Saturday, November 15, 2008

Molly Janczyk re: HB 315

From Molly Janczyk, November 15, 2008
Subject: HB315: A clarification, please.
Let there be no mistake. I fully support HB 315 and allowing educators to pay ahead for their own health care. I have simply put out arguments heard from school boards and some legislators -- not how I feel about the need for HB 315.
1. We must find steady funding for health care at STRS in order to attract quality educators. Otherwise, top educators will go elsewhere -- to other states or other careers.
STRS, being self insured, DOES NOT HAVE THE MONEY in spite of our differences to pay health care at $1.5 MILLION per day for a length of time.
2. We will have an aging population of active educators who cannot afford to retire and who cannot pay for health care in retirement. These older educators will bring increasing health problems with them.
School districts will pay more for health benefits for them to stay active, sick leave will increase and pay for substitutes will be added to the districts' bills. Taxpayers will pay more for ER care due to more educators unable to pay for healthcare in retirement losing health care.
3. Educators want to pay ahead for their own healthcare. School boards can find and reallocate money for needed increases totally only .5% per year topping out at 5 yrs. Trim administrative jobs, consolidate positions, work more efficiently and effectively. Money can always be found if the issue is important with redistributions. Lazares was a master at this!
This increase is a small price to pay to save healthcare for professionals well deserving. Educators should not be punished for extravagant spending. The dollars wasted do not add up to anywhere near $1.5 MILLION DAILY! BUT, this money could be used for the neediest retirees, and would create a more stable appearance and trustworthy status.
STRS has been stellar in its recouping of losses! I have never said otherwise. I am only commenting on the appearance to retirees in crisis and sensitivity and am nor have EVER implied that these monies would even come close to paying for healthcare now or in the early 2000's. $1.5 MILLION DAILY is a huge amount and long term health care can only be obtained through legislation by allowing an increase in contributions which has been stagnant for 15-20 yrs and never been raised to meet the inflation costs.
Without HB 315, retirees suffer draining their finances, selling homes, and refusing meds, treatments and Dr. visits. Future retirees fear no healthcare and none can ever pay for their own healthcare. Legislators like to throw out with the 35 yr rule, that they can, but even those cannot at today's costs. I doubt any legislators could either.
Please never confuse my attempts to present compassion and prudence to retirees as ever being anything but now and always for health care legislation to improve the quality of life for retirees-future and current. Ohio sorely needs a boost in education and a system that can guarantee health care would certainly catch attention of educators.
It is rhetoric for school boards and legislators to deny its important just as it is rhetoric for STRS not to ALSO improve its status and good intent by incrementally increasing years for retirement, reworking the 35 yr rule to be more equitable and stepping away from union demands and fully engage all membership -- actives and retirees.
One does not replace the other but all ways to improve long term should be engaged for their far future of educators NOW -- not later, as happened with us.
Molly J.

STRS/Express Scripts benefits recipients....there's a telephone number for you to call!

From John Curry, November 15, 2008, Saturday, Nov 15, 2008
Posted on Wed, Nov. 12, 2008
St. Louis-based Express Scripts offers $1 million reward after new threats
St. Louis-based Express Scripts, one of the largest pharmacy benefit management companies in North America, announced that a small number of its clients have received letters threatening to expose the personal information of its members.
Last week, Express Scripts announced that they received a letter threatening to publicly expose the records of millions of customers if the company didn't pay an undisclosed amount of money.
Now, a small number of clients have received similar letters.
The FBI is investigating the latest threats. Express Scripts is also offering a $1 million reward for information that leads to an arrest in this case.
Express Scripts announced that it has launched a website for members to obtain information about this security incident and to access resources and information to help them protect themselves against the possibility of identity theft. The location of this website is:

You might be working for the STRS investment department if……

..1. You sit on a throne instead of a chair.
..2. Your closet, cabinets and desk drawers are all stuffed and overflowing with hundred dollar bills.
..3. You work bankers' hours and a 37.5 hour work week.
..4. You ride to work in a chauffeured limo outfitted with every cutting edge luxury imaginable, including a sports bar.
..5. Your desk is made of solid gold embedded with diamonds, rubies, sapphires and emeralds.
..6. You own six homes, nine cars and a Lear Jet.
..7. The only sound heard in your board room is that of rubber (and occasionally the voice of a lone dissenter).
..8. Your personal wealth increases in inverse proportion to that of the retirees.
..9. Your board grovels each time a union boss enters the room.
10. You never see, let alone communicate with, the peons who sacrifice to provide the environment for your accumulation of personal wealth.
11. You say or think "Let 'em eat cake" at least once a day.
12. All the banks in town can't insure your funds because they are so vast.
13. You can "spike" your pension with the accumulation of bonuses.
14. You can retire with OPERS "Cadillac" healthcare and pay 1/10 the premium that STRS retirees pay.
15. Your annual PBI is enough to feed 500 retirees for one year.
16. You and your boss walk on water.

[Joke; spoof; from a retiree]
Palace on Broad Street
Home for STRS retirees

Let them eat cake!

Molly Janczyk: STRS has bled retirees dry and OEA doesn't care about us

Molly Janczyk to RH Jones, November 15, 2008
Subject: RE: "STRS cannot reduce that [retirees] pension"
True Bob. But, STRS is speaking of the amount of your pension check, only. In high times, $40,000,000 + was used for retiree 13th cks annually from discretionary monies. Those high ride times will probably never be seen again. Opportunities missed by STRS to seek HC legislation also long past. I doubt that HB 315 will be passed anytime in the near future.
STRS is wise to raise retirement ages and to seek alternate means for opposing legislators and school boards to consider legislating for educators. Many already see us as wealthy enough with many going for 88% of our salary for pensions, ability to retire early by most standards: 52-57 (with 35 yrs) when most of America retirees at 62 (early) to 66 now for my age group and older for younger workers affected by increased years by Soc. Sec. We get more today for our pensions than does the Soc. Sec. worker and have supplemental insurance thru STRS when many only have Medicare.
I am not speaking FOR STRS; just looking at what legislators and school boards argue.
STRS needs to make changes for REAL consideration and the ORSC is looking at age requirements to be increased whether OEA likes it or not. It would hurt very little to have incremental increases beginning 6 yrs out to 31 yrs., and so on.
Make 20 yrs. the earliest retirement for receiving HC benefits at higher premiums and higher out of pockets to encourage working longer and withdrawing later for those who can afford to retire early or who have supporting salaries from a spouse who also has HC benefits. NOTHING but access to HC for 15-19 years of service for NEW retirees. Disability is, of course, not in this mix but a separate entity.
IF someone is able to work another job besides education, disability should not be given. We should not be supporting able-bodied persons who can work full time jobs other than to 'possibly' add to income if they cannot make educator salaries. True disabled recipients are absolutely covered. Why are we paying individuals disability benefits who work full time jobs outside of education complete with HC benefits???? On the other hand, there are some who are kicked out that need revisiting who cannot earn enough to support their families and have HC. Subsidies may be in order -- but not full disability IF a person can work. There are many jobs that do not have the stress of teaching but connected to education that our unions need to secure for these individuals: library work, office work, education reps and inservice staff, etc.
Every cent needs looked at and line itemed. We are no longer able to pay folks for trying education for a brief period when they could afford to stay home or have substantial spousal benefits at home. If you can afford to retire at 15 yrs., then increase the mark to 20 yrs for early retirement with HC. Folks who chose to stay at home, may go back when kids are in school as hours are very closely aligned and still be there for their kids. Reward career teachers will less out of pocket costs.
Incrementally increase percent of salary for retirement. WE KNOW OEA AND OFT don't want this as they have rewarded themselves with the 35 yr rule. But, it is totally out of line with retiree total population and THESE ARE TOUGH TIMES!
We all make decisions. But, there should be limits to how long a person can leave their money at STRS for returning. If one go into another career, after 6 yrs., they should have to withdraw their money and should not be allowed to vote on STRS issues. Benefits should never be provided for those who leave and do not return in 6 yrs. as then kids would be in school full time.
In tough times, tough decisions should be made BUT NOT ONLY FOR RETIREES AND UPPING THEIR COSTS WITH NO HOPE OF INCREASING THEIR INCOME! We are a retirement system for active and retired educators, and BOTH should be affected in good and bad times. No one or few are going to leave over one year of increasing years to retirement or incremental changes. Reasonable changes for unreasonable times.
Funds for needy retirees established as well as the assistance program. WE ARE YOUR CHARITY! Denote $1 -- however much per ck donated to the fund to give to truly established needy.
TRIM! TRIM! TRIM! Current retirees were told to sell cars, homes, take less vacations, eat out less AFTER THE FACT OF IRREVOCABLE DECISIONS TO RETIRE! Time FOR ALL STRS MEMBERSHIP to chip in vs. punitive measures for those already devoting lives to education.
Freeze salary increases as our city mayor has done. Decrease extravagant over-the-top bonuses in the world of education PUBLIC pension funds vs. corporations. WALL STREET IS RELOOKING THE 90's BONUS POLICIES! SO SHOULD STRS!
DO YOU THINK YOUR BOARD GOING FOR 35 YRS CARES?? They are fed rhetoric and they robotics that they are, spit it back out.
WHAT CAN YOU DO FOR US TODAY! TOMORROW! Stop wasting our time with memos stating what we hear over and over. YOU CAN DO BETTER! WILL YOU?
OEA doesn't care about us. They never even mentioned us in communications until we got press time. They smirked and laughed and called us names. Finally, they had to at least mention us. They care about the actives and as Bill L. said to me long ago, "OEA is active educators." So much for considering their futures except the 35 yr rule active board members wrote for themselves and now strive to reach. 35 yrs is an achievement that should be met appropriately but going 20 pts in % is sure a giant leap for 30 yrs full retirement which less able bodied can make.

RH Jones: Better investment discipline in order

RH Jones to Michael Nehf, Molly Janczyk, John Curry and Kathie Bracy
November 14, 2008
Subject: Re: "STRS cannot reduce that [retirees] pension"
To Mr. Michael Nehf, Molly, John and Kathie:
Indeed, when one takes in consideration purchasing power, the STRS retirees' pensions have been reduced by the inflation of the dollar.
Many years ago a wise and honorable legislature put the very fair issued 13th check into effect to cover this loss of STRS retiree purchasing power. Also, the STRS retiree dwindling heath care benefits of the past few years have diminished the value of our pension. It is, therefore, the responsibility of our STRS Board and its employees to see that this reduction does not occur. In this aspect both have failed us retirees. Even if unintended, the enemies of public education are extremely alert to such failures at our STRS. Better STRS investment discipline is therefore in order. I hope that my concerns are passed on to the investment staff.
One member's opinion,

Friday, November 14, 2008

Why is this posted OUTSIDE the Board room?

...guiding all that we do at STRS Ohio, from Retirement Board actions to counseling members and investing money.
Sculpture: "Integrity" purchased by STRS for $100,000
(Click image to enlarge)

Freddie lost (25 Billion) what STRS lost.....they got front page/we didn't!?

From John Curry, November 15, 2008
November 15, 2008
Freddie Mac Lost $25.3 Billion in Quarter
Freddie Mac Seeks U.S. Aid After Posting Loss
Freddie Mac, the mortgage finance giant, said Friday that it lost $25.3 billion in the third quarter as it wrote down a tax-related asset that had buoyed its capital and the housing slump took a significant turn for the worse.
Freddie Mac’s loss as $19.44 a share, compared with a loss, before preferred dividend payments, of $1.24 billion, or $2.07 a share, a year earlier.
The government placed Freddie Mac and its larger rival, Fannie Mae, under conservatorship in September, pledging to inject capital as needed for the companies to operate and help stabilize the housing market. The companies’ regulator has submitted a request for the Treasury Department to provide $13.8 billion for Freddie Mac to erase the shareholder equity deficit.
Freddie Mac said it expected to receive the money from Treasury by Nov. 29.
Deteriorating conditions in the housing market led Freddie Mac to increase its provision for credit losses to $5.7 billion in the third quarter from $2.5 billion in the second quarter. It also recorded $9.1 billion in write-downs on securities and $6.0 billion in other credit-related expenses, guarantee assets and derivatives, up from a $481 million loss in the previous period.
The government took Freddie Mac and Fannie Mae on concern that mortgage losses were eroding the capital they needed to operate as the top funders of residential loans. The companies together own or guarantee nearly half of all mortgages.
Earlier this week, Fannie Mae said it lost $29 billion in the third quarter, more than it earned from 2002 to 2006. Most of the Fannie loss reflected a $9.2 billion charge for credit expenses and a $21.4 billion write-down of deferred tax assets.
[And if it weren't for one lone STRS Board member asking some hard questions and demanding answers, do you think we would EVER have been told we lost $25 billion in one year?]

Thursday, November 13, 2008

Sandy Knoesel responds to Shirlee Zerkel re: lost Medical Mutual disks

From Sandy Knoesel, November 13, 2008
Subject: RE: More disk loss questions
Dear Mrs. Zerkel:
As Beth Coffey explained, I was out of the office all day Wednesday at a retired teacher meeting in Youngstown. I have many members asking me various questions; so, if you need an immediate response, please contact our Member Services Center or use the Contact Us e-mail.
First, let me apologize for the inconvenience and worry the lost CDs from Medical Mutual have caused you. Regarding the past practice on receiving the Medical Mutual CDs, in June 2008 and previous months, the STRS Ohio disks were hand delivered by the Medical Mutual account representative. Staff did not know that Medical Mutual had changed to mailing the disks. We inquired why we had not received the disks and that’s when it was determined the disks were lost. In the future, this information will be transmitted electronically through encrypted information.
As posted on the STRS Ohio web site, a news release dated Oct. 23 from Medical Mutual states that an investigation into the lost disks was underway and if the disks were not located, a customer protection plan was in place to help with any potential fraud. Medical Mutual said the disks were likely lost within the post office itself and therefore it is unlikely the information has fallen into the “wrong hands.” Medical Mutual wanted to allow sufficient time for the postal investigation to occur before sending letters to retirees.
In response to your question about what happens if you experience fraud after the one-year protection expires, you will need to purchase your own identity theft protection if you believe you are at risk at that time. My name and Social Security number has been stolen twice. I was offered identity theft protection for one year in both cases.
I want to emphasize that no bank information was on the lost Medical Mutual disks. The statement to watch your other accounts is merely a suggestion to be aware of any unusual activity.
Sandy Knoesel

Molly Janczyk re: Bonuses and 13th check

From Molly Janczyk, November 13, 2008
Subject: RE: Bonuses and 13th check
Let's say there are 110,000 retirees. I am not sure of the current number. Was 105,000 and I saw close to 145,000 somewhere.
100,000 x $400 for each retiree in 13th ck = $40 million annually.
There are over 100,000 retirees and $400 is a low amount.
I rec'd over that in my first and only year of receiving a 13th ck in 12/99.
It seems so small to us but that is a lot of discretionary money and STRS and HCA have stated no use of discretionary monies until STRS is 30 yrs or below for their unfunded liability (basically a 30 yr debt to payout pensions and the recommended number given by the Ohio Retirement Study Council : ORSC) as well as an 80% funding ratio. Put that together with this crisis as the first priority is pensions and all that is mandated. I am unsure where we now stand on unfunded liability ; it did get down to under 30 yrs with our talented investment staff but I think it is now over 30 yrs again.
The point is, for me, appearance and sensitivity to shareholders in times of crisis. We were all thrilled when investment staff made huge gains for us outperforming their goals. Now, though, in times of struggle for shareholders, one expects their system to exercise prudence and decorum. The hugely overpriced bonuses for these times, is salt in our wounds when we cannot expect ANY relief in the form of 13th cks, or compounded COLAS, etc.
However, small changes could be made to show shareholders, STRS is sensitive to them. I outlined many ways monies could be used differently.
OEA will fight to the death over raising years for retirement. Probably, OFT as well. BUT, that is precisely what the ORSC is considering and is in order for a new time. It would be far from punitive to raise years incrementally as Soc Sec did decades ago beginning 6 yrs out so no one who is close to retiring is affected, having planned this. Of course, NO ONE worried about retirees getting hit AFTER THE FACT of retiring and did not grandfather us in. We would never want that to happen to anyone.
There are ALWAYS ways and means to accomplish goals. STRS puts out rhetoric-same ol. BUT, they CAN make such changes without legislation. Of course, our Union block on the STRS Board will fight that over any compassion for current retirees. BILL LEIBENSPERGER will help any active who wants to write a letter as he has stated previously in Ohio Schools.
Will our new Exec. Direc. stand up to the Board and make recommendations that include bettering conditions for retirees as well? So far, not.
Seems unlikely that HB 315 will go anywhere with school boards and so many against it. ORSC would like to see STRS make changes first towards achieving health goals by upping yrs of retirement along with other changes so as to direct more money into HCSF.
From Alice Marson, November 13, 2008
Subject: Bonuses and 13th check
Hi Molly,
If they have that kind of money to pay bonuses why can’t we merit a 13th check?
Alice Marson
Summit Co. STRS

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Molly Janczyk re: PBIs

From Molly Janczyk, November 13, 2008
(Response to Dorothy Rezabek)
Subject: FW: PBIs given to STRS Investment Associates
Personal note: Again, I do not fault STRS investors for this market crisis. In bad times, earnings drop and money is lost by all. I fault the size of bonuses in this time of shareholders struggle to pay to maintain their lives and who give up meds and medical treatments to survive. It is NOT a time for extravagance and those who earned, should get merits proportionate with earnings or benchmarks consistent with prudent and sensitive decisions. If earnings were .05%, then , make bonuses reflect that. If losses resulted but much less than expected, reflect that. We would expect to see not holding onto losing investments for many years waiting for the market to go up. Many analysts feel this market may never see gains like we enjoyed. Our investment staff did overwhelming jobs in good times. Easier to do, of course, but they outperformed other pension systems. Now, is the challenge to keep us healthy in spite of this crisis. That shows talent and needs to be recognized with reasonable and sensitive merits. If an investor shows poor judgement and investments, no gain.
Let's simply get real, here. Times have changed. Entitlement is history. Prudence and long term vision welcomed but not by holding onto investments simply not to miss the rise. The rise is predicted too long off. Shifting and reinvesting later in better times is in order. I am simplistic as that is all I understand and know and of course STRS is far better suited to this. Point is: appearance is everything to shareholders.

Molly Janczyk: Compassion and sensitivity are in order

From Molly Janczyk, November 13, 2008
Subject: RE: Investments
The point is that during times of crisis, we understand that money will be lost. However, moving monies protects much of that. STRS has a complicated portfolio and did move some monies. But, in a crash scenario, moving most to safe havens at least keeps the losses less. I understand, if you are not there for the rise, you lose earnings but in volatile times, seems more prudent to stay safe in money markets, and safe areas where guarantees of small gains are made: shorter term CD's and bonds, etc. When the rise seems stable, jump back in. Some short term fixed funds do require a 3 mo staying period. Doesn't seem this market is going for a soar before that or much longer.
I don't want anyone to misunderstand my understanding that about investors. If the investors still earned, great! But, in times of crisis when shareholders are suffering, it is sensitive to downsize bonuses. Even WALL ST is reconsidering its bonus structure in such times. The 90's are over. We may never see such a time again. Extravagant, oversized bonus structures need revisiting, as much of even corporate America is doing.
I do NOT fault the investors, I question those who decide such lavishness is still in order when shareholders are again taking the hit with 2009 HC increases, costs at the grocery store, etc. and 3% COLAS which never change to meet inflation.
Our investors did a stellar job and were recognized nationally for their incredible gains for us. I am sure they are just as good during bad times and did lose less for us. BUT, APPEARANCE IS EVERYTHING TO SHAREHOLDERS! Compassion and sensitivity are in order.
Mayor Coleman refused his raise. Doesn't mean he didn't earn it. Means, he is setting an example and being sensitive to his constituents. Wall St., Corporate America and many businesses are revisiting bonus structure during these times. I hope when STRS does so, it will do so with complete open minded prudence and solely on behalf of shareholders showing some sensitivity during this crisis.
From John Decker, November 13, 2008
Subject: Re: FW: Investments
Excellent letter by Monica with very good comparisons. Many of us are concerned/worried about the leadership at STRS. Dennis and John Lazarus uncovered many inappropriate expenditures and unfortunately, it is not getting any better. All I can say is - GREED!!

Michael Nehf: Once an STRS Ohio member begins receiving a pension, STRS Ohio cannot reduce that pension

Michael Nehf to Kathie Bracy
November 11, 2008
Dear Ms. Bracy:
Thank you for taking the time to send me an e-mail with your questions and concerns. In it, you asked about the safety of your pension and cite a recent posting on the SERS Web site. The applicable provisions of the statutes that govern STRS Ohio and SERS are very similar. The pertinent language of each statute provides that pensions are vested when granted. This means that retirees vested in the STRS Ohio defined benefit plan cannot have their pension formula reduced by STRS Ohio. In simple language, once an STRS Ohio member begins receiving a pension, STRS Ohio cannot reduce that pension.
I hope this answers your question. Thank you for writing.
Michael J. Nehf
Executive Director

Active teachers: You need a heads up on this one!

Question: investment losses continue and STRS "cannot reduce that pension," then....will future cuts come at the expense of retirees' healthcare benefits or are the active educators' future pensions on the potential "reduce" list? If I were an "active" educator... I would start to ask some questions!
John Curry

A moment of transparency.....

In case you were wondering (with all due respect) how much the STRS investment counselors make, this will give you an idea. These figures do not include their PBIs (Performance Based Incentives -- the politically correct term for "bonuses"). This information was respectfully provided by STRS.
Lowest base salary is $60,500
The average base salary is $150,210
Highest base salary is $350,000

Don Gatchell to STRS Board: Please be good stewards of our hard earned money

From Don Gatchell, November 13, 2008
Subject: Local RTA Members Fear Future of Pension Fund
STRS Ohio Board:
The key request most of the local STRS retirees have of the Executive Director, his staff & the Board members is "... please be good stewards of the money we earned and insure that it will grow over time so we can feel secure during all of our retirement years." Those of us who retired 10 or more years ago were told, no PROMISED by STRS officials in face-to-face meetings that during our retirement we would not have to worry because we would receive health insurance at 'little' cost to us, a 'secure' pension amount paid monthly that would 'rise' as inflation rose and a 13th check each year to help us with special expenses we incurred. Well, so much for promises! Right now I am not even sure that our pension fund is secure because of not only the failing economy and falling stock market, but also the risky STRS investments in financial & other stocks that investing resources like Morningstar were calling volatile a year ago. Maybe besides bonus checks to investment staff for superior performance, there should be a deduction from their pay for risky, non-productive investments.
The next step in the investments program is to compare STRS investment performance to not only the major stock indexes such as the DJIA, S&P 500, NASDAQ, etc., but also to the performance of other Ohio & out-of-state retirement funds. It might be wise also to check what big investment companies like Janney, Montgomery, Scott or Fidelity or Vanguard could do to assist or replace the STRS investment staff.. I do not wish to be ungrateful or rude to the dedicated STRS staff members, but many of us are very afraid for the future of our pension fund. Unfortunately, desperate times may require desperate actions by the Board.
Thanks for all you and your fellow Board members do to support STRS retirees.
Be well,
Don Gatchell
President, Ross County Retired Teachers Assn.

Dorothy Rezabek to Board: Will you vote for future PBIs which will be EARNED only when total fund returns show a profit?

From Dorothy Rezabek, October 30, 2008
Subject: PBIs given to STRS Investment Associates
At its September, 2008 meeting, the STRS Retirement Board approved $6 million for PBIs (Performance-Based Incentives) to pay 87 investment associates for losing $6.5 billion Total Investment Assets for fiscal 2007-2008. Most of us understand that terrible economic times have, once again, contributed to these monumental STRS loses.
What I don't understand & ABSOLUTELY DO NOT AGREE WITH, is why our STRS Board PAID MILLIONS IN PBIs (Performanced-Based Incentives) to REWARD STRS investment associates for LOSING BILLIONS. Moreover, I totally resent the slick attempt to gloss over the total fund return of -5.44% by stating investments exceeded the NEGATIVE composite bench mark by +.35%. How can you justify paying millions of PBIs by saying that STRS investment associates lost a few billion LESS than whomever forms the benchmark? Since the "P" in PBI stands for PERFORMANCE, why did the STRS Board pay any incentives, much less pay $6 million for poor performance???!!! To add insult to injury, the October, 2008 STRS Newsletter stated that the $6 million PBI was 3.4 million LESS than what was budgeted. Was this slick wording designed to make us GRATEFUL that the Board didn't pay the even larger, budgeted incentives???!!!
The message seems to be, " Attention STRS Investment Associates: Don't be too concerned if your investments tank. You won't be paid as much, but you'll still get your PBIs. Don't worry about getting fired for poor investment performance. Unlike almost every business in the world, no matter how many billion your investments lose, you'll still get your PBIs. Rah! Rah!! Rah!!! "
Suppose I owned a bakery & promised my employees millions of extra dollars, at the end of the year, if they sold enough doughnuts to meet, or exceed, a pre-set increase in my profits.Then the bakery was hit by a tornado & tons of doughnuts were lost. No business owner, in their right mind, would feel obliged to pay the promised incentive on a giant lose. Like a popular song says,
"Nothin' from nothin' is nothin'..." The tornado, which was inherently devastating, was not made worse because COMMON SENSE dictated the owner not pay promised incentives on a lost product.
I hope you, as an STRS Board member, can explain why the Board recently AGAIN voted to pay millions of dollars in PBIs on billions of investment loses.
Can you act responsibly and assure us that you, as an STRS Board member, will never VOTE FOR any future PBIs that are based on investment loses?
Kindly assure us that you will help revise the budget wording to ABSOLUTELY state that all future PBI's will NEVER be given as undeserved rewards on investment loses.
Will you assure thousands of STRS members that you will only VOTE FOR future incentives based on positive investment profits? Can you assure us you'll try to persuade other STRS Board members to only VOTE for future PBIs which can only BE EARNED when "Total Fund Returns" show a profit?
I trust you will respond soon.
Dorothy H. Rezabek, retired STRS member
Morrow, OH
Addendum: In October of 2008 it was discovered that, in fact, STRS had lost 25 Billion dollars in the previous 10 months. This figure makes the 6 billion dollar loss pale by comparison.]

Wednesday, November 12, 2008

Click image to enlarge.

A lady with a novel idea.....have the BANK handle those investments!

From Monica Oclander, November 12, 2008
Subject: Investments
This letter is being written in support of the comments of Dr. Dennis Leone in regards to the bonuses planned for your investment department. I am very well acquainted with investment analysts, and most of their careers rise and fall depending on their judgement. A group like the one working at STRS would not hold a position for long if they worked in an investment house such as McDonald & Company or any of the other Ohio firms if their recommendations resulted in a loss such as we've just had. While perhaps few could have foreseen the huge losses to the Stock Market, all are paid for their expertise, sans bonus, and to NOT have even had an inkling of the Tsunami of losses that have occurred seems to me that perhaps the collective expertise of the entire group is wanting. To give them a bonus for their disaster makes me wonder if the Board is not guilty of malfeasance. The Board members' job is to protect the members of STRS, not their investment unit. I suspect we have more than a leg to stand on if we were to take the Board to court.
I am a health care provider, and I do not see a bonus when I see more patients in a day than expected, or because of my intervention avoid a dramatic illness or circumstance for a patient. There is no expectation of receiving such a bonus. I was hired by a public health entity to a particular position which pays well below the amount the investment personnel apparently are taking home and I satisfy myself with what I am paid. I must say that the teachers and professors and other members of STRS are definitely not given bonuses commensurate to how many successful students they have in a year, and my former husband, a professor also member of STRS does not receive a bonus based on how many physicians are graduated from the medical college where he works. In good or bad weather, there are no bonuses, and STRS should cease and desist from handing out bonuses in good or bad years. It is, after all, the investment analysts' JOB to do research on the companies they recommend for stock purchase and to manage the money and no remuneration beyond salary should be expected. I believe that in these times just to have a secure position should be enough of a bonus. Now, to consider giving them a bonus following a particularly BAD year is an insult to all of the members, particularly the retirees. Imagine if I were to receive a bonus for having a patient die due to my prescriptions or malpractice?? That wouldn't make a lot of sense, now, would it? In all actuality, I could expect to have my privileges revoked, and perhaps my license as well. The Securities and Exchange Commission might have a strong opinion on the Board's action.
Has it ever occurred to the Board to have the Trust Department of the bank that handles their banking handle the task of managing the investments of STRS? The Trust Department would merely charge a percentage of the investment amount which I am sure would fall far below the added salaries and benefits, etc., of your investment unit. Like many items that the Board has voted itself over the years, having an in-house investment analysis department is a luxury the retirees of STRS can ill-afford.
Monica Oclander
Indianapolis, Indiana

Click image to enlarge.

Dispatch interview with Mary Ann Cervantes re: STRS bonuses

John Curry: How low can one go to clear the bar and still earn a bonus?
Columbus Dispatch, November 12, 2008
By James Nash
Chief of pension fund for teachers defends bonuses
The chairwoman of the pension fund for Ohio teachers tried to quell a controversy over bonuses paid to investment officers by pointing out that they helped the pension fund earn an extra $215 million.
In a message to current and retired teachers, Mary Ann Quilter Cervantes, chairwoman of the State Teachers Retirement System board, said the board will take another look at bonuses that have padded the salaries of investment officers by tens of thousands of dollars.
On Nov. 2, The Dispatch reported that the pension system awarded nearly $6 million in merit bonuses to 89 investment officers.
Ten of the officers received bonuses of $200,000 or more.
Some retired teachers are complaining that the pension system continues to pay generous bonuses even while pension investments lose billions of dollars in value because of the sharp stock market downturn.
Cervantes said the teachers pension has outperformed its benchmark by $215 million, in part, because of the performance incentives for investment officers.
“Because of the success that our internal investment staff has had over the last 30 years, both in times of market upswings and declines, the Retirement Board has chosen to keep the bulk of its investment activity managed by its own staff,” she wrote.
“To attract and maintain this staff, we have to pay competitive salaries.”
The board does expect to reconsider the issue this month, she wrote.
— James Nash
[View article here]

Molly Janczyk re: Getting Tom Hall appointed (by Ohio House Speaker and Senate President) to STRS Board

From Molly Janczyk, November 12, 2008
Subject: RE: Prof.
Tom Hall

The new House Speaker 1/09 is:
Armond Budish: *****TOM: Please resubmit your credentials and speak with him. 614-466-5441 Sen. Pres: Harris (still) The Senate Pres and House Speaker share an appointment for 1 seat on the STRS Board. The Governor appoints Johnson's vacant seat. His term is up. Kris Long: Governor's Legis Ass't **PLEASE ALL: CONSIDER RECONTACTING THESE LEGISLATORS TO APPOINT TOM HALL TO THE STRS BOARD.
Molly Janczyk to Tom Hall, November 11, 2008
Subject: Tom
Please contact:
Kris Long : Legis. Ass't for the Governor for the appointee seat on the STRS Board.
The Governor's appointee's term is up and it is now up for reappointment.
Please send your credentials and willingness to serve.

[Click here to read about Tom Hall]

The pillmakers didn't like to see this one!

From John Curry, November 10, 2008
Subject: The pillmakers didn't like to see this one!

Chief Of Staff Rahm Emanuel: A Friend To Pharma?

Now that the Democratic Congressman from Illinois has accepted the job of chief staff to President-elect Barack Obama, we thought we should share with you some of his remarks about the pharmaceutical industry over the past few years. Specifically, he railed against pharma over the issue of reimportation on a couple of occasions…
In September 2004, he had this to say: “…It’s not just politicians standing around and talking about why we need importation. How many studies do we need to show that the American people are convinced that drugs are too expensive in this country and committed to doing something about it?..The pharmaceutical industry and Congressional Leadership continue to hide behind the facade of safety concerns, while Americans continue go without the drugs they need.”
And in June 2007, a few months after introducing the Pharmaceutical Market Access and Drug Safety Act (HR 380), he said this: “For too long the Congress has let the pharmaceutical industry stand in the way of keeping safe and affordable prescription drugs out of the hands of the consumers. With this bipartisan legislation, we can help the American consumers benefit from a truly open and competitive marketplace.”

Tuesday, November 11, 2008

No, ORTA certainly doesn't appear to want to take on those kinds of issues -- they're MUCH too unpleasant!

STRS retiree to John Curry, November 11, 2008
Subject: Re: Where is ORTA?
John, The scary truth is that ORTA is a nice, pleasant group that just wants to be a cheerleader for retirees, pat each other on the back for showing up at meetings, not rock the "legislative or STRS boat" and 75% of the time that is okay. Another school analogy is to picture the ORTA as the elementary teacher who had the best bulletin boards & shared bake-goods with the other teachers & would have won Miss Popularity at her school. However, she regarded her students as annoying & distasteful and taught them very little.
Likewise, ORTA regards "real issues" as annoying and CORE & Dennis as distasteful, but does not want to actually take on tough issues that would truly make a financial difference for retirees.

~ Ann Nonymous

Molly Janczyk to Debb Smith re: Vacant chair(s) on STRS Board

From Molly Janczyk, November 11, 2008
Subject: Kris Long: Sen. Schuring:: Exec. Direc. Nehf: Legislators: Vacant Chair(s) on STRS Board
Kris never called or emailed me back on this issue of TWO vacant Appointee seats on the STRS Board.
Do legislators not have to follow the laws provided by SB133?
No one has made a move on this for 2 and 1/2 yrs.
We get NO answers yet there is a bill mandating 3 investment appointees and we have one with 2 vacant seats which does not provide necessary representation. We need public pension minded appointees NOT corporate minded as the first 3 which we pressured to step down.
Molly Janczyk to Debra Smith, November 4, 2008
Subject: RE: Sen. Schuring:: Exec. Direc. Nehf: Legislators: Vacant Chair(s) on STRS Board

Thank you for your speedy reply.
This is a long time issue no one wants to address with the House Speaker and Sen Pres.
Hopefully with the election, it will be considered by legislators who have constituent interests as their guide vs. union pull. Of course, the unions may wish for empty seats in order to continue their majority.
From Debra Smith, November 4, 2008
Subject: RE: Sen. Schuring:: Exec. Direc. Nehf: Legislators: Vacant Chair(s) on STRS Board
Hi Molly!
I have cc'd your email to Kris Long, who is now Director of Legislative Affairs for Governor Strickland. Kris is out of the office today, however she will be responding to your email shortly.
Should you have additional questions, please feel free to contact me.
Debb Smith
Executive Assistant,Legislative Affairs
Office of Governor Ted Strickland
614.728.9528 (o)
614.728.9522 (fax) anybody home?

From John Curry, November 11, 2008
Subject: Where is ORTA?
I just took a quick trip to the ORTA website and noticed, not to my surprise, that they are not touching this STRS bonus controversy "with a 10-foot pole."
Why does Ohio's largest retired educators' organization continue to ignore the plight of the retiree by failing to discuss with their members the current bonus payouts to STRS associates at a time of a massive market loss of our retirement investments?

Molly Janczyk and Mike Nehf re: Vacant Board seats and suggestions

Molly Janczyk to Mike Nehf, November 11, 2008
Subject: RE: Vacant Seats and suggestions
Prior to your seating, CORE Pres. and VP visited EVERY legislator with speaking points for HB 315. Membership devoted hours of time writing, calling legislators. I sent tens of emails on the subject to all my contacts including school boards and legislators both asking for legislation and providing membership with easy on line ways to connect with legislators on this topic. Then it was said that it would not even have hearings this year so things have slowed until we hear it is appropriate once again. Many attended the inservice meetings to be HC speaking persons -- I forget the name.
All organizations well know this.
From Mike Nehf, November 11, 2008
Subject: RE: Vacant Seats and suggestions
Dear Molly: I appreciate your interest in seeing that all board seats are filled. I share your concern, as do members of the Retirement Board. This continues to be among my list of goals within the Governmental Relations responsibilities here at STRS Ohio. I have had meetings with the Treasurer of State, Senate President and Office of the Governor to discuss their respective appointments. These meetings have been very productive. When any appointments are made, we will share this important news with the membership.
I have also been devoting a significant amount of my time studying how we can improve the life and financial stability of the retiree health care trust fund that helps all STRS Ohio retirees. I’m sure you know that is among my most important areas of focus. HB 315 in its current form would be helpful; however, I must look at alternatives if the bill doesn’t receive support. You and your fellow CORE members can help by continuing to emphasize the importance of this legislation to your local senators and representatives as you have done in the past. As we begin work on the Health Care Strategic Plan this December we will look at all viable options. I will keep an open mind to all suggestions that I receive.
From Molly Janczyk, November 11, 2008
Subject: Vacant Seats and suggestions
Why do you not answer anything?
1. Why are there vacant seats on the STRS Board? Not rhetoric but real answers.
2. Will you do something about this?
3. Do you see any REAL value in any of the suggestions I sent you and will you see if some beneficial change is possible for retirees?

Ryan Holderman: Retirees simply want their situation and viewpoint to be considered and understood

From Ryan Holderman, November 11, 2008
Subject: Sharing thoughts with CORE President David Parshall, STRS Director Nehf, STRS Board members, CORE and fellow retirees
Dear Dave:
I'm sorry that I will be unable to come to Columbus for the CORE meeting with Director Nehf. I will look forward to the report about that meeting. Thank you for making the arrangements and keeping the lines of communication open between CORE and the STRS Executive Director. It is an important relationship. I am taking this opportunity to share the thoughts that follow with you, fellow retirees, STRS Board Members, and Director Nehf
As you know, I exchanged letters with Director Nehf a few weeks ago. I appreciated his response. It was prompt and he carefully outlined the reasons for PBIs, etc. I understand the rationale for the bonuses and, in ordinary circumstances, agree that they are a standard practice in the world of investment managers. We are not, however, in a time of ordinary circumstance. The downturn in the economy, combined with increased scrutiny of perks, bonuses, severance packages and golden parachutes throughout the financial world, indicates that "business as usual" is becoming increasingly less tolerable.
In my discussion with fellow retirees (particularly those who are a members of WCRTA) of the bonuses awarded by STRS has confirmed that we are dealing with two highly divergent points of view. STRS sees the bonuses as a routine expense related to doing business in the investment world and encouraging investment managers to seek the highest level of return for pension funds. Retirees come from a world where doing the job that one was hired to do was expected and bonuses were non-existent. Each side finds it difficult to appreciate the viewpoint of the other.
Each year retirees face increases in costs for health insurance, medicines, local taxes, and living expenses. Their income simply is not keeping pace with those expenses. Those who were fortunate enough to be able to make small investments during their career have seen them shrink dramatically and, in some instances, disappear as the market has failed. Is it no wonder that the enormous bonuses they've read about have stirred feelings of betrayal and skepticism toward STRS?
Retirees that I have spoken with perceive that the STRS Board is reverting to business as usual, turning away from reform, and out-of-touch with the financial struggles of retirees, particularly those older retirees who are living on $30,000 or less. With the exception of Dr. Leone, they don't appear to have a voice addressing their issues.
Part of the resentment felt by retirees is fueled by the loss of the 13th check. A check that many, especially the older retirees with the lowest pension income, depended upon to meet expenses. I want to make it clear that I think that money would have been better spent by putting into the health care stabilization fund. Many, however, feel that retirees were called upon to sacrifice that bit of additional income when STRS faced financial pressure and yet STRS investment employees continue to receive very generous bonuses. They ask why bonuses are so large? Why hasn't the STRS Board capped the bonuses at 25 or 30%. It seems to them that those who have the least are being asked to sacrifice the most.
Throughout the turmoil of this issue one attitude prevails, retirees appreciate the work that STRS employees do on their behalf. They speak of the courtesy extended to them when they interact with STRS staff. They value the quality of service that they receive. They have no vendetta with those good folks. They simply want their situation and viewpoint to be considered and understood.
Thank you for the work that you do as President of CORE and thanks to the CORE officers and trustees who continue to be a voice for reform-minded retirees across the State.
Ryan Holderman

Investment Banking Compensation & Salary Report

From a retiree, November 11, 2008
Investment Banking Compensation & Salary Report
Getcha red-hot investment banking, private equity, venture capital, hedge fund, and even the mysterious “other” salaries, bonuses and compensation figures right here, boys and girls. Here’s a taste of the vast amounts of information you can have access to:
The average base salary for self-reported Associates at a bulge bracket investment bank is approximately $100,000. The average bonus is $148,000. The average base salary for self-reported Equity Research Associates is $72,000, with a bonus of $57,000.
[Click here for source]

Perhaps STRS is smarter than Harvard!

From a retiree, November 11, 2008
Subject: Perhaps STRS is smarter than Harvard!!!
Harvard looks to cut costs
The economic slowdown is making its way onto college campuses. Harvard University President Drew Faust said this morning that the prestigious university is looking for ways to cut costs, despite a nearly $37 billion endowment.
"We must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world," Faust wrote in an e-mail to faculty, staff, students and alumni. "Our own economic landscape has been significantly altered."
The school's endowment managed to grow at 8.6% for the year ending June 13, as the major stock indexes slumped in the same time period, but the school will have to absorb losses in the fund as the economy continues to shrink, Faust said.
"Virtually every college and university, their budgets are under strain, stress, for a variety of reasons," Matthew Hamill, a vice president of the National Association of College and University Business Officers, told The Associated Press.
[View rest of article here.]

Sandy Knoesel: Three letters sent out by Medical Mutual

Sandy Knoesel to Molly Janczyk, November 11, 2008
Subject: RE: FYI
There are three letters [sent out by Medical Mutual]: one to individuals whose name and Social Security Number were on the disks; a second letter to individuals whose names were on the disk but not their Social Security Numbers and a third letter to all others assuring them that their names and Social Security Numbers were not on the disk.

Monday, November 10, 2008

Molly Janczyk: More questions

From Molly Janczyk, November 10, 2008
Subject: FW: Trans Union Credit.
I answered the person below that it was for all Med. Mut. STRS retirees. WHY DOES STRS THINK SO MANY FOLKS COME TO US FOR ANSWERS INSTEAD OF THEM? They trust we will give the truth and find the right answers while working for them -- something they do not feel STRS is doing. It will make no difference; they feel they have a conscience and are doing the right thing because STRS staff and legal advisors tell them so. As Mooney told his board reps, who don't listen, What do you think STRS and its attorneys will say? They don't have the stamina nor the will to stand up to heat and not making nice on the board. Social gatherings would be a better place for them.
WHY DO THEY NOT INSIST ON FILLING THE VACANT SEATS ON THE STRS BOARD? One has been vacant since 2006. They do not want to make waves, period. Vote together, play nice and rationalize you are doing the right thing, no matter what. Send out STRS rhetoric. That is all good. Perhaps even mostly true. Doesn't mean it is the ONLY truth for pension systems, however. Numbers and facts can always be used to back any scenario. Doesn't change the fact that CHANGE COULD BE AFFECTED AS WELL!
To Molly Janczyk, November 10, 2008
Subject: Re: Trans Union Credit.
Wow -- very well said, Molly!! This should put all of them to shame, but if none of them have a conscience, it probably won't. Sometimes I think all we can do is keep hammering away and show the world what's REALLY going on down there.

Letter sent out by Medical Mutual re: Lost computer disks

Medical Mutual of Ohio
November 5, 2008
Dear____ :
You might have read in the newspaper that Medical Mutual has reason to believe that a recent mailing of computer disks to the State Teachers Retirement System of Ohio (STRS Ohio) might have been lost or compromised within the US postal system. This mailing contained the personal information of some of STRS Ohio's health plan enrollees. You are receiving this letter because your name and/or your dependent's name, your Social Security number and recent claim costs were included on one of the disks. The disk did not include any mention of medical conditions or treatments.
We are sorry if you first heard about this situation through the news media rather than directly from us, but we wanted to act quickly in sharing this information to reassure the public we are doing all we can to resolve this matter. We are aggressively investigating and will do everything we can to find the disks.
In the meantime, we have arranged for you to enroll, at no cost, in an online credit monitoring service provided by TransUnion, one of the three major credit reporting agencies. This service will provide you with one year of unlimited access to your credit reports and credit scores. The service includes daily monitoring by all three credit agencies, which will notify you if there are any critical changes to your credit files, including fraudulent activity, new inquiries, new accounts, new public records, late payments, change of address and more. The service also includes up to $25,000 in identity theft protection with $0 deductible. (Certain limitations and exclusions may apply.)
To enroll in this service, go to the TransUnion Web site at and in the space referenced as gift certificate code, enter (Code). Then follow the simple steps to enroll. You can sign up for this service anytime between now and January 30, 2009, using the gift certificate code noted above.
If you do not have access to the Internet, you may enroll in a similar paper-based, three-bureau credit monitoring service by calling the TransUnion Fraud Response Services hotline at (telephone number), Monday through Friday, 8:30 a.m. to 7:30 p.m. ET. Please use the following six-digit pass code, (Code), when prompted. The pass code will be valid until January 30, 2009. (Unfortunately, due to privacy laws, Medical Mutual cannot register you directly.)
In addition, we recommend you regularly review charges to your band and credit card accounts and alert these companies if you see unusual transactions.
We are establishing more stringent procedures to reduce the potential for this type of situation to happen again. We take our members' privacy very seriously, and we appreciate your understanding and assistance as we work to resolve this situation. If you have any questions, please call Medical Mutual at 800/854-8139.
Kent W. Clapp
Chairman, CEO and President
2060 East Ninth Street•Cleveland, Ohio 44115-1355
Larry KehresMount Union Collge
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