Saturday, December 12, 2009

RH Jones re: OPERS recommendations

From RH Jones, December 12, 2009
Subject: IMPORTANT OPERS Recommendations
To all active & retired educators:
Please click on to the attachments from OPERS to the PERI [Public Employee Retirees, Incorporated] Legislative Alert Email Network. Two things stood out to me (1) from: "OPERS Addressing the Present, Planning for the Future encourage member engagement in their retirement planning and to correct inequities resulting from benefit subsidization."
PERI is the union representing retired public employees. Educators, can you imagine ORTA encouraging member engagement in their retirement planning? They sure haven't in the past 10-years, or so. All that I have gotten from them is dirty looks and snubbed noses. I don't think Dr. Leone, Lazares, and all the other very numerous STRS retired members who have been engaging the STRS board and employees, have gotten only a very minimal of support for the positive changes this pressure has had on maintaining and moving forward our STRS pension benefits. As a "Paid Up for Life Member" I can only hope that due to educator media exposure, ORTA will change their representation methods and begin to aggressively do what we expect of them.
Also, in the attachments: "OPERS Recommendations" from them you will notice you will note this and I quote: "Cost of Living Adjustment (COLA) - Replace the current simple COLA with a simple COLA equal to the change in the Consumer Price Index up to 3%. This change would not apply to current OPERS retirees."
Retired educators, the good news their is that the OPERS is not cutting, or in any way, changing retired member's COLA. Also, I must say that I think strongly that our STRS will not cut our COLA either. They surely must know that cutting it may not be either morally correct or legally correct. This is not pension envy; this is STRS doing what is right.
This is the opinion of a retired teacher member of OH STRS,
Robert Hudson Jones
Memo from Bill Winegarner
Subject: Fw: IMPORTANT OPERS Recommendations OPERS Recommendations
Date: December 4, 2009

To: Participants in the PERI Legislative Alert Email Network
From: Bill Winegarner, PERI Administrator
Through out the summer and fall OPERS and PERI, as a member of the stakeholders group, have been working together to aid the OPERS Board of Trustees in determining what adjustments needed to be made in order to keep our retirement system viable, not only as a pension system, but also as a provider of healthcare for its retirees and their families.
I have attached two documents that will hopefully bring you up to date on the decisions that OPERS has made, and the corresponding requests that have been made to the Ohio General Assembly.
We will follow up with more material as the potential legislation begins to take shape.
In the meantime, we wish you and yours a wonderful holiday season.
Click images to enlarge.

Friday, December 11, 2009

Why can't Ohio see sponsorship of a bill similar to Alaska's SB 38?

From John Curry, December 11, 2009
Web posted Friday, December 11, 2009
Senate to review rules for prescription drug plan managers
By Margaret Bauman Alaska Journal of Commerce
Employees work in quality control as they check mail order prescription medications at Medco Health Solutions Inc.'s sprawling Willingboro Dispensing Pharmacy in Willingboro, N.J. AP File Photo/Mel Evans
As Congress debates a massive overhaul in America's health care system, Alaska lawmakers are considering how to control a major medical expense - the cost of prescription drugs.
The Alaska Legislature is considering a bill to require pharmacy benefit managers to reveal actual costs and profits.
Health insurance companies, which often provide administrative services for self-financed small business health insurance programs, contract with pharmacy benefit managers, known as PBMs, to administer prescription drug programs. PBMs in turn, contract with pharmaceutical firms for bulk drug purchases, and with pharmacies for "in-network" prescription sales.
Senate Bill 38, originally sponsored by former Sen. Kim Elton, D- Juneau, and now by Sen. Hollis French, D-Anchorage, would regulate pharmacy benefit managers.
The legislation would authorize the state Board of Pharmacy to cooperate with the state Division of Insurance to regulate pharmacy benefit managers.
SB 38 would require PBMs to disclose to the health care insurer all financial terms and arrangements for payments between the PBM and the prescription drug manufacturer. Disclosures would include rebates, drug substitution programs and various fees.
The legislation also would prohibit pharmacy benefit managers from terminating contracts or otherwise penalizing a pharmacist or pharmacies because of filed complaints, grievances or appeals with the PBM, or because they otherwise expressed disagreement with a PBM's decision to deny or limit benefits to a covered person.
The Alaska Pharmacists Association says Senate Bill 38, and similar federal legislation is needed to bring billings to private business under control. The APA says costs through mail order may greatly exceed the actual cost of the prescription drugs from manufacturers.
Federal privacy laws forbid PBMs, including Medco Health Solutions, from commenting on individual prescription drug cost issues unless they are posed by the person for whom the prescription was written.
So this writer asked the company about her own medication, Alendronate, the generic version of the drug Fosamax, taken by thousands of women to restore and maintain bone density.
A three-month supply of Alendronate costs $12.30 at an Anchorage Costco for members who have a prescription but are not covered by insurance.
A three-month supply of the same medication purchased through Medco's mail order pharmacy in Texas costs $105.72 under the Morris Communications prescription plan, with the employee required to pay $17.50 co-pay and the company billed another $88.22 by Medco.
(Morris Communications is the parent company of the Alaska Journal of Commerce.)
A Medco representative said the company is completely transparent in its dealings with the companies with which Medco administers pharmacy benefits.
An administrator for the Morris Communications' insurance program at United Healthcare said mail order is typically less expensive for brand-name medications, but may not be for some generic medications.
Less expensive prices for some generic medications at retail have resulted, in part, because of certain retailers' desires to drive people into their stores, where they will buy non-prescription items. Both the Fosomax and Alendronate when compared to Costco's price fall into this category.
In another recent incident, a North Slope oil field worker with Alyeska Pipeline Service Co. said a medication he purchased without using his insurance plan - after Premera Blue Cross had refused to honor the prescription at a local pharmacy - would have cost his employer nearly four times as much had the prescription been authorized by Premera.
Alyeska employee Ric Weinrick said the incident occurred when he tried to fill his wife's prescription for Lovenox, an anticoagulant, at his local Fred Meyer pharmacy in Wasilla, after his wife had surgery.
Weinrick said he paid $519.43 out of pocket for the medication, which his wife was supposed to begin taking immediately. Premera insisted that he fill the prescription through a mail order pharmacy, which would have taken days.
Weinrick said he was so aggravated by the situation that he did some computer research on costs of the drug, and what he learned angered him more.
He said he found his wife's prescription would cost $138 from online, significantly less than what he said was the $2,200 that Alyeska Pipeline Service's plan would have been billed by Walgreens' mail order pharmacy, after his $75 co-pay, had he filled the prescription via mail order. Weinrick identified Walgreens as one of mail order pharmacies listed under his plan at the time.
Weinrick said he brought the matter to the attention of Alyeska Pipeline's health plan administrator, and that he eventually got a $292.88 refund
"This whole thing is like a cancer," he said. "It goes so deep and it's so entrenched. The health care legislation they are working on in Washington right now, if it passes, it may treat the symptoms, but not the problem. The problem is the pharmaceutical companies are in bed with the insurance companies, who are in bed with the hospital corporations. They are feeding off of each other and the CEOs are making billions of dollars."
Eric Earling, a spokesperson for Premera Blue Cross - the state's largest health insurer- said Premera's contract with Medco to provide pharmacy benefit management services is a value to its members.
"Mail-order can be of particular value and convenience to our members," Earling said, noting that mail-order-only plans are selected at the choice of the customers, which are usually self-funded businesses. "Urgent prescriptions do not face mail-order-only requirements in order to support the obvious needs of our members."
Still, Weinrick's allegations echo those of the Alaska Pharmacy Association, which says pharmacy benefit managers reap huge profits for their administrative services.
Employees of some of Alaska's 35 independent pharmacies said Weinrick's experience is not unusual. They support federal and state legislation that would force pharmacy benefit managers to be transparent in how much they get in rebates from pharmaceutical firms that sell them the drugs, and how much they, in turn, bill clients.
The pharmacists said they are afraid to speak out individually, for fear of reprisal from the PBMs, who negotiate contracts with pharmacies where prescriptions may be filled.
Pharmacists who do speak out can find their contracts to fill prescriptions for certain insurance plans pulled by the PBMs or be subjected to a PBM audit, several said.
The pharmacists said that if the PBM finds an error in the billing for a particular drug, it may argue that it is likely that similar billing errors were made for a larger percentage of prescriptions for the same drug. The pharmacy may then be forced to pay thousands of dollars to the PBM to cover the probable cost of billing errors that may or may not have ever occurred, they said.
Pharmacists said they believe costs through PBMs are inflated. Examples included a customer paying a $37.50 co-pay for Zocor, a cholesterol-lowering drug, which the PBM then billed the customer's insurance plan another $187.50. The pharmacists said the actual cost of that drug to the pharmacy was $9, so the PBM made about $150 on one prescription.
Another customer paid 20 percent co-pay of $40.72 for a generic version of Prozac, an anti-depressant, which meant that the PBM billed the employer five times that amount, the pharmacists said.
Individuals with prescription insurance plans should demand to know how much their company is actually being billed for each drug, they said.
State officials heard complaints from pharmacists and from state employees, and looked into the details about the way drug claims were paid, said Pat Shier, director of the state Division of Retirement and Benefits.
The state used that information to write a better request for proposals for pharmacy services, Shier said.
The state formerly had a contract with Premera Blue Cross, which subcontracted pharmacy benefits management to Medco.
The state now is under contract, through Wells Fargo as the health insurance plan administrator, to use the Envison-Costco pharmacy plan partnership.
"We know the state is saving money on this, but more important to us, it is about our members finding a quality product at the place they choose to do business at a good value for them, the pharmacists and the plan," Shier said.

Tom Curtis chastises STRS executive director for ignoring stakeholders (THANK YOU, TOM; HE DESERVES IT!)

From Tom Curtis, December 11, 2009
Subject: 121009 Curtis To Nehf, Operational Reduction Of Costs
Mr. Nehf,
What kind of a man knowingly ignores the very people that pay his salary? Do you honestly feel that secure in your position that you can afford to thumb your nose to your stakeholders?
Others and I have written you several times over the past 3 months and requested your plan for drastic reductions in the operation of the STRS, similar in scope to what you have already approved to cut from all stakeholders' benefits.
In my opinion, you are simply another person that feels they are beyond accountability. Does that make you feel proud of yourself? I honestly do not know how it can.
Mr. Nehf, I ask you to step-up and show us that you are not just another greedy executive. Put your plan for reducing the operational costs of the STRS on the STRS Website. Please, show us what you are made of and show us your plan?
During this decade, management and the investment department are responsible for watching our pension fund lose in excess of $42 billion dollars. Yet, all during this decade, the STRS operated business as usual. You people must have few morals and ethics that you live by professionally. How can you get up in the morning and look at yourself in the mirror while you shave or put on your make-up and not see a person that is way out of line? And I must ask you, for what? None of you seem to have a vague idea of what ORC 3307.15 asks you to live up to. It is time for more reform from the management side of the isle. Try giving back to the very people that have provided each of you with fabulous working conditions and benefits.
So, in review, the STRS management and staff have stood by and watched our pension fund lose $42 billion dollars this decade, while they continued to receive above normal salary increases, bonuses, travel and so many other benefits that we the stakeholders never experienced in our careers. Yet, during this same decade, I have personally never heard management or staff offer to decline any benefit they were given. How is that morality possible in people that claim to be there for our benefit? Would not most people find your actions immoral? I do! (To me, that shows just how uncaring and entitled you all really are, $42 billion loss,WOW!)
STRS Stakeholder,
Thomas Curtis
[I wish to add one word: $$$GREED$$$. KBB]

Report on December STRS Board meeting

From STRS, December 11, 2009
This week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The December report follows.
State Rep. Todd Book, who currently serves as the chair of the Ohio Retirement Study Council (the legislative oversight body for the five Ohio pension systems), recently announced he is bowing out of the race in the second congressional district to focus on issues of high visibility at the Statehouse, including public pension issues.
Related to the anticipated legislation focusing on the five pension systems, the State Teachers Retirement Board approved additional proposed changes to pension benefits during its December 2009 meeting. These changes would have minimal or no impact on the current solvency status of STRS Ohio's pension fund. These changes also require legislation to be implemented; there may be an opportunity to include them in the above-mentioned pension legislation. The proposed changes include: increasing the cost for purchasing most types of service credit; tightening up the eligibility requirements to receive disability benefits (new STRS Ohio members only), and limiting the amount of credit given when members return to work following disability (all STRS Ohio members); and tightening up the eligibility requirements to receive survivor benefits (new STRS Ohio members only). The board will consider implementation dates and options for these changes in January.
Clifton Gunderson reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2009, at the December board meeting. The report noted that the system's financial statements were fairly stated in accordance with generally accepted accounting principles; further, no material weaknesses in internal controls or instances of statutory noncompliance were found. As a result, STRS Ohio received a "clean" audit known as an unqualified opinion, which is the highest level of opinion that an organization can receive.
STRS Ohio's financial statements are included in the Comprehensive Annual Financial Report, which can be accessed through the STRS Ohio Web site ( Copies of the report can also be requested by calling STRS Ohio's Member Services Center toll-free at 1-888-227-7877. Included in this report is a detailed look at STRS Ohio's investment activities, plus financial, actuarial and statistical information for fiscal year 2009 (July 1, 2008-June 30, 2009).
At its December meeting, the Retirement Board approved two changes to the compensation structure for STRS Ohio Investment Department positions. Compensation for these associates includes both fixed pay (base salary) and variable pay (pay that is "at risk). The variable pay is awarded through the Performance-Based Incentive (PBI) Program. First, the board approved reducing the variable pay by lowering the maximum PBI payouts. Second, the board approved targeting compensation for PBI-eligible associates at the median compensation level of a blended mix of 50% large/leading public funds and 50% private sector firms for comparable investment positions. As an additional frame of reference, the bottom 25th percentile of the private sector (actual total compensation) may be used for positions in which there are insufficient public sector comparisons.
As a result of this board action, total incentive opportunities for this fiscal year will decline by 13% or $2.8 million and total compensation (base salary plus maximum PBI) will be 1% below the median of the blended mix of large/leading public fund and private sector firms.
At previous meetings, the board has already approved these PBI Program changes:
- No incentives will be paid when the total investment fund does not achieve a positive absolute return, beginning this fiscal year.
- Incentives will be reduced by 3% for each billion the total investment fund is below $65 billion at the end of any fiscal year.
- PBIs will be increased by 8% if the total investment fund's absolute return exceeds +8.5% and the net relative return exceeds 60 basis points but less than 100 basis points; or increased by 12% if the total fund's absolute return exceeds +8.5% and the net relative return equals 100 basis points or more.
In addition, the number of eligible associates in the PBI Program has been reduced to 80 from 90.
The internal management of STRS Ohio's investment assets - versus using outside money managers - saved STRS Ohio about $112 million in fees in calendar year 2008 alone.
RETIREMENTS APPROVED The Retirement Board approved 118 active members and 92 inactive members for service retirement benefits.
In 2006, work began at STRS Ohio to replace the pension management computer system known as Legacy. This month, the new STaRS system is being fully implemented for use by associates. This multiyear undertaking involved associates in Information Technology Services, Member Benefits and Finance, plus an outside vendor. The project involved replacing the entire infrastructure of STRS Ohio's pension management system, including benefits processing and payments, employer payroll reporting, call tracking and electronic workflow. It also affects how members and employers interact with STRS Ohio through the use of the Web sites for business purposes (e.g., employer reporting functions) or to access personal account information or other services.
The annual health care open-enrollment period ended Nov. 24. The changes made to the STRS Ohio Health Care Program for 2010 generated about 20,000 calls to the Member Services Center. In addition, nearly 9,700 retirees attended one of the 61 Health Care Plan Highlights meetings presented by the Member Education Department around the state. Of the more than 4,800 individuals who completed a survey after the meeting, 98% stated STRS Ohio staff "met or exceeded their expectations" and 41% rated the presentation a "perfect 10."
Preliminary results show that less than 2,000 individuals who had been placed in the new Medicare Advantage Plan - Aetna Medicare Plan (PPO) - "opted out" and enrolled in the Medical Mutual Basic Plan or a regional fully insured plan (AultCare, Paramount or Kaiser Permanente). More than 62,000 benefit recipients and their family members with Medicare Parts A & B remained in the Aetna Medicare Plan. Overall, about 3,500 plan changes were made. Additional open-enrollment results will be available in January.

Thursday, December 10, 2009

Ralph Roshong's speech to the STRS Board, December 10, 2009

Goldman Sachs is going to be paying out $23 billion in bonuses to their "investment staffs" after having the federal government, that is "we taxpayers", bail them and other Wall Street firms out of bankruptcy. There are many other firms operating the same way. I am sure that these same investors and top management leaders were an integral part of the whole Wall Street Gang who played loose and wild with investors' funds and caused the worst financial dilemma this country has witnessed since 1927. I am a firm believer in our capitalistic form of economy, but this scenario is absolutely appalling to me and, I believe, 99% of our country's citizens.
And you, the Board, and our investment department want to pattern our staff's pay packages after that obscene example, as the "salary consultant," I believe, now wants to use the 50%ile of Wall Street as a benchmark instead of the current 25%ile.
Last month you heard from a Salary Consultant you employed to provide his and/or his firm's opinions on how much our investment personnel should be compensated. If I recall correctly, he said their base salaries should be increased ONLY 2-3%. Has the consultant read anything about what raises are being given other wage earners in our state our country and where the CPI has been lately? You do know that a salary consultant's task is to keep all their clients' wages spiraling upward, or they are out of a job. After he gets our salaries and bonuses increased, he then goes back to the Wall Street firms and says, "Look where the STRS personnel are and we have to get yours higher now." He then talked about bonus percentages and, I believe, recommended a scale of only 17.5% to 90% bonus rates for staff. I THINK THIS IS ABSOLUTELY ABSURD! First, the investment staff's base salaries are already highly differentiated, I presume, by responsibility. Why would we want to apply a highly differentiated scale of bonuses to their highly differentiated base salary, a monumentally disproportionate amount? If any bonus is paid at all, apply the same appropriate percentage to all of their already differentiated salaries.
I believe your stated annual goal for our fund's growth is approximately 8%, and I am not sure if this is accomplishable in light of the fact that we have not even averaged that amount over the previous ten years in a much better economic climate. Now look at the disparity in the percentages, 8% growth for our pension fund, but the bonus percentages are anticipated to range from 17.5% to 90%. I assume I missed something somewhere in relevancy. Why not establish a bonus program, that if the fund reaches their stated goal of 8% for the year, the investment personnel each get an 8% bonus?
Then I believe you reinstituted the bonus program, but "deferred" payment. What is that move all about? They either earned it, in which case, pay it; OR they did not earn it, in which case, don't pay it. Defer appears to me to be a political term and move that says, "this will allow the membership to forget it for a while and the topic will cool down."
On another point, I would hope the staff is giving some thought to assessing our building space and whether there might be any feasibility in attempting to lease space to other tenants, possibly the other pension funds, ORSC, or similar organizations. Would a staff member please be kind enough to provide me the number of square feet in our building that is useable as office space?
On still another note, I hope the changeover of software for the staff is progressing well.
Thank you very much for providing myself and others the opportunity to express our opinions to the Board. We are in fact very appreciative of your efforts on our behalf.

...and then some wonder why I rail at Medicare Advantage programs!

From John Curry, December 10, 2009

Wednesday, 09 December 2009 11:51

Today Energy and Commerce Committee Chairman Henry A. Waxman and Oversight and Investigations Subcommittee Chairman Bart Stupak released a new report which found that 34 Medicare Advantage insurers expend significant sums on profits, marketing, and other corporate expenses. Last year, the insurers spent an average of $1,450 per beneficiary on profits, marketing, and other corporate expenses, nearly ten times as much as traditional Medicare spent on administrative expenses per beneficiary.

On average, Medicare Advantage insurers spent over 15% of premium revenue on profits, marketing, and other corporate expenses. Two-thirds of the Medicare Advantage insurers surveyed by the Committee had a "medical loss ratio" - the percentage of premium revenues used to pay medical claims - below 85% during at least one of the four years examined. In contrast, traditional Medicare spends 98% of its money on medical care. If all Medicare Advantage plans had spent at least 85% of their premium dollars on medical care from 2005 to 2008, they would have spent an additional $3 billion on medical care for seniors.

"Medicare plays a critically important role in insuring that millions of Americans receive the health care they need," said Rep. Waxman. "But as this report shows, Medicare Advantage insurers are squandering billions of dollars on overhead costs - in fact, they spend ten times the amount per beneficiary as traditional Medicare. Our health care bill includes much needed reforms to the Medicare Advantage payment system. There is no reason for Medicare to pay private insurers more than traditional Medicare pays in any community in the country. That will insure that taxpayer dollars are spent wisely."

"Medicare Advantage was never intended to be a program for insurance companies to pad their corporate expense accounts," said Rep. Stupak. "Seniors pay Medicare Advantage premiums with the expectation that the money will be used to provide critical medical care - not pay for marketing campaigns and executive bonuses. The disparity between the percentage of premiums used to pay medical claims in traditional Medicare and Medicare Advantage is unacceptable; our seniors deserve better. This report is just the latest example of private insurance companies exploiting the Medicare Advantage system for their own gain."

At the request of Chairman Waxman and Subcommittee Chairman Stupak, the majority Committee staff analyzed premium revenues, medical claim payments, marketing costs, profits, and other data from 34 major Medicare Advantage insurers.

The report found:

  • From 2005 through 2008, the average Medicare Advantage insurer spent over 15% of premium revenue on profits, marketing, and other corporate expenses. Two-thirds of the Medicare Advantage insurers surveyed by the Committee had a medical loss ratio below 85% during at least one of the four years examined. Six of the insurers had medical loss ratios below 75% in one or more years. In comparison, traditional Medicare spends less than 1.5% on administrative expenses and over 98% on health care. In the aggregate, the Medicare Advantage insurers spent $1,450 per beneficiary in 2008 on profits, marketing, and other corporate expenses, nearly ten times as much as traditional Medicare spent on administrative expenses per beneficiary.
  • Requiring all Medicare Advantage insurers to have a medical loss ratio of 85% would provide billions of dollars in additional medical services to seniors. The total amount spent on profits, marketing, and other expenses by Medicare Advantage insurers over the last four years was $27 billion. The House health care reform bill requires Medicare Advantage plans to spend at least 85% of their total premium revenues on medical claims. If this threshold had been in effect from 2005 through 2008, the Medicare Advantage insurers would have spent an additional $3 billion on their beneficiaries' medical care, enough to eliminate all copays for preventive care for all Medicare beneficiaries for ten years.
  • In 2007 and 2008, Medicare Advantage insurers with medical loss ratios lower than 85% paid their executives over $1.2 billion. In 2007, a company that had a medical loss ratio of 79% paid an executive over $35 million. The same company paid 16 more executives salaries and bonuses worth $1 million or more. Another company with a medical loss ratio of 79% paid more than $210 million in compensation to 260 executives.
  • Medicare Advantage insurers have spent millions on expensive retreats. In 2007, one company with a medical loss ratio of 83% spent $3.1 million for two events in Hawaii. In 2007, a company with a medical loss ratio of 84% spent $2.5 million on employees and agents at a retreat in San Jose del Cabo, Mexico and $1.4 million on an event in Rome, Italy. In 2008, a company with a medical loss ratio of 82% spent $1.5 million on a meeting in Edinburgh, Scotland and $1.8 million on a trip to Cancun, Mexico.


Jim N. Reed to Donna Seaman re: The fox guarding the hen house and a return to the Dark Ages

From Donna Seaman, December 10, 2009
Subject: Re: You Are So Correct in Your Assessment...
Hi Jim, Wow, what a nice, encouraging, supportive letter from you! I received it just now (Thurs. early morning) as I am getting up and trying to get motivated to attend another STRS board meeting, an 80 mile drive on this cold, snowy morning. Yes I am so very discouraged at the board's and Mr. Nehf's total lack of concern for retirees. Many of us keep trying but to no avail. Thanks for your comments, I really needed that today!
Donna Seaman
From Jim N. Reed, December 9, 2009
Subject: You Are So Correct in Your Assessment...
Dear Ms.Seaman,
I have read your comments with much interest and completely share your observations regarding the continuing lack of attention by STRS Board members and Executive Director to the necessity, indeed moral obligation, to cut the fat internally.
Isn't it amazing how much emphasis has been given to the recommended reductions in active and retiree benefits targeted for current and future educators without any mention of trimming the obesity of perks granted those whom we employ at STRS.
As I have frequently stated, as long as our (STRS) retirement funds are subject to the disconnected decisions made by members of another retirement system (PERS), we have little hope that the legal, ethical, or moral interpretation of fiduciary responsibility within STRS will ever see the light of day. Has there ever been a more obvious model of the fox guarding the hen house!
I am appalled by the lack of recognition of the reality attributable to your recent letter by educators, retired and active, in Ohio. Even after 45 years in public education it has never ceased to astound me when it comes to the apathy, disinterest and passiveness of so many in our profession.
Isn't it also interesting that the OEA and ORTA continue to remain asleep at the wheel regarding this issue? What are these organizations for if not to represent and protect the welfare of those that have made hefty contributions for that expected support as actives or retirees?
I applaud your continued vigilance and courage to speak out against the stunning absurdity of suggesting the plethora of reductions and "take-aways" for educators while the people in the palace have spent and continue to spend as though they are unaware of their irresponsible contributions to the $40 billion loss.
Any recommendations to the ORSC for fiscal policy adjustments to correct the bad times within STRS are a farce as long as internal house cleaning remains out-of-bounds.
The public image of STRS has suffered immeasurably over the past decade among STRS-literate members and several investigative reporters. There has been little damage control exhibited by the STRS Board and Executive Director. We are encouraged to forget the heritage of embarrassment and move forward.
Thank goodness for the reform-minded efforts of former Board members Dr. Dennis Leone and Mr. John Lazares during this decade. I can't even imagine the plight of our retirement system had these two courageous watchdogs not confronted the inept policy making and administration that has plagued the once proud STRS.
Jim N. Reed

Wednesday, December 09, 2009

Donna and Dean Seaman: Who on this board is going to stand up for retirees?

From Donna and Dean Seaman, December 9, 2009
Subject: board meeting
STRS Board members and Mr. Nehf:
Recently Mr. Nehf sent out a statement to STRS retirees about the potential "sustainability" of the STRS pension system. In this statement Mr. Nehf states, and I quote, "The STRS Ohio Defined Benefit Plan is sustainable with reasonable, measured changes for the future."
Mr. Nehf's statement continued to explain how STRS and the STRS board has proposed several changes to the Ohio Retirement Study Council, now to be sent on to the state legislature for approval and or modification.
Mr. Nehf's statement does NOT include any indication of making internal STRS operational changes, many of which I and other retirees have been suggesting to you for a very long time. Internal changes are just as important for STRS to maintain its sustainability as are all the numerous changes you have handed out to retirees in recent months and years (elimination of the 13th check, changes and drastic cuts in health insurance, increased costs of premiums and co pays, particularly for non-STRS spouses, proposed reduction of COLA, to name a few).
Retirees are still waiting to see reduction in the STRS building staff, reduction in their health insurance benefits which would reflect and match the changes in our coverage, the possibility of reducing the size of used office space and renting out space to other businesses in this palatial office building.
I remind you once more that you are legally and ethically bound by Ohio Revised Code to be responsible overseers of STRS funds. Your smartest and brightest investment staff, who will be rewarded with $3 million plus in totally undeserved bonuses, even though the performance based incentives are deferred, have let retirees and the fund down by an unbelievable loss of $42 billion dollars in fund value earlier this fiscal year.
You know that while the best and brightest may not have done anything illegal, they have lost ground in the court of public opinion and have lost credibility and respect from many of us retirees. In my judgment, they are no better than Bernie Madoff, move over Bernie, there is room for others from STRS to join you!
Mr. Nehf and board members, it is absolutely essential that you implement internal cost reductions in addition to the many you have inflicted upon STRS retirees to main sustainability of this public pension fund.
Who on this board is going to stand up for retirees?
Donna Seaman, 2002 retiree
Dean Seaman, 1986 retiree
(These are our own views and do not represent those of any organization.)

Duke and Jane Snider: Report on December 7 Brown County meeting

From Duke and Jane Snider, December 9, 2009
Subject: Meeting Dec. 07, 2009
Kathie, Sorry we haven't gotten back to you. We asked Al Rhonemus to write about the meeting which we will forward to you (with his permission). We encourage anyone who attended the meeting to email their thoughts to you. They may have more or different opinions and thoughts about the meeting.
The meeting was with STRS Executive Director, Mr. Mike Nehf, and Laura Eckler in attendance Dec. 07, 2009. There were retirees from six counties and two Representatives, Rep. Danny Bubp and Rep. Uecker. Mr. Nehf spoke about fifteen minutes, then opened the remainder of the meeting for questions and comments.
A handout was distributed about "The STRS Ohio Plan to Strengthen the Financial Condition of the Retirement System" which was broken down into The Issue, The Planning Process, The Plan, Next Steps, and Looking to the Future. Since this handout was given to everyone at the meeting, we'll email it to you (in two separate emails, page 1 and page 2).
Basically Mr. Nehf explained something had to be done which we believe most agreed; however, there were different thoughts about the way to do it. Many retirees wondered why retirees and active teachers were "targeted", and there seemed to be nothing done or cut at the STRS level. Mr. Nehf explained that steps have been taken i.e. freeze salaries, head count, reduced budget cut 11% over last year, bonuses examined and changed, and continuing education to be only in Ohio except for investment staff which must travel.
The COLA which STRS board has recommended to reduce to 2% was a big concern of many, but OPERS recommended NOT changing the 3% COLA. The final decision of the recommendations of the five retirement systems will be rolled up in one rather than individually.
Mr. Nehf presented his answers in a polite and professional manner. Many seemed to understand he cannot change the mistakes of the past, but there are some things which he can control. We did not take notes, because a student of the media class video taped some of the meeting, but had problems with the battery. John Curry had volunteered to make DVD copies for those who couldn't attend the meeting, but it depends on how much was videoed.
The tone of the whole meeting was very pleasant and professional. Reps. Bubp and Uecker spoke at the end of the meeting and showed empathy toward retirees. Mr. Nehf also answered questions after the meeting.
Anyone who attended the meeting who reads this, would you please give your take about the meeting? This is how we feel which others may have more or different thoughts which we respect. We want to thank Mr. Nehf for volunteering to come to Brown County. We also want to thank all who took time out of their busy schedule to attend the meeting.
Duke and Jane Snider
Sardinia, Ohio

Al Rhonemus: Report on December 7 Brown County meeting

Al Rhonemus to Duke Snider, December 8, 2009
Subject: About December 7th Meeting
Although I am not able to hear really good because of age and ear problems, here are a few highlights I observed yesterday with CEO Mike Nehf.
Very congenial meeting with representatives in attendance from six counties (Adam, Brown, Clermont, Highland, Hamilton and Warren) plus two House of Representative members who represent the counties in attendance.
Emphasis seemed to be to get the Legislature on board to increase funding from both active teachers and local school districts to support the down turn in the economy which will indirectly affect our retirement and health care benefits in the future if not passed by the legislature. (The state representatives indicated it will be difficult to get any increase in contributions from taxation monies because of the school district budgets are already “strapped” by economy problems plus 2010 every state representative and half of the senators will be up for election and they will hesitate to increase funding for anything during an election year.)
Personal note: some school officials in our area want to see that the active teachers pay as much percentage into the STRS fund as the school districts do. We seemed to go away from the meeting stating if those who will be retiring down the line (say 10-15 years away) may suffer much more than those who are presently retired.
Future retirement amounts and health care depend upon passage of this funding. However, no bill has been presented yet to the legislature because all five public retirement systems will have to get a combined bill however noting then the total bill will be subdivided according to the retirement system (STRS, PERS, etc.) The down side to the meeting was everyone would feel the pain of increased funding by active teachers, retirees or cut in cost of living from 3% to 2%.
The subject as to why many teachers are disgruntled asking if the STRS Board and STRS staff has made any cuts. Mr. Nehf assured us that several ways are being cut. He said they have made approximately 11% cut in cost for the staff and board. One impressive statement “I have to sign every voucher, not only for travel and other out of town expenses.” So much more in house meetings rather than out of state travel, etc. He did mention that a few of the investment staff had to travel because of the investment far beyond our American borders.
The bonus situation was discussed briefly and explained that no bonuses will be paid unless an increase income beyond a certain bench mark and the board would have to openly approve any bonuses.
All in all it was a good meeting and those in charge tried to answer the questions whether it was for the good of all retirees or some on an individual basis. Mr. Nepf says STRS has $60 billion in assets.
Al Rhonemus

STRS Ohio Plan to Strengthen the Financial Condition of the Retirement System

From Duke Snider, December 9, 2009
Click images to enlarge.


Harry Thistlewaite: A Call from STRS

From Harry Thistlewaite, December 8, 2009
I GOT A CALL FROM AN STRS REPRESENTATIVE TODAY. No, our retirement checks are not guaranteed for life. The hope is that we will never have another drop in the market that we had last yr. The other hope is that the new revisions that STRS is trying to implement will eventually pass the legislature. You will always have a retirement check but if the funds are not there, and are reduced again, you can probably expect a reduction in your retirement check. I talked with this guy for over a half-hour and in his estimate, we should not have any worries. Easy for him to say. I brought up 2 of the emails I sent to STRS in the past and getting a reply from them at STRS that indeed our retirement check cannot be reduced and he said that is incorrect information.
Merry Christmas and Happy New Year
Dec. 9 comment: The representative also told me that current teacher organizations are fighting many of the changes that may affect them.

Tuesday, December 08, 2009

"The OEA is lawfully obligated to provide for teachers' retirement."

Oh really??????????????
One learns something new each day, doesn't one?
From John Curry, December 8, 2009

Medicare "Advantage"? Advantage to WHOM?

From an STRS retiree, December 8, 2009
Subject: Advantage plans
I am a retired teacher (two years now) who is very worried about the switch to Aetna Advantage plans. My spouse has a chronic disease that requires a transplant of both lungs. Since Congress just voted to cut $400 billion from Medicare, Advantage plans will suffer. The benefits will be reduced and the premiums will increase. Perhaps, they will disappear entirely. What it means to my family, is that we will never be able to return to a supplement plan, because we would have to go through underwriting with the insurance company. As I see it, STRS has sold those of us on Medicare "down the river." It is stressful enough to deal with emphysema - now we have to live in fear of having no insurance in addition to Medicare.
Thank you for listening, please keep up the "lifeline" to the retired educators of Ohio.
I did not send this to you to appear in your blog. I just wanted you to see how terrible the decision of putting us on an Advantage plan with Aetna will be for us.
(Posted with permission)

Sunday, December 06, 2009

Letter to Dispatch: Medicare Advantage drawbacks

From John Curry, December 6, 2009
Medicare Advantage plans have drawback
Columbus Dispatch, December 6, 2009
I respond to last Sunday's letter "Medicare Advantage good fit for elderly," from Roger Shipe, concerning House Resolution 3962 and Medicare Advantage plans. Although these plans seem to work well for senior citizens with minor illnesses, the same isn't true for those facing a catastrophic illness.
I work at an oncology practice, and we see many patients who find that their plans have a cost share of 5 percent to 30 percent, and they might have to pay up to $4,500-$6,000 out of pocket per year in addition to their co-pays.
So while you may save money by not purchasing a supplemental plan, in the end you might have to pay much more.
The plans also are very limited as to which hospitals may accept their insurance.
Larry KehresMount Union Collge
Division III
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