Ralph Roshong's comments to STRS Board, April 14, 2011

Good afternoon STRS Board Members:

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

I would like you to know all of us, the retirees, thank you for the work you put forth in our behalf for our retirement program. I would like to offer a very WELL DONE to all the members of the staff in the three major departments, investments, benefits, and finance.

My comments today are directed primarily to the situation our state government created when they inserted the 12/12 article into the budget bill. Their idea to reduce the school board's participation rate to STRS from 14 to 12 % and increase the employee's rate from 10 to 12%, as you well know, has created chaos. The school board rate of 14% and the teacher's rate of 10% have been a standard for a very long time.

This smoke and mirror proposal, has all the earmarkings of what they did to the lottery profits many years ago. The original profits were provided to schools on a per student basis as additional funds to provide services outside staff costs. The Legislature promptly offset those monies as general fund foundation payments to the schools and reduced their original foundation payments. This is another example of looking as if they are reducing a local school board's cost, but taking it back plus more from future foundation payments.

The Legislature, two years ago, charged the five pension systems to come up with a financial plan to return our pension fund to a 30 year funding level. You have struggled to complete this task which was nearing completion and now this 12/12 debacle. My advice on this issue is to maintain your course toward your original goal of the school board's share to end up at 14% and the teacher's share to be at 13%. If the 12/12 plan is adopted by the Legislature, then the STRS plan must change to raise the school board's rate by 2 points to get back to 14 and raise the employee's rate by 1 point to get to 13, the STRS Board's original proposed goals.

I have heard some whispers that if the 12/12 stays in the budget, the COLA might have to be re-visited and as a retiree I don't like the sound of that idea. I supported the 1 point reduction very strongly, but would not support a 2 point reduction. In the unlikely situation of that occurring, I feel you must change the STRS proposals and call for the immediate implementation of all your proposed changes on new retirees and no 15 year or so implementation timeline. I have felt all along those criteria should be implemented as soon as possible.

I would again comment on the Performance Based Incentive Program, "BONUSES", which you just adopted. I feel the investment department should have a bonus program, but it should not take 19 pages to justify or explain it, and the differential percentages, 17-90, are totally unjustified. You already differentiate the staff's salary by responsibility criteria. The further geometric differentiation by these large percentages is, in my opinion, totally unwarranted. If the investment team has done a great job, the STRS Board should assign an appropriate bonus percentage to be applied uniformly to each of their salaries.

Thank you once again for listening to our comments.