Friday, January 29, 2010

STRS FLASHBACK - Lest there be doubt............ 88/35 and Slater's two slides that tell a lot

From John Curry, January 29, 2010
Some STRSers are under the impression that the 88/35 hasn't hurt STRS's finances "to date." Well....the tables below (as presented by STRS's Bob Slater) that were "up to date" as of July 1, 2008 tell a different story. By now, I think it can safely be assumed that, in fact, the 88/35 has cost STRS over one billion dollars in extra monies.
35/88 - You be the judge!
From John Curry, June 22, 2009
On Wednesday, June 17, STRS's Bob Slater presented two slides in his presentation to the STRS board. He mentioned that the enhanced 35 year/88% payout, since its inception, has resulted in an additional cost of nearly one billion dollars to Ohio STRS's finances.
On Thursday I attended the board meeting and asked Mr. Slater for some documentation re. this cost factor. Mr. Slater then sent me these two slides that he presented during the board meeting which related this situation. His letter (and attached two slides) are included.
Please pay particular attention to slide #2. In the "Accrued Liability" line (of that slide) you'll see the amounts of $87.43 and $86.49. The difference between these two amounts is $0.94. One billion X $0.94 = 940 million dollars. Had STRS not adopted the "enhanced" (35 year/88%) formula this 940 million dollars would not have been paid out. For years CORE members have asked for this information and told that it was available but neither Herb Dyer nor Damon Asbury produced a copy. CORE members were told that the difference made by the adoption of the 35 year/88% enhanced benefits was really not significant as compared to the original formula when used to calculate the payouts for the 35 year teacher. I'll let you be the 940 million dollars significant?
Click images to enlarge.

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RH Jones: No need for STRS to take back any of our compensation

From RH Jones, January 29, 2010
Subject: January STRS, OEA Board of Directors, and SERS Meeting
To all:
The news media everywhere today, 01-29-2010, is announcing that the national economy is growing at 5.75%; the fastest since 2003! With this being true, the STRS investment staff is certainly growing our STRS funds mightily. Therefore, there should be NO need to even think about taking away one of STRS retirees deferred compensations: that of the flat 3%, nor any other take-backs.
Contrary to what others may think, I think that we do not necessarily need "bean counters" on the STRS board; but, instead, our board needs to have trenchant and compassion concern for their retired stakeholders. Where we need "bean counters" with the highest quality and intuitive skills is in the ranks of our investment staff!
Also, worthy of note, as depicted in Kathie Bracy's Blog, is the graph showing our STRS' rise in investment income. I believe that they are worthy of our praise and awards for this continual growth. I expect that they have learned a lesson and will not allow our investments to dive so far as they did in the years 2000 and 2008. There has been no end of negative criticism over those terrible losses. I expect it should not ever happen again. If it does, it will be, for the third time in recent years, too close together and the staff will be looked at with very critical eyes. Personally, I do not expect this to happen. Our STRS now enjoys a very fast and expensive computer system that will help keep the investment staff in quick control of any down "Bear" markets -- No excuses if it happens the third time. None.
Ladies and gentlemen, after all the gloom, this retiree is able to smile -- for the time being.
Robert H. Jones, retired teacher OH STRS member

Tuesday, January 26, 2010

Dave Parshall: Aetna and a breach of ethics

Dave Parshall to Sandy Knoesel, January 26, 2010
Subject: RE: AETNA phone polls.
Sandy what they are doing is unlawful. I just got off the phone with CMS [Center for Medicare and Medicaid Services]. They stated to me that there are no such requirements for Medicare Advantage Plans, and that they are forbidden from asking such questions. Healthful outcomes are the responsibility of healthcare professionals and patients not insurance companies. CMS wanted to file a complaint because they want to go after Aetna. Did the letter that went out come from STRS or Aetna? Sandy you are supposed to be representing retirees and not insurance companies. I talked to a supervisor at CMS and he stated that there clearly is no such requirement than only Medicare Gap policy issuers can ask a limit number of questions. You can’t take ETNA at their word. I suppose they can ask these questions, but it is a lie to tell retirees that it is a requirement for them to ask these questions. Please send me a copy of the letter that was sent out to retirees and a copy of the complete list of questions that the survey asked. This is a serious issue because it is a serious breach of ethics.
Dave Parshall
From Sandy Knoesel, January 26, 2010
Subject: RE: ETNA phone polls.
In the future, it would be helpful if you would give me all the information you have when asking a question. Medicare doesn’t have any underwriting; so I don’t understand your point. Health information helps the Medicare Advantage plans improve the health outcomes of enrollees. This is a fully insured product.
From: David Parshall, January 26, 2010
Subject: RE: ETNA phone polls.
Thanks Sandy. We called Medicare and three different people said that this was not required my Medicare for Advantage Services. The calls are reported to be coming from New Delhi. There is no underwriting and with the new HEPA laws this is confusing. Thanks for the quick response.

CORE President Dave Parshall: Message to CORE members about the Aetna phone poll

January 26, 2010
Subject: Aetna phone polling John send this message as worded.
To CORE membership, I have contacted Sandy Knoesel at STRS about the Aetna health records phone poll. This is an invasion of privacy and smacks of underwriting which they can’t do under Medicare guidelines. I am advising our members to not answer any of the questions until we have insurances from STRS as to how they are going use this information.
Dave Parshall

John Curry, Sandy Knoesel and Dave Parshall on Aetna health survey

From John Curry, January 26, 2010
Subject: Fw: ETNA phone polls
Keep in mind, despite Sandy's comments, that CORE member Shirlee Zerkel asked 3 different people at CMS if Medicare (CMS) requires this and all 3 CMS people stated that ia survey is NOT required.
Click image to enlarge.
From Sandy Knoesel, January 26, 2010
Subject: RE: ETNA phone polls.
I am assuming that these individuals are enrolled in the Aetna Medicare Advantage Plan. The Center for Medicare and Medicaid Services (CMS), which regulates all Medicare Advantage Plans, requires that new enrollees be offered a health survey. By answering these questions, Aetna professionals can determine if the individual should be offered any special services due to their health status. The survey does not affect the individual’s premium and only takes about five minutes. A letter was sent in advance to let the enrollee know that Aetna would be calling. Staff reviewed the letter, script and survey in advance. I have attached the draft letter. I hope this information is helpful.
Sandy Knoesel
From David Parshall, January 26, 2010
Subject: ETNA phone polls
Hi Sandy,
Our members are upset about phone calls they have been getting from ETNA asking personal health questions. Why are they doing this and how will they use this information? They act like they are underwriting policies which of course they can't. But they do set a rate for our group contract. This seems to me to be an unwarranted invasion of privacy. They are not telling the persons phoned what they intent to do with this information. Please look into this. I am telling our members not to answer any of these questions and until I hear from you.
Dave Parshall

Shirlee Zerkel: Concerns about a letter from Aetna Medicare

From Shirlee Zerkel, January 25, 2010
The following letter to Mr. Nickell asks about my concerns about the phone survey from Aetna. But I see that response from Mr. Nickell's computer that he is out of town till early in Feb. But in the meantime we are to call Marsha Strong at 614-227-2980 if we have concerns.
From Shirlee Zerkel, January 25, 2010
Subject: Concerns about a letter from Aetna Medicare
Dear Mr. Nickell:
I am one of the STRS retirees who was moved into the Aetna Medicare Program. On Saturday, Jan. 23, I received a letter form Aetna stating: "The Centers for Medicare and Medicaid Services (CMS), the federal agency that administers the Medicare program, requires Medicare Advantage Plans to conduct a health assessment survey for all new Medicare enrollees in a timely manner." This was not to be a written survey. Aetna would call in one to two weeks. Three other STRS retirees here in Lima did not get the letter; they just got the call. Why the difference in method since we are all STRS retirees? Two things bothered me about the contents of this letter.
(1) the statement that the federal Medicare program required it and (2) The questions concern personal health issues and also they want the name, phone and address of my doctor. Does your department at STRS know anything about this survey and do we have to answer such questions as 1.How many nights have you stayed in the hospital in the last 12 months?
2. Do you take more than six medicines a day and this includes, prescription, over the counter, vitamins, eye drops and skin patches?
3 .At the time, are you receiving medical treatment for any of the following conditions: breathing problems, diabetes, heart problems, high blood pressure, kidney problems, cancer, stroke. I called Medicare today and was able to speak with 3 associates at the Virginia office. They all stated that Medicare does not require such health assessment survey's. Medicare does require the Advantage plans to cover similar benefits that the traditional plan covers. If they agree to that and fulfill that request then Medicare works with them. This was what I was told by two of the Medicare associates. Please advise as soon as possible as Aetna can call anytime.
Thank you for looking into this concern.
Greg Nickell responded:
Dear Ms. Zerkle:
I have asked another staff person to investigate your questions as I am attending to my ill father in Florida. I will get back to you tomorrow.

RH Jones re: Aetna phone poll

From RH Jones, January 25, 2010
Subject: Re: Aetna Reps phoning for a "so called" poll?
To all:
Re: Aetna Reps phoning retirees for a “so called” poll?
According to Dr. K. Fluke, 2-retired educators have received phone calls from a male representative from Aetna asking them to respond to a poll. He asked personal health questions. These two astute individual retirees refused to give out information over the phone and then also phoned STRS to complain about this privacy intrusion.
Personal health is a private matter never to be discussed over the phone. Who knows for sure whom this individual might be? Even if it may be legitimate, your personal health information in the wrong hands can cause all kinds of expensive trouble for you. Just politely hang up.
My individual opinion,

RH Jones: No COLA cuts for retired educators

From RH Jones, January 25, 2010
Subject: Absolutely no COLA cuts for retired educators
Re: CORE’s John Curry email: “Is it Bill Leibensperger time with a new game show called ‘Lets Make a Deal’”
To all members of the ORSC and Ohio’s educators:
As reported to me by an email from John Curry, I am deeply concerned with OEA’s VP Report of a meeting with the Chancellor of the Board of Regents on 01-14-2010. Bill Leibensperger presented HPA with a “Straw Proposal”: STRS Pension Benefit Changes. Note: the proposal that “no tiering” (?) of COLA benefit is not clearly articulated in the report. Evidentially, it applies to active teachers. Also, note: Most surely everyone evolved with the ORSC understands that Leibensperger represents active teachers. Retired educators have their separate associations and unions representing them. However, since OEA is affiliated with OEA-R, as a separate association their inclusion is debatable.
Concerning currently retired educators, I believe it was HB 157 that promised a “fixed 3% COLA” and brought in into effect in 2002. This still covers all retired educators. However, there is some question as to the constitutionality of cutting this promised fixed differed compensation. If reduced, or taken away by the Ohio Legislature, it may, and most probably would violate the U.S. Constitution’s “Bill of Rights”. Note: the U.S. Constitution trumps any State Constitution.
Most distressing to this retired teacher is that the Leibensperger report recommends, beginning July1, 2011, current retire educators receive only a 2% COLA. Thank goodness it is just a proposal. If the ORSC acts on this, current retiree educators will be financially devastated even more than they are now. Our promised health care/prescription has already been diminished, especially the spousal coverage; the discretionary variable supplemental deferred compensation (13th check), and an Ad Hoc increase to the retiree base, have not been issued in the past 10-years, or so; therefore, there are no “grounds to stand on” in cutting any promised currently retired deferred compensations.
The 3% COLA included in the HB 317 effectively eliminated the previous COLA bank that, previous to HB 317, retired teachers formally possessed; and, in 1999, as a last resort for keeping up retired educators with inflation, compassionate OH Legislators granted an Ad Hoc raise in the base to bring all of the retirees to a 2% base calculation (It is interesting to note: OPERS’ base at that time was increased by 2.2%).
Due to my above reasoning just cited, a reasonable and sensible person could conclude that these promised compensations to currently retired educators should definitely remain in effect.
Respectfully submitted,
Robert H. Jones, retired teacher OH STRS stakeholder member

Dr. K. Fluke's letter to the Plain Dealer editor re: STRS

Cleveland Plain Dealer, January 24, 2010
Duty to protect all state retirees
The Jan. 5 editorial ''Pension protection'' recommended Ohio legislators act now to eliminate pain for the State Teachers Retirement System and the Ohio Police & Fire Pension Fund.
I think that some of the financial problem might have been reduced if legislators had passed bills to increase employee contributions in the past.
As an example, the teachers' retirement system has not had an employee increase in the last 20-plus years. Inflation increased during much of this time. Retired teachers from the 1980s feel this.
Currently, all Ohio retirement systems have an annual cost-of-living (COLA) increase. Many Ohio newspapers are reporting changes. Comparing each Ohio retirement system for COLA changes uncovers considerable differences.
In the Public Employee Retirement System (PERS), there have been minor changes. Our legislators receive their pensions from PERS. Our legislators take care of their own interests. They need to reduce the pain experienced by those who retired many years ago from the State Teachers Retirement System and other Ohio systems.
Kay W. Fluke

Sunday, January 24, 2010

A Shelby County blog's comments re. House Bill 400 and its sponsor, Rep. John Adams

20. Jan, 2010
The Sidney Daily News printed John Adams press release on the front page of the newspaper giving the appearance that it was actual news and not an act of self promotion that all politicians commit.
In the press release is states that Adams wants to abolish income taxes in Ohio. He cites a source that lists Ohio as having one of the highest income taxes in the country. There is a reason for that. Ohio has dropped it’s corporate taxes to almost nothing. Lawmakers are bending over backwards trying to bring bring jobs into the state. Ohio has been rated one of the top 5 business friendly states.
Adams also brings up the fact that there are ten states with lower income taxes than Ohio. Several of these states have a zero income tax rate. These states have industries supporting them (Alaska), receive large amount of federal dollars to run their state (Arkansas, Alaska) or have higher corporate and business taxes. Ohio has none of these things.
There is no way to cut income taxes in the near future without raising corporate and business taxes which will derail any sort of economic recovery this state is trying to obtain. We need jobs. period. The money has to come from somewhere, and we can’t scare businesses away by threatening to raise their taxes.
Saying you want to stop taxing people is a great way to get people to vote for you, but is entirely unrealistic.
Ohio ranked #4 for best business climate by Site Selection magazine, also received 3 consecutive Governors Cup awards from the magazine.
The Small Business & Entrepreneurship Council ranked the state #10 for best business-friendly tax systems in their Business Tax Index 2009, including a top corporate tax and capital gains rate that were both ranked #6 at 1.9%.
The Directorship’s Boardroom Guide ranked the state #13 overall for best business climate, including #7 for best ligitation climate.

A little more info re: the FOI and teachers' personal information...

From John Curry, January 24, 2010
Below is some FOI news that may be of use to CORE members. These articles came from the Ohio Coalition for Open Government and, if you click the link below, you'll get eight more pages of Ohio FOI information from those who use the FOI request quite often - Ohio's newspapers. It's a good read!
Teachers’ data are private, union leader tells judge
From The Columbus Dispatch The head of Ohio’s largest teachers union told a judge, during Dec. 21 testimony, that releasing the names, addresses and other personal information of licensed teachers, administrators and school staff puts their safety and privacy at risk. “Acts of violence, verbal abuse and threats” were among the concerns cited by Patricia Frost-Brooks, president of the Ohio Education Association. The union is seeking a permanent injunction blocking the Department of Education from releasing the information. It was requested by the Ohio Republican Party under the state’s public records law.
After a four-hour hearing in Franklin County Common Pleas Court, Judge Daniel Hogan said he would keep in place a temporary restraining order preventing the state agency from releasing the information until he decides whether to grant a permanent injunction. Hogan will hear arguments from attorneys for both sides on March 19.
During cross examination by Assistant Attorney General Jeffrey Clark, Frost-Brooks said she had received only four complaints from her members about the issue. She also acknowledged that the information is also available from property records and voting records kept by county governments.
The Ohio attorney general’s office, representing the Education Department, says the information is considered government records and subject to disclosure upon request. There are no exemptions protecting the personal information of educators, attorneys say. In testimony, an Education Department employee stated that the department’s database includes the names of up to 900,000 who have or once had educator licenses in Ohio.
Paper may seek lawyer fees from schools
The Supreme Court ruled November 2009 that the appeals court had properly dismissed the Enquirer's claim based on mootness.
"Nevertheless, as we recently held in a different public records mandamus case ... 'even if the Enquirer's mandamus claim were properly dismissed as moot, a claim for attorney fees in a public records mandamus action is not rendered moot by the provision of the requested records after the case has been filed,'" justices said in an opinion that did not identify an author.
Concurring were Chief Justice Thomas Moyer and Justices Maureen O'Connor, Judith Lanzinger, and Robert Cupp. Justices Paul Pfeifer, Evelyn Stratton and Terrence O'Donnell agreed with the decision to dismiss the newspaper's mandamus claim, but said the request for attorney fees also should have been dismissed.
"I believe that the requested documents did not constitute public records ... when the Enquirer made its initial request," Justice Stratton said.
"The district was not obligated to produce copies of the documents until it had used them to carry out the school district's duties and responsibilities, at which point they became public records subject to inspection," she said.

Shelby County legislator draws attention (and ire) of the Dispatch's Joe Hallett

From John Curry, January 24, 2010
The question that Joe asks below (in his headline) is the question that should be asked of all the other co-sponsors of HB 400 (which I'll call the John Adams ill-conceived attempt at destroying state and local government in Ohio bill) and these legislators should also be asked the same question...each and every one of them. How will we pay for our schools if it kills income tax? You might even want to ask them how we will pay for police and fire protection while you are at it. Oh, don't forget to mention libraries, health departments, county bureaus of weights and measures, welfare, veteran's services, extension services, courts and the list goes on and on.....all dependent upon state tax revenues. The saddest part about this whole fiasco is that not a one of the legislators listed below has detailed a plan for just what vehicle would replace the current income tax. If you are a public servant or retired public ought to be offended. At the end of Joe's article I will once again list the sponsors of this piece of trash proposed legislation.
"The state of Ohio this year will spend $2,220 for every man, woman and child living in Shelby County, Representative Adams. Are you prepared to tell them they can expect to be less educated, less safe, less healthy and more inconvenienced because of drastic cuts of services that would result from killing the income tax?"
Joe Hallett
Joe Hallett commentary: How will Ohio pay for its schools if it kills income tax?
Sunday, January 24, 2010
By Joe Hallett
Here are some questions for John Adams, the live Republican state representative from Sidney, not the dead president from Massachusetts.
You have introduced a bill to phase out the state income tax over 10 years. This year, the income tax will raise $7.6 billion, accounting for 45 percent of all tax revenue raised by the state. If you succeed in killing the income tax, how will you replace the lost revenue?
Are you prepared, Representative Adams, to raise the state sales tax by 6 cents to a national high of 11.5 cents on the dollar? That's how much would be needed to replace revenue lost by killing the income tax. How do you think your friends at the Ohio Council of Retail Merchants and the National Federation of Independent Businesses would react to more than doubling the sales tax?
Are you willing to let schools in your home county of Shelby and others close? In the current two-year budget, the state is spending $14.2 billion from its general revenue fund on primary and secondary schools. That's roughly how much the state income tax will generate during those two years for the fund.
Without the income tax, how will you keep schools open? The tax was instituted by the General Assembly in 1971 because financially ailing schools all over the state were closing. When Republicans asked Ohioans to repeal the tax a year later, the voters opted by a 69-31 margin to keep it.
The state of Ohio this year will spend $2,220 for every man, woman and child living in Shelby County, Representative Adams. Are you prepared to tell them they can expect to be less educated, less safe, less healthy and more inconvenienced because of drastic cuts of services that would result from killing the income tax?
At a legislative hearing last week on your bill, Representative Adams, you said: "This is falsely reported as requiring cuts in government spending. Government spending will continue to grow under my plan."
How can that be, when you deprive government of one of its primary sources of funding? And isn't reducing government spending by starving it of money a big reason why you want kill the income tax?
You also said that eliminating the income tax would lead to robust economic growth and new jobs, and would stem the tide of Ohioans leaving the state for Florida and other states without an income tax.
Even if you are correct and people flock to Ohio for new jobs, how will that help schools stay open and provide the services those new Ohioans would expect? There would be no income tax to pay for them.
There is no doubt that some Ohioans move to Florida to escape paying state income taxes. But there is a bigger reason: the weather. South Dakota and New Hampshire have no state income taxes, but Ohioans don't seem to be stampeding to those states.
Of the nine states without income taxes, six, including Florida, have higher sales-tax rates than Ohio, according to a study by the Ohio Legislative Service Commission. And five of the states have higher per capita local taxes than Ohio.
Each of the nine states without income taxes has a greater ability than Ohio to raise revenue through other means, or have sparse populations that don't cost as much in services. For instance, Wyoming's annual Medicaid cost equals what Ohio spends in 12 days.
Florida's beaches and Nevada's casinos produce significant tourism revenue that offsets the need for state income taxes. Alaska and Wyoming generate large amounts of revenue from severance taxes paid by the oil, natural gas and coal industries. Texas reaps significant tax revenue from its oil and gas resources. Property and sales taxes in New Hampshire and Washington are substantially higher than Ohio's.
House Democrats are holding hearings to demonstrate the folly of Adams' bill and to embarrass likely Ohio GOP gubernatorial nominee John Kasich, who has advocated phasing out the state income tax.
Wisely, Kasich appears to be inching away from the idea, because he knows he might actually have to govern. Kasich risks his credibility if he continues to call for killing the tax that pays for schools and services that residents want.
Joe Hallett is senior editor at The Dispatch.
Now, here's a list of those "geniuses" who have created this might want to let them know how you feel about it.
128th General Assembly Regular Session
H. B. No. 400
Representative Adams, J.
Cosponsors: Representatives Batchelder, Mandel, Blessing, Morgan, Martin, Maag, Wagner, Hall, Wachtmann, Combs, McClain, Derickson, Goodwin, Jordan, Uecker, Boose, Huffman, Ruhl, Sears, Grossman, Snitchler, Stebelton, Blair, Hackett, Burke, Beck, Hite, Mecklenborg, Bubp, Daniels

Linda Meinelt to ORSC: Protective provision needed if COLA is cut and market rebounds

From Linda Meinelt, January 24, 2010
Subject: Fw: STRS
Please share with all members of the ORSC:
As the time draws closer for you to decide the future of the retirement systems, please keep in mind that current retirees have really taken the "hit" and, under the proposed plan, will be again "hit'' the hardest by changes.
If the non-compounded COLA is cut to 2%, a clause should be included that if/when the market recovers, the COLA for current retirees return to 3%.
Linda Meinelt
STRS Retiree
Larry KehresMount Union Collge
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