Saturday, January 29, 2011

Of course, WE (STRS) don't have any 30-year service retirees with annual retirement incomes of less than $30,000, do we?

From John Curry, January 29, 2011
Several years ago, CORE members were told this by an STRS official (right, Gary R.?). Finally, in the fall of 2007 we were given this chart by former STRS Executive Director, Damon Asbury. Lo and behold, we did have retirees with 30 years of service and annual STRS retirements of less than $30K, didn't we? We knew it, they denied it...until we pressed and pressed and finally Damon released this table.
Now, let's take a look (below) at what the Ohio Highway Patrol has submitted to the Ohio Retirement Study Council in an effort (a very humanitarian effort) to look after their retirees with the very low annual retirements (i.e. usually the eldest). They (the OHP) really have a heart, don't they? A similar request was presented to some members of our retirement board and Executive director Michael Nehf this past summer and we were met with a stone wall and a lip service to possible relief in the form of a charity the same breath a "means test" was also mentioned. GIVE ME A BREAK!
The OHP retirement system is requesting NO COLA reduction for those retired (benefit recipient) troopers with annual retirement incomes of less than $26,000. They don't even specify that the recipient has to be a retired trooper who spent the minimum necessary amount of service time (25 years) to be eligible for full benefits, do they?
So, just how many STRS retirees, with incomes of less than $26,000 are there....or $30,000 for that matter? Well, one can only surmise and "guesstimate" by using the attached table that is several years old and with a "cut-off point of -$30,000. Several years ago the magic number was 8,922 (annual salary under $30,000) now, this figure has diminished as many of these people were up in their 80's and 90's and so are no longer with us. I think a fair estimate today would be around 7,000 -8,000.
DO YOU THINK THE FAILURE TO CUT 7,000 RETIREES OUT OF A 1% COLA EACH WOULD PUT A MAJOR DENT IN STRS? Of course, with STRS's new 63 million dollar computer system in service one would think that it wouldn't take their 'puters just too much effort to print out an actuarial table as to how many retirees and how much moneys we are talking about, would it? But... successful requests for actuarial tables from STRS are "like pulling hen's teeth," aren't they?

Ohio Highway Patrol recommendation to ORSC:

Decrease the Cost of Living Adjustment (COLA) from 3% to 2%, except for any benefit recipient age 65 and older and receiving a HPRS pension benefit of less than 185% of the Federal Poverty Level (-$26,000). The HPRS Board may authorize a COLA in an amount not to exceed 3% when funds are available according to Section 5505.121, ORC.

2007 chart from STRS:
(Click image twice to enlarge.)
STRS: All retirees get screwed, but in addition, the oldest ones get thrown under the bus!

Friday, January 28, 2011

Molly Janczyk responds to the STRS proposal adopted 1/27/11

From Molly Janczyk, January 27, 2011
Subject: The OEA makes a statement re. STRS's latest plan........they don't like it
OEA says the plan cuts too deep for actives and doesn't offer flexibility to actives nearing retirement. WHAT? Phasing in to 2023 for some changes is not flexible enough! Please, where was flexible when retirees bore the burden of saving health care overnight forcing selling of homes and cars, cashing in their finances and skipping or cutting drugs and medical treatment, opting for Basic coverage due to expenses when they were ill and needed better care, returning to work after retirement was stolen from them from which we will never recover.
OEA is screaming, in my opinion, because it wants all of them possible to be eligible for the 35 yr. rule and 88% of their final 3 years to be in effect until 2015. It should be offered in 2012 along with retiree COLA reduction. So far, actives have had their salaries affected by .9% when retirees costs increased by over 800%. Under 65 yrs of age, medical monthly premiums alone were $1150 for self and spouse last year. Never thought I couldn't wait to be 65 for some relief. Some retirement.
Then the RX costs with the average retiree on 6-10 meds. This year I have to save $400 a month to meet RX costs and that is being 65. It is time for actives to take an interest in their retirements and be happy with 77% of their FAS when most got 66%. They will retire at much higher salaries with 77% pensions or more. Greedy, OEA!
But, it always was about OEA and never concerned about past actives - current retirees. You want longer so you can get the 88% your former OEA active convicted STRS Board members put into place. Thank goodness, some fairness prevailed with the retired Board members and investment appointees to the STRS Board. Thank goodness we have legislation, thanks to SB133 (Leone, Lazares, Wachtmann) putting into place 11 STRS Board members so that it was no longer totally controlled by OEA active Board members WHO VOTED TODAY TO STOP language allowing STRS to increase to 4% if necessary in the future if necessary. OEA Board members.
If the Governor gets involved, there are serious problems and OEA is always warning US about what gets into print! Gee, Bill L., might not get your 88% along with the 6 figure salary and other perks you enjoy. But, you're just worried about actives out there aren't you?
Unfair as usual: OEA
My opinion.
Molly J

Dayton area educators speak out re. reform....

From John Curry, January 28, 2011
Pension changes let employers off hook, union president says
By Margo Rutledge Kissell and Laura A. Bischoff, Staff Writers
Dayton Daily News, January 28, 2011
Many teachers were learning at the end of the school day Thursday that they could have to pay a larger share of their retirement costs and see their pension benefits reduced under a plan designed to keep the State Teachers Retirement System solvent.
The plan has to be approved by the General Assembly and Ohio Gov. John Kasich.
Increases in the years of service required for eligibility, new minimum age thresholds, and benefit cuts would begin Aug. 1, 2015. Smaller cost-of-living adjustments and higher worker contributions would kick in July 1, 2012.
“It’s too bad one of the real benefits of being in the public education system — retirement, the pension — is going to have to go this way,” said David Romick, president of the Dayton Education Association, who sent an email Thursday notifying the membership of 1,150 teachers about the proposed changes.
Republican lawmakers, however, contend the public pension systems offer better benefits than what the private sector typically offers these days.
“These systems are so generous compared to the private sector. We should be thankful,” said state Rep. Lynn Wachtmann, R-Napoleon, a longtime advocate for sound fiscal stewardship of the public pension systems.
Lawmakers rejected earlier proposals by pension leaders that called on taxpayers to shell out more to keep the systems solvent.
The STRS plan will be wrapped into a comprehensive bill that aims to overhaul the five public employee pension systems in Ohio.
Collectively, the systems serve 1.1 million workers and retirees and another 600,000 former government workers who have pension accounts on file. The five systems have investment portfolios totaling $162 billion.
The Dayton Education Association doesn’t support the STRS plan, which is projected to save about $10.9 billion and does not include any increase in employer contributions.
“Employers have been let off the hook,” Romick said, adding that the union’s biggest concern is that most of the responsibility for improving the system has been shifted to active members.
Romick said this comes as a majority of teachers in the district are “taking home less money overall than five years ago” because of salary freezes and increases in health care expenses. Teachers in the district have not had a pay raise since the 2008-09 school year other than step increases for those with fewer than 15 years experience, he noted.
Michele Prater, spokeswoman for the Ohio Education Association, which represents 130,000 unionized teachers, said they know the long-term solvency of the pension plan will require difficult decisions but they don’t think this plan is the answer.
“We just believe the cuts are too deep and don’t offer enough flexibility for teachers nearing the end of their career,” she said.
Dayton teacher Vivian Jordan, 62, who plans to retire in June 2012, would get out right before smaller cost-of-living adjustments and higher member contributions would take effect .
For those like her who have been considering retiring in the next few years, “our plans can be upset by them saying now you have to work beyond 30 years.”
Sue Gunnell, assistant superintendent of administrative services for Huber Heights City Schools, believes many people are waiting for a clearer picture of how they might be impacted because the plan still needs to be approved by lawmakers and the governor.
“There are so many potential scenarios, it’s hard to get an actual calculation,” said Gunnell, 52, who has been in education for 31 years and would be impacted by the proposed STRS changes.

Contact this reporter at ?(937) 225-2094 or mkissell?

Not all active educators are glaring at the headlights!

Adrian Smith to John Curry, January 28, 2011
Subject: Re: Our meeting earlier this past year re. lowest pension amounts and a possible COLA adjustment
Seems pretty simple for me....we must look out for EVERYONE in the system....Getting closer to retirement it's scary that STRS seems to work like a lot of local boards of education...they don't know what they are really doing.. unlike some boards, they DO HAVE the resources to act competently....while I'm not happy about many of the provisions, I can live with them but I cannot understand the COLA cut. It drastically affects ONLY retirees who are at a stage of life where earning supplemental income can be very difficult.
I'm already scared...should I go this or next year....can we anticipate a flood of new retirees next year of which many are being literally forced to leave because of the deep cuts in the COLA. I am not ready to leave teaching but I'd be crazy not to, with this current recommendation of the 5 year 'waiting' period. Simply put over 25 years of retirement I will receive just over $100,000 less waiting until 2013(new rules) than going in 2012(old rules)!
I'm also jittery that once people realize this, there will be 'bubble' of new will that affect the system.....I'm jittery enough already that I've got my hand on the button every retirement forms etc are all complete on my desk at home waiting to be sent in at a moments notice because I don't know what we will hear next.....the anticipation of the changes (good and bad) that retirement will incur aside, it's very heartless and mindless by those in charge to see little if any thought FOR THOSE THAT THEY ARE SUPPOSED TO REPRESENT put into their decisions but rather only trying to protect their own images.
In hindsight (and it's hard to believe I'm saying this because I trusted in STRS), if I had known this 30 years ago and had had the choice of opting out of STRS and placing this money with a financial advisor/company of my own choice I would have done it. My funds would not have been affected by blind self serving political decisions except if they were my own.
John....I've only been getting your feeds for a couple of days but you are doing a world of service to all of those teachers who believed in others so we could worry about kids. What would our kids say if we failed them like this?

Adrian Smith
John Curry to Mike Nehf and STRS Board, January 27, 2011
Subject: Our meeting earlier this past year re. lowest pension amounts and a possible COLA adjustment
Ladies and Gentlemen,
I'm sure all of you recall our small meeting earlier this past year re. what could be done to adjust potential COLA cuts for those pensioners who were receiving very small pensions due to their final average salaries when (most of them anyway) they retired decades ago. We discussed a possibility of modifying the COLA cuts for these most needy (and mostly elderly) among us.
The bottom line was that STRS didn't adopt any provision for a COLA modification for those receiving the least among us and the only possible relief suggested was that an STRS board member mentioned a "charity" fund that some retirees may be eligible for and.... then this issue died.
Well, little did I know that even before this potential COLA cut discussion to modify cuts to these unfortunate STRS retirees, another Ohio public retirement system had already addressed this situation with more creativity and compassion that was forthcoming from STRS. Here, ladies and gentleman, is what another Ohio public retirement system had already accomplished and had related (in writing) to the Ohio Retirement Study Council.
The Ohio State Highway Patrol Retirement System happened to address this very same issue (that STRS just couldn't seem to be able to successfully address) on Sept. 9, 2009....almost one year prior to our meeting at STRS on that warm summer day, didn't they? It's a shame this meeting couldn't have been more productive. It's also a shame I didn't discover these words until today.
John Curry
P.S. Below is how the Ohio Highway Patrol Retirement System successfully addressed this very same problem and a link to the origin of these words.

Thursday, January 27, 2011

You see....when the OHP Retirement System submitted THEIR proposal THEY took into account the least among THEIR lowest-income retirees!

From John Curry, January 27, 2011
Here is the wording right from THEIR (OHP retirement) WEBSITE. I don't see anything mentioned about a "means test" like was pondered by some officials at STRS before they trashed this same concept. Of course, we are just educators and not highway patrolmen (and women) and we should settle for less, right? John
(taken from page 5 of the Adobe download at the website link above)
Decrease the Cost of Living Adjustment (COLA) from 3% to 2%, except for any benefit recipient age 65 and older and receiving a HPRS pension benefit of less than 185% of the Federal Poverty Level (-$26,000). The HPRS Board may authorize a COLA in an amount not to exceed 3% when funds are available according to Section 5505.121, ORC.

So, Ann, where does ORTA stand on yesterday's vote at STRS?

John Curry to Ann Hanning, January 28, 2011
It is apparent, from the news article below and other news articles, that the OEA does "not support the plan." What is ORTA's position on supporting the plan or not supporting the plan?

'Ohio Federation of Teachers President Sue Taylor said the union hadn’t yet seen the details of the plan'

From John Curry, January 27, 2011
Teacher pensions to change?
By Julie Carr Smyth
Associated Press, January 27, 2011
COLUMBUS – Ohio public school teachers would pay a larger share of their retirement costs, work until they’re older and see pension benefits cut under changes approved Thursday that aim to keep their primary pension fund solvent by saving $10.9 billion.
The State Teachers Retirement System board approved a host of changes to the benefit program that serves the bulk of the pension fund’s 470,000 members, more than 15,000 of whom work in Greater Cincinnati. The changes must be approved by lawmakers and the governor.
Spokeswoman Laura Ecklar said the package marks the end of a two-year effort to find a way to keep the pension fund afloat for the long haul. “The bottom line is, without changes, sometime in the future the fund wouldn’t be able to pay benefits. And, difficult as it was to develop this plan and recommend reducing benefits, it is necessary to do,” Ecklar said. “And it still provides a reasonable, reliable pension for our retirees.”
The plan calls for increasing minimum age and service requirements necessary to qualify for retirement benefits and requiring teachers to pay 13 percent of their salaries into the system while receiving reduced benefits and smaller cost-of-living increases. Those payments are made in lieu of paying into Social Security.
Ohio Education Association spokeswoman Michele Prater said the state’s largest teachers union does not support the plan. The union represents about 130,000 teachers, including at least 12,570 in the Cincinnati region.
The STRS board has plenty of company.
Like most public pension systems nationwide, the Cincinnati Retirement System – the only city-funded pension plan in Ohio – faces serious financial challenges.
Heavy losses in the 2008 stock market meltdown, combined with generous benefit enhancements over the years, soaring health coverage costs, retirees’ increasing longevity and other factors, have left the system facing a $1 billion-plus long-term shortfall. Unless major changes are made, experts warn, the $2.1 billion system could be insolvent within two decades.
To stabilize the system, the city’s pension trustees are considering proposals that, among other things, would raise retirement ages, lower annual cost-of-living increases and shift a greater share of health costs to retirees. The trustees are expected to forward their recommendations to City Council for action next month.
Republican state Rep. Lynn Wachtmann, chairman of the House Health and Aging Committee, said Wednesday that he plans to introduce a pension reform bill next week. The legislation is slated to include proposed eligibility and benefit changes to all five of Ohio’s public pension funds.
Gov. John Kasich has signaled he could play hardball on the issue, including opposing pension reforms he does not see as going far enough.
Ecklar said a combination of factors made current pension formulas unsustainable – including the hit to investment losses during the recent economic downturn and longer lives for retirees and their survivors.
Local teachers were wary of the STRS plan.
“Just like with anything else, there’s a lot of fear involved. They’re worried about, ‘How will this affect me when I retire?’ ” said Tim Adams, a sixth-grade teacher at Fairfield Intermediate School and president of the 545-member Fairfield Classroom Teachers Association.
“Personally, I want to be able to retire, and when I retire, to be able to get the money that I invested back,” said Adams. But, “If I’ve got to choose between not having a retirement or a reduced retirement, I’ll take the reduced retirement,” he added.
Some teachers are balking at the prospect of adding years to their expected working careers before they can retire.
“Anyone who has been a teacher or has lived with a teacher knows that it’s an exhausting job,” said White Oak Middle School teacher Melissa Nelson, who is also president of the teachers union local at Northwest schools. She has taught 20 years and had planned for about 10 more. But she’s not sure she’ll stay beyond that if her retirement gets pushed back by five more years.
“Some people may be working up to 60 or 70 years old. But the job is too exhausting for most people to be able to continue it at the same excellence level at that age,” she said.
Ohio Federation of Teachers President Sue Taylor said the union hadn’t yet seen the details of the plan.
The union represents about 20,000 teachers including 2,300 in Cincinnati.
Recommendations approved Thursday would reduce the difference between assets held by the pension fund and what it owes in pension payments to $27.9 billion – an amount the fund could feasibly pay off in the legally required 30 years.
To get there, the board voted to set a minimum age of 60 with 35 years of service as the new threshold for full pension eligibility. Under current rules, teachers can retire at any age once they’ve served 30 years. Members still could be eligible for partial early retirement benefits at 55, but after 30 years of service rather than the current 25.
The new age and service requirements would be phased in over eight years. Members still would be able to retire at age 65 with 5 years of service.
Teachers retiring after 35 years at age 60 or older would receive 77 percent of their final average salary as pension, a reduction from the current rate. The average salary would be calculated over five years rather than the current three, which could reduce payouts further.
The plan does not include any changes to the amount teachers’ employers, including school districts, colleges and universities, pay into it.
Enquirer reporters Denise Smith Amos, Cindy Kranz, Jessica Brown and Barry Horstman contributed.

Leon Knore reports on special 1/27/11 STRS Board meeting

From Leon Knore, January 27, 2011
About 10:30 this morning, January 27, 2011, the STRS Board approved the latest proposal to submit to the legislature for long-term fiduciary and financial stability. This latest proposal replaces the plan submitted by STRS to the legislature back in September, 2009.
Mr. Stein moved, seconded by Mr. McGreevy, that following verification of staff’s calculations by PricewaterhouseCoopers (PwC), the Retirement Board hereby rescinds its long-term fiduciary and financial contingency plan adopted on Sept. 1, 2009, and amended on Oct. 15, 2010, and adopts a plan substantially in conformity with staff’s recommendation presented to the Retirement Board on January 26, 2011 and with the material terms detailed below and directs the Executive Director to submit the verified plan to the Ohio Legislature.
1. Contribution Rate: Additional 3% employee contribution -- for a total of 13% employee contributions -- with a three-year phase-in, plus legislative language authorizing the Board to seek up to a total of 14% employee contributions effective July 1, 2012.
My understanding is that the contribution rate of each active educator which is presently 10% of their pay will be increased to 11% as of July 1, 2012, to 12% as of July 1, 2013, and to 13% as of July 1, 2014. STRS is also asking the legislature to authorize an additional 1% for the future after 2014 if needed. Boards of Education (employers) already contribute the equivalent of 14% of each teacher’s salary to STRS.
The unknown and important influential factor for STRS is that the number of active STRS contributing members has been declining during the past seven years; however, payrolls have continued to increase. Payroll growth, however, has only averaged 2.65% in the past seven years while STRS has assumed that the growth would be 4%.
2. Retirement Eligibility: Phased-in retirement with a minimum age of 60 years and 35 years of service, over the period of Aug. 1, 2015 to Aug. 1, 2023.
Active STRS members may retire at any age and receive “full benefits” with 30 years of service before August 1, 2015. However the new plan for “full benefits” would require the retiring member to be (a) age 56 with 31 years of service as of August 1, 2015, (b) age 57 with 32 years of service as of August 1, 2017, (c) age 58 with 33 years of service as of August 1, 2019, (d) age 59 with 34 years of service as of August 1, 2021, and (e) age 60 with 35 years of service as of August 1, 2023.
3. Final Average Salary (FAS): Five-year FAS effective August 1, 2015.
4. Cost-of-Living Adjustment (COLA): 2% COLA for all retirees effective July 1, 2012; 60-month deferral for new retirees effective August 1, 2012.
The 60 month deferral means that any STRS member retiring after August 1, 2011 will not be eligible for any COLA for five years. (August 1, 2017 at the earliest)
5. Retirement Formula: 2.2 % for all years of service (35 years of service represents 77% of FAS) effective August 1, 2015.
The motion was approved with board members Correthers, Hayden, and Myers voting no.
What is not in the proposal is important such as health care increases or decreases, defined benefit vs. defined contribution plans, retire/rehire policies, or employer pickup of employees’ contributions, or minimum pensions.
Note: the non-black print is/are my comments, not that of STRS.
--Leon Knore

Dave Parshall reports on the STRS vote on the pension solvency plan that will go to the State Legislature

Dave Parshall to CORE members, January 27, 2011

This morning the STRS board approved a plan to send to the legislature that will over time pay down our unfunded liability to 30.00 years. Find the PDF attachment with a copy of plan that was passed. The only three board members voting no were Mr. Myers, Ms, Correthers, and Ms. Hayden.
This vote was preceded by a vote on a motion to eliminate the language that would have given the board the flexibility to increase the employee contribution to a maximum of 4%. The vote was spit 5 to 5 and the motion failed.
The importance of the failure of this motion can't be stressed too much. The board now has future latitude to increase the employee contribution without having to go back to the Statehouse and ask for the authority to permit the increase should it be needed. The danger of having to go back to the legislature is that it could open up an even bigger can of worms.
The language that was included in the approved plan was a very smart political decision. It shows that we are committed to solve our own problems. It also gives the board flexibility to increase and then also decrease the employee contribution. The board does not anticipate the need or has any plans to raise the increase to 4 %.
Our COLA was reduced to 2 % and believe me, it has been a fight these past months to hold it to this. Having watched this process unfold for the past two years, I can tell you that a ton of work by the STRS staff and our board members has gone into the final plan.
In view of the political climate at the Statehouse today and the pressure put on us by the vast media attacks these past two years, we are lucky that the plan is not more harsh. I am fully aware of those of us who have low pensions now and I have started to the process to help these people. Comments were made to me today that we need to find a way to help these people. A number of our retirees have taken a $1000 dollar hit each month to cover their health care cost. Several board members told me today that they are going to tackle health care next. CORE will be involved in this process.
What’s next? There is a chance that the passed STRS plan that will be sent over to the Statehouse may not be exactly what is in the actual bill. CORE will have to see what is in the bill and then develop some talking points and a lobbying strategy.
On February 2, I and several other CORE Officers will be attending the new STRS Champions meeting. I will let you know what comes out of this meeting. CORE members need to thank the STRS staff for their work and board members who voted for this plan.
Mr. Stein and Mr. McGreevy spoke strongly today with well reasoned comments and were a voice for reason. Dale Price, CORE-endorsed board member, likewise over the two day period helped the board make the final decision. Mr. Books also made numerous helpful suggestions and comments.
In my opinion, no board member has evolved more during this process since October than Mr. Hill. He did a lot of soul searching and questioning which eventually led to his vote for this plan. Once again, keep in mind that this plan will most likely not be the one we see in the new bill. Time will tell and CORE will be there.
Dave Parshall, Pres. of CORE

STRS Board votes 1/27/11 on pension solvency plan to present to State Legislature

From STRS, January 26, 2011
This week, the State Teachers Retirement Board held a special meeting. Following meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as sent to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The January report follows.
The State Teachers Retirement Board took an important step to strengthen the financial condition of the pension fund by approving a plan at its Jan. 27, 2011, meeting that will help ensure STRS Ohio can continue to pay pensions to future generations of teachers. The board's plan is projected to save about $10.9 billion in accrued liabilities and does not include any increase in employer contributions. All of the changes contained in the plan require legislative action by the Ohio General Assembly and the governor to be implemented.
The plan's components increase member contributions; increase age and service requirements for retirement; calculate pensions on a lower, fixed formula; increase the period for determining final average salary; and reduce the annual cost-of-living adjustment (COLA) for current and future retirees and defer the COLA for future retirees. With these changes, teachers would receive 77% of their final average salary with 35 years of service. This plan complies with the Ohio statutory requirement to bring the pension fund to a 30-year funding period. Further, the current 1% employer contribution to STRS Ohio's health care fund continues.
The plan includes the following components:
• Increases age and service requirements for retirement.
Age and service requirements for retirement would increase to a minimum age 60 with 35 years of service. (Members may currently retire at any age with 30 years.) This change would be phased in based on the following timeline:
• Age 56 with 31 years beginning Aug. 1. 2015, and retiring by July 1, 2017
• Age 57 with 32 years beginning Aug. 1, 2017, and retiring by July 1, 2019
• Age 58 with 33 years beginning Aug. 1, 2019, and retiring by July 1, 2021
• Age 59 with 34 years beginning Aug. 1, 2021, and retiring by July 1, 2023
• Age 60 with 35 years retiring Aug. 1, 2023, and later
Members may still also retire at age 65 with a minimum of five years of service.
Currently, STRS Ohio members may retire early with a reduced benefit at age 55 with 25 years of service. The service requirement for a now actuarially reduced benefit would be increased to 30 years of service. This change would also be phased in based on the following timeline:
• Age 55 with 26 years beginning Aug. 1, 2015, and retiring by July 1, 2017
• Age 55 with 27 years beginning Aug. 1, 2017, and retiring by July 1, 2019
• Age 55 with 28 years beginning Aug. 1, 2019, and retiring by July 1, 2021
• Age 55 with 29 years beginning Aug. 1, 2021, and retiring by July 1, 2023
• Age 55 with 30 years retiring Aug. 1, 2023, and later
Members may also still retire at a minimum age 60 with five years of service, but the benefit would be actuarially reduced beginning Aug. 1, 2015.
This information may also be viewed as a chart at:
CHANGE IN BENEFIT FORMULA BEGINNING AUG. 1, 2015 - New formula would be 2.2% for all years of service.
Teachers retiring with 35 years of service at age 60 or older would receive 77% of their final average salary as a pension.
The current 35-year enhanced benefit formula would be eliminated. Those who have 30 years of service; who are age 55 with 25 years of service; or who are age 60 with five years of service as of July 1, 2015, would receive the greater of:
(a) The benefit as of July 1, 2015, under the current formula; or
(b) The benefit upon retirement under the new formula.
In short, members who are eligible for service retirement would receive no less of a base pension benefit than they could have received on July 1, 2015.
• FAS calculation would be based on the five highest years of earnings.
Pension benefits are determined by a member's age, years of service and FAS; the current FAS period is three years.
• Beginning July 1, 2012, current retirees would receive an annual 2% COLA; members retiring Aug. 1, 2012, and later would also receive a 2% COLA, but it will not begin until 60 months after the date of retirement.
Currently, the COLA is 3%; both current and proposed COLAs are a fixed-dollar amount each year, not compounded.
• Increase member contributions by 3%, phased in 1% per year beginning July 1, 2012, through July 1, 2014.
Currently, STRS Ohio members pay 10% of their salary to STRS Ohio in lieu of paying into Social Security. In the pension legislation, the Retirement Board will seek language that gives the board discretion to seek up to 4% total in increased member contributions. To achieve the 30-year funding period, the board's plan calls for only a 3% contribution increase phased in over three years. Authority for up to a 4% increase would give the board flexibility to address future funding experience.
Since the board first took the prudent and proactive step in spring 2009 to address its funding challenge, it has sought feedback from its membership, employers and legislators, noting that no actions would be taken lightly as all actions impact Ohio's public educators. Adoption of the steps contained in this plan by the Ohio Legislature would help ensure STRS Ohio pensions continue to:
• Provide a reasonable and reliable income for retired teachers that they won't outlive.
• Provide a stable source of revenue for local economies and provide tax revenues to support needed government services.
• Save taxpayers billions of dollars in potential public assistance by helping to ensure these pensioners will not have to turn to public assistance, Medicaid or social services in their retirement; and
• Help Ohio's schools, colleges and universities recruit and retain quality educators.
The Jan. 27, 2011, Board News can also be viewed as a PDF by clicking the following link:

Wednesday, January 26, 2011

Why would some Board members want to hold up the vote till TOMORROW without offering something BETTER? YOU be the judge!

Report on January 26, 2011 special Board meeting
From Dave Parshall, January 26, 2011
Today at STRS, after much discussion, the board settled on a Scenario that all seemed to be able to support. A motion was made to take the vote. A 7 min. recess was called to allow for the printing of the motion. It appeared that the decision was finally about to be made.
However, after the break, Tai Hayden voiced her concern about the selected Scenario. She said, “I don’t like it; it hits actives too hard." This is a board member that has never asked one question during the months of this process, and made no comments or asked a single question today at all. One has to wonder who she may have called during the break.
In any event, the motion was tabled until tomorrow. Several other board members stated they also wanted time over night to think about the plan. That board needs to finally realize that this plan which was recommended by the STRS staff is the best that we can get and that it is time to act.
Most of the board’s comments up to Ms. Hayden's were really well thought out and right on the mark. The end was disappointing. Time is running out on us.
Dave Parshall

Tuesday, January 25, 2011

A postscript re: Upcoming Board decision

From Dennis Leone, January 25, 2011
What is sad is this: This board is about ready to make a decision and will be telling everyone that the plan's focus is to bring our unfunded liability under 30 years. No one will really understand, unless they read it my report, that the success of the plan will be based on the HOPE that the 4 charts I presented improve on their own. The board, I believe, will dodge this.
The fact that the 4 charts likely will not get better on their own dictates that serious cuts need to be made now affecting actives.......perhaps even eliminating the COLA for ALL new retirees in the future. The board doesn't have the guts to do it, and they likely will further punish us.

More thoughts from Dennis Leone.....

January 25, 2011
I hope a Board member will ask the STRS staff to put together projections for eliminating the COLA for ALL FUTURE NEW RETIREES. We are talking about the current 175,000 active members, which means that the long term impact will be very, very substantial.
Think about how much more money the active teachers are making than current retirees. How many of them even know that they are due to receive a yearly COLA upon retirement? Almost none. Removing it would be "taking away" something they have never had and are not even expecting. If Tim Myers and folks try to imply that active teachers are planning on their COLAs upon retirement, the real truth is that probably 99.9% are NOT. They don't even know it exists. I didn't.
It is very dangerous for the board to adopt a plan that, ON PAPER, solves the 30-year unfunded liability problem, but the truth is that the plan is driven by a quiet, invisible HOPE and a PRAYER that the 4 charts will somehow improve on their own. It isn't going to happen.
A solution is possible and retirees do not need to be slaughtered by it. If the suggestions I offered at the end of my report are used, along with some of the other things the Board has under consideration (i.e. age requirement, and perhaps a 0.5% cut or 1.0% cut in current retirees' COLA, etc.), then the liability problem is fixable.
Dennis Leone

A former STRS Board candidate responds to Dennis Leone's advice to the STRS Board

January 25, 2011
As usual, Leone is right on target. However the STRS board sheep lack the needed nuts to do what has to be done NOW to save the future! The current active teachers would willingly, gladly, go along with a phased-in increase to protect their futures. I suspect the new administration and legislature will eventually DICTATE the future for us, as the economy and dollar continue to decline globally, and they will become the tail that wags the dog.They might be ruthless!
Click image to enlarge.

Nancy Hamant: Where are the actuarial studies for the Board changes?

From Nancy Hamant, January 25, 2011
Dennis Leone's summary of action needed to address the STRS Pension Fund's unfunded liability follows--read and keep it--as you will want to refer to it as legislators address the laws that cover Ohio Public Pension Funds. Also, remember that fiduciary responsibility for the STRS Pension Fund is held by the STRS Executive Director, the STRS Chief Financial Officer and each member of the STRS Board.
The actions of the fiduciaries need to be fair and equitable to all STRS members, both active and retired. Which brings up a question, what part of the Ohio Revised Code permits the direct access that the HPA has to the decision making process of the STRS Board? How is it that the HPA is provided direct access? Have HPA members been made fiduciaries? No other STRS members have such direct access or input. Where are all of the actuarial studies for any of the recommended changes?
Nancy B. Hamant

A postscript re: Upcoming Board decision

From Dennis Leone, January 25, 2011
What is sad is this: This board is about ready to make a decision and will be telling everyone that the plan's focus is to bring our unfunded liability under 30 years. No one will really understand, unless they read it my report, that the success of the plan will be based on the HOPE that the 4 charts I presented improve on their own. The board, I believe, will dodge this.
The fact that the 4 charts likely will not get better on their own dictates that serious cuts need to be made now affecting actives.......perhaps even eliminating the COLA for ALL new retirees in the future. The board doesn't have the guts to do it, and they likely will further punish us.

Dennis Leone: The bottom line

From Dennis Leone, January 25, 2011
Here is the bottom line: The board soon will adopt a plan that will show solvency ON PAPER for the required 30-year unfunded liability period, BUT no one will really know that it will be based on the HOPE that the 4 charts (see the end of my report) somehow will get better on their own. It isn't going to happen, and there will be plenty of hacked-off lawmakers a few years from now when they see it for themselves.
Is it fixable? Yes, but it would require the board to eliminate future COLA payments for ALL new retirees (which currently are 175,000 active members).
Will the board do it? No. Tell me, did any of us even know that we were going to get a COLA until we retired or until we were nearly retired. Active members, for the most part, don't even know that they will get a COLA. A decision to stop it would be stopping something the vast majority of actives don't even know is there.
Dennis Leone

Dennis Leone to June Hughes: Not one board member has suggested a plan that will impact the oldest retirees

Dennis Leone to June Hughes, January 25, 2011
Subject: Re: Thank you
Yes, June, you are correct. It seems as though the Board's top priority now is to stay on good terms with OEA, rather than have a focus to do what's best for retirees.
I am so disappointed in the comments I read from Jim McGreevy and Bob Stein. It also seems that the board is convinced that the best way to fix the current problem is to clobber our COLA instead of having meaningful immediate changes for actives.
You are right, the problem of the 4 charts is already here, and the board is trying to pretend that it is not here. The bottom line is that the board will come up with a solvency plan, then HOPE that the 4 charts will somehow improve on their own so the adopted plan will work. In the meantime, we might get screwed with our COLA.
I think it's embarrassing that not one board member has suggested a plan that will impact the oldest retirees in the least. It's like they think it's more important to protect the future COLA of a 22-year-old teacher who is 30-35 years away from retirement. It's just plain dumb.
Dennis Leone
From June Hughes, January 25, 2011
Subject: Thank you
The trouble is it's already caught up with us - I retired in 1990!!! Why do we in my group have to pay for those who are retiring in the future. We paid for those before us, we now pay in the present (lower COLA, 13th check, higher healthcare payments, etc.) and the board wants us to 'save' the future retirees.
What's wrong with this picture? When do we get to really retire from paying and paying and paying for everyone but ourselves? It's a shame or it should be a shame that 70 and 80 year olds must work somewhere to pay personal bills. As an example, I know of one retiree who works at Costco.
Dennis, keep on keeping on!!!!

Molly Janczyk: Opinion

From Molly Janczyk, January 25, 2011
Subject: RE: Dennis Leone: Upcoming STRS Board Decision: Truth and Reality
I don't think 60 for full retirement with any number of years would work.
60 with minimum of 10 yrs for a much reduced retirement or even 15 yrs for any early retirement. 60-62 for full retirement may be more agreeable as the general public cannot retire until 62 for early and 66 for full benefits edging up for younger workers through Soc Sec. That is a big sticking point with voters that teachers can retire so early in their minds when they have to work much longer. They are resistant to agree to paying taxes to support earlier ages than they can retire. They won't buy arguments that we are more exhausted than they who work in factories or labor or other areas no matter how we word it.
Whether we agree with this or not is no longer the point. I do agree that the past benefits lost are no longer an issue with saving health care and pensions on the table. Discretionary money was available for past enhancements which no longer exists and cannot be afforded at this time. I want my pension and health care preserved over 13th checks and .5% of COLA. Cuts at STRS is not going to add anywhere close to the amounts to preserve those things. BUT, appearances are everything and in such times, streamlining should be very visible to membership for good will and sharing the load. Unfortunately, we cannot change what has been done and I also agree, that working to save the system is urgent and we should all be thinking of how to contribute the safety of all of us and securing the future vs . continuing at this time to stay on the past with no solutions in mind.
Future elimination of COLA for future workers does not save much now as it is not being paid out now. However, it would help preserve future benefits. Now, is the problem for the many reasons listed and heavily due to the economic turns just as our basking in benefits was a result of the upturns of the past. Everyone has lost in this market and most pension systems in trouble. Problem , no visions as to the day when the bottom dropped out. Here are are.
Educators will probably have to pay an additional 5% contribution just as a young educator proposed to the board a few years back IF they want to preserve their future. Upping the employer contribution was really never a viable option as no acceptance ever existed for it. Leone and Lazares long ago wanted a Plan B but were told by OEA that there was no Plan B or it would seem right off that other options existed. Smart, right? That has been the problem for years.
Educators upping their contributions by 5%. Career educators receiving the bulk of benefits regarding COLA, premiums, all out of pocket expenses. A percent withdrawn from checks vs. a dollar amount to ease those with less. The argument is these folks may have additional incomes and this may not be as fair as hoped. Any under a dollar amount annually with all incomes considered, should pay less and those with a higher amount, pay more. A percent would help in this vs. a straight dollar amount - one size fits all.
Bottom line for me: Save Health care and secure pensions. Beyond that, in these times, is all gravy, realistically speaking. We're talking hundreds/thousands of our money to purchase health care or match pensions vs. $40-100 a month for COLA matching. DO I WANT COLA? OF COURSE! I JUST WANT HEALTH CARE AND MY FULL PENSION THE MOST FOR MY FINANCIAL WELL BEING.
We have to be smart about what we say and our figures must be spot on and not passed by amateur economists or pundits with no real basis except elementary figuring and opinion.
Just my opinion. Leone's positions, as always, have foundation and long term solutions are not a must for our pensions and benefits. A think tank with experts is in order. I personally, have had exceptional service from STRS Health Care Dept heads such as Greg Nichols (Dept Head: Health Care benefits )and Greg Wilson (Dept Head Pharmaceutical Benefits)-now gone for Economic reasons for his own family who gave me his number should I have problems with which he can help even being away from STRS. They have both gone beyond any expectation to help my husband manage his multiple health problems. The quality of their professionalism is beyond compare.
Point, many of us are experiencing a lot of support from STRS in many ways. We want to save pensions and health care, period. That is the place we are now facing. Let's get on with some real solutions for current and future retirees and for now, focus on that vs. small fish in our very big tank of problems. Solve the big problems and later, if applicable with an upturn of returns in a solid future should that occur, then, back to the smaller items IF discretionary money ever again is available.
Leone always has foundation for his positions and the rest of us need do the same. Real foundation.
My opinion:
Molly J.

Monday, January 24, 2011

Dennis Leone: Letter to the STRS Board on Upcoming Board Decision: Truth and Reality

Upcoming STRS Board Decision: Truth and Reality
By Dennis Leone
January 24, 2011
Perhaps, since the STRS Board has learned that an increased employer contribution is simply not in the cards (no real surprise there), an opportunity now exists for the Board to correct some mistakes that it made with its first attempt to adopt a pension solvency plan last October.

Of course, the STRS Board almost never admits that it makes a mistake. Since I began researching Board actions in 2002, and while I served as an STRS Board member between 2005 and 2009, I can recall only twice when such an admission was made. The first was former STRS Board member Michael Billirakis (a former OEA president), who admitted publicly in 2004 that the Board should never have spent $875,000 on sculptures. In 2005, new STRS Executive Director Damon Asbury also made an astonishing admission in public: "The Board and the staff have fallen out-of-touch with the membership." It is interesting that such a statement was made in 2005, because 6 years later the same problem has re-surfaced. The current Board is disconnected from retirees like it was in the early 2000s, and this is a fact irrespective of: (A) How the Board interprets its own self-serving member surveys; (B) What the Board hears f
rom an STRS cheerleading club called ORTA; and (C) What the Board is told by a look-the-other-way union called OEA.

The Truth:
1. The Board's decision last October NOT to separate each item for voting purposes was ill-advised and just plain wrong. Decisions pertaining to the solvency of a pension fund affecting hundreds of thousands of members deserve separate votes on each issue so the membership can see precisely where the voting Board members stand. It also was ill-advised to permit an OEA-driven group (which calls itself HPA) to be able to place its desired plan on a formal board meeting agenda for action. This forced Board members to specifically vote yes or no on a plan developed by an outside group. I wonder if the board will allow a group called CORE (Concerned Ohio Retired Educators) to have a formal agenda item that will force the board to vote on a plan that will better protect the oldest retirees who have the least. No, I don't think that will happen.

The truth is that no board - not a school board, not a college board, not a corporate board - allows an outside group to put something on a formal board meeting agenda that will force the b
oard to specifically vote on it yes or no. Discussion items from outsiders are fair game, but certainly not items requiring a vote.

2. The Board's action last October pertaining to a member's Final Average Salary (FAS) calculation was extremely inappropriate. To refresh your memory, instead of the Board specifically voting to raise the FAS calculation from 3 years to 5 years, the Board decided to request language from the Legislature that will permit the Board to alter (without legislative approval) the FAS calculation in future years. This was a meaningless action on the Board's part. All it did was give OEA more time to push for a delay in the activation date for any such change in the future. The Board's upcoming new plan needs to specifically change the 3-year FAS to a 5-year FAS, and the activation date needs to be immediate (2011) instead of phased-in. Don't dare tell me, as Jim McGreevy told retiree Molly Ganz in an 10-18-10 email, that "the (implementation) delays are an attempt to treat teachers nearing retirement in a way that is fair to them as individuals." What did I just read, from an elected retiree rep on the Board? Has the Board always
treated retirees fairly?

Never mind that the current Board supports an immediate cut in retirees' COLA and that previous boards immediately dropped retirees' benefits (like spousal health insurance) with no warning what-so-ever and no phase-in period at all. It is a stunning insult to all retirees for the Board think it's okay to have phase-in periods for changes affecting teachers at the same time the Board is seeking an immediate cut in the COLA. It also is an insult for the
Board for look the other way about prior injustices imposed on retirees with an attitude of "Oh well, we're not responsible for what previous boards did."

3. The famous "drops in the bucket" position of former Board member Jack Chapman is once again alive and well with the current STRS Board. For those board members who lack STRS history, Mr. Chapman -- in response to retirees who were outraged over their pension money being spent on parties, booze, multiple board trips to Honolulu, and giant bonus checks going to 300 non-investm
ent staff members at STRS - said publicly that such were merely financial "drops in the bucket" for a pension system that has billions in assets. (Chapman, like Billirakis and former Executive Director Herb Dyer, was later convicted in court on state ethics violations.) Current board members apparently believe that since changes like the needed FAS alternation noted above represent a "drop in the bucket" that such aren't as important and can be put off. Not doing what is right because it represents only a "drop in the bucket" in terms of savings is another insult to retirees.

4. The Board also refuses to have STRS employees live by the same health insurance decisions it imposes on retirees. The cost savings to STRS, some Board members insist, would be so minimal that it wouldn't significantly impact the system's solvency. As well, the Board is stuck in a fantasy land belief that in order to "attract and keep the best and the brightest" employees, top drawer benefits must be offered. This is pure nonsense and unrealistic. Freezing wages and causing STRS employees to pay more for their benefits often
was one the most difficult tasks I had when I served on the board. There were times that motions I made -- like freezing wages and bonuses in years STRS lost money in the stock market -- died for the lack of a second. It was only until legions of retirees (mostly associated with CORE) complained loudly that anything changed and such actions occurred.

5. The Board is making a huge mistake if a decision is made NOT to stop all COLA payments for new teachers who become part of our pension system after 7-1-11. It does not matter if this will not, in the eyes of board members, produce enough cash savings to correct the solvency problem. It is simply the right thing to do financially. Funny, isn't it, that so many other states are moving in this direction, irrespective of whether it represents a "drop in the bucket." In fact, I will take this argument one step further: If our Legislature, in its infinite wisdom, does something horrible like eliminate the COLA entirely for all current retirees, the STRS Board has no one to blame but itself for such a mess. Why? Ultimately, our future solvency problem could be largely corrected by eliminating the COLA for all future NEW retirees. Oh no, active members on the board like Tim Myers would say. Not us. Don't "take away" something, some Board members believe, that active teac
hers feel they are entitled to receive. Never mind that the current 175,000 active educators in Ohio have never received a COLA. Some Board members and OEA will argue that it wouldn't be fair if current retirees receive a COLA in the future but new retirees do not get to receive the same COLA.

6. Some Board members think it's their business to point out that 8 out of 10 retirees are currently working (at least part time). This, they think, makes a COLA not as imperative. Board member Jim McGreevy even wrote recently: "I do not buy into the notion that pre-1999 retirees are more needy than post 1999-retirees." Really, Jim? What planet have you been living on? Have you checked to see how low the annual pensions are for those who retired before 1999? No Board member seems to acknowledge that active educators, unlike retirees, are in position currently to build up their future retirement. Board member Tim Myers also recently came up with a unwise idea to eliminate the 1% set-aside dollar amount that exists for health insurance. This is the same Tim Myers, who at my last board meeting in 2009, made a formal motion to stop any and all discu
ssion of the bonus check question. The motion failed, but other OEA teachers on the Board were quick in their attempt to support what Myers recommended.

7. The Board majority seems to be obsessed with cutting current retirees' COLA, and to do so immediately. The Board majority also seems to be committed to keeping the active teachers' increase, phased in, at 2.5%. This is extremely shortsighted on the Board's part. The active
teacher contribution rate must be increased at a level of not less than 3.0%, and it needs to be increased immediately. It also is silly for Board members to believe that because a phased-in 2.5% increase would cause an immediate 0.5% increase in 2011 for active members; this makes their situation equal to that of retirees. Furthermore, the ill-advised and very costly 88%-35 year benefit - which never should have happened in 2000 - needs to go, and it needs to go now. It will defy logic if the Board adopts a plan to immediately cut current retirees' COLA at the same time it slowly phases out the sacred 88%-35 year benefit. The 88%-35 year benefit needs to be eliminated now.
The Reality:

The day may come, unfortunately, when our lawmakers review and understand the attached document entitled "Factors Driving STRS Planning Assumptions." The revelation of what the charts say may not occur for several years. When it does happen, they will realize -- and it will be painfully obvious -- that more should have been done in 2011 by the STRS Board to correct the future solvency problems, like changing the FAS calculation from 3 years to 5 years immediately, like increasing active teacher contributions by at least 3.0% immediately, like dropping the 88%-35 year benefit immediately, and like eliminating the COLA for new teachers (and even, perhaps, for all future new retirees) immediately. Why do I write this?
1. STRS Investment Returns - For everything to work (and for our unfunded liability to get below 30 years), STRS is counting on receiving a + 8.0% return on its stock market investments per year. The attached chart shows that over the past 9 years, the average return has been + 5.01% per year. The chart also shows that for the past 7 years, our average return has been + 5.44% per year. At one recent STRS Board meeting, the Board was advised by a paid consultant that it might be wise to lower this revenue assumption to + 7.5%. The Board hasn't done this. It makes me feel that the Board wants to pretend that an + 8.0% assumption is realistic. It is not. Does anyone really think we will receive an average stock market return of + 8.0% for the next 30 years? Isn't going to happen! Is there anyone who does not believe there will be external events that will cause the stock market to drop significantly again?

2. Active Member Payroll Growth - In this category, STRS is banking on receiving increased revenue that assumes an average payroll growth of 4.0% per year in the future. Prior to 2009, the STRS Board even used an assumption of 4.5% in this category. What are the facts? For the past 9 years, the payroll growth of active members has been an average of 3.31% per year, and - worse yet - the payroll growth for the past 7 years has been a dismal 2.65% average per year. Yet we are banking on receiving at least an average of 4.0% per year. It isn't going to happen. Hundreds of school districts are currently freezing base raises and are permitting only experience "step" increases of about 2.0% to occur. Some school districts, like the Cincinnati City Schools, also have recently elimina
ted the automatic "step" increases that teachers expect to receive. Times are changing, and the STRS Board's thought process about payroll growth needs to change too.

3. Total STRS Active Members - Between 1927 and 2003, the number of active members in STRS increased consistently each year. Something happened in 2004 that no one wants to talk about. The active membership started declining, from its peak of 179,944 in 2003 to 173,327 in 2008
. In that five-year time span, active membership at STRS dropped by 6,617 persons. In 2009 and 2010, the active membership at STRS climbed by 2,515, causing some Board members to think that this category is on the rebound. The board needs to be made aware of the fact that the slight rebound of the past 2 years likely will be short-lived. To begin with, the increase of 2,515 likely was driven by increased numbers of charter school teachers (who are generally paid less than their public school counterparts), by part-time public school employees, and by university employees. There is nothing to suggest that the number of public school active members will be increasing in the immediate future. The opposite is true. In fact, the Ohio Department of Education is acknowledging for first time that there is an overall decline in the number of public school students in Ohio.

4. Total STRS Retiree Members - This is the one category where things are extremely consistent. In the past 9 years, the number of STRS retirees has grown by 27,803. The data shows that yearly, the number of new retirees increases about 3,475. There is no reason to believe this will change. The scary part of this picture is the fact that in 2003, there were 108,294 retirees and 179,944 active members, which meant that retirees represented 37.6% of the combined total. In 2010, retirees represented 43.1% of the combined total. This trend, assuming that it continues (and there is little to suggest that it won't) is a recipe for future significant financial decline at STRS. If these two charts ever meet, and the number of retirees starts surpassing the number of actives, we are in big trouble.
In March of 2007, after the Board and STRS staff published reports announcing that "pensions are secure" and that the desired 30-year unfunded liability likely would be achieved by 2009, I published my disagreement and opposition to such statements. My comments were met with distaste by my fellow board members and staff. Even OEA President Patricia Frost-Brooks later criticized me publicly at a Board meeting for not being an STRS team player. Ten months before the collapse of the stock market, I wrote:
"My point simply is this: Absent a continuation of great investment returns, we will not be able to offset the realities - if they continue - of the other three areas (active member payroll growth, total active membership, and total retiree membership) shown above. I am hopeful my fellow board members will be agreeable to approve a contingency plan to minimize the negative impact of a significant stock market downturn."
The Board didn't want to hear this. Recently, Board member Jim McGreevy even wrote: "We were happy to accept the pre-2008 reality was sustainable." Someone needs to ask Jim who he means by the word "we." The bottom line, it appears, is that what the Board pretends to be reality becomes reality, even when it later proves to be massively flawed. McGreevy also recently wrote: "Individuals who are retired, to this point in time, contributed to the unfunded liability by not making adequate contributions." That's right, Jim, blame retirees, not the decision makers - the STRS Board and the STRS Staff.

It is interesting that recently, Board member Bob Stein wrote: "I know we would be dealing with a more sympathetic executive and Legislature if educators and other public employees had been more attentive and active." Wow, what a statement! Is that the responsibility of Susie Smith, a 25-year-old teacher, or her union leaders and the OEA-dominated STRS Board? CORE tried, Bob, month after month at Board meetings, to wake people up. Had you been there, you'd know. I tried too, Bob, in early 2007, ten months before the stock market downturn, but no one want
ed to listen - not my fellow STRS Board members, not the STRS staff, not ORTA, and not OEA. It was more convenient to pretend that things were getting better, even when the facts (see the attached charts) suggested a different story.

Things can be fixed now, but not until the STRS Board understands how important it is for the final plan to increase the 3-year FAS to a 5-year FAS immediately, to increase the active contribution by at least 3.0% immediately, to dump the 88%-35-year benefit immediately, and to eliminate the COLA for newly hired teachers (and possibly for ALL future new retirees) immediately. The future and the realities of the 4 attached charts mandate that the final Board plan contain the
se elements.

Dennis Leone
STRS Board Member, 2005-2009
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