OUR pension funds and....Josh, why did it take you this long?

From John Curry, March 20, 2012

http://www.plunderbund.com/2012/03/20/slow-to-react-mandel-waits-14-months-to-take-action-against-bank-accused-of-scamming-ohio-pension-funds/

Slow to React – Mandel waits 14 months to take action against bank accused of scamming Ohio pension funds

By Ben On March 20, 2012

The first Board of Deposits meeting Josh Mandel has attended since being elected Treasurer ended up being a newsworthy event. Not because Mandel finally decided to do his job, it was because of the actions he took during the meeting.

Mandel announced yesterday that he had formally replaced two banks charged with fraud that were contracted to manage $41 billion of international assets held by Ohio’s four largest public pension systems. According to the Dayton Daily News, the banks Mandel is replacing have bilked the State of Ohio out of $16 million dollars already. The Board moved to transfer the management of these assets to two other banks yesterday.

Now, before we throw Mandel a parade for finally doing his job, the first question that should be asked is why did it take 14 months for this to happen? These accusations of fraud were made in August of 2010 by none other than candidate for Treasurer Josh Mandel. During Mandel’s campaign against then Treasurer Kevin Boyce, Mandel attacked Boyce for investing state assets with State Street Bank, one of the banks removed yesterday. At the time, State Street Bank was being sued in California for charging the state’s pensions too much in fees.

Naturally, one would assume that once he was elected Treasurer Mandel would rush headfirst into investigating these banks and protecting Ohioan’s investments. Well, that didn’t exactly happen. After being elected Treasurer Mandel waited 6 months to ask Ohio Attorney General Mike DeWine to formally look into these allegations. And then no further action was taken until yesterday.

The question that people should be asking is why didJosh Mandel sit ideally by for over a year while taxpayers’ money was being abused? Before Josh Mandel can claim that he is some kind of crusader against fraud that is working to protect the investment of Ohio school teachers, fire fighters, and police officers, why was he asleep at the wheel and let these abuses continue for almost 15 months? Mandel can’t take credit for stopping fraud yesterday he knew was happening 14 months ago.

Let’s not kid ourselves, Mandel recently caught a lot of flak for his refusal to do his job and then flying to the Bahamas to raise campaign funds from the pay day loan industry. While, yesterday’s announcement may have been made by the Treasurer’s office; it was also a campaign decision done to help push the focus away from Mandel’s recent missteps and on to another issue.

Mandel shouldn’t be applauded for doing his job; he should be questioned about why it took him so long to figure out how to do it in the first place.

Evangelize!

RH Jones re: Defined benefit pensions

From RH Jones, March 19, 2012

To all:

Please read the attachment below. This is part of the start of the nationwide attack on our delayed compensation state pension.

It seems to me that the public thinks that our pension is supported by taxpayers. Our pension is our money that we honorably negotiated during our career employment which was established by our elected public employers and our Ohio State Teachers Retirement System (STRS). Our STRS was formed way back in 1920 by the public, legislators and teachers working together to form a modest retirement income for teachers. This was done in the American spirit that honors those whom have worked the productive years of their lives to educate Ohio's youths. Our STRS has survived through WWI, WWII, the Korean War, the Vietnam War, and the numerous wars since then. It has also survived the Great Depression, the Great Recession; and, with the help of the legislature, it has somewhat survived inflation of the dollar, until now. It has been 25 years since the Ohio public legislature has boosted their share of the employer compensation to the STRS. Without an employer increase in their contribution, retired teachers have been left with a diminishing value of their pension. Increased health care costs brought on by inflationary medical expenses. These have been far beyond normal inflationary rate in those 25 years. The simple non-compounding 3% Cost of Living (COLA) allowed by the legislature early in 2008 helped, but in no way could keep retirees up with inflation as they paid out higher bills caused mostly by increases in taxes, food, fuel, transportation and, of course, medical.

Cutting out the pension's defined benefit is not the answer either. Defined Benefit pensions pour billions into Ohio's economy, and would pour ever more if the public pensions could keep up with inflation; however, private Defined Contribution pensions, that many far-right conservatives are advocating, would pour even less into the economy -- as research has proven. That type of pension would, therefore, not be able to add such billions to the Ohio economy. It would just help the few businesses whom would be offering financial advice. Over the years businesses come and go but the Defined Benefit pension "stays the course" and helps to smooth the financial ups and downs of our free economy.

The capacity of the middle class - of which retired teachers, due to their personal training expenses and responsibilities, should have a part, has been diminished by the super rich. For instance, the Akron Beacon Journal recently published the salary of the Goodyear Chief Executive Officer (CEO). In his last contract he gets over $12 million for the year. Also, tax cuts for big local, state, national, and international businesses have been rampant of late; but no tax cuts for retired teachers, or other retired public middle class workers. Factory and retail workers working in many businesses have been held down from their share of business profits in order to supply CEOs with income that is far too enormous for their work contribution. Many university CEOs of both private and public universities are doing the same. This is at the expense of their students, and taxpayers, whom are paying out more toward public university tuition.

Personally, I can understand some of the comments of the financial adviser below; however, the fault is not with state pensions. Before I retired I hired a financial adviser to help me with my financial situation. But as the middle class has shrunk in numbers and income, there is now less money available to purchase the talents of financial advisers, or other small businesses. But please do not expect to gain business by depriving a proper retirement from those retired teachers who taught you.

RHJones, a concerned retired teacher

http://my.opera.com/BobbyMack/blog/2012/03/05/pension-retention-will-be-sent-to-detention-or-the-golden-goose-is-wearing-a-no

Pension Retention Will Be Sent To Detention or, The Golden Goose Is Wearing a Noose

March 5, 2012
By Rob McClain

Public employee pensions are promises made by people who never have to fulfill them. Pension fund managers are the promise-keepers. They balance risk and return by using demographics, life expectancies, and asset allocation to provide paychecks for life.

Public employees expect a comfortable retirement after a period of service. Their pension plans are about to have train wreck. According to StateBudgetWatch.org, “at its current level of tax collection, Ohio would need to devote 8.75 years of tax revenue to pension funding simply to catch up on already-made promises.” Forget funding for roads, education, Medicaid, or ANY other program, including new state employee benefits and salaries. The pension monster needs all your money, Ohio.

Public employee unions absolutely intend to send us the bill for their pension plan’s underperformance. Their members can and will engage in whatever intimidation is necessary to get what they want from every school board, township trustee or Governor of the state. Think SB5; was there anyone on the side of taxpayers in that argument other than Governor Kasich? Union money poured into advertising to scare voters into making what will be one of the most ill-advised decisions in fiscal history.

So, how did this happen? Pension funds invest in financial instruments that stabilize their returns so the portfolio (The Golden Goose) can generate tomorrow’s paycheck for life (The Golden Eggs). The pension system goose was never built to handle the confluence of disasters that is dashing the dreams of public and private pensioners. Any one of these “waves” could be survived by a careful and cautious fund manager. But not any three…and certainly not all six:

Wave 1: The Federal Reserve’s near-zero interest rate policy for a more than a decade.
Wave 2: The finance industry’s of use derivatives to leverage their profits.
Wave 3: The 40% crash in the stock market in 2008-2009.
Wave 4: Collapse of the housing market and the “fraud-closure” aftermath.
Wave 5: Destructive demographics: workers are retiring too soon and living too long.
Wave 6: More than 70% of retirees will require long term care during their last years.

This column lacks the space to explain each item at length, so let’s pick just two:

The Federal Reserve intends to keep interest rates near zero (Wave 1) until at least 2014. At a time when pension funds need to shore up funding in a big way, returns in fixed securities are stagnating. You can’t run uphill on a treadmill, and pension managers know it. They must break promises, change retirement rules or wait for union leadership to browbeat money out of taxpayers.

Pension funds loaded up on mortgage-backed securities (Wave 4) beginning in the 1990’s because of the asset’s AAA ratings and steady returns. With a plague of “walk-away” homebuyers, how is that working out for pensions? About as well as electing a community organizer as President.

Thanks to the federal government’s recent “fraud-closure” settlement between major banks, the Justice Department and 49 state attorneys general, the banks are allowed to reduce the balances of millions of mortgages, driving down the value of the bonds held by pension funds, as well as the income they receive from holding the assets. Bottom line: public pensions will shrink. The private sector is in no better shape. The S&P 1500 is staring at a pension under-funding obligation of $484 Billion. Does anyone honestly believe that union leadership under isn’t going to lash out and demand that taxpayers pony up?

Again, look to the streets in Greece, where the government has had to cut benefits. Rioters there think that they have a solution: burn the cities until someone cries “Uncle”. Union leaders in Wisconsin and Ohio whipped members into a frothing-mouthed frenzy over contributing more money to their own retirement and medical insurance costs. Teacher unions in New Jersey savaged Governor Chris Christie over a one year pay freeze and 1.5% salary contribution toward insurance costs. The head of the Bergen County teachers’ union sent an e-mail asking members to pray for his death.

My hope is that future pensioners will sit down and make a plan for individual financial security. If you don’t make a plan, I promise you that your fund manager has one for you. The plan manager starts by saying, “We will not honor the promises we made” and ends with you saying, “Welcome to Wal-Mart”.

Fallacies about teachers

From John Curry, March 18, 2012

http://www.ocala.com/article/20120318/OPINION/120319723

Fallacies about teachers

Realities of profession show smarts don't make cents

By Jim Touchton
Special to the Star-Banner
March 18, 2012

According to a report in Florida Today, the Florida Legislature, supported by the American Legislative Exchange Council (ALEC), plans on portraying teachers as "overcompensated underachievers" in an apparent effort to continue dismantling Florida's public school system, replacing it with corporate-run, for-profit, public charter/virtual schools.

Another report, co-sponsored by the Heritage Foundation and American Enterprise Institute, concludes teachers are overpaid, underworked, not as smart and receive better benefits at lower cost than nonpublic employees.

Malarkey! I'll use personal career experience to debunk this travesty of intelligent reasoning.

First, a brief biography. I have an electrical-engineering degree and worked in private industry for 24 years. I have been a teacher for seven years, a union member since day one and a part of Marion Education Association's leadership for six of those seven years.

I have seen the best and worst of both worlds and offer an inside perspective, not some data collected third-hand and analyzed by third parties with an ax to grind.

The crux of the above delusion seems to be ALEC's passion to: force reduced spending on public education; increase cash flow into privately held, for-profit charter schools; increase virtual schooling, effectively removing the need for brick-and-mortar facilities (forcing parents at all economic levels to provide facilities and technology) thereby "virtually" eliminating any class-size cap or teacher-student ratio.

Here are some examples showing these greed-induced fantasies, and misanalysed conclusions are as useful as a screen door on a submarine.

Fallacy No. 1: ALEC believes "digital learning," virtual schooling, improves education.

There is no evidence to suggest online courses are better than live classes. They are cheaper, and you get what you pay for. I have seen students fail online classes because there is no motivation or mentorship to guide unmotivated students to perform. Some students report accepting payments to take virtual courses in another student's name. That can't happen in the real world.

Fallacy No. 2: ALEC believes teachers' total compensation looks good when divided by the number of contracted hours.

This one may be true, but I have yet to meet a good teacher who only works during contracted hours. For example, I am contracted for 1,519 hours per year. Last year alone, I worked more than 2,260 hours. Almost 49 percent nonpaid overtime! I averaged around 10 percent overtime in the private sector, so who's underworked here?

Fallacy No. 3: Workers moving into teaching see a 9 percent wage increase; those moving out of teaching see a 3 percent wage decrease.

Excuse me, my wage change moving into teaching was a staggering 40 percent-plus decrease. Without reference to context or type of job change this is meaningless. How did they measure education students working as servers who graduated and moved into teaching? How did they measure teachers retiring and taking a "fun" job to keep busy without regard to pay? No mention of extra hours for fundraisers, tutoring, planning, recertification, etc. — all "off the clock."

Fallacy No. 4: Teachers have generous health benefits.

My portion of family-coverage health insurance premiums went from $60 a month with a private company to $620 a month with the public school system. I hope the insurance company enjoys my generosity.

Fallacy No. 5: Teachers enjoy considerable job security, worth an extra 1 percent of wages.

Job security? Under Florida law, all teachers hired after July 1, 2011, are "probationary" forever. No matter what their results or rating, they can be given any reason for dismissal, appropriate or not — they're "just not needed." This doesn't count the 50 percent-plus dropout/turnover rate within the first five years, or the 10 percent of teachers laid off in recent months. I feel better about my 48 percent-plus salary decrease now.

Fallacy No. 6: Teachers are not subjected to equivalent education rigors and "not as intelligent" as other professionals.

Using average GPA of education majors (3.65) versus "hard science" majors (2.88) to "prove" teachers do not receive as rigorous an education and are "less intelligent" (based on SAT scores) is bunk. My college GPA is 3.49. Based on my SAT scores (from 1975) my IQ is 127. We see countless examples of second-career "hard science" folks coming into education — only to run off because the challenge of good teaching is more about reaching students than good science.

There are other fallacious arguments, but I believe my point is made. Are all teachers "highly intelligent?" Are all teachers good teachers? Arguably not! But neither are they the overcompensated intellectual midgets recent maleficent data conspirators claim.

Just because someone has "Ph.D." behind or "Congressman" in front of their name doesn't mean they know what they're talking about.

Jim Touchton is the Advance Placement physics teacher in the EMIT magnet program at Forest High School and the second vice president of the Marion Education Association.

RH Jones: OEA-R, ORTA and ALEC

From RH Jones, March 18, 2012

John Curry and all:

As I see it, OEA-R has not mentioned ALEC yet either. Gee, I wonder, are our dues money going to waste as they are paid out for salaries for failing directors and expenses for transportation for them to paid- for-dinners where they talk to the choir? Public education is at the wall. When will they awaken? Financially well off "Tea Baggers" seem to be heading the Board of ORTA; and active teachers are the main concern of the OEA-R. Are the retired teachers left to fend alone without help for which they pay dues?

Against the likes of ALEC, if the leadership lacks the skills or desire to battle them for our delayed compensation pension, will they be so kind as to step down?

RHJones