Saturday, May 12, 2012

Hey, Ann Hanning, meet your counterpart for OPERS retirees, Bill Winegarner.......he doesn't sound like you!

From John Curry, May 12, 2012
Because pension provisions are carved into law, it can be difficult to change them, particularly for workers already vested in the systems and retirees already out the door.
Seven states — Maine, New Jersey, Rhode Island, Oklahoma, Colorado, Minnesota and South Dakota — have taken steps to cut back cost of living allowances for current retirees. That prompted a string of legal challenges from retirees who argued that the Cost Of Living Adjustment was a contractual benefit. Courts in Colorado, Minnesota and South Dakota ruled against the retirees and cases are pending or on appeal in Colorado, Maine and Rhode Island, according to Brainard.
“An automatic COLA is a surprisingly expensive benefit provision and it is becoming more expensive as longevity improves,” Brainard said. The COLA is a big lever for the Ohio systems. “If you effect only new hires, it takes much longer to generate any savings.”
Bill Winegarner, of Public Employee Retirees Inc., which represents 62,000 retirees in Ohio, said, “Those people who retired under the COLA deserve to retain the COLA because you can’t change the law after the fact. So, our position on the COLA for current retirees is: No change.”
He stopped short of saying that PERI would file a lawsuit over the COLA reductions.

Changes to public employee pensions the most sweeping in state history
By Laura A. Bischoff, Tom Stafford, Brandon Smith-Hebson and Jeremy P. Kelley, Staff Writers
May 12, 2012
COLUMBUS — The looming changes to Ohio’s four largest public employee retirement funds represent the most sweeping pension overhaul in state history and the first time that 1.7 million government workers and retirees would see significant cuts to their pension benefits.
Retirees will see their cost of living allowances cut and workers will be told to put in more years, pay more money into the system and accept a lesser benefit at the end of a long career, if the bills become law.
Pension officials, who have been begging lawmakers to take action for nearly three years, say the changes are needed to shore up their finances for the long haul and to allow them to avert drastic cutbacks in health care benefits for current and future retirees.
Stock market losses, people living longer, generous benefits and crushing health care costs are driving the need for reforms. Without changes, the systems would eventually run out of money to issue monthly pension checks.
Locally, many public sector union leaders and managers — who also pay into and benefit from the system — understand the need for change. But they don’t hesitate to describe the impact of incentivizing retirement.
“Because of the (proposed) changes, some of our truly great educators are having to get out of the business before they had otherwise wanted,” said Kathy Richison, president of the Springfield teachers union.
The same sentiments are echoed in other publicly-funded sectors like work in county government.
Without changes, Ohio Public Employees Retirement System would slash its annual spending on retiree health care to $500 million, from $1.6 billion, beginning in 2014, said OPERS Executive Director Karen Carraher.
“No one is extremely happy with all the changes, especially those affecting them. However, most retirees understand the STRS’ financial situation. And they are accepting and supporting the proposed plan,” said Ann Hanning, executive director of the Ohio Retired Teachers Association, which has 30,000 members. “We know that some things must change and the sooner, the better for all members of the system.”
The five pension systems are: Public Employees Retirement System, State Teachers Retirement System, Schools Employees Retirement System (non-teachers), Ohio Police and Fire Pension Fund and the Highway Patrol Retirement System, which is not impacted by the reform bills.
The bills would require active teachers to contribute 14 percent of their pre-tax income to the retirement plan, up from the current 10 percent. A teacher making $60,000 would have to plan for $2,400 per year less once the change was fully phased in.
Employees of city or county governments would need to work 32 years instead of 30 to retire at age 55, and with only five years’ service, an employee would have to wait until age 67 to retire.
Clark County Administrator Nathan Kennedy said that when the legislature discussed pension changes last year, “some of the employees that had their 30 years plus decided to leave.”
As a result, “we lost a lot of employees and a lot of institutional knowledge.”
If that happens again, “we’d be losing some good employees,” Kennedy said.
If there is a silver lining, he said, it is the potential cost savings and the opportunity to reshape the county work force for changed circumstances. The cost savings would come from the generally lower salaries of newly-hired employees and from positions left unfilled.
Ohio Senate gets the ball rolling
Ohio Senate President Tom Niehaus, R-New Richmond, and Senate Minority Leader Eric Kearney, D-Cincinnati, introduced four pension reforms bills, one for each of the four largest systems. Niehaus said he hopes the bills will go to the Senate floor for votes this week.
The bills are likely to stall in the Ohio House, where key members are urging their colleagues to wait for a consultant’s report to double check the numbers and changes being pitched by the pension boards. State Rep. J. Kirk Schuring, R-Canton, a member of the Ohio Retirement Study Council, said, “I think we should do something this year. Hopefully, we’ll be on the same page and on the same path sometime later this year.”
Lawmakers are scheduled to recess from June through the November election. The House may take up pension reform after lawmakers return in November.
How do the programs work?
Like most states, Ohio’s public pensions are defined benefit systems. The pension benefit is based on age, years of service, final average salary and it is guaranteed, regardless of how well-invested contributions performed over the course of the worker’s career.
Defined contribution plans, such as 401(k) funds, are more common in the private sector. The employer and worker contribute to a fund over the years, but the amount in the retirement nest egg when the career ends isn’t guaranteed.
Public employees in Ohio do not participate in Social Security.
Some fiscal conservatives are disappointed that lawmakers aren’t pushing for a switch to a defined contribution plan or a mandatory hybrid between the two types of plans.
“By many measures, the retirement benefits received by government workers in Ohio, on average, are more generous than those received in the private sector,” said Andrew Schwiebert of the Buckeye Institute, a conservative public policy think tank. He told state senators that Ohio could save $3.3 billion over 30 years by establishing a defined-contribution plan.
But others say a direct comparison can’t be made between some risky, stressful public-sector jobs — like those in public safety — and the whole of the private sector.
“The robberies, the burglaries, the assaults, the homicides, the car chases. Anything ... that would make your adrenaline and your stress levels go up, the average person doesn’t deal with those on a daily basis,” said Andrew Scott, president of the Springfield Fraternal Order of Police.
“I’ve seen a lot of (police officers) retire, and when they get close to that retirement age, they look worn out,” he continued. “They look a lot older than they actually are. Then a short time after their retirement, they look younger. They’re less stressed, and it’s visible.”
Ohio’s proposed changes are in step with reforms recently adopted by other states. According to the National Conference of State Legislatures, 41 states have enacted significant pension reforms in the past two years. Those changes have included:
• boosting employee contribution rates;
• increasing age and service requirements;
• stretching out the final average salary calculation;
• adjusting cost of living allowances, according to NCSL.
“Legislatures around the country have been acting (on pension reform proposals). Ohio is one of the few states that hasn’t acted yet,” said Keith Brainard, research director for the National Association of State Retirement Administrators.
In Ohio, public pension benefits are not bargained in union contracts or crafted by the systems’ boards. Instead, they are prescribed by state law.
In a multi-billion dollar pension system, there are certain levers that officials can move to make projected revenues match projected expenses: contribution rates, age and service requirements, final average salary calculations, and cost of living allowances.
Under the new Ohio proposals, police and fire employees would have to contribute more money to their retirement, with the increase from 10 percent to 12.25 percent phased in over three years. That’s an impact of $1,000 to $2,000 per year for most officers.
City of Springfield Personnel Director Jeff Rodgers said retirements from the Fire Division were “a little bit larger” last year, when changes were under consideration. But he said those retirements also were driven by provisions of Senate Bill 5, which eventually was repealed by voters.
Rodgers said any effect of the deliberations in Columbus this year has been “fairly sparse” and limited to people who are “right on the fence” about retiring.
He added the situation could change “if it becomes law.”
David Estrop, superintendent of the Springfield City School District, said he thinks teachers and other school personnel are waiting until legislation actually passes to make decisions on whether to retire.
In the past two years “we’ve seen an increased number” of retirements as the legislature has considered changes in the retirement systems, he said.
“I think the information is just in the process of getting out to everyone” about what new legislation may bring. “I suspect we will know over the next couple of weeks” what will happen.
COLA, or no COLA?
Because pension provisions are carved into law, it can be difficult to change them, particularly for workers already vested in the systems and retirees already out the door.
Seven states — Maine, New Jersey, Rhode Island, Oklahoma, Colorado, Minnesota and South Dakota — have taken steps to cut back cost of living allowances for current retirees. That prompted a string of legal challenges from retirees who argued that the Cost Of Living Adjustment was a contractual benefit. Courts in Colorado, Minnesota and South Dakota ruled against the retirees and cases are pending or on appeal in Colorado, Maine and Rhode Island, according to Brainard.
“An automatic COLA is a surprisingly expensive benefit provision and it is becoming more expensive as longevity improves,” Brainard said. The COLA is a big lever for the Ohio systems. “If you effect only new hires, it takes much longer to generate any savings.”
Bill Winegarner, of Public Employee Retirees Inc., which represents 62,000 retirees in Ohio, said, “Those people who retired under the COLA deserve to retain the COLA because you can’t change the law after the fact. So, our position on the COLA for current retirees is: No change.”
He stopped short of saying that PERI would file a lawsuit over the COLA reductions.
While the pension reforms may seem drastic, Ohio is known for prudent stewardship of the public retirement systems, Brainard said. Unlike other states, Ohio has five state-run systems rather than a patchwork of locally run funds and Ohio has never skipped making the mandated employer contributions into the pension funds.
“I think that the systems are perceived to be well-run and the Legislature for the most part has been very responsible in funding them,” Brainard said.

Thursday, May 10, 2012

Charts, charts and MORE charts!

You'll see a lot about STRS income and outgo as it affected you in the past, is affecting you now, and will affect you in the future! Click here and scroll down. May 10, 2012

eUpdate from STRS re: pension legislation

From STRS, May 10, 2012
Pension Legislation Introduced, Stakeholders Testify in Support
Monday, the Ohio Senate unveiled four pension reform legislation bills co-sponsored by Senate President Tom Niehaus (R-New Richmond) and Minority Leader Eric Kearney (D-Cincinnati). The bill that addresses STRS Ohio's pension reform initiatives is Senate Bill 342. Click here to view thePension Plan Reform Update document that contains details of the STRS Ohio plan to strengthen the financial condition of the retirement system.
At a hearing to introduce the bills on Tuesday afternoon, Sen. Niehaus thanked the pension systems for helping to advance the legislation. He thanked the co-sponsor noting "how important pension reform is for all members of the Senate," and added, "Protecting the retirement incomes and health benefits of public employees is not a partisan issue."
Later in the session, STRS Ohio Executive Director Michael Nehf, along with the executive directors of the School Employees Retirement System, the Ohio Public Employees Retirement System and the Ohio Police & Fire Pension Fund provided testimony to the Senate Insurance, Commerce and Labor Committee in support of the bill. Mr. Nehf's testimony acknowledged that "without changes, STRS Ohio will eventually be unable to pay benefits" and that "the State Teachers Retirement Board's action was taken to uphold its fiduciary duty to the members and retirees of our system." Furthermore, he stated that the "pension reform plan maintains a 1% employer contribution to the health care fund and allows the Retirement Board to continue working on a long-term strategic health care plan." Click here to view his complete testimony, which is also available on the STRS Ohio website.
Wednesday, the Senate Insurance, Commerce and Labor Committee heard further testimony on the pension bills, including testimony from STRS Ohio constituents in support of S.B. 342. Ohio Senate leaders had previously told STRS Ohio that they wanted to see broad constituent support for the system's reform plan before taking action. Supporting testimony acknowledged that while the changes are difficult they are necessary to strengthen the financial condition of the retirement system.
Sen. Kevin Bacon (R-Minerva Park), committee chairman, has indicated there will be another Senate hearing on the pension reform legislation bills on Tuesday, May 15. STRS Ohio will continue to use its website, newsletters and email news service to provide timely updates about the progress of this important legislation.

STRS calls special board meeting for May 15

From STRS, May 10, 2012
PUBLIC MEETING NOTICE
A special meeting of the State Teachers Retirement Board will be held at 1:00 p.m. on Tuesday, May 15, 2012, for the purpose of discussing Long-Term Fiduciary and Financial Contingency Planning, pension reform legislation and any other matters that may arise. The meeting will be held at the STRS Ohio offices in Columbus, Ohio.

My, my...something I forgot to mention......

From John Curry, May 10, 2012
Remember how, when STRS was considering (several years ago at a meeting that CORE members and I attended with Michael Nehf and several board members) but not applying the 1% COLA cut to those retirees with very low annual retirements but...in the end......didn't develop the compassion that the Highway Patrol did with their lowest pensioned retirees? Remember how STRS was "concerned" about how the STRS pension was possibly not the only income that these lowest retirees had? I do!!!!!!!
Here's the point ...Col. (Ret.) Rice and the OHP DIDN'T BRING UP THIS "ONLY SOURCE OF INCOME" ARGUMENT WITH THEIR HUMANE SOLUTION TO THIS PROBLEM...DID THEY" Gee...I wonder why not?

John
See Col. Rice's comments here.

Wednesday, May 09, 2012

STRS board to meet May 16-17, 2012

From STRS, May 9, 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:
Wednesday, May 16, 2012
 ...10 a.m. Disability Review Panel and Final Average Salary Committee (Executive Session)
Thursday, May 17, 2012
 ...9 a.m. Audit Committee Meeting, followed by Retirement Board Meeting
The Retirement Board meeting will come to order on Thursday, May 17, 2012, and begin with a Report From the Investment Department followed by the Executive Director's Report, public participation, Long-Term Fiduciary and Financial Contingency Planning, a Report From the Member Benefits Department - Health Care, routine matters, old business, new business and any other matters requiring attention.
John Curry: Just talked to Col.(Ret) Tom Rice of the Ohio Highway Patrol Retirement System and obtained some interesting facts.
From John Curry, May 9, 2012
...about THEIR COMPASSION for THEIR RETIREES WITH LOW RETIREMENT INCOMES.
Col. Rice related that there are approximately 1,500 retired OHP Retirement System trooper benefits recipients. Of that 1,500 retired troopers 203 of them are receiving a pension that is below the "poverty line" of $27,990.50 (see letter below). He said of those 203 that 170 of them are age 65 or over.
I thanked him for his system's COMPASSION for these retirees and also advised him that STRS has thousands of retirees in this same situation AND THAT STRS (UNLIKE THE OHP) DID NOT EXEMPT THEM FROM THE 1% COLA cut. Believe me...he was aware of that also! NOW IS THE TIME TO CONTACT YOUR REPRESENTATIVE AND LET HIM/HER KNOW ABOUT THIS INEQUITY. Remember....THEY WON'T MAKE A DECISION UNTIL AFTER THE ELECTION IN NOVEMBER.
John 
Tom Rice to John Curry, April 23, 2012 
Subject: RE: COLA cut
John,
Good morning. I saw your question regarding the qualifiers for older retirees and wanted to get back to you with an answer. Below is the proposed language contained in HB 69. The 2012, Federal Poverty rate for a family of two is $15,130.00. One hundred and eighty-five percent of: ($15,130.00 X 1.85) = $27,990.50. As it is proposed right now, OSP [Ohio State Patrol] retirees (age 65 years or older - see below) earning less than $ 27,990.50 per year will continue to receive a 3% COLA. We feel pretty comfortable that this provision will remain in the proposed legislation. I hope this answers your question. If not, please call me. 614-430-3553 or cell phone [xxx].
(a) For each person sixty-five years of age or older who is receiving a pension not greater than one hundred eighty-five per cent of the federal poverty level for a family of two persons, as revised annually by the United States department of health and human services in accordance with section 673(2) of the "Omnibus Reconciliation Act of 1981," 95 Stat. 511, 42 U.S.C. 9902, as amended, the board shall increase the pension by three per cent.
(b) For persons other than those described in division (B) (1) (a) of this section, the board shall increase the pension by two per cent, except that for any calendar year in which the actuarial valuation required by section 5505.12 of the Revised Code demonstrates that a period of thirty years or less is required to amortize the state highway patrol retirement system's unfunded actuarial accrued pension liabilities, the board may increase the pension to not more than three per cent.
Take care,
Tom
Col. (ret.) Thomas W. Rice, Consultant 
Highway Patrol Retirement System
614.430.3553 
 trice@ohprs.org

Tuesday, May 08, 2012

Foot dragging by Ohio's legislators is costing Ohio pension funds $2 million per day?

From John Curry, May 8, 2012
....and they've been delaying for at least two years now? Let's see...what is 365 days X 2 years X 2 million dollars per day?
John 
Ohio public pension changes get moving in Senate
By Julie Carr Smyth, AP Statehouse Correspondent 
May 8, 2012
COLUMBUS, Ohio (WTW) — The Ohio Senate has fast-tracked legislation stabilizing Ohio's public pension funds, with both parties supporting passage of four landmark bills as early as next week.
The Ohio House is unlikely to move the bills until at least summer, as lawmakers there wait for results of a state-commissioned study on the retirement systems.
Republican Senate President Tom Niehaus (NEE'-hows) and Senate Democratic Leader Eric Kearney said Tuesday that it's time to move the bills. The funds are losing as much as $2 million a day during the delay.
The bills contain fiscal adjustments in premiums and payouts that officials say are necessary to secure retiree benefits long-term for teachers, firefighters, police and other public workers.
Ohio has some of the largest public pension funds in the nation.

Thank you, CORE members.....

.....for your participation with the anti-public educator Buckeye Institute website re. teacher pensions. Even this favorite website of the Teabaggers failed to muster any significant challenge to your comments listed at the end of the anti-public pension article. Here is the link to that article and your comments at the end of it! You make me proud!
John
From John Curry, May 7, 2012
Larry KehresMount Union Collge
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