions and voted YES, in unison, as a union is supposed to do? (Only exception: the 3 years John Lazares and Dennis Leone were on the board at the same time) The OEA controls the STRS because they have controlled the board for 20 years. This has been detrimental, because no one group (OEA) should ever be permitted to be in charge continuously. Unfortunately, educators as a whole were far too busy doing their jobs and were blind to what the OEA administrators were doing behind their backs.

Flashback!

Vol. No. 78
August 1992
STRS News for active members

Executive director announces retirement; Board to select successor this fall

State Teachers Retirement System Executive Director C. James Grothaus has announced he will retire December 31. He intended to retire July 1, but agreed to extend his contract while an executive search firm (OEA) helps the Retirement Board find his successor.

History shows that the OEA has definitely controlled the STRS since 1992, when the OEA administrators chose Herb Dyer to be the next ED. The OEA held 5 of the 9 board seats. Those 5 voted for Herb Dyer. We all know what transpired after that time.