RHJones on: Fw: STRS's Executive Director Mike Nehf writes write to the top...we have had our plans in place for months now......

From RH Jones, October 10, 2011

To Mike Nehf, the STRS Board and all:

Below, in the STRS "plans in place for months now" mentioned in John's message, Exec. Dir. Nehf did not mention a recommended 33 1/3 % cut in retired teacher's simple 3 % COLA. Since the COLA does not compound, there is already a sacrifice being made by retired teachers and I humbly ask that this hurtful cut be eliminated as part of the "fiscally responsible plans". Fiscally responsible to whom? It is certainly not responsible for our STRS, an organization that is supposed to supply a proper pension from the delayed income that we teachers paid into the fund, not to provide, at least, a partial inflation proof pension as with the present simple 3% COLA - it is, therefore, not proper. Why is it not proper you may ask? I bring your attention to "Reasons for inflation explained" in the "Guest Column" of the Norton Post of Oct. 8, 2011. If you would like to read it in it's entirety, I suggest that you click on to the newspaper's website. The article is written by Tom Martin, IT consultant, Wadsworth, Ohio. The following is my brief synopsis:

1) Exponential function is a very simple math function that shows how quickly things can grow. If you invest $100 at 7% in 10-yrs. it would double to $200. At 10 % it would take just 7-yrs. to double your investment.

2) Inflation is the direct result of watering-down our currency. The dollar today is worth just 3% of its value 100-yrs. ago. Today's dollar is only worth 10-cents compared with just 40-yrs. ago.

3) Real inflation today is 10%. In just 7-yrs. your dollar will be worth just 50-cents. Its not that prices are increasing, our dollar is decreasing in purchasing power.

The cause for this inflation is the 'discounting' of Fed money by selling Treasury bonds to banks and by using the Mandrake Mechanism to create money out of thin air.The banks then convert each dollar into $9 and then lend it. They then repeat this process 28-times, further diluting the money. This is called Fractional Reserve Banking. Our STRS should change the "plans in place for months now" as Tom Martin's article proves that retired teachers have already done their share of sacrificing by living in inflationary times unable to keep up financially. Also, please remember that our STRS used to put 4% of its total payout into the HC/Rx fund, and that has been dropped already to just 1%. The HC/Rx inflation, having risen far beyond the inflation rate, has been terribly hurtful to retired teachers as well as our STRS. Personally, I paid out of my pension income over $13,000 last year just for HC/Rx.

My message is not meant to be critical of our STRS but only to help explain the facts of the financial situation of retired teacher's modest pension to the STRS officials. The 33 1/3 % COLA cut sorely needs to be taken out of the recommendations to the legislature for reforms of our STRS pension.

Respectfully submitted,

Robert H. Jones, retired STRS teacher annuitant member