Dean Dennis' speech to STRS Board October 18, 2018

STRS October 18, 2018 

My name is Dean Dennis, STRS Chair for the CFT-Retirees Chapter, spokesperson for the Ohio STRS Member Only Forum. I retired with 35 years from the Cincinnati Public Schools.

Today I want to make some points:
First and foremost, the adopted STRS investment return assumption, or earning assumption, of 7.45%  is significantly too low. While it might serve STRS employee's with their investment goals;  it does not serve STRS members regarding their pension. This too low of an earnings assumption is the primary reason our retired members are going without a COLA and our active teachers will not have a COLA for 5 years upon retirement. 

STRS trustees know STRS is earning 8.6% over the 30 year funding period, this is far above 7.45%. Trustees know that STRS has always earned above 8% for every 30 year funding period.  Yet, you are assuming 115 basis points less than you are earning.  This isn't okay.

Subtract 7.45 from 8.60 and the difference is 115.  Since we have a 115 basis point difference, we can easily add 25 basis points to the earnings assumption and add back  $5 1/2 billion to the 30 year period.  We can easily add back 50 basis points and add back $11billion. This would still allow for a 65 basis point cushion.   

Trustees will only gain credibility with members, when members see them take into account what they actually earn, and then adopt an earning assumption more in line with reality. 

Adopt an earning assumption 40 ,50, or 60 basis points lower as a safety margin.  Credibility is lost when trustees adopt an earning assumption 115  basis points below actual earnings. This only punishes those you are supposed to be serving.  Are we really to believe you can't provide a COLA?

Review the handouts,  I passed out to you. The stock market's 30 year rolling periods average is nearly 10%. The stock market even earned 9.99%  during the 30 year period which included: Black Monday, Desert Storm, the Savings and Loan crisis, wars in Iraq and Afghanistan and three recessions. 

Trustees  should easily be comfortable in adjusting the earnings assumption upwards from 7.45%.

Other suggests:

Revisit the recent adopted mortality tables. This "new actuarial best practice," adversely penalizes retirees. Today's 75 year old should not be assigned the same mortality rate as a 21 year old entering the system.  This accounting falsely skews actual liabilities. It also harms retirees from receiving their rightful COLA.

I know that being only granted 3 minutes I run out of time, so I can't go into any depth on:  Avoiding alternative investments,  changing the payroll growth assumption rate,  seeking legislation to change our 30 year funding period to 35 years,  seeking legislation to increase in the employer contribution or increasing the time to present to the Board from 3 minutes to 5 minutes. 

So I'll switch gears and close with one last thought,  having 5 elected STRS board members for active teachers, yet only 2 elected STRS board members for retired teachers deserves attention.  This is a disproportionate ratio which does not reflect the number of active teachers compared to retired teachers. 

Since there are 7 elected board members, the ratio should be a 4 /3 split and both retired teachers and active teachers should be allowed to vote for all  elected  STRS Board members. I hope you give this some thought as well.

Thank you.

Speakers at October 18, 2018 STRS Board meeting; Bob Stein chooses to chastise one speaker publicly for speaking a few seconds too long. Pick your battles, Mr. Stein!

October 18, 2018
STRS Board meeting

Bob Buerkle, Dean Dennis, and Robin Rayfield all spoke Thursday, plus 9 others.  Besides the "Toys R Us" person, there were 11 other speakers who mostly talked about the importance of getting our COLA back ASAP.  

Bob Buerkle's speech was about the last 51 year experience history of the STRS showing the Actuarial Assets, Unfunded Liability, the Funding Period and the Funded Ratio for all 51 years.  He pointed out that from 1980-82 when the STRS Funded Ratio was below 56% and the funding period was between 50-59 years.  However, during the four years from 2009-2012, when STRS claimed our funding period was at infinity, our more important "Funded Ratio" never went below 56%.

Then Bob explained that he and Dean Dennis had been in a meeting with the STRS in house Attorney William Neville, Legislative Liason Marla Bump and State Representative Bill Seitz in which Mr. Neville said that once the "Funded Ratio" reached about the 85% level it becomes easier on the retirement system to pay COLA's without negatively affecting the system's strength.  So Bob pointed out to the Board that during the 42 year history of COLA payments the STRS "Funded Ratio" was only above 85% funded in 4 years, yet a COLA was paid in all 42 years.

Bob also pointed out that soon after the 1979 COLA boost to 3%, Legislative action was taken to properly fund the increase to by raising the Employer Contribution Rate to 14%, the last time the Employer Contribution Rate was ever changed.

BECAUSE BOB'S SPEECH RAN A FEW SECONDS OVER THE 3 MINUTE LIMIT, CHAIRMAN OF THE BOARD, BOB STEIN, PUBLICLY CHASTISED BOB FOR RUNNING OVER THE 3 MINUTE LIMIT.

A post for STRS Facebook site, but which will probably never make it, but will elsewhere

Hey, STRS, instead of deleting posts with difficult topics YOUR MEMBERS are concerned with, how about addressing them instead? After all, isn't this what WE pay YOU to do? 

BTW, since you are deleting our posts, don't be surprised if they start showing up elsewhere. You may have our money to throw around as you wish (shades of Herb Dyer, one of your ex-directors who once originated a similar sentiment and was subsequently sent away from your palace in disgrace), but there are THOUSANDS of us (and still growing), and the social media have given us a voice, which is only getting louder and louder the longer we are ignored. 

If you don't want to listen to us now, so be it. But I suspect you will later. 

Hey, STRS members, what do you want to bet this post will never make it to the STRS FB site? Of course not. It will be censored. But, hey, it will still make it to our Forum, and to my blog. www.kathiebracy.blogspot.com 

A post submitted to the STRS FB site but was censored

Kathie Bracy, October 14, 2018
I posted the below item on the STRS Facebook page yesterday. I couldn't find it today, so I posted it again tonight. Just in case it disappears again, here it is, in full (if it disappears again, I'll put it on my blog): KBB

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Interesting FB site. Nice to know how many centenarian members there are in STRS, but how does that help us? The STRS speaker who addresses my county retired teachers organization has thrown out those numbers to us more than once. Nice. We get it. But when will she start telling us what STRS is doing to restore our COLA (the elephant in the room), which should never have been cut in the first place? When will she tell us why it's OK for STRS employees to continue getting regular raises (their COLA) while we get none, and why the investment department (whose members also get those nice raises) is so huge and why those people continue to receive humongous bonuses when STRS beneficiaries keep losing income? Do they really need it more than retirees who have much smaller incomes? Why doesn't she tell us why STRS employees do not pay into the STRS retirement system? Gee, this room is getting FULL of elephants! 

A word here for anyone who may be calling retirees "COLA complainers" (shades of the late Joe Endry, one of the six STRS Board members who were convicted of ethics violations in Franklin County Municipal Court; he called us "malcontent retirees" for protesting the huge increase in healthcare costs for many members). Those who would call us COLA complainers need to review the history of the STRS Board and rethink this issue before it's too late. You don't want to learn some lessons the hard way.