Thought for Today.....

NO other Ohio pension system pays out at the rate of 88.5% Final Average Salary for 35 years work....they all (except STRS) pay 77%......so, the solution IS VERY EASY for STRS...immediately stop offering 88.5% and drop it back to 77% for 35 years! Stop penalizing current retirees with additional COLA cuts!

John Curry

Another editorial in the Dispatch re: Ohio STRS

http://www.dispatch.com/content/stories/editorials/2014/01/20/pension-needs-adjustments.html

Short takes: Pension needs adjustments

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Dispatch editorials express the view of the Dispatch editorial board, which is made up of the publisher, the president of The Dispatch, the editor and the editorial-writing staff. As is the traditional newspaper practice, the editorials are unsigned and intended to be seen as the voice of the newspaper. Comments and questions should be directed to the editorial page editor.

Monday January 20, 2014

News that Ohio’s State Teachers Retirement System is even more off the mark in meeting its future obligations should prompt immediate action, not a wait-and-see, fingers-crossed approach.

In November, a consultant hired by the fund said it would take 36.1 years for the system that serves almost 500,000 current and retired Ohio teachers to pay off its unfunded liabilities. That meant that the fund was out of compliance with state law, which requires that public pension funds be able to meet their obligations within a maximum of 30 years.

But now, the situation has gotten even worse; the consultant, Segal Co. of Chicago, made a miscalculation during last year’s actuarial study. The funding period actually now stands at 40.2 years.

Because STRS already was out of compliance at the 36.1 years, its board is to present a corrective plan to the Ohio Retirement Study Council by Feb. 24. It should take into account the new projections and work to comply with state law. It is possible that members might have to take further benefit cuts or make higher employee contributions.

The state mandate isn't arbitrary. It is a protection for Ohio’s public employees, assuring them of the financial security they are counting on when they retire.

While Ohio’s retirement funds are not in immediate danger, others around the country have gotten into serious trouble by waiting too long to address unhealthy trends.

This four-year error is only a serious problem if the retirement system fails to take it seriously. Making adjustments today can ward off far more painful adjustments later.

For lawmakers or board members of any legislature or board!

Keep your hands off their pensions!

From John Curry
December 9, 2013

http://www.nytimes.com/roomfordebate/2013/12/05/the-public-pension-problem/pay-retirees-the-pension-benefits-what-theyve-earned?emc=eta1 

Pay Retirees What They’ve Earned 

Dean Baker is an economist and the co-director of the Center for Economic and Policy Research. 

December 5, 2013 

Cutting pension benefits amounts to taking away pay from workers after they already put in their work. If governments feel the need to take property, they should look for wealthy victims. But, of course, the Wall Street folks who bear much of the blame for the problem seem likely to get away unscathed.

Governments aren't seizing properties sold too cheaply or reclaiming tax breaks to arenas and businesses. Why take back workers' money?

Much of the underfunding dates to the 1990s stock bubble, when many pension managers made minimal contributions because the stock market run-up was financing their funds for them. The bond-rating agencies green-lighted this practice, effectively assuming the bubble would grow ever larger. (Some of us knew better.) Wall Street types engorged themselves on fees  from these funds, taking money that could be used to pay retirees. 

Once governments got in the habit of not making contributions, they found it hard to break when the bubble burst. Illinois and Chicago went a decade without making required contributions. The collapse of the housing bubble devastated state and local revenue, while increasing expenses, making the obligations harder to meet. 

Still, in most cases, the unfunded liabilities are not nearly as large as has often been claimed and can still be met. For example, I've calculated that Chicago’s unfunded liabilities are around 0.6 percent of the value of future income over the next 30 years.The figure is comparable for the state of Illinois. These sums are hardly trivial, but presenting them in this light is not as scary as simply reporting that tens of billions of dollars are owed, as those pushing cuts are prone to do. 

Taking care of these obligations could mean some increase in taxes, which is inconvenient, but this is money owed. As with the federal debt ceiling, another source of scare mongering, the place to deal with the problem is when the commitments are being made, not when it is time to pay up. 

In the case of Detroit, there will be no choice but to have the state intervene as it already has in appointing a city manager. The city is a creation of the state. Under its constitution, which requires pensions be paid, it is difficult to see how the Michigan can avoid taking responsibility and paying the pension obligations. 

The crucial point is that employees worked for these pensions. They are not a gift from the government; they were part of their pay package.Governments are not looking to seize properties that may have been sold at too low a price or to reclaim tax breaks and incentives to sports teams and other businesses that may have been too generous. Why do so many people on the political arena think it’s a good idea to take back the money that workers have already earned? 

That says a great deal about politics in America today.

STRS (especially Jim & Bob), are you listening?

(Click to enlarge)

NO other Ohio pension system pays out at the rate of 88.5% Final Average Salary for 35 years work....they all (except STRS) pay 77%......so, the solution IS VERY EASY for STRS...immediately stop offering 88.5% and drop it back to 77% for 35 years! Stop penalizing current retirees with additional COLA cuts!

John Curry

Dave Parshall: A message to Mike Nehf

From Dave Parshall

January 18, 2014

Hi, Mike, long time since you heard from me. I assume you remember me. I always tell folks that you were always honest and up front with me.  Please read a message we sent out to all our former CORE members and to McGreevy and Stein who are supposed to represent retirees. 

You know, Mike, it does not make sense to keep hitting retirees especially the older retirees, like me, now, who don’t have the large pensions that retirees do today. Certainly it makes no sense in terms of fairness to still allow the unearned 88%/35 year pensions that continue to cost us money on the backs of the older lower pension retirees. At this point I feel if you got the 88% you don’t need a COLA for at least ten years or even ever unless our fund is below the 30 years unfunded liability.

As you and the Board try to find an answer to the mistake made by the accounting firm, please keep these thoughts in mind. I know greed pervades our society these days, but OPERS always seems to be fair to their older retirees while STRS seems not to be able to find a spine to do so. Oh yes, OPERS doesn’t have an OEA telling what to do.

I hope all is well, Mike. 

Best,

Dave Parshall

Bob Jones: Some words about the ad hoc raises and an open letter to ORTA

Bob Jones to Kathy Kienle

January 16, 2014

Subject: Re: Bob Jones on: Re: An open letter to Ann Hanning

Kathy,

If my memory serves me correctly, the last periodic ad hoc raise on our base was approximately 1998. [Another retiree writes "Bob, I do not believe we have had an Ad Hoc raise since 1989 or l990. I know that I missed it and I retired in l992!] It was especially good to those who had been retired the longest. My personal opinion, as to the reason for the delay in this needed base raise, is politicians that undervalue the benefits of public education and our OHSTRS officials that forget writing checks to retired teachers is the reason our OHSTRS was established in the first place.

Bob Jones

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From Bob Jones

January 16, 2014

Subject: Bob Jones on: Re: An open letter to Ann Hanning

To all ORTA members:

Just to remind ORTA members that every 15 to 20-years we have had ad hoc raises from the Ohio Legislature who regarded traditional public schools as necessary to grow Ohio's economy both in the present and the future. If the STRS Board decides to cut retired teachers COLA, once again, it would seem to this ORTA Life Member that the ORTA officials, as well as our two STRS Retired Teacher Reps, should lobby for this ad hoc increase to our base pension.

It seems to me, sadly,  that a "game is being played" to keep retired teachers from ever having any increases to keep us up with inflation of the dollar, especially today when the Feds came out with data on the increase of wholesale prices. As every thinking individual knows, when wholesale prices increase, retail price increases are not far behind.

All three branches of our Ohio government should not skimp on the education of our children. In particular, the Ohio Legislature is responsible for the financial health of retired teachers - which is certainly an incentive for them to do that which is right for the future of Ohio. In order to move our state to a bright economic and culturally great future without financially healthy retired teachers, there is little incentive for our best college students to enter into one of the most honored professions: teaching in traditional public schools.

Respectfully submitted,

Bob Jones