RH Jones: Retired teachers gave fair share already

From RH Jones, April 13, 2012
To all:

When our HC/Rx was cut, that insured that we retired teachers already have done our share to keep STRS in the 30-year funding standard. Cutting our COLA is being unreasonable to us. Yesterday while attending the Medina CRTA meeting, a representative of STRS mentioned that there is some consideration to make the goal 32-years rather than thirty. As you know, our supplemental check, commonly known as the 13th check, is awarded on a very fair to all retired teachers when the 30-year standard is met. This check helped us older retired teachers keep up somewhat with inflation.

Once before, I have mentioned that there is a ploy to keep from issuing to us this end-of-the-year check when it is most needed. I wonder, has the STRS officials turned their backs on retired teachers, especially those who have been out for 25-years or more, to favor active teachers who, up to this point have given up nothing. I do not think that this is being envious of the active teachers. Up to this point they have escaped their share of STRS support. It is obvious that the group really escaping its responsibility is the employer - It has been around 25-inflationary years since they had an increase in their contribution to the STRS.

To want to cut our retired teachers simple COLA at this time is unconscionable. This cut in our COLA is paraskevidekatriaphobia (Friday the 13th) thinking. In the Beacon, 04/13/2012, page B6, they mention: “Supermarket prices for 16 basic food items rose 6.9 percent in the first quarter from the year earlier.” Considering coupling this with the inflationary HC/Rx costs and gasoline; it is surely true that we 25-year pensioners are hurting.

RHJones, a proud CORE member

The unkindest cut of all....the COLA cut!

From John Curry, April 13, 2012

Some are forgetting that retirees are losing a very significant amount EACH YEAR with this proposed COLA cutting plan. This is critical to understanding retirees' losses.

The active teachers are still teaching and have affordable health insurance, we retirees DON'T! We need these lost amounts (COLUMN A-B) to help us pay, especially for medical expenses, as our STRS insurance has high premiums (only to go higher) and high deductibles (only to also go higher) and minimal coverage (only to become more minimal and watered-down just so STRS can claim they furnish health insurance).

If we don't complain, who else is going to go to bat for us? Remember, we only have 2 "retiree" board members on the STRS board and several supposed retiree organizations that certainly aren't going to bat for us at this time. If you think they have gone to bat for us then please send me an article from ORTA or OEA-R that contains the COLA information, like that which is presented below, to their membership so that they can also understand the beating that they are about to take.

Politicians only listen to retirees who complain; if they hear no complaints, they think we will be happy with a 1 year freeze at 0% followed by a 2% COLA for the remaining years. Other states are placing some of this burden on teachers who have yet to be hired into the profession with additional cutbacks so that they know before entering the profession what to expect.....Ohio could also do this.... but won't. Maybe it is about time they did.

Also keep in mind that there are, contrary to what STRS (at one time) even denied existed, thousands of retiree benefits recipients with original pensions between $20,000 and $30,000. Think of the beating they will take with their meager pension payments. The Ohio Highway Patrol retirement system is making exceptions for some of their lowest pension recipients and excluding them from the COLA cut, why can't STRS? Some will not agree with what I have said above....so be it.

I will not lie down and roll over.....will you?

John

Column A shows what is received with current 3% COLA
Column B shows what is received with one year COLA Suspension and then 2% COLA for the following years.
Column A - B (A minus B) shows how much is lost if the new plan is adopted.
ORIGINAL BENEFIT is $40,000
3% COLA = $1,200
2% COLA = $800

A $40,000 pension and the effects of a COLA change from the current 3% (Click image to enlarge.)

A – B shows a LOSS of $30,000 in only 10 years. That is $466,000 - $436,000 = $30,000

OR

ADD all the YEARLY LOSSES in Column A-B to obtain the same figure: $30,000

Dennis Leone: Impact of COLA suspension

From Dennis Leone, April 12, 2012

IMPACT OF COLA SUSPENSION

I wish to weigh in on some things I have read recently regarding how a one-time COLA suspension would affect retirees. I checked with STRS staff yesterday to make sure my understanding was correct. Here is where things are, if the STRS Board suspends retirees' 3% COLA payment for one year, then ALSO reduces the COLA to 2% in future years:

If a teacher retired 10 years ago with a $40,000 pension, he/she has been receiving an uncompounded $1,200 COLA payment (3%) per year -- that applies only to the base $40,000 pension amount. This means that the retiree's current pension is $52,000 (10 X $1,200 + $40,000). If the COLA is suspended for one year, said retiree's pension would remain at $52,000 for one year because he/she would not receive the annual uncompounded $1,200 in Year 11. This is ALL the retiree loses due to the one-time suspension of the 3%. If the Board action is to provide a 2% COLA for the future after the one-time suspension, this means that said retiree's pension would increase each year by $800 instead of $1,200. In this illustration, the retiree's $52,000 pension would rise to $52,800 in Year 12, then rise to $53,600 in Year 13, and $54,400 in Year 14....and so on.

I think what many retirees are arguing is this: If the Board implements a one-time complete suspension of the 3% COLA, AND implements a 2% COLA effective one year later, the $40,000 retiree (who is now receiving $52,000) would receive zero in Year 11, then $800 in Years 12-20. The total impact if BOTH board actions occur translates to said retiree's total pension after 20 years becoming $59,200 instead of $64,000. A $64,000 pension for a $40,000 retiree, of course, assumes that nothing would ever change over the next 10 years and that all retirees somehow would still receive an uncompounded 3% COLA per year forever. This is not realistic.

All things considered, I believe we all realize that our lawmakers will require nothing less than a 1% reduction of the COLA long term. Given this certainty, I feel it is fairer for a $40,000 retiree to consider his/her "loss" from the one-time total COLA suspension as $1,200. Yes, said retiree will not receive another $4,800 over 9 years after the suspension due to a new 1% COLA reduction in subsequent years. But didn't all of us honestly expect a 1% reduction to happen anyway? The delay in implementing a 1% COLA reduction, and the fact that active teachers also are not yet paying more to STRS, have exacerbated the long-term solvency problem. An STRS Board member could argue, for example (if a new 2% COLA does not kick in until 2015) that the one-time suspension of the 3% COLA was a "catch-up" for the 3 years that our COLA remained at 3%. I certainly thought that a 1% COLA reduction would be in effect in 2011 or 2012.

The delay in a Legislature-approved final plan also will make it necessary for active teachers to have a locked-in 14% contribution rate in the future (which will match a local school board's 14% contribution rate). The previous Board plan -- which I argued did not go far enough -- did not lock in anything above 13% for active teachers. Also, a minimum retirement age of 60, plus the permanent elimination of the 35-yr/88% benefit, will become a reality. Politics will prevent the latter being eliminated as quickly as it should, which represents another complaint I have with the current plan. It always seems okay for the Board to make changes that IMMEDIATELY impact retirees, but not so when it comes to changing something affecting active teachers, like the 35-yr/88% benefit. OEA/OFT always will urge the Board to delay, delay, delay when it affects active teachers. I have never heard OEA/OFT suggest anything like that when it comes to the plight of current retirees.

Finally, I am of the opinion that while it is good that the Board's plan will do away with the 3-year final average salary (FAS) that establishes a retiree's baseline pension, and change it to a 5-year FAS, the FAS really needs to go to 7 years at some point in the distant future. (The Board will realize this as well at some point in the future, especially if the stock market goes south again.) A 7-year FAS in the future, in my mind, also would enable the board NOT to change the COLA status at all for the 30,000 retirees who retired with a pension of less than $30,000. These are our oldest retirees who have the least. There is a void of support for these individuals, and it always has been that way. It is wrong.

Dennis Leone
Former STRS Board Member (2005-2009)

STRS Board to meet April 19, 2012

From STRS, April 11, 2012

PUBLIC MEETING NOTICE

The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:

Thursday, April 19, 2012

...8 a.m. Staff Benefits Committee Meeting

...9 a.m. Retirement Board Meeting

RH Jones: Active teacher voter registry part of job evaluation?

From RH Jones, April 11, 2012

To all:

As the November election will be here faster than we can imagine, I would like to resend to you my message below. It is to remind union leaders and active teachers to do what has to be done to get teachers registered to vote. Boards of Education should not employ teachers who lack the civic responsibility to register to vote. Yes, today any citizen can easily find out if you voted, or not. Our public school system is being threatened with extinction by the far-right who now control our Ohio government and is financed, by wealthy individuals and corporation in our state and out, in such as groups as the American Legislative Election Commission (ALEC). Therefore, not to vote is writing your own termination of employment one way, or the other.

Further, for any promotion to public school administrator, in addition to background checks, voting registry should also be included in the promotion consideration. In my opinion, if you do not care enough to vote, how can you be considered to be a leader of American professional educators whom, all of them, must include teaching the American way in every aspect - whether it is the 3-Rs, history, science, physical education, art, or music. Better yet, teachers and administrators who run for political office and are elected in that capacity, and back Ohio Public School District education, should be awarded with the highest job evaluation by their respective Boards of Education. Such individuals should be held in the highest honor for setting such an example of responsible civic leadership to the youngsters and educators in their charge. All citizens will be better off in the spin off of prosperity that parallels education for all.

RHJones

Subject: Re: Active teacher voter registry part of evaluation?

To all Union Leaders and their Members: 16 May2011

While professional retired public school teachers have no tangible penalties for not voting, union leaders should call in each those active public school teachers, who are not registered to vote, to advise them of the importance of their voting as a responsibility of union membership protections.

We in the public school system are unfortunately sometimes at the mercy of cynical politicians who want to destroy public schools; therefore, it is imperative that all members get registered to vote. In order for a teacher to have the enthusiastic backing of the union representation at evaluation time, or when their employment is in jeopardy, they need to know that a major part of being a professional teacher union member is voting for traditional education friendly politicians.

As the end of the 2010-2011 school year comes to a close, it is evaluation time for each educator. To find if union members are registered to vote, or not, you leaders can find if they are registered by logging on to: www.co.summit.oh.us/election Click the “Voter Information” tab, then click “Voter Registration Lookup”; Type in the name, click “Details”. I have written in my Summit County in the above as an example; just write in the county where the individual resides.

Certainly teaching students American Democracy throughout the grades Pre-K-16, of course at different levels and techniques, requires professional teachers to set an example for students by voting. In last November’s election, surely if all active educators had taken the time to do their duty by researching political candidates and then voting for education friendly political candidates, the traditional public schools systems would not be so threatened today. Unions, or if you would rather call them associations, need to crack down and get tough on non-professional educators who cannot take the time to support their school systems by voting.

Union leaders need to “earn their keep” by enforcing this vital activity that is so crucial for Ohio’s children and their teacher’s livelihood. The alternative to not voting last November is now known to all: We would have knowledgeable representatives in office that fully support traditional public school district education had all professional educators voted. Our present tragedy would have been averted. We cannot let this happen ever again. A professional teacher VOTES!

RHJones, a retired teacher

LOSS of INCOME due to COLA CUTS

From Mario Iacone, April 9, 2012

COLA CUTS - $$$$$

While reviewing the following chart, please keep in mind that COLA ACCUMULATES YEARLY.

THIS YEAR'S COLA increases your pension this year and every future year.

Also, if you have any questions with the following figures, please ask STRS to review them for accuracy.

COLA CUTS are a SIGNIFICANT REDUCTION IN FUTURE PENSION BENEFITS

PLEASE REVIEW THE CHART [Click to enlarge]

Lifetime income is substantially reduced with any yearly reduction in COLA.

The above estimates only represent cuts from reducing the COLA to 2%.

Income lost by a one year COLA SUSPENSION is NOT INCLUDED in the figures. To factor the COLA suspension, multiply your COLA by a given number of years and add it to the above.

For example, if your Yearly COLA is $1,000. 5 x $1,000 = $5,000 income loss over five years. Add that $5,000 to the appropriate five year loss listed on the chart.