Jim Conard: Saving A lot of Money for STRS

Jim Conard to STRS, April 20, 2011

After much thought and deliberation I have come to the conclusion that active and retired teachers are going to take major cuts in their benefits that are unfair after paying into STRS throughout their teaching career. At one time Ohio had one of the top retirement systems in the United States. I had the privilege of working in the Department of School Finance for 17 years. Some of my figures may be off but I think they are very close. For one thing, in 2008 our investors lost $36 billion dollars, which caused a major impact in our budget. With my experience, there are only 9 windows in which an investor can invest. If you look at our last STRS Ohio News, dated October 2010 and turn to page 5, they are only investing in 6 areas. My question is why do we need 80 investors?

Therefore, I have come to several points of concern. In my opinion, the following would help our economic situation:

1. STRS needs only 27 investors rather than the 80 present investors. The average base salary for an investor is $156,000.00 and in addition to that, they receive an average bonus of $70,000. This would total for the average investor $226,000.00 If you reduced the investors by 53, that would be a savings of $11,978,000.00 in just one year alone.
2. Number of STRS employees should be reduced from 589 to 189. This would be a reduction of 400 employees. The savings would be approximately $20,000,000.00. I base this on the fact that 2 years ago the computers at STRS were up-graded at a cost of $63,000,000.00. Everything is on the computers, so why do we need 589 employees. Remember! STRS employees are there to benefit, preserve and/or improve the retired teacher's quality of life.
3. There should be a benchmark for teachers when STRS assets reach $65 billion. At that point the retired teachers should have the 13th check reinstated. The benchmark should not be set up for the investment staff!
4. There should be no bonuses for investors or any other employees at STRS.
5. Since cuts are necessary due to the present economical problems, all areas of the STRS funding should be affected, not just active and retired teachers. The STRS staff's salaries and benefits should be cut, also. Since the fund is in a desperate situation, then everyone should be giving up something.
6. We need more than 2 retired teachers on the STRS board. There is a need for a level playing field. We really need five!
7. We should encourage Tim Myers to resign from the board immediately and replace the director Mike Nehf.

Other areas of concern:

1. STRS Building - Why not rent out half of that building to business professionals, such as, lawyers, accountants, etc.? I would think this could bring in a large income.
2. Parking Garage - Why not rent it out by the month or year? I know parking is at a premium in Columbus. This could bring in a large amount of money.

The savings from a reduction of investors and a reduction in STRS employees could be $32,000,000.00 Bob Stein has called this "miniscule". But over a period of 5,10, or more years this is a hell of alot of money.

I still say that under 3307.15, it is illegal to use investment money for bonuses.

Jim Conard, Shelby County Retired Teacher
Sidney, OH