Ralph hits the nail on the head in his speech to the Board

Ralph Roshong's speech to STRS Board, February 17, 2011

STRS Board Members:

I am Ralph Roshong, a 1991 retiree and I thank you for allowing all of us to address you with our thoughts.

First, thank you for observing your agenda schedule by returning back from your executive session on time. We appreciate it.

To review some past topics on which I have spoken, I would encourage you to:

a. keep the topic of square footage of our building in mind and whether or not the space is well beyond the needs of the STRS purposes. Consideration might be given to renting some space to other organizations in the future.

b. continue to monitor the bonus plan you provide for our investment personnel. I feel it is well beyond appropriate levels. A bonus program is fair, but not the size of our current program.

c. review the benefit levels of our STRS employees' healthcare program in light of continued increasing of costs. Premiums, deductibles, co-pays, etc. should be of the same levels as healthcare benefits for the retirees.

Commenting on your revised pension saving measures you approved to recommend to the legislature, I offer the following comments:

1. I am totally baffled as to the Board?s logic in imposing a 33% reduction in our COLA immediately and then take 10 years to phase in the reductions to the new retirees' retirement formula. In fact, it will probably be closer to 14 years, as it has already been over two years talking about the need and then it will be at least two years before the changes start plus 10 years on top of that making 14 or more years. If that slow impact is so necessary, maybe you should phase in the COLA reduction at 0.1 % per year. This is another gigantic slap in the face to retirees just as it was in 1999 when that STRS board implemented the notorious 88.5% formula of which the 11% bonus is being recommended for disposal. Another big black mark is the rude absence of any consideration of not reducing the COLA for those retirees who retired with a low salary prior to 1980 and who by all standards need the COLA most.

2. I have not been able to determine by your reports when the pension fund is anticipated to reach the 30 year funding level with the proposed changes. We are, in all likelihood, going to see continued reduced income from current active educators, higher payouts in benefits, retirees living longer and a continuation of paying out more money monthly than we take in.

3. I have heard at your meetings during the past year or two, the board is planning to receive more investment income on average annually for the next ten years than we received annually on average over the past ten years. This in light of the additional comments from staff that the recovery over the next ten years will be very slow. I strongly feel that the projections and anticipations for income over the next ten years are overly optimistic.

Last and certainly not least, I want to compliment the three major departments:

1. The finance department under Robert Slater for getting the monthly checks out on time and keeping the fiscal matters in order.

2. The benefits and healthcare department under Sandy Knoesel for keeping the healthcare working efficiently and getting $2 benefit for each dollar you spend on healthcare.

3. The investment department under Steve Mitchell for making our money work as well as possible and having quite a few nice months of investment gain.

Thank you.