Monday, July 16, 2012

STRS knew this 17 years ago...

From John Curry, July 16, 2012
....but they certainly didn't heed their own advice, did they?
Back in 1995 (5 years before STRS approved the 88%/35 years "sweetener" to retiree benefits) the STRS produced a book entitled The Story Thus Far......STRS at 75. This book was 173 pages long and was a compilation of STRS' history up to the year 1995.
If one would read the final chapter. entitled "Here Comes Tomorrow" (pp. 151-155), they would find the following advice given by the same agency which (5 years later) failed to heed their own advice. So...what "advice" am I talking about? is an excerpt from "Here Comes Tomorrow":
Effect on Health Care
......."Coupled with longer life expectancy and the resulting rapidly escalating health care costs, STRS payouts for health care are expected to grow by more than five percent each year, quadrupling through the next 25 years. This will increase demands on the pension system to fund this benefit and may force increasing the amortization period for unfunded liability and decreasing the funded ratio. Investment portfolios will have to be modified to meet new goals. And the current two-percent-of-payroll contributions allocated for health care will almost certainly need to be increased."
......."These are all problems future STRS managers must solve."
So....did they follow their advice? At the time the above words were put to print STRS was contributing twice as much (2%) as they currently are contributing towards our health care (1%). Five years after the words in script above were placed on that page STRS passed an 88%/35 years rule at the expense of funding health care coverage for ALL retirees.....didn't they? The STRS Board, at that time, didn't seem to mind, did they? Weren't many of the members on that board the same ones who were later convicted of criminal violations of the Ohio ethics laws?
P.S. Cut the 88, we can't afford to wait!
Larry KehresMount Union Collge
Division III
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