Saturday, May 22, 2010

STRS FLASHBACK - 6 Years Ago - I want my bonus back!

From John Curry, May 22, 2010
Canton Repository, May 29, 2004
Five STRS employees sue to get back their bonuses
Copley Columbus Bureau chief
COLUMBUS — Five employees have sued the State Teachers Retirement System seeking the bonuses they were denied by the pension board last week.
The employees filed the suit in Franklin County Common Pleas Court late Friday asking for class-action status for 268 noninvestment staff eligible for the $1.8 million in bonuses ranging from $416 to $46,574.
The documents filed by Columbus attorney Michael R. Szolosi Sr. appear to ignore Cassandra Hill, a teacher in the STRS Day Care Center whose bonus was to be $174, even though she appears in the appendix filed with the lawsuit. In fact, the appendix lists investment staff and the bonuses they received even though they are not a party to the suit.
Included among the 268 employees are two deputy executive directors, Robert A. Slater, with a bonus worth $46,573, and Sandra L. Knoesel, $43,324, and the board’s executive assistant, Eileen Boles, $6,427.
Repeated attempts to reach retirement system spokeswoman Laura Ecklar for comment about whether she and others would join the suit were not returned. Her bonus was listed at $15,204.
The suit asks for an unspecified amount of punitive damages and attorney fees. The suit seeks temporary and permanent injunctions to prevent the retirement system from using the money set aside for the bonuses for other purposes.
Reached in Chicago, Executive Director Damon Asbury said he knew some employees were talking about filing a lawsuit.
“This was not unexpected,” he said. “We will turn it over to the attorney general to look at and advise us on our next step.”
Kim Norris, a spokeswoman for Attorney General Jim Petro, said the case “is winnable because of the financial condition of the funds” at the time the bonus plan was in effect.
The bonuses were to be awarded to noninvestment employees for work done in the 2002-03 fiscal year. In the aftermath of media reports about questionable spending at the retirement system, the bonuses were suspended last year. The retirement system board voted 5-4 on May 20 not to pay the bonuses to noninvestment employees and unanimously terminated the program. Bonuses were awarded to investment staff, however.
At the meeting, Asbury and Assistant Attorney General John E. Patterson, who is the board’s attorney, recommended that the bonuses be paid. Both predicted a lawsuit would be filed and that the retirement system would lose if the bonuses were not paid.
Petro, however, instructed his representative on the board to vote against the bonus plan because he said it wasn’t in the best interest of the pension system.
The employees bringing the suit are Thomas P. Scott of Mount Vernon, Marvin L. Moore of Columbus, Donald E. Van Loon Jr. of Delaware, Dwayne T. Lane of Canal Winchester and Carmen Fenton of West Jefferson.
Scott, who works in the information technology section at the retirement system according to Asbury, has an annual salary of $98,310. He was scheduled to receive a $15,729 bonus.
The annual salary, job and bonus of the other four are: Moore, a retired computer specialist, $60,560 and $5,632; Van Loon, Web developer, $81,610 and $12,155; Lane, Web developer, $79,420 and $7,433; and Fenton, tax coordinator, $52,150 and $2,033.
The suit accuses the board of acting arbitrarily and in bad faith by giving bonuses to some employees and not others when many of those receiving the money had similar jobs to those who did not. It also said lack of the bonus will affect employee retirement benefits, which are based on the average of the final three years of pay.
The suit also accuses the system and board of arbitrarily setting a lower figure for calculating how much the bonuses should be. The maximum bonus was set at 80 percent instead of 100 percent. The plaintiffs said the retirement system broke its contract with employees because a performance-based incentive plan was in place in 2002-03, which was to be paid in September 2003.

Friday, May 21, 2010

Executive Director's Report to STRS Board May 21, 2010

Click image TWICE to view.

STRS report on May 2010 board meeting

From STRS, May 21, 2010
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 May report follows.
CONTRIBUTING MEMBERS MARK HILL AND DALE PRICE WIN BOARD SEATS Mark Hill and Dale Price were elected to the State Teachers Retirement Board in the recent election. These two individuals will take their seats on the board on Sept. 1, 2010, and serve a four-year term through Aug. 31, 2014.
RETIRING BOARD MEMBER STEVEN M. PUCKETT RECOGNIZED FOR BOARD SERVICE During its May 2010 meeting, the State Teachers Retirement Board passed a resolution recognizing the valuable and significant service provided by Dr. Steven M. Puckett during his tenure as a board member. He joined the board in January 2003 as the representative of the State Superintendent of Public Instruction. He is retiring from the State Department of Education on June 1.
BOARD REVIEWS ENROLLMENT, COST TRENDS AND IMPACT OF FEDERAL HEALTH CARE LEGISLATION ON 2011 HEALTH CARE PROGRAM PREMIUMS The factors that affect health care costs nationwide continue to also affect the STRS Ohio Health Care Program. At the May Retirement Board meeting, STRS Ohio staff reviewed these factors and their impact on the annual premiums for each of the plans offered under the STRS Ohio Health Care Program. At the June board meeting, staff will present proposed premiums for all of its health care plans for calendar year 2011 for the board's approval. This allows staff to review the claims experience and trends for the first three months of 2010 before making final premium recommendations.
During the May presentation, staff noted that escalating health care premiums, along with accompanying higher out-of-pocket expenses, remain a national issue. National medical and drug trends continue to outpace the Consumer Price Index (CPI). The continued introduction of new medical technologies and specialty prescription medications play a significant role in these trend rates. STRS Ohio plan enrollees' use of services and claims experience also affect their premiums. The claims experience is particularly high among the non-Medicare Plus and Basic Plan enrollees, as more healthy individuals are not enrolling in the STRS Ohio program due to the availability of less costly plans in the marketplace. In determining premiums, staff must also consider changes resulting from the recent federal health care legislation. For example, this legislation capped Medicare Advantage plan subsidy levels for 2011 at the 2010 levels; yet, medical costs continue to rise. This will mean higher premiums for STRS Ohio's Aetna Medicare Plan (PPO). Nevertheless, it appears that the Aetna Medicare Plan (PPO) will still be less expensive than the Medical Mutual Plus Plan in 2011 for Medicare Parts A & B enrollees and will continue to also provide a savings to the STRS Ohio Health Care Program. The coverage levels and popular features provided by the Aetna Medicare Plan (PPO) will not change for next year.
This fall during the annual health care plan open-enrollment period, STRS Ohio benefit recipients will also have the opportunity to enroll in the dental and vision plans for the period extending from Jan. 1, 2011, through Dec. 31, 2012. There will be no changes in coverage or premiums for the dental plan offered through Delta Dental and the vision plan offered through VSP for this next two-year period.
DRAFT PENSION LEGISLATION LANGUAGE EXPECTED SOON STRS Ohio has been told that the Ohio Retirement Study Council (ORSC) anticipates receiving draft pension bill language from the Legislative Service Commission soon. The five Ohio public pension systems can then review their pertinent sections and make any necessary corrections. In the coming months, STRS Ohio also expects to receive a separate package containing language for the additional supplemental changes approved by the Retirement Board in December 2009. These changes primarily focus on disability and survivor benefits and the cost to purchase service credit. Following the close of fiscal year 2010 on June 30, the board will receive updated financial information this fall about the pension fund to consider as it evaluates any further changes to the draft bill, including the proposal presented earlier this year to the board by the Healthcare & Pension Advocates for STRS (HPA).
RETIREMENTS APPROVED The Retirement Board approved 129 active members and 75 inactive members for service retirement benefits.
STRS OHIO RECEIVES CERTIFICATE OF ACHIEVEMENT RECOGNITION The Government Finance Officers Association has awarded its Certificate of Achievement for Excellence in Financial Reporting to STRS Ohio for the 2009 Comprehensive Annual Financial Report. This is the 20th consecutive year STRS Ohio has received this national award, which recognizes annual reports that achieve the highest standards in government accounting and financial reporting.

FLASHBACK - The OEA might deny it today but....if one looks back, they will see that the OEA backed the former high rollers and high rolling at STRS!

From John Curry, May 21, 2010
I wonder if today's OEA will share the article below with their current members????????????? What do you want to bet????????????????????? John
"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."
The Canton Repository
August 5, 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."

Thursday, May 20, 2010

Alice Faryna's speech to STRS board, May 20, 2010

Request to divest STRS holdings in private insurance companies; (supported by Concerned Ohio Retired Educators)
Retirement benefits for public employees were severely compromised after the economic downturn devastated investments on which benefit reserves depend. Of particular concern to STRS retirees is the fact that health benefits are not mandated by Ohio law. The parallels between the flaws in the financial sector and the insurance industry are striking; top management in both industries continued to grant extravagant compensations and bonuses to themselves and capital gains to their major investors while looking to their customers and taxpayers to foot the bill. Health reform ideas centered on cost control in areas which offer only minimal cost reduction: tort reform, expanding information technology and wellness programs. Where was the call for cost control within the industry itself? We call your attention to alarms which have been sounded by 2 credible sources.
Wendell Potter, formerly a Cigna executive, has testified before Congress about how poorly the industry serves consumers of health care:
1. Wall Street investors expect ever higher earnings from health insurers, forcing measures which increase profitability at the expense of providing care. Examples are: denial of claims, denial for pre-existing conditions; and cancellation of policies when illness strikes. The percentage of premium (MLR) spent on payment of claims consequently falls. The MLR reform in the current law is inadequate for meaningful reduction of costs
2. Insurance companies have spent $1.5 million a day over the past year lobbying Congress to defeat health reform.
3. Executive compensation is no small part of their costs.
Something is wrong with these priorities.
Economist Paul Krugman sounded the 2nd alarm, after the 39% premium increase in Anthem's individual market in California. He says, "Bear in mind that private health insurance only works if insurers can sell policies to both sick and healthy customers. If too many healthy people decide to remain uninsured, the risk pool deteriorates, forcing insurers to raise premiums. As more healthy people drop coverage, the risk pool deteriorates even further. Now cash-strapped Californians have been dropping their policies or shifting into less-comprehensive plans. Those retaining coverage tend to be people with high current medical expenses. And the result, says the company, is a drastically worsening risk pool; in effect, a death spiral."
Furthermore, calls for minimalist health reform that would ban discrimination on the basis of pre-existing conditions only makes the matter worse. It's a popular idea, says Krugman, "but as every health economist knows, it's also nonsense. A ban on medical discrimination would lead to higher premiums for the healthy, and would, therefore, cause more and bigger death spirals."
We are also concerned about the PBI incentive program:
While no incentives will be paid if the investment fund does not achieve a positive return, and are reduced if the fund is below $65 billion at the end of each 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 more.
As we have seen from the banking debacle, such incentives actually create an incentive for risky investing. We should reward prudent investing.
  • Legislation at the federal level is inadequate to prevent the death spiral Krugman detailed.
  • Unless this industry is restructured into a non-profit industry, this is a dangerous investment. (There is currently a proposal being made by shareholders that WellPoint return to its original non-profit status.)
  • Allen Hubbard, a recent member of WellPoint's Board of Directors, predicted that we will have a single payer health care system in the US within 15 years as the people and Congress turn on health insurance companies as a way to cut costs.
  • The fiduciary responsibility to make a profit for their shareholders, increases the cost of healthcare and increases costs to STRS in providing such to its members.
  • A report by the American Medical Association on health insurance found that one company generally dominated the market in most areas, eliminating competition and driving up costs.
  • The Centers for Medicare and Medicaid Services recently warned Aetna of possible contract revocation of Medicare Advantage Plans due to their prescription policies and not taking the appropriate measures "critical to protecting the health of its enrollees." Three other major insurance companies were sanctioned this way in two years.
  • States may now reject proposed unjustified premium increases. This was recently done in Massachusetts. The insurers claim that the rejection will cause destabilizing losses for them.
We urge STRS to take note of the impending death spiral of the private insurance industry and divest its holding in these companies.
Alice Faryna, M.D.
Retired from WSU School of Medicine

Deborah Silverstein's speech to STRS board, May 20, 2010

I ask the STRS board to seriously consider divesting of all holdings in the private insurance industry.
Moral reasons compel STRS to divest its holdings. The Universal Declaration of Human Rights, adopted by the United Nation in 1948 at the urging of the United States, declares that all human beings have a right to medical care. Insurance companies regularly and routinely violate all standards of compliance with that declaration through the lack of universality, accessibility, equity, affordability, comprehensiveness and non-discrimination.
By holding investments in these companies, the shareholders support and encourage a type of behavior that is reprehensible and puts profits before the lives of living human beings. Some examples include:
  • WellPoint recently awarded its CEO, Angela Braly, a 51% increase in salary, bringing her total income up over $13 million annually. During a time of economic recession, when many people are scraping together just enough to keep a roof over their heads and feed their children, a raise of this magnitude is irresponsible.
  • The Indianapolis Star, on January 16, exposed that WellPoint had been covertly funding U.S. Chamber of Commerce attack ads against health care reform. WellPoint spent tens of millions on other non-covert lobbying.
  • McClatchy Newspapers, on February 24: "While Anthem Blue Cross proposed a 39 percent rate increase on thousands of its California customers, its parent company gave 39 of its executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats.
  • The Los Angeles Times, on March 10, updated its readers on the ongoing rescission scandal involving WellPoint in California. "Only a small fraction of eligible Californians have benefited from agreements that Anthem Blue Cross made to settle accusations that they systematically and illegally dropped sick policyholders to avoid paying for their care."
  • Consumer Watchdog reported March 31 that WellPoint sent a message to investors describing how it would simply re-label administrative costs as "medical care" in response to the new health reform law.
  • Reuters reported in April that WellPoint routinely targeted women diagnosed with breast cancer, using a computer algorithm, and immediately began fraud investigations. Women were subsequently dropped from coverage for erroneous or flimsy reasons.
  • The disclosures come to light after a recent investigation by Reuters showed that another health insurance company, Assurant Health, similarly targeted HIV-positive policyholders for rescission. That company was ordered by courts to pay millions of dollars in settlements.
  • Last February, Anthem Blue Cross agreed to pay a $1 million fine and an additional $14 million in restitution to alleged victims to settle another lawsuit for improperly rescinding the policies of 2,330 people.
  • A year earlier, Anthem Blue Cross, a subsidiary of WellPoint, agreed to pay a $10 million fine to settle similar charges, alleging that WellPoint had illegally rescinded more than 1,100 policyholders.
  • A 2007 investigation by the California Department of Managed Health Care bore this out. The agency randomly selected 90 instances in which Anthem Blue Cross of California dropped the insurance of policyholders after diagnoses with costly or life-threatening illnesses to determine how many were legally justified. None were.
STRS must take a strong stand against such practices by divesting of any holdings in health insurance companies.
Deborah A. Silverstein
Kent, OH

Kay Fluke's speech to STRS board, May 20, 2010

STRS Senior Retiree
As I view the STRS Board, Health Care Advocates, ORTA and OEA, I do not recognize anyone who can speak for the senior STRS retiree. That is the person between the ages of 70-80 with an average life expectancy of 77 (male) and 83 (female). Personally, I have been a life member of ORTA for 25 years and 30 years life member of OEA.
Prior to 1986 retirement, I was counseled by STRS in both group and individual counseling that health care would be provided for me, spouse and children. This has drastically changed. The benefit promise certainly influenced the timing of my retirement. Senior STRS retirees cannot recoup personal investment loss. Their health care has escalated. Consumer Reports indicates a 20% increase in health costs between the ages of 55 to 75. Cost of long term care predicated on age is sky-high. My goal is for you to recognize that cuts against the senior retiree would be devastating and not proportionate to other retirees.
Ad Hoc raise legislated in the year 2000 capped eligible senior retirees at 85%. The Ad Hoc raise legislated for active members provided a 35 year bump and at 3-4 years more, 100% of the final average salary.
Check/read the book The Story Thus Far, STRS 75 Years, 1995. Note: what will be the story in 2020?
Last year I spoke to Summit County Akron area recent retirees about joining ORTA and OEA-Retired. They want to know what the organizations have done for retirees and what is being done now for retirees. Why have 20 years passed since we have seen an increase in the employee contribution? The feeling was little organizational action was pursued to motivate legislators for the change.
Senior retirees should have "Golden Years" for retirement, not benefit cuts, but cost of living protection for inflation, which is just around the corner.
For about 25 years, I have served as legislative chair for Summit County Retired Teachers. My observation is that a third of the current membership could qualify as Senior STRS Retirees. We must have an advocate!
K.W. Fluke, Ph.D.
SCRTA Legislative Chair
Akron, Ohio

RH Jones' speech to STRS board, May 20, 2010

I am retired teacher Robert Hudson Jones.
To the board and management: Restore our benefits. Carry on the tradition of the intellectual "firepower" that the boards and management have used to provide benefits since the STRS inception: way back in 1920.
The historic cataloging of the retired STRS member benefits can be found in the book entitled The Story Thus Far...STRS at 75. These benefits were synopsized in the book's "BENEFITS ROUNDUP."
The authors say: "One of the system's most reassuring achievements has been its alertness to, and preparation for, the trauma of escalating health care costs" (page 45). They also stated that: "Health care plan further expanded to provide coverage to [the] spouse of a benefit recipient" (page 111 [1978]). Also mentioned was the addition of dependent children, and if unmarried, the inclusion of a qualified, financially dependent person. And our prescription drugs were made available by mail for just $1 per prescription. Note: the catch-up 13th check was initiated in 1981; but, subsequently, since 2001, the 30-year funding limitation has not been met.
To restore benefits in both the public and private retirement systems, there are class action suits happening all over the nation. For instance, the Akron Beacon Journal published an article "Newspaper ordered to restore [retiree] benefits" (Beacon, May 15, 2010, page D2). This also happened to the OEA. Will it happen to the STRS as well? Can I rest assured that all the STRS retiree cuts will be restored very soon, especially for those retired over 20 years, and that no further retiree cuts will take place -- such as the proposed 1% cut to our simple 3% COLA?
Retired member benefit cuts are not a good legacy to leave in 2020, when the next book, ...STRS at 100, will be published. I have faith that you will quickly restore our benefits, for to do otherwise would dishonor past commitments to retired members.

Bob Buerkle's speech to STRS board, May 20, 2010

Nationwide Pension Reforms
So far, I have identified at least 20 states that are making changes in their pension plans. These changes are increasing retirement age and service requirements, lowering pension formulas (also called multipliers), increasing the number of years used for FAS calculations, increasing contribution rates by the employees and employers and reducing COLAs. All of this has a familiar ring, to a point.
At least ten of the states have already passed legislation. Ten more are in the process. They all differ from Ohio in that all 10 already have legislation that will only apply to new hires. More states are planning similar legislation for new hires only. These states are: NY, TX, IL, LA, NJ, GA, NV, HI, VA, NM, KY, MO, PA, RI, FL, KS, IA, NE, MA and CA.
In at least four states, NY, VM, MI and MA, early retirement/severance incentives are also being offered to existing employees.
So far, Colorado, Rhode Island and Minnesota are the only three states that are making, or plan to make, any changes to the COLAs for retirees. All three states are already in class action lawsuits over the COLA reductions. Only these three states are changing the rules after the game is over for their retirees. Shame on them.
Twenty states are solving their financial problems in the right way, with "New Rules for New Hires." When you start playing the game (Ohio teachers under STRS), you play by the Ohio Laws codified on ORC 3307 and implemented by the STRS. To think that these laws can be changed during the time that you are playing the game, or worse yet, retroactively after you are through playing the game, is almost incomprehensible.
Think about this analogy:
If a person commits a crime that they must be tried for, they have to be tried under the laws that were in place at the time they committed the crime. If the law is changed later, even if it is because of the crime committed by this person, the punishment they receive cannot be based on the new law. Their punishment must be based on the law that was in effect when they committed the crime.
I am not saying STRS is not trying to protect the retirement system. I'm not saying you haven't worked hard on the solution you came up with. But to STRS retirees, this process makes us feel like we have less protection under the laws and guarantees we retired under than criminals have.
I hope you will redo your legislative proposals and have New Rules for New Hires.
Bob Buerkle
Cincinnati Public Schools Retiree

Dave Parshall's speech to STRS board May 20, 2010

It has been some time since I last spoke to you publicly, but having listened to you since the first Longterm Fiduciary planning meeting in 2009, I can no longer remain silent. I and other CORE members have always asked for fairness in any planning. Please allow me to introduce some pertinent realities you need to understand.
From the first LTF planning meeting, Mr. Slater and other STRS staff members have been correctly pointing out that the combined increased contributions by active educators and school boards is the keystone to any successful plan. It is the biggest cost driver, and without it everything else collapses.
I do agree that teachers' welfare should be part of any school board's responsibilities as the cost of education. However, one has to wonder if you have been reading the headlines. Cleveland has laid off 546 teachers; Columbus, 116; Lorain, 183; and the list grows longer every day. In the best of times, an increase by school boards would be a hard sell. Remember what the OSBA did to House Bill 315? Even "grandfathering" the increase to 2020 is still fantasy.
There have been statewide media attacks on our pensions, painting educators as greedy, overpaid public servants. Candidates are running for office with a platform to do away with our defined benefit pension, in favor of some kind of 401 plans. This is an attempt to direct the public's attention away from what has happened to the private sector pensions that have been replaced by hopeless dreams of a good retirement based on what is left of 401k plans. Have you forgotten the "Buy Ohio" attempt?
There are some realities about the COLA, or our so-called "Cost Of Living Allowance," that need to be pointed out. First, the cost of goods and services in Ohio goes up the same real dollars for all residents, no matter what a person's income. So why continue the unfair practice of figuring out COLA based on a percentage of our final average salary? In real dollars, the amount of COLA paid is far greater for those with the largest pensions. The COLA dollar amount is much less for those with pensions of $35,000 or less. Not only is this unfair, but it costs STRS needless dollars. Your current plan is still unfair and costly.
You need to listen to Mr. Brooks and his 3% for the first $30,000. This would be fair across-the-board. I am sure there could be other fair plans as well. It is time to rethink your position on the COLA. Many of the most conservative states have grandfathered current retirees. Why haven't you?
Please understand that ORTA does not speak for or even understand what most retirees are thinking. They never ask. In other states, the retired teachers associations are leaders for reform, but not in Ohio. They never speak at STRS board meetings and almost totally ignored Dennis Leone and his landmark findings. Clearly, they were asleep at the switch then, and still are. Go along to get along is not leadership.
Mr. Brooks and the STRS staff have been telling you all along that some of the changes can happen overnight. The changes to current retirees sure did. When you are in your sixties or seventies, there is little you can do to improve your financial picture. All the grandfathering for future retirees will be a red flag to the legislature. I base this on firsthand experience with them.
Please face some of these realities. If you don't, then when your time comes to leave the board and you are asked the inevitable question, "What will you do next," you can't say the usual "I am going too Disney World," because you will have already been there.
David K. Parshall

Tuesday, May 18, 2010

These retirees won't take it lying down!

From John Curry, May 18, 2010
From The Associated Press, May 18, 2010
Retired Minn. employees file class action suit to undo legislative trims to pension benefits
ST. PAUL, Minn. (AP) - Two retired Minnesota state employees have filed a class action lawsuit arguing that the Legislature has violated the contractual rights of public sector retirees to receive pension benefits at levels promised when they retired.
In the legislative session that ended Monday, state lawmakers curtailed the yearly rate of increase for pension benefits from a 2.5-percent annual increase to between 1 and 2 percent depending on the pension fund. Attorneys for the state employees say that violates the U.S. and Minnesota constitutions.
The attorneys say retirees will lose millions of dollars in promised benefits. They say thousands of public sector retirees are eligible to join the lawsuit.
Larry KehresMount Union Collge
Division III
web page counter
Vermont Teddy Bear Company