Dennis Leone, candidate for STRS Board, in his own words

Dennis Leone

The March 2013 issue of STRS Ohio News was enclosed with each ballot for the election of two candidates for the retired seats on the STRS Retirement Board. Profiles were given for each of the four candidates, along with Significant accomplishments and each candidate’s responses to three questions. Below is the information provided on Dennis Leone, by Dennis Leone. The election runs April 4 - May 6, 2013, with votes to be tabulated on May 11.

~  ~  ~  ~  ~

DENNIS LEONE: Retired, Lancaster City Schools, General Sherman Junior High School Principal, 2009-2010; Ohio University-Chillicothe Branch, Pre-School Child Development Center Director, 2005-2008; Chillicothe City School District, Superintendent of Schools, 1997-2004; Talawanda City School District (Oxford, OH), Superintendent of Schools, 1984-1997; Liberty Center Local School District, Superintendent of Schools, 1981-1984; Preble-Shawnee Local School District, Assistant Superintendent, 1980-1981; Initial Public Education Employment: Alexandria City School District, Alexandria, VA, 1974-1980. Current member: STRS Committee of the Buckeye Association of School Administrators; Ohio Council of Professors of Educational Administration. Past member: Elected member of the STRS Board of Directors (2005-2009); Legislative Chair, Ross County (Ohio) Retired Teachers Association; Legislative Affairs Committee Member, Buckeye Association of School Administrators.

Significant accomplishments: In 2003, published a 13-page report on how the STRS Board was spending pension money irresponsibly on things like parties, booze, lavish Hawaii trips, and giant bonuses for hundreds of STRS employees. These findings triggered significant reform at STRS. Several newspapers formally recognized my research. In 2007, successfully advanced several new policies while serving as an elected STRS Board member that provided new oversight for Board member expenditures and STRS contracts desired by the staff.

Why do you want to be a member of the State Teachers Retirement Board?

I wish to be a voice on the STRS Board to protect retirees' COLA and health care. The newly adopted pension solvency plan that was signed by the governor has a provision that concerns me greatly. The language gives the STRS Board the legal authority to reduce our COLA in the future without legislative approval. I testified against this language provision at the Statehouse before the law was passed, and I learned that neither of the retiree members on the STRS Board formally objected to the new language. Interpreted literally, this provision will give a future STRS Board the ability to put more money in the pockets of active teachers (by, let's say, lowering their annual contribution rate) and pay for it by reducing a retiree benefit. STRS boards in the early 2000s made decisions that favored active teachers or STRS staff over retirees.

One example was the adoption of the ill-advised 88%/35-year benefit around the same time the board eliminated the 13th check for retirees and health insurance subsidies for retiree spouses. Can these types of decisions happen again? Yes, unless enough board members object to it. Board decisions have not always been as sensitive to retiree concerns as they could have been and should have been. The COLA simply should not have been cut for the very oldest retirees who have the least. Many provisions in the new pension solvency plan (like increasing the minimum age for retirement and raising the final average salary from three years to five years) should have occurred ten years ago to make the financial picture at STRS better today.

When I served as a board member in 2005-2009, my fellow board members were not interested in developing a contingency plan to mitigate a possible future downturn in the stock market. I also recall, when I served on the board, I was the only member who was dependent upon the STRS health insurance plan. I found myself always asking the STRS staff to seek ways to help retirees. While the board has tone to great lengths to have generous phase-in periods for future pension system changes that affect current active teachers, changes adversely affecting retirees have never been phased in. They have always been immediate in nature. Grandfathering current STRS retirees has never been seriously considered. STRS Executive Director Damon Asbury admitted publicly in 2004 that the board and the staff had lost touch with the membership in the early 2000s. This cannot happen again, and retirees need a stronger voice on the board. In fact, there should be more than two retirees on the 11-member STRS Board, and I hope to pursue legislation that will cause this to happen.

What do you see as the role of a State Teachers Retirement Board member?

The role of the STRS Board is driven by Ohio law. It stipulates that board members are to prudently discharge their duties “solely in the interest of the participants and their beneficiaries,” and for the “exclusive purpose of providing benefits to the participants and their beneficiaries.” While I believe that a reasoned, collaborative working relationship between board members is in everyone's best interests, such must translate into board members doing everything they can to protect retirees. Before a vote is taken on any issue, Board members need to always ask: “How will this action impact retirees, and will it affect retirees adversely?” Asking this question has not always been a priority in past years.

Board members must work collectively together, and cannot take a “hands-off” approach when it comes to governance and financial decisions. It is true that board members must always desire to attract and retain highly qualified employees at STRS, but board members also have a responsibility to be realistic about the individual contracts, salaries, and fringe benefits that are provided to staff. I have found that board oversight in this area is critical to ensure that salaries and investment staff bonuses are not excessive, and that spending abuses do not occur again. Further, when retirees are forced to pay more for their health insurance, for example, so should all STRS employees, on a proportional basis. I wrote in 2003 that the STRS staff – with over 700 employees – had become bloated. I feel that fiscal responsibility prevailed when I served as a board member in 2005-2009. The staff size at STRS now is more reasonable, standing at less than 600 employees.

How would you prioritize the key issues that the State Teachers Retirement Board should focus on?

Board priorities in the future, in addition to those listed above, need to include the development of a meaningful contingency plan to deal with a future stock market downturn and other related economic realities. It is likely that the pension solvency plan recently signed by the governor will need adjustments, and probably before 2018. The future steps that are taken must protect our pensions, our COLA, and our health care. In the immediate past, the STRS Board and staff have not used realistic revenue assumptions for STRS. The staff knows this now and has recently lowered them, after resisting to do so for years.

Stock market returns likely will not be as high as we'd like them to be in the future, the total number of active teacher members likely will continue to go down (while the number of retirees will continue to go up significantly), and active teachers likely will not receive the annual salary increases at the same rate they received 10-15 years ago. In fact, more and more school districts in Ohio are currently dropping their automatic “step” increases for teachers. All of this spells a problem for STRS. I wrote prior to the stock market fall in 2008 that these trends commanded the STRS Board to develop a contingency plan and realize that absent fantastic stock market returns, STRS would be in trouble from a revenue standpoint in the future. My focus as a board member will be to work with fellow board members and the staff to develop a meaningful contingency plan in the immediate future, given the economic realities that have been very obvious. In short, retiree advocacy needs to be Job #1 for all 11 STRS Board members. My 84-year-old mother-in-law is totally dependent upon the STRS pension and the COLA she receives. I remind myself of this fact on a frequent basis.