From Leon Knore, Former CORE member in NE Ohio
Written by Kay Borchers, submitted by Leon Knore
February 27, 2022
Thank you to all of you who signed petitions and/or helped gather signatures for the STRS Board open positions. You will receive a ballot in late March or early April. PLEASE VOTE. Retirees are encouraged to vote for ELIZABETH JONES and actives to vote for STEVEN FOREMAN and JULIE SELLERS. These candidates support a change in retirement criteria for active teachers, restoration of a COLA for retirees, and other changes in favor of actives and retirees.
Are you aware???
--- Active teachers are contributing 14% (highest in the country) and get the least for their employee contribution than all public employees in the USA (10.9% with 3.1% paying unfunded liabilities of STRS).
--- Totaling the past three years, the top 30 employees of STRS received over one million each (top was $1,956,736).
--- At the August 19, 2021 board meeting, the current STRS Board authorized STRS staff salary increases (1.4%) and bonuses including the $6.7 million “Performance Based incentives”. Bonuses were awarded in 2017 even though a loss on Panda investments was over $525 million.
-- Ohio law ORD3307.67 allows STRS to make decisions about COLA. STRS Board members approved a reduction then discontinuation of COLA for retirees since 2017. Actives must wait five years after retirement if a COLA is approved.
-- COLA 2022 for retirees – STRS Ohio (0%), OPERS (3%), SERS (2.5%), Soc.Sec. (5.9%), OP&F (3%), HPRS (3%).
--- STRS Ohio has offices in California, Georgia, Illinois, and New York (not true of other teacher retirement systems).
--- STRS Board and staff member travel was paid in September 2019 and November 2019 (over $238,000) for trips to England, Turkey, China, and Japan. The STRS credit card was used extensively in Dallas and Ft. Lauderdale.
--- STRS has 530 employees – average compensation is $125,378.
--- For 2019 – STRS had 65 people making over $200,000 a year. In adjoining states – Michigan has only 5 officers making over $200,000 a year. Indiana and Kentucky have only 2.
-- STRS Ohio policy explicitly states investment staff compensation 20% higher than other pensions and Wall Street.
HRS Policy#4.150 This involves 94 STRS employees.
--STRS bought a Dallas office building in 2019 for $180 million. In 2020 it was worth only $112 million.
--STRS does not rent part of the building for other users. Other retirement systems rent part of their building for income.
--Benchmark Financial completed a forensic audit of STRS Ohio with $75,000 contributed by several sources.
*STRS has a transparency problem. For example – with regards to fees and expenses—costs of alternative investments have been under reported by about $2.75 million per day or two times the amount of paying a COLA to retirees. Under reporting means that STRS has about a loss of $2 billion over a five-year period. STRS pays fees to Wall Street money managers for not investing money (committed capital). STRS paid nearly $143,000,000 in fees for money not invested.
----The State of Ohio Auditor has done a preliminary investigation and has stated “The information obtained to date supports a reasonable basis for conducting a special audit.” A special audit has been initiated of STRS.
--The Ohio Retirement Study Council has broken the law by not performing an audit on STRS every ten years. It has been over fifteen years. Suggestions were not followed by STRS from the 2006 audit by ORSC.
Information from the STRS Ohio Benefits site
-- Life insurance – Full time - $50,000 minimum up to 2x base salary – STRS pays full premium
Short-term/Long-term disability – 60% of base salary up to $5000 monthly maximum – STRS pays full premium
--Educational Assistance – Full time – 100% tuition up to $7500 per year for undergraduate and graduate students with a lifetime maximum of $42,000. Part time – 100% up to $3,750 per year with lifetime maximum of $21,000.
--OPERS – Associate contribution: 10% STRS Ohio contribution: 14%
--Health Insurance Deductible Plan -- Full time -- Optional: POS or HDHP plan
POS Active - $37.41/pay – single - $112.24/pay – family POS Passive - $48.63/pay single- $145.91/pay family
STRS Ohio pays remainder of premium HDHP - $28.91/pay-single - $86.72/pay – family
--Dental Insurance – Optional: STRS Ohio pays full premium for both full time and part time employees
--Vision Insurance – Optional: associate pays full premium $3.51/pay – single $9.74 per pay – family
--Free parking, $10 monthly membership in fitness center, on-site child care at a weekly rate, cafeteria
In a January 14 OEA Legislative Watch article, the writer states that retired teachers need and deserve cost-of-living adjustments. The writer also stated that the STRS Board may also consider changes to benefit active teachers such as eliminating the age 60 requirement or decreased employee contribution. The question is how to pay for these changes. Another statement by the writer is that shoring up the funding of STRS has taken shared sacrifice.
Where is the sacrifice to STRS employees? They received 1.4% wage increases last year. The August 19, 2021 performance-based investment bonuses were based on their own benchmarks and totaled over $6.7 million. The bonuses were awarded in 2017 even after the $525 million loss from the Panda bankruptcy (not reported to STRS stakeholders but by media - at least three years after). The regional office directors have exorbitant bonuses. Why should they receive additional bonuses because they choose to live outside Ohio? Why does STRS even maintain regional offices outside Ohio? Why were our STRS dollars used to pay for trips to China, India, England, Turkey, and Japan? Why was the STRS credit card used extensively in Dallas and Fort Lauderdale? Why hasn’t the Ohio Retirement Study Council done their independent audit (required every ten years but has been over fifteen years)?
Where is the sacrifice for STRS Board members? Through the Freedom of Information Act and/or subpoenas, ORTA (Ohio Retired Teachers Association) has collected some data from STRS. They also are awaiting other requested data that STRS has denied them. Released information shows reimbursement for travel to Zurich, London, Milan, etc., and more than one entry for meals nearing a cost of $300.00. There are also numerous trips to New York City, Chicago, Boston, Phoenix, Palo Alto, Los Angeles, Minneapolis, and the list goes on and on.
Sacrifice to an active is extending the number of years needed to teach before retirement, adding time needed to pay off student loans, or delaying major purchases, or not being able to save money for the future, or struggling to stay within a budget with inflation driving up the cost of necessary items. Actives in Ohio are paying 14% of their salary toward STRS – the highest rate in this country. After they retire, they will not receive a COLA for several years and the 14% they contributed will decrease in power to 10.1% because STRS is using some of their funds contributed to pay down unfunded liabilities.
Sacrifice to a retiree without the promised COLA is: trying to work another job to pay for basic necessities, turning down the thermostat by one or two degrees and closing off some rooms to lower the gas and/or electric bill, patching the house roof for three years and then replacing it only to find that with inflation the cost is now $2000 higher, repairing the over ten-year-old car with 100,000 plus miles instead of being able to replace it, paying more for medical insurance and expenses but decreasing visits to the doctor and not pursuing recommended health/wellness procedures, and implementing other cost-cutting measures.
In early February, Plan Design Levers Results were released by STRS. Several options are listed. However, none of the options list the reduction in expenses by the STRS staff, a wage freeze for current STRS employees, a reduction in bonuses, closing regional offices, curtailing travel expenses, and the list goes on and on. There are startling numbers on the Ohiocheckbook.gov website that support a need to examine the spending at STRS Ohio. Please share the above information with other actives and retirees.
If current STRS Board members are voted back in, these spending practices will continue.
This is your retiree and actives $ contributions. This is why we need a change in STRS Board members.
Actives – Please vote for Steven Foreman and Julie Sellers.
Retirees – Please vote for Elizabeth Jones.
