Bob Buerkle: A letter to STRS retirees and active teachers

From Bob Buerkle

May 10, 2017

To all STRS Retirees and active teachers,

When STRS held a March, 2017 informational meeting in Cincinnati, Nick Treneff and Gary Russell told the audience that STRS was still considered a "Top Quartile" pension system. NO WAY JOSÉ!

That boat shipped out on 01/07/2013 when the Ohio Legislature gave STRS the authority to eliminate our COLA.

STRS is now back to treating our money as if it was theirs again. They want to fund their ideas, not deliver on the pensions they promised. That is exactly what got STRS Director Herb Dyer fired in 2003. Dyer wrote a retiree saying “the pension system’s money is the Board’s money to spend as they see fit,” and “perhaps retirees should go out to dinner less often.” A few months before this time Dyer spoke at a meeting in Cincinnati covering his infamous leaky bucket of health care funds. That time he suggested to the audience that they "should consider downsizing from a Cadillac to a Chevy".

We did not expect to buy Cadillacs in the future, since few of us bought them when we were working.  Instead of STRS Management telling us to how to manage our finances after they have ravaged them, let's put the real problem out there. STRS keeps losing more of our money, our finances! "I say, Just invest our money in the various indexes that historically have always returned over 8% over 30 year periods.  That is the only requirement necessary so STRS can fulfill the retirement promise that was made to us. That is STRS' most important job! That's what you are employed to do, and at our expense".  Remember, it is our money not yours. You are supposed to be our Fiduciary and deliver the Benefit what was codified and Defined by law when we accumulated our benefits while working, and which were  specified by law when we retired.

STRS Management and the Board have now stolen over 25 Billion dollars of our promised pension benefits in their two money grabs. It is our money but they think they can do what they want with it by telling us that this is what they need to do to provide assurance that STRS will be able to pay future benefits. That's hogwash!  This is a smoke and mirrors game by management and it is not what the retirees and current members need or want.

After the first 13 Billion Dollar grab in 2014 no lawsuits were filed by any Union, any Organization, any Individuals or any Class Action Lawyers. Emboldened by this non-reaction to the STRS pension takeaways, they looked ahead to other takeaway ideas, describing them as "necessary to be able to pay future pension benefits". So in February, 2015 the STRS Board voted to adopt a "30 Year Closed Amortization Funding Period". This is costing Billions of your pension dollars to implement and it was not necessary. This is a lofty goal but should only be attempted when it could be achieved without destroying retiree pensions. A good year that this could have started would have been in 2000 when STRS had a funding ratio already at 92%. In 2017 STRS is in no position to start a 30 year closed funding program when we have a funded ratio standing at only 69%. All they are doing is stealing our money to fund their project. This is something that STRS Management wants to do for their own self desire and self aggrandizement. It is not what retirees need, it's what STRS wanted to do with your money, not what you wanted and not what you needed! 

It is also not a Legislative Mandate.  And if "Closed Funding" is so great, why doesn't OPERS do the same thing for their members and retirees?  OUR STRS EMPLOYEES ARE IN THE OPERS RETIREMENT SYSTEM.  WHY DON'T THEY RAISE THE ROOF OVER THIS NOT BEING DONE FOR THEIR OWN PENSION SYSTEM?  WHY DON'T LEGISLATORS FORCE THEIR OWN PENSION SYSTEM TO DO THIS FOR THEM?  AFTER ALL YOU KNOW, THIS "30 YEAR CLOSED FUNDING PERIOD" IS ALL THE RAGE NOW!  The path chosen by the STRS Board and Management is not mandated and should be shelved for now.

STRS already had the tools to deal with 30+ year unfunded periods like they used in the 1980's, 1990's and through 2006. Then STRS management came up with a plan in 2010-11 to seek legislative authority to reduce and/or eliminate our COLA. That is so much easier than writing those time consuming annual letters to the Ohio Retirement Study Council explaining how STRS will get back under a 30 year funding period over a period of years. By the way, this process was followed many, many times in the past and STRS was always able to work their way back under 30 years of funding and this is still the Legislative Mandate. One of the most recent periods occurred after the 2001 recession. STRS wrote their plan each year. In 2005 the plan that was written to work our way back under 30 years of unfunded liability by 2020. Instead of taking 15 years to achieve this it was accomplished in just two years and by 06/30/2007 the unfunded period was reduced from 42 years to 26.2 years.

We should demand that no more unnecessary and non-mandated ideas be implemented until all lost pension benefits are repaid to retirees and restored for current workers.

Bob Buerkle