Tom Curtis on ORSC report: Another reason to vote for Jim Stoll and Bob Stein

From Tom Curtis, April 9, 2009
Subject: 040909 ORSC Comparison of STRS investment performance!

Hello STRS Stakeholders,

The information below is really interesting. [http://kathiebracy.blogspot.com/2009/04/orsc-comparison-study-strs-investment.html] The STRS paid the 89 investment staff employees roughly $6 million dollars in bonuses recently. This amount is huge compared to what the investment people were paid at the other 4 Ohio pension systems.

Actually, there is little comparison. 3 of the other four do not have an in house investment staff. OPERS, who has twice as many stakeholders as does STRS, paid their investment people roughly 1 million in bonuses. OPERS did not lose as much value as did the STRS.

Now look at the performance from these STRS investors, compared to the other 4.

Need I say more?

Please keep in mind that 5 union-supported board members (3 OEA & 2 OFT) voted NOT to suspend the bonuses. What are these board members thinking? It is time for change on the STRS board.

I urge you to vote and to contact others and ask them to vote for the two non-union supported candidates.

Jim Stoll for actives
Bob Stein for retirees

ORSC comparison study: STRS investment performance a real eye-opener -- and they STILL get huge bonuses? Something's wrong with this picture!

From Ryan Holderman, April 8, 2009

Subject: ORSC Comparision of STRS investment performance!

Dear One & All:

The attached chart was released today by the Ohio Retirement Study Council, the group that oversees all five of Ohio's public retirement systems.

It compares the investment performance of each group over the following past intervals:

.....2 Quarters (STRS came in 5th)
.....1 Year (STRS came in 5th)
.....3 Years (STRS came in 4th)
.....5 Years (STRS came in 1st)
...10 Years (STRS came in 2nd)

It is also worth noting that this report covers the periods ending December 31, 2008. One can only imagine what effect the losses of the past three months have had!

This makes it even more difficult to understand why the STRS Board voted only to suspend performance based incentive bonuses rather than eliminating them as STRS Board candidate Jim Stoll has pointed out, "The Board, however, voted only to "suspend" (as opposed to eliminate) these outrageous bonuses, which topped out at $259,200 for one of our Investment Associates. It has come to my attention that many members are under the misconception that the bonuses have been eliminated – this is not true. In fact, the Board is planning to pay "7/12" of the 2009 Bonuses in September 2009 (some as high as $165,000) .......... for losing more than thirty billion dollars ($30,000,000,000) of our pension assets."

We need candidates who are willing to speak out, like Jim Stoll and Bob Stein, on the STRS Board!
Click image to enlarge.
http://www.orsc.org/uploadpdf/Invstmt%20Perf%20_2008_12_31.pdf (page 69)

Minutes of the March 19, 2009 C.O.R.E. Meeting

March 25, 2009

Twenty-five Concerned Ohio Retired Educator (CORE) members were in attendance at the March 19^th meeting in the Sublet Room on the second floor of the STRS Building in Columbus. At noon President Dave Parshall opened the monthly meeting by asking for acceptance of the February minutes. Mary Ellen Angeletti moved that they be accepted; Kathie Bracy seconded the motion.

Cards were circulated for members to sign for Donna Thorp and Ruby Fisher, who are both recovering from surgeries. Due to Ruby’s surgery, Treasurer Herman Fisher was unable to attend the meeting. However, he did send word via President Dave that our account is in the black.

There were no committee reports, but President Parshall reminded everyone that membership is still encouraged. In fact, currently CORE has over 1700 e-mail addresses. It was stressed that those e-mail addresses are very important.)

The new business part of the meeting revolved around the upcoming STRS election. CORE is endorsing Jim Stoll, active teacher, and Bob Stein and Jim McGreevy, retirees. A CORE flyer highlighting the three CORE-endorsed candidates will be sent out as soon as Jim McGreevy’s photo is added to the flyer. Once the flyers are completed and available, members are encouraged to run more off and to distribute them to teachers, retired and active.

Dave read the letter CORE received from candidate Jim McGreevy: What follows is the body of that letter:

“I would like to extend my thanks to the membership of CORE for their endorsement of my candidacy for the position on the STRS Board representing retired members. Over the past several years I have worked hard to educate myself on the issues that are important to our members, and if elected I will continue to work diligently to represent those members to the best of my ability as a fiduciary under ORC 3307.15.

CORE’s endorsement of me represents an expansive “big tent” approach to the issues confronting all of us at STRS. Frankly, I see a lot of very tough issues ahead that will require some difficult solutions. Please be assured that if I am entrusted with this position I will always be open to your advice and the counsel of your leadership. It is probably unrealistic to believe that we will always agree on every detail, but I have faith that all of the stakeholders, working together at STRS, can achieve our goal of providing financial security to our members.”

Following the explanation of the flyers, a discussion of health care ensued. It was commented upon that even though Medicare Advantage programs were cheap up front, the administrative costs are up. (There is a profit from running it.) Most members seemed to agree that it would be hard to pass even a revised H.B. 315 in the current economic climate. It was generally agreed that a long term “fix” is needed. We need to get the message out about health care and our pension. We must support each other. A national healthcare solution my be our only hope. Start to get involved. See the letter writing suggestion below. Dave Parshall will be attending a Single Payer grassroots meeting soon and will report back.

The topic of the meeting then turned to our pension fund…and the use of the word “safe” as opposed to “guaranteed.” In an effort to answer this, President Dave read a letter from a CORE lawyer, who had tried to address the matter for us. He directed members to Chapter 3307 of the Ohio Revised Code. The legal expert stated, “The sections on contributions are found starting at Section 3307.26.Benefits begin at Section 3307.50. The regulations that do detail policy are generally found at Ohio Administrative Code Section 3307:1-3-01. There are also a lot of sections to read.”

The lawyer continued, “You should be able to find the codes on line. I believe that Ohio Legislature maintains a site with the Revised code. This will keep you busy for a while…”

Plenty of discussion followed the reading of the letter. AIG, local pension systems, Warren Buffett, the top eight corporations being in fiscal trouble, single-payer health care possibilities, and the power of grass roots’ efforts were all roundly discussed. One suggestion that came out of the group’s conversation was that members need to be writing letters. To this end Alice Faryna will e-mail a model letter so that members will have a guide, if they need one. It was also suggested that concise, legible, hand-written letters were the most effective. Legislators, the governor, and newspapers should hear from us In fact, in order to help us get the word out, there is a link to editors of any papers on Bob Stein’s site.

The meeting closed at 1:30 after a reminder that people need to be attending the STRS Board Meetings. We need to have a presence so that we have an impact. For those who can’t attend a meeting, call and ask STRS to send a CD of that month’s meeting!

Respectfully submitted,

Marie M. Fetters

CORE Secretary

CORE endorsements

February 19, 2009

At today's CORE meeting, the following candidates for STRS Board were selected for endorsement:

.....Bob Stein (retiree seat)
.....Jim McGreevy (retiree seat)
.....Jim Stoll (active seat)

Bob Stein, candidate for retired seat on STRS Board

------------------------------------------------------------

Bob Stein is the only STRS candidate with a specific plan to improve investment returns.

We must recover benefit cuts of the last 10 years as well as make STRS sound. Future benefits and pensions are not fully secure unless the fund is growing.

Health Care -- Retirement without healthcare is not really retirement. Requiring retirees to pay increasing health care costs slashed spendable pension dollars. Expect higher costs next year. Increasing investment returns by 1 1/2 percentage points could fully fund retirees’ health care. This is reasonable if the recommended investment reforms are adopted.

Cost of Living Adjustment -- Current COLA is not compounded and only slows purchasing-power losses during retirement. 1977 retirees have lost 14% in purchasing power since retiring. ($140 loss for every $1000 in your pension.) This does not include increased health care costs that come directly out of pensions. STRS should cover real cost of living increases.

Better investment strategies must be implemented. -- STRS’s investment advisory firm's plan has similarities to mine but we have not adopted anything close to either one. Global markets are maturing. Without proper adaptation our fund will continue to suffer large market shocks.

How A Pension Fund is Different

Most people are used to budget systems like households or schools where the incomes are relatively fixed by employers or tax rates. The best control they have is over expenses. We know such situations well and tend to see controlling expenses as THE solution to any money problem. Pension funds, however, are primarily large investors with payroll-dependent income that creates investment income. Contributions at 24% of your salary plus investment returns should pay your pension. While control of expenses is desirable, investment income is absolutely necessary in order to pay benefits.

Stopping losses and improving returns should be our first focus. Expenses can only be cut to a certain degree before the only cut left is pension benefits. For example, 2008 administrative costs were near $0.065 Billion. Total pension benefits are almost $5 Billion. Eliminating ALL administrative costs might pay for about 1 day of pension benefits. At $30+ Billion, losses since our fund’s recent peak represent about 6 years of pension checks.

As you can see, creating income from investments is many times more important than any other activity STRS undertakes. It may be our only real choice. We’ve lost 35+% because STRS investments follow US stock markets too closely. Not “everybody” is losing money in this economic decline. Our investment model needs updating. We must adopt strategies that allow better returns and avoid wide stock market swings.

Income from increased payroll contributions requires legislation that is unlikely in tough economic times. The only realistic choice is better investment returns.

The board must decide. Staff and advisors can’t make investment policy regardless of what they know.

We need more investment experience and training on the STRS board.

Vote Bob Stein for STRS

Bob Stein

for the STRS Board

Unique Experience

· SEC Registered Investment Advisor

· NASD licensed securities broker

· 27+ Years of teaching

· College for Financial Planning

Investments, Taxes, Insurance, Retirement and Estate Planning, Employee Benefits

Since 1972 Bob has traded and invested in stocks, bonds, real estate, partnerships, futures contracts of all types, and foreign exchange.

Bob Stein is the only candidate with:

· Broad Investment Experience

· Financial Training

A real plan to improve investment performance.

Endorsed by Concerned Ohio Retired Educators

www.BobStein.us for details and a complete bio

3.16.09