Monday, April 23, 2012

Message from CORE president Dave Parshall

CORE members and supporters:  Some thoughts from CORE president Dave Parshall
By now you have had a chance to review the plan passed last week by the STRS known as Scenario "8", and its financial impact on all of us. Some additional information may help us all deal with the changes. First, since 2009 I have been telling CORE members and others who would listen that if all that happened to our pensions was a 1% reduction in our COLA, we would be lucky.  There was and is a severe financial crisis at STRS.  If deep corrective measures are not enacted then by 2040 or 2050, STRS would not be able to pay pensions. Due to politics, the first plan sent over to the Legislature via the ORSC [Ohio Retirement Study Council] was never enacted, which made our financial problem even deeper. 
All five state pension systems have been given a final opportunity to resubmit their plans for reform.  The Senate wants this done by early summer.  Yes, I know this is another in a series such deadlines STRS has been asked to meet since 2009.  This will likely be the last one. The staff at STRS came up with ten different scenarios.  Scenario "8" was the most fair to all stakeholders of the STRS membership, both actives and retirees.  I personally supported this plan, but only if an adjustment could be made for older, 30 year teachers with low pension at or below $30,000.  I, Marie Fetters, and Dennis Leone made impassioned pleas last Thursday during Public Speaks at STRS. There was little support for this change to the plan, and it passed unanimously "as is" by the board and now is on its way to the legislature. 
Our two retiree board members, Mr. Stein and Mr. McGreevy, made comments before the vote pointing out the hardships to older retirees.   Dennis Leone during his address to the board pointed out that if the "board was made up of all retirees then the vote would be different". However, this is not the current reality.  Maybe someday there could be at least an even split on the board.  Now that Scenario "8" is the plan, more information may help you come to grips with cuts to our COLA. 
First you need to know that both Bob Stein and Jim McGreevy have been working behind the scenes since 2009 to come up with a plan to help protect our older retirees from the cuts.  But there was no consensus of like support from fellow board members and or especially the members of Health Care Pension Advocates.  OEA and the university representatives by sheer numbers control the HCPA and have the power to influence the board.  ORTA, as we know, is a "go-along-to-get-along" organization and has never taken a stand on any issue truly affecting retirees.  That is why CORE has been needed all these years.  It was reported to HCPA via ORTA that retirees were fine with the changes to COLA and because few if any questions were asked at RTA presentations. 
HCPA and the STRS board could have found a way to account for the older retirees, but lacked the will or support from their membership.  It's easy for all of the stakeholders to look at the plan and concentrate on their own status.  I had hoped that money could have been found to help the older retirees by tweaking some of the other aspects of the plan, like reducing the phasing in the change of the retirement age and years of service.  However, it was reliably reported to me that it was the legislature that pressured for this perk for actives because actives have been ringing their phones off the wall.  So this was off limits and I am sure OEA would have a hard sell with actives for a shorter phase in period. 
We need to remember that actives are taking a hit also.  They will be paying 14% of their salary into STRS over their remaining career and they will work until 60 or beyond to have 35 years of service. They will not have a COLA for 5 years after retirement, and then it will be a 2% COLA.  Actives will never see a 3% COLA that we have had since our retirement. Also keep in mind that when the 88% rule was enacted, current retirees also got a boost that refigured our pension above the 2.2 factor that actives will now have.  The FAS will be figured over 5 years instead of 3 as ours was.  I see this as not that big a deal because most of them will have been at the top of the salary scale for many years before retirement. 
How many times, after reading the headlines about how public education and teachers are under attack, have we all said "boy I am glad I am no longer in the classroom"?  I know I have.  The move to end public education and privatize it has teacher morale at an all time low.  Many teachers are planning on leaving the profession as soon as the economy picks up.  Just this week Cleveland, Cincinnati and Columbus announced that they will be cutting hundreds of teachers. Class sizes are growing making their jobs more difficult and teacher evaluation is becoming a nightmare. This will affect the STRS retirement fund and eventually our pension. 
So, what do we do now?  We as retirees need to go to our RTA meetings and ask the leadership why members' input about the plan was not requested via their website or maybe even a mailing to all members.  They sure can mail us information about membership renewal. 
Next we need to wait and see what happens to the plan once it gets to the Senate.  CORE will keep you posted.  Certainly, when it goes to the House, we will need to meet with members of the House. I still say that if all that happens to our pensions is the 1% COLA reduction, then we will be lucky.  Keep in mind that we may have to reluctantly get behind Scenario "8" because there still are members of the legislature who have not given up on the Defined Contribution plan for future retirees which will really drain the pension fund.  As of now we have preserved our Defined Benefit pensions. 
One last thing: when you can, thank Bob Stein and Jim McGreevy for trying to fix the problem.  CORE will be making plans for action as the new issues develop. 
Dave Parshall
Larry KehresMount Union Collge
Division III
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