NOTE: To find the most current posts, please scroll down to the two big red arrows. You can't miss them.

Angel of Grief

Garrison Keillor

Items of interest in the Archives: The 2013 STRS Board Election

Many people have been very interested in reading about the irregularities of the 2013 STRS board election. There are many posts related to this topic, beginning the first week of April 2013, after the ballots were mailed to retirees from STRS. You can find them by going to the Archives for this blog, over in the right sidebar, and clicking on dates beginning with April 7, 2013. Dennis Leone announced his candidacy for a retired seat in November, 2012. There is a lot of information about him in the Archives, beginning with November 12, 2012 posts. 5/28/13

.....so what REALLY happened in 2003 that touched off a firestorm at STRS that is still smoldering today? Read it here, from the Cleveland Plain Dealer. (Hint: It ain't over yet!)

More here (Akron Beacon Journal, 2003)

A MUST READ: Dennis Leone Reform Initiatives as an STRS Board Member  Between 2005 and 2009

To find current, day-to-day posts -- pull your scroll bar down a ways, just below the big red arrows (you can't miss them). Thanks.

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Note from this blogger.....

In case you weren't aware, I am quite willing to post opposing views on this blog; in fact, I welcome such opportunities. If you disagree with anything you see posted on my blog, please feel free to submit your views and I will gladly post them.

Kathie Bracy 
kbb47@aol.com 9/15/10.........................................

Find your state representative and senator here.

http://www.legislature.state.oh.us/

Gettin' a little tired.....

Some communications to Mike Nehf and Tim Myers, dating back as far as 2009, continue to go unanswered. Looks like it will be a long wait, but we haven't forgotten. You can see them here and here.

I know, it's weird.........

Many posts that appear "at the top" for a while are eventually moved down, where they can be found under their original posting dates. Also, if you are confused by the postdating, this is done to keep these posts up there; otherwise, they drift down when new posts are added. It's a "blog thing" which I have no other way to control. KB

Handy links: Contacts, information and more (short version)
This is an abbreviated version of the original 'Handy links' post. Click here to view a more complete list. (Some of it is old.)

STRS Board.....STRS website

Board calendar

E-mail contacts at STRS (old, but some may still work)

Map/directions to STRS, 275 E. Broad St. Columbus, OH 43215

STRS "Membership Survey" (spoof)
State legislators.......State of Ohio website

Latest OEA salaries (2011) over 100K; USDL report

Rich DeColibus' PowerPoint presentation STRS' PBI Program; Does it work?: click December 21, 2008 (blog Archive) and scroll down to December 23 posts.

Charts: PBI (bonus) payments

Popular links; click, then scroll down: charts, graphs, investment staff, lists, spreadsheets

$TR$ Inve$tment $taff $$$ (old)

SPECIAL (must read):

Dennis Leone's INVESTIGATIVE REPORT on STRS: May 16, 2003...Who is Dennis Leone?........(PDF version)...More on Dennis Leone .......(PDF version)

Dennis Leone: "Catcher of Thieves"

Dennis Leone's STRS Report to ORTA, March 2007

Dennis Leone's Testimony at the Statehouse 9/5/12
The Plain Dealer article that started it all

Dennis Leone: Factors Driving STRS 30-Year Planning and Revenue Assumptions (with charts)

Historic PBI vote, January 16, 2009

Charts: PBI (bonus) payments

CURRENT POSTS BELOW

Dean Dennis to STRS Board: Some key points to consider

Dean Dennis' speech to the STRS Board

December 13, 2018

My name is Dean Dennis, I retired with 35 years from the Cincinnati Public Schools.

I want to start by reiterating some previous key points related to the COLA:

1) The stock market's 30 year rolling periods average is nearly 10%. Even in the 30 year period which included: Black Monday, Desert Storm, the Savings and Loan crisis, wars in Iraq and Afghanistan and three recessions, the market earned 9.99%. The Board should be comfortable in adjusting the earnings assumption upwards from 7.45%. We average 8.6% over the 30 year funding period and have always earned above 8%.

2) The Board should seek legislation to change the STRS funding period from 30 years to 35 years to better coincide with the present work requirement.

3) The Board should seek an increase in the employer contribution. Ohio Revised Code 3307.14 states that if STRS Ohio cannot meet its financial obligations, the burden falls on the employer, not the employee. The Ohio teacher contribution rates have increased multiple times and are now the highest in the United States for any teacher; all the while, employer contribution rates haven't increased a penny in 35 years.

This is a prime time to approach the Legislature. Ohio House Bill 413 is on the radar screen of legislators and they know that Ohio's employers have been receiving roughly a billion dollars annually from Worker Compensation surplus rebates.

Not only is it a prime time to approach the Legislator, it could be considered an obligation from reading the recently revised Ohio Board Policies. Under the Policy Titled: Board Member Education, it states, "the topics Board Members need to be knowledgeable about include, but are not limited to, the following," listed #2 is, Legal framework of the Retirement System. The above mentioned code, ORC 3307.14 addresses STRS and how financial shortcomings need to be made up by an additional employer rate of contribution.

Regarding more Board Policies:

Under Member Benefits which includes health care; I'd like to suggest that since 10% of retirees receive an annual $5,000 benefit related to Medicare Part A, of which 90% of retirees are not receiving, and since our Health Care Reserve is 170% fully funded, that the Trustees explore creating a Medical Benefit Bank for the 90%. This could be done by utilizing the 70% from the 170%. The Health Care Reserve could still remain 100% fully funded. This seems both fair and doable. I'm not suggesting anyone lose any benefits. I am suggesting you create an additional benefit with the excess money in the Health Care Reserve. It is our money and without a COLA it is a way to create a useful benefit.

Last, but not least, the policy under Public Participation at Board Meetings. The Board only allots 45 minutes to a maximum of 15 speakers granting 3 minutes to each speaker.

I hope the Trustees can see how ridiculous this is. Within about 90 seconds after stating your name, who you represent, your number of years of service, you are being interrupted to be told that you only have a minute left.

You can't send a more clear message that we aren't important. It would be appreciated if this policy could be reviewed. Some of us are making round trips totaling over 200 miles only to have to rush through a 3 minute presentation.

We'd like to think that you think we have something of value to say.

Thank you.

Dean Dennis responds to a retiree's question on how STRS funds are being mismanaged

When a retiree on the STRS Member Only Forum (on Facebook) recently asked for an explanation in laymen's terms of "how our STRS fund is being mismanaged or how it is in danger of failing", Dean Dennis provided her with a nutshell version and an invitation to communicate further for a more detailed explanation. Below is what he wrote.

From Dean Dennis

November 30, 2018

Hi [name withheld], I would be happy to share my thoughts with you. Please send a message to me and we can exchange phone numbers so I can answer your questions and clarify answers in more detail. That said, let me try to give you a "somewhat" short explanation.

First, regarding the mismanagement, the funds are being mismanaged in the sense that STRS is a public pension system and is trying to become "fully funded" or 100% funded at our expense. Public pensions are very different than private, or industry pension systems. Unlike a business, which can go "out of business" or bankrupt and severely harm retirees financial by not coming through with their financial obligations; state pension systems do not go out of business.

This isn't to say, they don't adopt different retirement plans. Ohio is nothing like Kentucky, but even in KY, at this point in time the KY legislature is meeting their obligations to their retirees. Ohio is doing fine and will always need teachers, Ohio will always need police. It is for this reason that the thought among experts is that state pension systems, like ours, should be 70-80% funded. This is considered enough and some feel that public pension systems that try to become 100% fully funded are doing a disservice to taxpayers by diverting monies needed for other things, such as infrastructure.

A public pension system above 75% funded, is generally considered very financially viable. STRS Ohio is above 75% funded, BUT they want to keep withholding your COLA until they get to 100%. What if a bank had an internal financial funding goal and decided not to let you withdraw some of your money that you had already earned. This is kind of what is happening.

This brings me to a second point. STRS doesn't want to adopt a long term plan to reach their self-imposed financial goals (according to the State of Ohio, STRS is well within State guidelines). Since teachers now have to work 35 years to retire, this should be the new funding period. However, it is still 30 years. Has STRS approached the State about changing it, like they did when they wanted the power to adjust our COLA? The answer is NO.

STRS wants to move towards their funding goals rapidly (not 30-35 years) and because we are giving them our COLA we're sending the message that we don't mind. They want to get there in 5-10 years. While they are keeping our money, they are also moving in the opposite direction of what is now considered to be best financial practices. STRS is getting into hedge fund investments right when other states such as California are getting out. Hedge Fund investments are considered risky, they are largely unregulated and they are full of hidden fees. I like to invest, but I would never consider buying into a hedge fund.

Regarding your second concern, STRS is telling us going forward they are only going to earn 7.45% on our monies over a 30 year funding period. The Ohio Legislature looks at 30 year funding periods to monitor the solvency the state pensions systems. STRS cannot deny that they have decades of financial history covering 30 year periods and they average nearly 8.6% on their monies. This is far above 7.45%. But, by crying poor me they have created an excuse to withhold our COLA from us. STRS has NEVER earned less than 8% over any 30 year period.

Let me ask you this, if STRS is doing so badly, why are so many of their employees getting six figure bonuses to go with their six figure salaries? Also know that the Ohio Legislature only gave STRS the power to adjust the COLA, yet STRS totally eliminated it. A number of the legislators are upset and concerned. Ohio's largest pension system (not STRS) is currently resisting going from 3% COLA to 2.5% COLA. Those resisting are legislators who are members of that system. Our pension is similarly funded. Perhaps their system, PERS, and STRS should have the same COLA guidelines. Until we get a chance to talk I hope this helps.

How much of your hard-earned dollars are going into the pockets of that humongous STRS investment staff? Jim Stoll fills us in

From Jim Stoll
November 14, 2018

STRS Investment Staff 2018 Base Salary + BONUSES and Total Compensation

*Note – These are ONLY the TOP 10 of the 84 Investment Staff Salary and Bonuses for 2018. Total compensation figures were rounded to the nearest dollar amount.

IT'S NO WONDER THEY CAN’T PAY YOU A COLA….. They are too busy lining their own pockets. These figures were provided by STRS through a Public Records Request.

Below: STRS INVESTMENT STAFF 2018 (Top 10) SALARY AND BONUSES There are 81 others!! Scroll down for full listing of all.

Click image to enlarge.

As you can see there are Seven Employees making over a HALF Million Dollars a year! This is virtually unheard of in the PUBLIC sector….. But STRS doesn’t base their salaries and bonuses against the public sector. They want to pay their investment employees in the top 25 percent of the PRIVATE sector. Why? Doing so is totally ridiculous. It’s like comparing apples to oranges. These investment staffers ARE NOT the private sector. They don’t invest or put their own money at risk and they aren’t at risk of losing their jobs in a downturn or with a bad performance like the private sector. The STRS Board should be ashamed of itself for approving this outrageous salary and bonus structure.

Of further note, the payout of bonuses for staff has gone from just over $3 million ten years ago to almost $9 million today. They can increase their bonuses by 200% but can’t give you a 2% COLA?? Wow!

Jim Stoll

Click the two images below to see the full listing.

Dean Dennis: STRS Is Healthy and Can Afford a COLA

From Dean Dennis
November 6, 2018

STRS Is Healthy and Can Afford a COLA

Ohio STRS is nothing like many of the private pension systems, or the Kentucky or Illinois Pension systems you've read about.

Ohio STRS has 78 billion available for investments. To meet retirement obligations, they need to pay out roughly 7 billion annually for pension promises. STRS takes in roughly 3.5 billion from employer and employee contributions. Therefore, STRS needs to make up an additional 3.5 billion annually on their investment earnings (approximately 4.75%).

Historically, over every 30 year legislatively dictated funding period, STRS has earned roughly 8.6% on their investments. This is nearly 4% more than the needed 4.75% to cover pension benefit payments. While STRS historically earns 8.6% over each 30 year funding period, STRS now only assumes they will make 7.45%. This is called the STRS Earnings Assumption Rate. So, the STRS Earnings Assumption Rate is set at 1.15% lower than what STRS actually earns over the 30 funding period. If you've heard of basis points, 1.15% is 115 basis points. Having your earnings assumption rate set 115 basis point lower than what you actually earn on 78 billion dollars and over a 30 year period is significant. It's like saying our investment department is going to earn about 25 billion less dollars over this period than they used to earn.

So, what does STRS do with the extra money they earn over the (above stated) 4.75% they need to earn to pay pension benefits? They apply it to pay down their projected term long liabilities. These liabilities are mostly created by actuarial changes in long term assumptions. These changes in assumptions also caused retirees to lose their promised COLA (after they already retired) and active teachers to work 5 years longer and be at least age 60 to retire. Active teachers also had their contribution increase to 14%. While none of this happened after they retired, they still took quite a blow. Many other states like New York and Colorado have made significant changes in their pension systems, but they usually didn't apply their changes to current teachers. Instead they create a different tier for new teachers. STRS Ohio didn't even entertain this.

If STRS had been realistic about actual earnings, realistic about the longevity of their actual current retirees and approached the legislature to informed the legislature that the 30 year funding period should be changed to 35 years to reflect current reality, retired and active teachers could have been spared a tremendous amount of pain.

In Ohio, if a pension system falls under the 30 year funding period, Ohio's legislature wants to know "what's up?" and expects the pension system to submit a plan of action. When STRS Ohio changed their assumptions, they took our pension system out of the safe zone and threw in into the caution zone that would draw the attention of Ohio's legislature.

They had many options:

1) adopt a realistic earnings assumption rate in line with historical earnings (in other words leave the 7.75% rate alone)
2) leave the mortality rate alone
3) change the 30 year funding period to 35 years
4) adopt a new tier for future employees who would not be impacted by having a promise broken
5) seek an increase in the employer contribution
6) submit a plan of action projecting a timeline to Ohio's legislators on the Ohio Retirement Study Council.

STRS did none of the above. Instead, they requested control of the COLA and requested draconian changes to active teachers. Rather than take a long term approach and trust their decades of earnings history they panicked. They wanted to get healthy at one swoop of the pen.

By nearly all metrics for public pension systems, STRS Ohio is well funded. Public pension systems should be between 70-80% fully funded. The latest financial reports shows that STRS is 76% fully funded. This means all financial obligations are in the bank for retirees and a significant amount of financial obligations are in the bank for active teachers. But again, STRS is trying to do everything at once.

If STRS was a mortgage company, they would want you to have $350,000 in the bank for a $350,000 house. STRS actions are pitting active teachers against retirees because STRS has a goal of becoming 100% fully funded in an unrealistic time period. This comes at the expense of teachers, both retired and active. Rather than use the actual earnings assumption over the next 2-3 decades on their 78 billion dollars set aside for investments, they are trying to have all debt paid within 5-10 years.

I used the mortgage example because what if you were approved for a 30 year mortgage loan for a $350,000 house and suddenly the mortgage company informed you they wanted you to pay off the mortgage in 10 years? What if the company had the power to garnish your wages or raid your bank account? Sound crazy? Essentially, this is what STRS is doing to us.

We, and the public, give STRS a significant part of our salary for 30-35 years of which to invest. STRS then earned more money over our 30-35 year career than they projected to earn in relation to their 30-35 year stated Earnings Assumption Rate (the rate they claimed they needed to payout our promised benefits upon retirement). Then, STRS reneged on their promise. For retired teachers they robbed them of their COLA, after they crossed the finish line. For active teachers they moved the finish line and increased their contribution.

Bottom line, STRS is financially healthy. Think about this, if STRS hadn't dropped the Earnings Assumption from 8% to 7.75% and then to 7.45%, STRS would be nearly 100% fully funded already and you wouldn't be reading this overly long article.

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

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

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.

Columbus Dispatch endorses Richard Cordray for governor

Columbus Dispatch

September 30, 2018

For Ohio governor: Richard Cordray offers a path forward 

Ohio voters have many important statewide offices to fill this fall, and no decision is more important than who will serve as Ohio’s next governor. After careful consideration of the two major-party contenders and their impressive public-service records, The Dispatch endorses Democrat Richard Cordray over Republican Mike DeWine. 

Both are lawyers who should be well-known to the Ohio electorate.

Cordray, 59, of Grove City, is a central Ohio native who became a hometown hero in 1987 when he went undefeated on TV’s iconic "Jeopardy!" game show at a time when contestants were limited to five appearances. He entered politics as an underdog in 1990, defeating six-term state Rep. Don Gilmore. 

He served as the state’s first solicitor general from 1993 to '95, was elected Franklin County treasurer in 2002, re-elected in 2004 and then elected state treasurer in 2006. When the need to clean up a mess arose in 2008, Cordray was elected Ohio attorney general, filling the remaining two years of the scandal-plagued term of Marc Dann. 

In 2012, Cordray was appointed by President Barack Obama as the first director of the federal government’s new Consumer Financial Protection Bureau, serving until he stepped down to begin his run for governor last November. 

DeWine, 71, also has a long history of public service. Growing up in Greene County’s Yellow Springs and now of Cedarville, he was first elected in 1976 as his county’s prosecutor. In 1980, he was elected to the Ohio Senate and then to the U.S. House of Representatives, where he served four terms. 

In 1990, DeWine was elected lieutenant governor as the running mate of George Voinovich, serving one term before winning a U.S. Senate seat in 1994, where he was re-elected in 2000. His bid for a third Senate term was denied by Democrat Sherrod Brown’s win in 2006. 

DeWine then became Ohio attorney general via an election he won over Cordray in 2010, and was subsequently re-elected in 2014. 

So we’ve seen a Cordray-DeWine matchup before, and now, like previously, we tap Cordray as the preferred candidate. 

Our choice is in some ways a departure from past practice, and in some ways it is not. 

True, it is rare for this newspaper to favor a Democrat over a Republican for the governor’s office. Since 1962, the Dispatch recommended a Democrat just once in that 56-year span: Ted Strickland won the Dispatch endorsement in 2006 and went on to defeat Republican J. Kenneth Blackwell for the seat previously held by Bob Taft. 

Now, like then, a term-limited governor, John Kasich, is prohibited from seeking a third stint and voters have the opportunity to choose a new direction for the state. 

Now, like then, Ohio faces significant challenges. Now, like then, Republicans enjoy control of both chambers in the Ohio General Assembly, as well as the governor’s office — and yet the majority party is ineffective in moving the state forward. 

That larger context is important in viewing the governor’s race in 2018. 

Both candidates advocate for improvements in early childhood development, as they should, to help break cycles of poor educational outcomes. Both candidates are committed to addressing the state’s opioid crisis. 

But DeWine potentially represents entrenchment with what has been a largely unresponsive Republican legislature while Cordray offers a different direction and proven leadership to challenge the status quo. 

DeWine supports further restrictions on abortion rights and has questioned the sustainability of Medicaid expansion, which secured health care coverage for 700,000 low-income Ohioans. He worked as attorney general to dismantle federal health-care reform in the Affordable Care Act and has declined to join other state attorneys general in protecting insurance coverage for those with preexisting conditions. 

Then there is the issue of public records, which the attorney general’s office is charged with protecting but which DeWine at times has suppressed, as was demonstrated in his fight against releasing autopsy reports from a Pike County mass murder in April 2016. 

The next governor will need to work with a legislature that has seen a Republican House speaker step down amid an FBI probe, infighting in a Republican House caucus that effectively stalled all legislative progress for seven months and resistance by Republican majorities to creating a plan for balanced congressional redistricting until faced with a ballot issue earlier this year to do the job for them. 

A Republican DeWine administration does not offer much hope for shaking up intractable legislators. With DeWine as governor, the legislature wouldn’t be the least bit restrained in its pursuit of more gun freedom and abortion restrictions. 

Cordray offers a more forward-looking vision for clean energy, protecting Lake Erie, supporting the ability of local governments to provide services to their communities and working with JobsOhio to improve workforce development and help grow small and mid-sized businesses. He also is a voice for reasonable gun restrictions, including red-flag laws to restrict firearm possession for those with demonstrated mental health issues. 

He argues persuasively that making Ohio more responsive to women’s rights and family-friendly issues, such as reducing costs of higher education, will make the state more attractive for business development and expansion. 

Cordray touts his executive experience as state treasurer and attorney general as well as in establishing and operating the federal Consumer Financial Protection Bureau in the Obama administration, recouping $12 billion for 30 million Americans despite resistance from a Republican Congress. 

For those who fear Cordray would lean too far left, his authority will be checked by what is anticipated to remain a Republican legislature. 

How the next governor relates to President Donald Trump is not a major issue, but we fear DeWine would not call out bad behavior and ill-advised policy decisions as Cordray has done. 

“This is a change election,” Cordray says, and we agree change is needed. 

For the path forward he will offer as Ohio governor, the Dispatch endorses Richard Cordray.

Dean Dennis: WILL OUR NEXT GOVERNOR HELP OHIO'S RETIRED TEACHERS?

From Dean Dennis, September 29, 2018 

On November 6, 2018, Ohioans will be electing a new governor. The next Governor of Ohio needs to know that current Ohio STRS retirees are not receiving a COLA because 

1) Ohio's General Assembly turned over control of our COLA to Ohio's STRS Trustees.

 2) Ohio's STRS Trustees then adopted an arguably low earnings assumption which is 114 basis points (7.45% adopted, 8.59% earned) lower than what they actually earn over the current 30 year, legislatively required, funding period. 

3) In turn, Ohio's STRS Trustees used this unjustifiably low earnings assumption as an excuse to withhold paying out Ohio's retirees their promised COLA. Ohio's retiree's could lose six years of COLA's by May of 2022, the time the trustees stipulated they would revisit the COLA. Any Governor of Ohio should be appalled that teachers who dedicated their lives to Ohio's children are being treated in this manner.

Mike DeWine and Richard Cordray both are making Ohio's children one of their top priorities. But are Mike DeWine and Richard Cordray willing to make Ohio's teachers a top priority? Will Richard Cordray or Mike DeWine publicly commit that Ohio's retired teachers are deserving of their COLA and commit that if elected, they will make sure we have a COLA? Let's find out. Contact each one and ask. You can use this information or tell your own story. Here are their email addresses, please cut and paste and send them a message:

Mike DeWine: info@mikedewine.com
Richard Cordray: info@cordrayforohio.com 

Bob Buerkle's remarks re: Melissa Cropper's 9.20.18 speech to STRS Board

Thank you for the speech you made at the STRS Board Meeting, Melissa. It is exactly what needed to be said and what the Board needed to hear. All board meetings should be available to be listened to and/or viewed on the internet at our convenience. They have the equipment and personnel that we have already paid for to do this but they want to keep us in the dark as long as possible. 

STRS Director Nehf came over to me after one recent Board meeting and said that STRS was trying to be as transparent as possible. I don’t believe that at all. I believe that STRS knew that the Ohio Constitution did not give legislators the authority to retroactively change a promised pension benefit so STRS sought and received total control of the COLA from the legislature to do this on their own. 

Director Nehf knows that up until now, by using investment assumptions and actuarial manipulations that have proven very wrong, he and his team have gotten away with one of the largest personal property thefts in American History. If the STRS course is not reversed, all of the current active and retired teachers will lose nearly 38 billion of their “personal property” in pension dollars; stolen from them in their lifetime. 

STRS would retort that withholding the COLA is strengthening the system to get to 100% funded status. We don’t need to be 100% funded, the legislature doesn’t require us to be 100% funded, none of the other Ohio Pension Systems are 100% funded, but one day Director Nehf will be able to say that “under his directorship, STRS was able to get to a 100% Funded Ratio.” Of course, retirees now know what this really means and that it will be achieved mostly by withholding, lowering, eliminating or delaying our COLAs.

By the way, by comparison, there’s never been a bank heist that even approached one billion dollars, let alone 38 billion.

Bob Buerkle to STRS Board 9.20.18: Why it is so important to get the COLA restored ASAP

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Bob Buerkle to ORSC 9.17.18: Eliminating the COLA is not adjusting the COLA

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Ohio Federation of Teachers President Melissa Cropper to STRS Board, 9/20/18: You are invited to the Toledo COLA forum at your convenience

From Dean Dennis: Below is OFT's President, Melissa Cropper's, address to the STRS Trustees on September 20, 2018. A little background is in order in order to appreciate the context. 

OFT was trying to meet members' needs by arranging a forum regarding our COLA. The forum would have taken place on September 26. I was in fact invited as one of the speakers, as were a couple of STRS Board Members. The forum was canceled because OFT could not find any board members to attend. When OFT learned why, President Cropper make it a point to drive to Columbus and address the STRS Trustees. What follows is her speech: 

Melissa Cropper's speech to the STRS Board, 9/20/18 

As an elected person, I understand that I have certain responsibilities to the people who elected me. I have a responsibility to be accessible. I have a responsibility to listen to concerns. I have a responsibility to be responsive. Sometimes I agree with the concerns that are brought to me, and sometimes I disagree. When I disagree, I have a responsibility to not only explain why but to also listen to the other side and try to come to some understanding or solution. I also take direction from my Board and not the other way around.

We have all seen what happens when people feel like their voices are not heard. We saw the Women’s March on Washington D.C. , the teacher walkouts across the nation, and more specifically, the teacher protests over pension issues in Kentucky. These protests all had two things in common. One – they happened because people felt like their concerns were being ignores. Two – they started with a Facebook page. 

Our members across the state have been increasingly interested in the decisions and actions of the STRS Board. In fact, their engagement over the time that I have been involved with OFT has increasingly grown. They understand that you all have a very difficult job to do, and they appreciate your work, but they are frustrated that they can’t watch a Board meeting unless they drive to Columbus, and if they do drive to Columbus, they only have three minutes to express a concern with no actual interaction with Board members, and they cannot even send an email directly to a Board member.

Our Toledo President decided to respond to those concerns by inviting elected board members to a meeting with our members about their concerns. You see, our members believe that we have a board that is both appointed and elected for a reason. Appointed members represent the concerns of those who appointed them, and elected members should represent the concerns of those who elected them. Both should listen to the concerns of those they represent, bring them back to the board, and ask the difficult questions on our behalf.
We were shocked when we heard that Board members will not attend that meeting because they have been advised by STRS to not attend any meetings where the COLA is being discussed.

I am sincerely hoping that this has been a misunderstanding or misinterpretation, and since I was not directly involved in those discussions, I want to extend an invitation to you today for our meeting on Sept. 26. If that date doesn’t work, let us know what date will work, and we will accommodate. 

Thank you.

Dean Dennis to STRS Board 9/20/18: LISTEN TO US. RESTORE OUR COLA

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

I want to discuss early 2017 when Segal made recommendations to the trustees. The recommendations included:

1) Lowering the STRS investment return assumption 

2) Adopting updated mortality tables

3) Reducing the payroll growth assumption and inflation projection 

These actions, which you adopted, increased STRS's liabilities nearly $11.5 billion. This in turn extended the funding period well beyond the 30 years. Prior to these adopted actions, STRS was well within the 30 year funding period. It also cost us our COLA. I want to discuss each of these actions, then offer suggestions. 

First, you lowered the investment return assumption to 7.45% from 7.75%. Prior to that, it was at 8%. Although Segal made this recommendation, if consideration was given to STRS's historical 30 year earning returns, why did you comply? Has STRS ever reported less than 8% for any 30 year funding period? 

Here are the last four reported 30 year period earning returns: Fiscal Y2015 - 9.09%, Fiscal Y2016 - 8.4%, Fiscal Y2017- 8.39%, Fiscal Y2018- 8.59%. 

Why are you assuming an earning assumption rate of 7.45% when your current 30 year return is 8.59%? This is more than a 100 basis point gap between actual data verses a guess into the future. When this discrepancy is applied over a 30 year funding period, it projects a significant, but not justifiable, liability. 

Incidentally, the current 30 year funding period, which earned 8.59%, takes into account the recession of the early 2000's and the 2008 - 9 financial collapse, the second largest financial disaster since the Great Depression.

Why not adopt a 30 year rolling average and simply subtract 50 basis points from the average, as a margin of safety, for our earnings assumption rate? A formula based on historical earnings makes more sense than guessing the future. If you were to do this, our earning assumption would be near 8% and we'd have our COLA. 

Second, the mortality tables. My understanding is, one of the newer "best practices" of actuaries is to adopt the age of the younger employees (the generational approach) and apply that mortality factor to liability assumptions. 

This stricter approach in essence skews the liability of older retirees. Withholding, retirees' COLA because of this accounting procedure seems unfair. However, equally unfair is making current teachers work until at least age 60 and have at least 35 years of service, and also withholding their COLA for 5 years. 

Third, you reduced the payroll growth assumption from 3.5% to 3%, yet it actually increased by 4.1%. Can you understand why many members feel your adopted assumptions benefits STRS administration's goals at the expense of STRS active and retired teachers? 

Before May of 2022, when you stated you will revisit the COLA, a teacher earning a $1,000 COLA will have lost $23,000. Even if the COLA is restored July 1, of 2022, they will lose an additional $6,000 a year for every year thereafter in addition to the $23,000 loss. 

One can see if they were to live only 10 years beyond 2022, their financial loss will be $83,000. As elected Board members are you aware of how your newly adopted assumptions are impacting us? 
Here are some suggestions:

1) Seek changing the 30 year funding period to 35 years to match the new career length requirement. This will decrease the liability period.

2) As already mentioned, look at what you actually are earning over the legislatively set 30 (or 35) year funding period and make the earning assumption rate 50 basis points less. Adopting an earning assumption rate that is 75 to 100 basis points below actual earnings severely punishes those who you are supposed to be looking out for.

3) Seek an increase in the employer contribution. By statute, ORC 3307.14 states that if STRS Ohio cannot meet its financial obligations, the burden falls on the employer, not the employee. While Ohio teachers contribution rates are now the highest in the United States for any teacher, for the past 35 years the employer contribution rate hasn't risen a penny. 

Were you aware that Ohio's employers have been receiving roughly a billion dollars annually from Worker Compensation surplus rebates. One prominent Republican legislator has suggested this revenue could be used to justify increasing the employer contribution and be an approach to helping restore our COLA. 

It's time is to start advocating for us. We're getting hammered. 

Lastly, we have two new board members, we hope this Board adopts a new culture; one that looks out for its members. We know by the Board's past actions that they listen to STRS management. We hope the Board can show us, through their actions that they will listen to us, and hear us. 

Please hear this, The Ohio General Assembly gave you the authority to adjust the COLA, not suspend or eliminate the COLA. Listen to us; restore our COLA.

Dennis Leone to STRS Board August 16, 2018: You need to provide better oversight

"As board members, YOU need to take a leadership role and provide better oversight, which means not just questioning, but challenging and requiring meaningful improvements to help retirees receive the COLA they were promised and so very much deserve." 

Dennis Leone's Speech to the STRS Board 

8-16-18

Members of the Board, my name is Dennis Leone. I served on this board in 2006, 2007, 2008, and 2009. I recall some of my fellow board members not taking their oversight responsibility seriously. I remember board members pretty much blindly accepting the recommendations and conclusions of staff and outside "expert" consultants on very important matters pertaining to payroll growth assumptions and investments. Are board members still doing this today, when perhaps they should not? It is so easy to accept, isn't it, what you are being told by staff and so-called "experts." It is lot harder to call into question what you are being told, and to say "no, I do not accept this and it is my conviction that we need to do better."

I recall vividly in 2008, when the total STRS assets hit $81 billion, and when the DOW stood at 14,400. Yes, the stock market went south and we went down to $65 billion, but isn't is curious to the board that today - 10 years later - the DOW stands at 25,000, but we STILL are not quite where we were in 2008 when the DOW reached a high of 14,400.

Here is something I do recall from 2008, and you need to listen to this: We lost a ton of money with our Enron stock. I recall asking during board meetings in this room why we had not bailed from Enron, when so many others had. The answer the board was given by the staff was "no, our consultants tell us that is not the right things to do………we need to hang in there." So we didn't bail, as we should have, and we lost millions and millions more. I recall pushing for a new policy in 2008, which I could not get, that would have required STRS to pull back from stocks that were losing a certain percentage of their value. No, the staff and "expert" consultants did not want to do that either, so we didn't.

The data and recommendations the board accepted in the past for annual payroll growth assumptions have been embarrassing. In the 8-year span between 2005 and 2013, we received a miserable annual average of 1.33%.....not even close to the 3.5% assumption the board was told by staff and "experts" to use. Did the staff survey Ohio superintendents or treasurers and ask them to share what they thought might be the base raises and step increases during those years. Never, not once. In my 23 years as a superintendent in Ohio, I never once received such a survey from STRS. The board, instead, accepted conclusions from staff and outside "experts," who - quite frankly - did not know what the hell they were talking about in this area.

Are there investment recommendations you have accepted that you should not have? Is it wrong for you to conclude that we should being doing better, and producing more investment revenue to support retirees and undo the board's absolute broken promise to 143,000 retirees for an annual COLA? This has been the only way many retirees have been able to keep up with increased costs for home insurance, car insurance, and health insurance. It is sinful that you have given bonus checks to staff when you have given no increase, nothing, to retirees. But I guess if you continue to accept what you are told that the bonuses are necessary in order to keep the best and the brightest employees, then indeed you have fallen for the same malarkey that many board members did during my 4-year term.

Please study carefully the attached Bloomberg report, which offers 5 meaningful suggestions for pension boards to juice up their investment returns.

But my suggestions are more simple. As board members, YOU need to take a leadership role and provide better oversight, which means not just questioning, but challenging and requiring meaningful improvements to help retirees receive the COLA they were promised and so very much deserve.

Thank you.