John, did you jump the fence?

From John Curry, March 2, 2011

Like many critical of the proposed changes, John Lazares, who served on the 11-member STRS board from 2004-08, says changes approved Thursday will cost districts more because older teachers with larger paychecks will be forced to stay in the classroom longer. He also said past decisions — such as the offering of health care in the mid-1970s — greatly contributed to the organization’s financial hardships.

Offering health care in 1974 was a mistake, Lazares said. “Now, in the last few years, because health care costs have gone up so greatly and so many baby boomers are retiring, they’ve seen they can’t furnish health care costs and (also) a retirement plan,” he said.

http://www.western-star.com/news/lebanon-oh-news/pension-changes-will-cost-taxpayers-1070321.html?printArticle=y

Pension changes will cost taxpayers

‘Districts will have to put up levies more often to pay for higher salaries,’ official says.

By Andy Sedlak, Staff Writer
February 2, 2011

FRANKLIN — A former board member of the State Teachers Retirement System says proposed changes to its pension plan will come out of the wallets of taxpayers and put a financial burden on school districts.

Like many critical of the proposed changes, John Lazares, who served on the 11-member STRS board from 2004-08, says changes approved Thursday will cost districts more because older teachers with larger paychecks will be forced to stay in the classroom longer. He also said past decisions — such as the offering of health care in the mid-1970s — greatly contributed to the organization’s financial hardships.

“School districts will have to put up levies more often to pay for higher salaries and fringes,” said Lazares, 61, superintendent of the Warren County Educational Service Center and former Kings Local Schools superintendent. “The only place (districts) can save money is getting senior people to retire when they hit 30 years.”

Under the current plan, teachers may retire and receive 65 percent of their highest three years as long as they’ve logged 30 years. Under the proposal, teachers must work at least 35 years and be at least age 60, collecting 77 percent of their highest five years.

Arnol Elam, superintendent of Franklin schools, echoed Lazares’ statements.

“This will surpass any unfunded mandate out there,” Elam said. “Let’s say 10 teachers a year fall into the new retirement (category), that’ll represent $1.1 million a year in additional operating revenue for the district.”

The eligibility change would be phased in from 2015 to 2023. The proposed plan must be approved into law by the General Assembly and Gov. John Kasich

STRS cited higher health care costs, significant financial losses two years ago and a history of generous benefits as reasons for the change.

Offering health care in 1974 was a mistake, Lazares said. “Now, in the last few years, because health care costs have gone up so greatly and so many baby boomers are retiring, they’ve seen they can’t furnish health care costs and (also) a retirement plan,” he said.

Laura Ecklar, director of communication services for the STRS, said while it is an optional benefit, all state pension systems have taken advantage of the health care option and it comes from a fund separate from pension money.

“This issue is not created by health care as much as it is by demographic issues and the fact we just went through a huge recession,” Ecklar said. “Rising health care might force a person to work longer, (but) I think we’re all aware health care costs are a significant issue for everyone, not just retiring teachers.

“At the end of the day, without this package of changes, there would be a time when we wouldn’t be able to pay pensions at all,” she said.

For more information regarding proposed changes to the STRS Ohio retirement system, visit www.strsoh.org.