Friday, August 14, 2009

STRS FLASHBACK - 6 Years can one be on leave of absence from one's position when one doesn't have a position?

From John Curry, August 14, 2009
"Leone questioned how Billirakis could be on leave from a position that never existed or he never filled."
Canton Repository, September 5, 2003
Superintendents spar over board member’s pay
Copley Columbus Bureau chief
COLUMBUS — Two superintendents accused each other of breaking the law in an argument related to the State Teachers Retirement System.
Chillicothe Superintendent Dennis Leone accused the Perry Local Schools in Lake County of fraud for billing STRS for the lost services of STRS board member Michael N. Billirakis, who has been on Perry’s payroll in name only for the past two years.
Leone later retracted his accusation, but still said Perry schools should not have billed STRS more than $33,000 during the last two years to pay part of Billirakis’ salary.
Perry Superintendent Tim Berkey said the charge was “absolutely unfounded.” He accused Leone of violating Ohio law by using taxpayers’ money to pursue a personal, political battle not in the interest of the Chillicothe district.
The two superintendents duked it out in an hour-long phone conversation Wednesday night.
The issue, however, may now be moot. Billirakis said Thursday he agreed with Leone. He asked Perry schools to stop billing STRS in January. He said neither Perry nor STRS should pay for his salary if he’s not teaching.
Billirakis said the National Education Association, where he is an executive committee member, will reimburse Perry for the portion of his salary the union has not covered the past two years. Then, he said, Perry will reimburse STRS.
Billirakis said his pay this year will come entirely from NEA, where his full-time position keeps him on the road in and out of Ohio most of the year. Billirakis said he will initiate a change in board policy this month about how STRS reimburses districts.
“I’ve found board members are all over the place in how they’re charging,” he said.
Districts with employees on the STRS board are allowed to bill the pension fund for the cost of hiring a substitute or replacement for the days missed because of board business.
Billirakis has not been in a classroom since 1988, when he became an officer in the Ohio Education Association, the state’s largest teacher union. In 2001 when he was named an NEA executive, Billirakis moved his teaching contract to Perry schools from a lower-paying district in Portage County. Doing so improved Billirakis’ benefits when he retires. Perry lists his salary, including benefits, at $101,820. Billirakis lives in Pickerington, southeast of Columbus, while Lake County is east of Cleveland.
Berkey said Billirakis, a social-studies teacher, is on a “leave of absence” and “does not perform any work for Perry.”
Leone questioned how Billirakis could be on leave from a position that never existed or he never filled.
“It’s fraud to get reimbursement,” Leone said.
Leone said Thursday morning, “The more I think about it, I think that all three (Perry, STRS and Billirakis) are equal partners to the problem. I think this whole deal smells really bad.”
Damon Asbury, interim executive director of STRS, did not return a phone call for comment Thursday.
Leone said his school district’s attorney said he has not violated any law in his campaign for accountability. “I don’t want my district’s (retirement) contribution to go up because of misspending by STRS,” Leone said.
“A school administrator should not be taking taxpayers’ dollars to pursue a political issue,” Berkey said. “This is not a school district issue.”

Thursday, August 13, 2009

Latest 'propaganda sheet' (?) from your friendly retirement system

----- Original Message -----
Name withheld
To: John Curry
Sent: Wednesday, August 12, 2009
Subject: STRS mailing...
Hey John:
Got my "STRS Ohio News" propaganda sheet today.
Chart on page 4,...Why did the Operating Budget increase so dramatically in 2007-08? From $89.5m to $96m...
Also, 5 HC section, no where is Aetna called "Advantage". Just promoted as the new Aetna Medicare Plan. Interesting.
They have made us cynical.

Linda Meinelt: How to contact the Governor to encourage Mr. Boyce to appoint Dennis Leone to the STRS Board

Below is the text of a letter I am sending to the Governor asking that he encourage Treasurer Boyce to appoint Dennis Leone to the Bd. (since his term has expired and he is no longer eligible to run). If any of you are interested in doing the same, you can contact the Governor:
Governor's Office
Riffe Center, 30th Floor
77 S. High St.
Columbus, OH 43215-6108
Fax: 614-466-3555
There is link to type in your message to him.
As an STRS retiree, I am writing to ask that you please meet with Treasurer Boyce regarding his appointment to fill the vacancy on the STRS Board.
Dr. Dennis Leone, who served as an elected member on the STRS Bd., is no longer eligible to run for a seat on the Board. He would be an excellent appointment to this position so that he could continue to serve the STRS constituents who have come to believe in and trust this honorable man. This position requires more than political or union training and support.
I know the primary concern for appointment to this position is financial expertise and Dr. Leone certainly fits the bill.
As Superintendent of Chillicothe Schools, Dr. Leone acquired much financial expertise while overseeing the budget for that district. He has been a financial watchdog for STRS since 2003 when he worked to disclose Board members and the Administrator's unethical activities. He has also been honored publicly by many experts for his understanding of budgetary issues.
The ending of Dr. Leone's term on the Board has been upsetting for thousands of retirees who saw his tenure as a representation of honesty, leadership and concern for the ''little guy." He is not afraid to stand up for what he feels is right and to vote "no" despite pressure to do otherwise.
Dr. Leone would be an outstanding addition to the Bd. bringing not only continued financial expertise but the ability and willingness to represent all STRS stakeholders which he had been doing as an elected member.
Please encourage Treasurer Boyce to appoint Dr. Leone to the STRS Board. Thousands of retirees will be grateful to Treasurer Boyce and you for the appointment.
Linda Meinelt
Columbus, OH

Wednesday, August 12, 2009

RH Jones: Future COLA & other taboo cuts

From RH Jones, August 12, 2009
Subject: Future COLA & other taboo cuts ( please read the last sentence, especially)
To all:
At the moment, after reading the on-line STRS August News, in writing they say: ".... the board has discussed reducing the COLA and/or delaying when it begins following a member's retirement in combination with other changes to shore up the pension fund." To me, this means that they will not change the COLA for retired members, but will for those who will retire in the future. What this does not say is, in my opinion, that they may not give those of us already retired any COLAs in the future. That, everyone, I have a problem with. With hyper-inflated HC/Rx costs and over 3% inflation predictions by the U.S. Dept. of Labor, retired educators will not be able to keep up. If we live long enough, it will put us in poverty. And, in some cases, because we do not have a compounded COLA, it already has. Also, there is still the consideration of cutting out the death benefit. This would hit hard, and heartless. And, it would hit at the worst time in the life of the surviving spouse. Nothing could hurt worse.
After I read of the astounding salaries, bonuses and benefits some STRS employees receive, they cannot put the blame on the STRS pensioner members for putting the 30-year amoritizement into jeopardy. Over the past years, this has been a major part of the compounded siphoning of funds away from where it should be: in the pockets of the pensioner. This is why the STRS exists. Certainly, they have been cutting expenses since Dr. Dennis Leone (the lion) roared at them, but it still is not enough. All reasonable members want the STRS employees to be happy and productive; but, when they loose so much and then, once again, blame the loss on the recession as they did before in 1999, that makes me wonder: They did not say the boom years made billions for the STRS; they said it was their investment expertise. Personally, I do want them happy, but happy within reason. A past OSBA leader put out information that the Ohio School Boards were unhappy with the past STRS excesses allowed by the STRS board and because of it, would not support any increase in the 14% employee contribution to the STRS funding --- I can document this.
In another matter, I am concerned that the retired educators receiving over $100,000 per year are being considered for cuts. I was a teacher, not an administrator. The administrators in cities are especially under greater pressure than I, and worked longer hours. Also, in my studies for my Masters Degree in Education, I learned that the education administrators were paid much less than those in comparable businesses of the same size. The administrator pay is not excessive in Ohio. They certainly had greater responsibilities than those in industry, or in the classrooms. They earned it; They paid into it; And, they deserve it. Note: We deserve all of our Social Security, as well.
With our promised benefits, retired educators pour billions into the Ohio economy. To take some of it away, even our HC/Rx, is to take some of Ohio's economy away and we will need to go into other state care systems. Besides, our benefits were promised to us, and to take them away even with new Ohio legislation, may be a violation the grandfathering protected by Amendment #15 of the Bill of Rights. Ex post facto refers to prosecuting for actions committed when the past actions were not illegal, but made so afterwards.
This is my opinion,
RH Jones, retired teacher OH STRS member

Tuesday, August 11, 2009

STRS FLASHBACK - 6 years ago - Let's cut a deal!

From John Curry, August 11, 2009
"Actually, the decision on the final replacement is already made. Though board members deny it, the state’s two large teachers’ unions will heavily influence the final decision. Reportedly, the Ohio Education Association, which has two of its state and national officers already on the STRS board, is allowing the Ohio Federation of Teachers to decide who the union preference is."
"The OEA is already under fire for its position supporting former Executive Director Herbert Dyer and the board’s decisions regarding artwork, a fancy headquarters, extensive travel, bonuses and other spending. So to deflect accusations that it has undue influence, OEA cut a deal with the smaller union to come up with a candidate."
Canton Repository, August 15, 2003
Culture of secrecy still pervades STRS operations
Copley Columbus Bureau chief
COLUMBUS -- Aristotle is credited with writing, “All men by nature desire to know.”
On the same subject, Patrick Henry wrote, “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them. ... To cover with the veil of secrecy the common routine of business, is an abomination in the eyes of every intelligent man.”
We might excuse Aristotle’s and Henry’s gender problem. Today, it would be more appropriate to use “people” or “persons” or “men and women.” But their underlying message is still sure — secrecy is an abomination.
As far as we know, George Washington never said, “No comment.” In all his writings, Thomas Jefferson never left for history the phrase “this is off the record” or “don’t quote me on that.”
In fact, Jefferson wrote, “My own opinion is that government should by all means in their power deal out the material of information to the public in order that it may be reflected back on themselves in the various forms into which public ingenuity may throw it.”
Our country’s founders would surely be disturbed with the position the State Teachers Retirement System has taken to keep information from its 413,219 members.
Despite being asked repeatedly by at least two newspapers, STRS will not release the names of those active members who have asked to be considered for an open seat on the nine-member board.
Lawmakers and educators — members of STRS — alike call that position a mistake and unbelievable.
Instead, in the STRS version of representative government, the eight remaining board members will decide in secret who the finalists will be. It could be one person; it could be as many as eight. They decided last night, and, today we are supposed to learn who those will be. Members then can contact the board to offer their preference. But members will not be given an opportunity to comment on everyone who applied.
Actually, the decision on the final replacement is already made. Though board members deny it, the state’s two large teachers’ unions will heavily influence the final decision. Reportedly, the Ohio Education Association, which has two of its state and national officers already on the STRS board, is allowing the Ohio Federation of Teachers to decide who the union preference is.

The OEA is already under fire for its position supporting former Executive Director Herbert Dyer and the board’s decisions regarding artwork, a fancy headquarters, extensive travel, bonuses and other spending. So to deflect accusations that it has undue influence, OEA cut a deal with the smaller union to come up with a candidate.
The federation has interviewed candidates and will recommend a woman for the position. She will be the foregone leader in the selection process if there is more than one candidate. And there will be, so the board can deflect criticism that the selection process was undemocratic. It’s a smokescreen.
No one will know who the other candidates were, nonetheless their qualifications. The STRS board will continue to operate as it has for years, ignoring its members and deciding for itself what those members will get.
The Dyer culture remains. Instead of saying “it’s the board’s money and they can spend it any way they want,” the board’s attitude is “we know what’s good for our members; who cares what they think?”
Why should nearly a half a million people be kept in the dark? What does STRS have to hide?
This conspiracy doesn’t stop with STRS and the unions, but includes Attorney General Jim Petro, who told STRS it can keep the list secret because of his skewed interpretation of the Ohio Revised Code. Of course, none of us will know exactly what Petro said because that communication is also secret.
This is the same Petro who tells the public he wants more accountability at STRS. This is the same Petro whose representative on the board was asleep for eight years while the board was spending money hand over fist as the pension fund lost billions. This is the same Petro who complained about the tone of a letter from the Copley Newspapers’ attorney asking for the names.
This is the same Petro who in a year or so is going to want all the teachers and retirees to vote for him when he runs for governor.
To paraphrase Abraham Lincoln, “Let the people know the facts and STRS will be saved.

Special update from STRS

From STRS, August 11, 2009
Subject: [News] August Update From STRS Ohio
Although the State Teachers Retirement Board does not meet until later this month, we are issuing this update to provide current information to our members. Following the board meeting, which will be held Aug. 20-21, we will issue an August Board News.
NIRS REPORT SHOWS DEFINED BENEFIT PLANS REDUCE RISK OF POVERTY AND HARDSHIP AMONG OLDER AMERICANS Last fall, STRS Ohio shared information with its members about the formation of the National Institute on Retirement Security (NIRS). This organization, which STRS Ohio joined as a charter member, is using research and education programs to show how defined benefit plans enhance retirement security for their participants.
The most recent report issued by NIRS shows that defined benefit pension income plays a critical role in reducing the risk of poverty and hardship among older Americans. The report, titled "The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships," notes that pension income resulted in a savings of $7.3 billion in public assistance expenditures and 4.7 million fewer households in poverty or near poverty in 2006 in the United States. More than 23 million older Americans received a defined benefit pension that year.
The value of the defined benefit plan is well understood by the State Teachers Retirement Board; preserving STRS Ohio's Defined Benefit Plan for future generations of Ohio educators is one of the driving forces behind the board's current long-range contingency planning (see article below). About 441,000 of STRS Ohio's members are currently enrolled in or receiving benefits from the system's Defined Benefit Plan.
To read the complete NIRS report, go to
WORK CONTINUES ON FUNDING PLAN STRS Ohio members will receive an STRS Ohio newsletter in their mail this month. The newsletter provides a detailed article about the Retirement Board's discussions that began last March to strengthen the solvency of both the pension fund and the health care fund. Looking long term, the reduced level of STRS Ohio's investment assets, coupled with future expected investment earnings and current contribution levels, will result in a shortfall for the pension fund. Unless changes are made, STRS Ohio will eventually be unable to pay members' projected benefits.
The timeliness of the board's discussions became even more apparent when the Ohio Retirement Study Council, which is the legislative oversight body for Ohio's five public pension systems, instructed each system in May to present board-approved plans for achieving or maintaining a 30-year funding period at the ORSC's Sept. 9 meeting.
Options currently under consideration for inclusion in STRS Ohio's plan include:
- Increasing contributions from the current 10% from active teachers and/or 14% from employers.
- Instituting a minimum retirement age or years of service for retirement.
- Increasing the number of years used to calculate final average salary to five from three.
- Changing the formula for calculating pensions.
- Changing the cost-of-living adjustment (COLA).
We would encourage all STRS Ohio members to read this month's newsletter, as well as other future STRS Ohio communications. This will enable you to keep current with the board's discussions, as well as with the expected work by the Ohio Legislature in the coming months on pension legislation.
During the past few weeks, many members have written or called STRS Ohio, expressing their opinions and ideas about the Retirement Board's long-term contingency planning. We have also talked with many members personally, as well as with constituency groups. Board members and staff greatly appreciate the input. However, we are also aware of some misperceptions held by some members. We would like to address some of these items in this update.
PERCEPTION: Once the Retirement Board adopts a plan, the staff can begin implementing it. FACT: The adoption of a plan is actually only the first step. ANY CHANGES the board wants to make will REQUIRE CHANGES IN CURRENT LAW, as each option the board is considering is contained in a section of the Ohio Revised Code. The only way for the law to change is through legislation passed by the Ohio Legislature and signed by the governor.
As noted earlier in this update, all five pension systems in Ohio will present their board-approved plans to the Ohio Retirement Study Council (ORSC) on Sept. 9. The ORSC consists of three members of the Ohio House of Representatives, three members of the Ohio Senate and three members appointed by the governor. It is expected that each plan will be unique to that system, as each system faces different funding challenges based on the pertinent economic and demographic factors affecting current and future unfunded liabilities.
Following the September meeting, the ORSC staff will evaluate each system's plans, work with the systems' staff to find commonalities, perhaps start drafting bill language and report the results of their findings to the council members. Since the ORSC meets monthly, this report could occur at the ORSC's October meeting. Eventually, one bill covering all five systems is expected to be drafted and introduced. Then, the normal legislative process will begin that includes (a) assignment of the bill to a committee; (b) committee hearings; and (c) passage of the bill out of committee for a floor vote - and then the process repeats itself in the other chamber. Assuming the bill moves successfully through all these phases, it then goes to the governor for his signature. THEN, AND ONLY THEN, CAN ANY CHANGES BEGIN.
PERCEPTION: The Retirement Board is considering the elimination of the cost-of-living adjustment (COLA) as one of the ways to strengthen pension solvency. FACT: The Retirement Board has never discussed the complete elimination of the COLA, nor has any constituency group called for the elimination of the COLA. However, the board has discussed reducing the COLA and/or delaying when it begins following a member's retirement in combination with other changes to shore up the pension fund.
PERCEPTION: One of the options being considered is to decrease the COLA, but only for those who are age 65 or older. FACT: This option is not being considered by the board. As noted above, the board is discussing a reduction in the COLA and/or delaying when its payment to a retiree might begin. One example might be to reduce the COLA to 2%, beginning at age 65. Those younger than 65 would not receive a COLA until they reach age 65. This is just one illustration of how a change could be constructed; the board has not yet made any decisions.
PERCEPTION: The markets are starting to recover. Changes aren't necessary; better investment returns will solve the problem. FACT: STRS Ohio cannot "invest" its way out of the funding challenge it faces. Even before the unprecedented downturn in the markets, STRS Ohio's funding period already exceeded 40 years. State statute requires Ohio's pension plans, including STRS Ohio, to have a 30-year or shorter funding period or a plan in place to accomplish this. STRS Ohio would need a 20% annual compound return over the next five years to reduce its funding period to 30 years. This is highly unlikely. The Dow Jones, currently at about 9,200, would need to be above 24,000. In looking at its options, the board is assuming an 8% return on its investments - knowing that in any individual year, returns may exceed or fall short of this number. However, 8% over the long term is not enough, by itself, to restore long-term solvency to the pension fund.
PERCEPTION: If STRS Ohio had never offered the enhanced 35-year benefit, these changes wouldn't be necessary. FACT: The 35-year benefit has contributed to increased unfunded liabilities, but so have the other components of S.B. 190 that included changes to the pension formula for active teachers; recalculation of the base benefit for many retirees; and a one-time increase for all benefit recipients who needed a raise to restore their benefit to at least 85% of its original purchasing power.
Over time, there have been a number of factors that have impacted funding for pension benefits - not just S.B. 190. These include other improvements to the benefit formula and to various groups of retirees; more than $711 million in "13th checks"; allocations of more than $5.4 billion to the separate health care fund; and legislation setting the COLA at 3% in 2002. Increased life expectancy among STRS Ohio members and lower-than-expected payroll growth among active teachers have also had an impact.
To address these growing liabilities, STRS Ohio took several steps over the years, including increasing members' contributions; lowering the annual interest rate paid on member withdrawals; stopping the 13th check; decreasing the amount of employer contributions put into the health care fund; reducing the match on reemployed retirees' lump-sum payments or monthly annuity benefits; and adjusting investment asset allocations and accompanying expected returns.
Even with these changes, the funding period for the pension fund stood at 41.2 years on July 1, 2008. This means that based on the value of investment assets at that time, we expected to pay off all unfunded liabilities over the next 41 years by achieving an 8% annual rate of return and meeting all other actuarial assumptions. However, due to the recession, the market value of our investment assets declined by about $24 billion over the past two fiscal years. As a result, STRS Ohio's unfunded liability almost doubled in just one year and the funding period now stands at "infinity." Much more significant changes are needed to enable STRS Ohio to meet its funding challenge.
PERCEPTION: Retirement Board members are paid for serving on the board. FACT: Retirement Board members are not paid for their board service. They receive reimbursement only for their expenses, such as mileage for traveling to Columbus for meetings or food and lodging when they need to stay overnight for multiple-day board meetings.
PERCEPTION: Most members are not happy with the proposed changes. Since board members are supposed to serve the membership, they should listen to their members and not make any changes. FACT: It is always important that both board and staff listen to the concerns and comments of STRS Ohio members and consider them in their deliberations. However, these same board and staff members have a responsibility to be good fiduciaries of the pension fund. Knowing that the pension fund will eventually run out of money to pay projected benefits unless changes are made, the board and staff have the responsibility as fiduciaries to try and make changes that ensure the long-term solvency of STRS Ohio for future generations of teachers. Early on, the board and staff recognized that there were no easy solutions and proposed changes would not be well received by many members. However, if no changes are made, there is a very real probability that there will be no STRS Ohio Defined Benefit Plan within 30 years.

STRS Board meeting scheduled for August 18-21, 2009

From STRS, August 11, 2009
The State Teachers Retirement Board and Committee meetings currently scheduled at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215, are as follows:
Tuesday, August 18, 2009
...8:15 a.m. Disability Review Panel (Executive Session)
Wednesday, August 19, 2009
8:30 a.m. Investment Committee Meeting
Thursday, August 20, 2009
9 a.m. Retirement Board Meeting
Friday, August 21, 2009
9 a.m. Resumption of the Retirement Board Meeting
The Retirement Board meeting will come to order at 9 a.m. on Thursday, Aug. 20, 2009, and begin with Long-Term Fiduciary and Financial Contingency Planning, followed by the Executive Director’s Report (expected directly after the lunch break), public participation and the resumption of the Long-Term Fiduciary and Financial Contingency Planning. The Retirement Board meeting will resume at 9 a.m. on Friday, Aug. 21, and begin with a Report from the Investment Department, and if necessary, Long-Term Fiduciary and Financial Contingency Planning discussions will resume. The Board will also address routine matters, old business, new business or any other matters requiring attention before adjournment.

Monday, August 10, 2009

Of course, STRS doesn't want to talk about this, do they? They'd rather cut the COLA, wouldn't they?

From John Curry, August 8, 2009

"Laws were enacted this year in Georgia, Louisiana, Nevada, New Mexico, Rhode Island and Texas that reduced benefits for new employees, a report released by the group this week said."

U.S. state pensions face overhaul in bad economy

Fri Aug 7, 2009

By Karen Pierog and Jim Christie

CHICAGO/SAN FRANCISCO, Aug 7 (Reuters) - When Illinois was facing at least $55 billion in unfunded pension liabilities back in March, Governor Pat Quinn outlined what he called "bold reform" for the state's retirement system.

In a move now being replicated in other cash-starved states, the governor proposed a two-tier system, leaving benefits for current workers untouched, but imposing changes such as a higher retirement age and capping cost-of-living increases on new employees.

That would allow the state to reduce its pension liability by $162 billion over the next 36 years, a substantial saving at a time when revenue is being decimated by the recession and the state is struggling to balance its budget.

Quinn's reform effort failed, but lawmakers agreed to create a pension system modernization task force charged with making recommendations by November.

Illinois is not alone in trying to reduce its huge liability.

The National Association of State Retirement Administrators found a nearly $443 billion collective unfunded liability for the 125 state, local government, and teacher pension funds in its most recent survey.

The situation is likely to worsen as the recession punches holes in budgets nationwide and causes big investment losses for defined-benefit pension plans that pay out a fixed income.

But the economic downturn may also lead to more reforms as politicians and taxpayers realize they can no longer afford plush pensions compared to defined-contribution 401(k) plans in the private sector which pay income based on variable investment returns.

"It's an acute issue," said Ron Snell, director of state services at the National Conference of State Legislatures.


Laws were enacted this year in Georgia, Louisiana, Nevada, New Mexico, Rhode Island and Texas that reduced benefits for new employees, a report released by the group this week said.

On the local level, New York City has repeatedly trimmed pension benefits for new hires by creating pension tiers.

Mayor Michael Bloomberg in January estimated that adding a fifth and less generous tier would save $200 million in fiscal 2010. By fiscal 2030, the savings would add up to $7 billion.

But the state did not approve the measure and the state financial control board has moved the entire initiative to fiscal 2011.

New York Governor David Paterson has also proposed a money-saving fifth pension tier, which he says would save at least $48 billion over the next 30 years for both the state and local governments that belong to the state retirement fund. Though two major unions for state workers supported the plan, it has not been approved.


The board of the California Public Employees' Retirement System, the biggest U.S. public pension fund known as Calpers, held a retreat last week to review the two-tier issue. The fund has just seen a record annual loss, adding to the burden of meeting its unfunded liabilities.

The 23.4 percent loss, or more than $56 billion, came just as a public-disclosure campaign uncovered individuals with annual pensions through Calpers of $100,000 and more. It has so far found more than 5,000 six-figure recipients, including one individual receiving just under $500,000 a year.

Snell noted that like Illinois a number of other states created special pension commissions this year that could lead to more action on reforms by 2011.

Still, reforms will be tough to enact as unions usually oppose diminished benefits. That leaves taxpayers, who will ultimately be left to pay the pension tab, to push for changes.

"Taxpayers will demand these (reforms) be enacted," said Richard Ciccarone, managing director and chief research officer at McDonnell Investment Management in Oak Brook, Illinois. "It will become more of a rallying cry at elections."

That is a concern at Calpers. Some of its board members have warned of a voter initiative to force a two-tier system on the fund.

They fear voters who have seen 401(k) retirement accounts dwindle, while public pension payments are guaranteed, would embrace the measure even if it triggers harmful, unintended consequences for the fund, public employees and its retirees.

They point to results of two recent local elections that signal voters are restive.

In November, more than 75 percent of voters in Orange County approved a measure requiring a vote of the public to approve new pension increases for county workers.

That same month, voters in Pacific Grove, California, allowed town officials to study whether the town would be better off withdrawing from Calpers and placing its employees in defined contributions retirement plans like 401(k)s.

Dwight Stenbakken, executive director of the League of California Cities, would not be surprised if other local governments across the state began similar reviews on closer inspection of their generous retirement benefits.

"We haven't been able to say 'no,'" Stenbakken said. "The seeds for change are there."

(Reporting by Karen Pierog and Jim Christie, additional reporting by Joan Gralla in New York)

Tom Curtis: Retirees must be vocal or we lose our COLA

From Tom Curtis, August 10, 2009
Subject: Re: ***CORE ALERT*** August 4, 2009**
Hello Jerry,
I hope your summer trip away was great for the two of you and that you are both healthy and well.
Thank you for getting more involved. This will not be the last time you will need to write letters though. We must continue to be vigilant. The majority of retirees had better stand up and be counted or our 3% COLA will be history. The OEA couldn't care less about retirees, (they hold a large majority of the board seats) as we no longer pay them the huge amount of dues they received from us during our careers. They are still pushing to keep the 35 year - 88-1/2% rule, which is ridiculous. Just think of the many administrative people that have or will soon retire with 35 years and will be receiving 100K+, while older retirees receive a paltry amount because the pay scales were not high when they retired. All of this makes no sense to me. It is the older retiree that needs the boost, not the highly paid ones of today.
I personally have been unable to attend the board meetings since early 2006, because I cannot control my anger and rage at our board. Whatever the OEA gained for teachers while teaching, they have stripped away from us, once retired. First, the 13th check, then HC subsidies/quality of coverage, spousal and dependent subsidies eliminated and now they want our 3% COLA reduced or eliminated. A 3% COLA which really is not a COLA, because the interest has never been compounded. ENOUGH is ENOUGH! We retirees either become vocal or we will once again get the short straw.
Tom Curtis
Larry KehresMount Union Collge
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