Saturday, June 19, 2010

STRS FLASHBACK - 7 years ago - A Dyer Double Header - Dyer has his defenders as the heat gets turned up another notch and.....

....."I don't get any bonuses for doing my job!"

From John Curry, June 19, 2010
“Mr. Dyer may have rankled some individuals or misspoken, but he has done what the executive director of this retirement system needs to do,” said Hazel Sidaway, a board member from Plain Township.
(note - Hazel was later convicted of an Ohio ethics violation)
More lawmakers calling for STRS chief to resign
Canton Repository, June 20, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS — Pressure continues to mount on those who run the State Teachers Retirement System of Ohio.
• A Stark County lawmaker wants employees of the public retirement system to return $14 million in bonuses.
• A growing bipartisan contingent of legislators is calling on Herbert L. Dyer, the system’s executive director, to resign or be removed.
• And, in a private letter this week to the chairwoman of the STRS board, Ohio Auditor Betty Montgomery said that if Dyer were one of her employees, he would be out of a job.
Dyer has said in the past that he will not step down.
And he has his defenders.
“Mr. Dyer may have rankled some individuals or misspoken, but he has done what the executive director of this retirement system needs to do,” said Hazel Sidaway, a board member from Plain Township.
“At this juncture of what may be finally an economic recovery, ... the system would not be well served by his departure. I would be truly saddened ... if political forces were going to override ... the overall best interests of our system.”
STRS members, legislators and others accuse Dyer and the board of going on a spending spree during at least the past three years, spending $15 million on staff bonuses, artwork and travel to places like Alaska and Hawaii. The spending happened while investments plummeted by $12.3 billion and health-care contributions of retirees jumped significantly.
Ohio Rep. Scott Oelslager, R-Plain Township, wrote to Dyer on Thursday saying the trust in STRS has been damaged. To recover that trust, Oelslager said bonuses should end and those awarded be returned to the system “either by lump sum or by establishing a payment plan.”
He also said the artwork purchases should end and a regular performance audit be established if not already in place.
Laura R. Ecklar, STRS director of communication services, said performance measures are in place and were used to determine which employees received bonuses and how much.
Rep. Michelle G. Schneider, R-Cincinnati, said Oelslager’s letter indicates she is getting “a lot of support.” Schneider, the first House member to call for Dyer’s resignation, began circulating a letter Thursday asking House members to join her. Oelslager did.
Sen. Kirk Schuring, R-Jackson Township, has 15 colleagues, nearly half the 33-member Senate, who have joined him in calling for Dyer’s resignation. Schuring said he expects more and will hold a press conference next week to announce their names. One of those senators, Kevin Coughlin, R-Cuyahoga Falls, jumped the gun Thursday by sending out his own press release using material Schuring provided.
Schuring and Schneider said they and their colleagues have been inundated with phone calls and e-mails from constituents concerned about STRS spending.
Montgomery sent her letter to Deborah Scott at her Cincinnati home. Dyer has said the board allows him to intercept mail sent to members at the STRS office in downtown Columbus.
The auditor wants the board to examine Dyer’s performance, and she said wants her concerns addressed at the STRS board meeting today.
“Who received bonuses and the amount of these bonuses is very troubling,” she wrote Scott. “His public statements have been arrogant ... and reflect a complete lack of professional demeanor.”
Montgomery also said she wants her concerns addressed at the STRS board meeting today. The “board must be prepared to discuss what decision we must make to help repair some of the unnecessary damage Mr. Dyer’s behavior may have done to the confidence in the system itself.”

A teacher wrote: “I've had my experience with Mr. Dyer. I can't get over the fact that these people feel and truly believe that it is their money to spend and they're damned well going to spend it all. ... I don't get any bonuses for doing my job.”
Readers show intense concern about STRS, not to mention anger
Canton Repository, June 20, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS -- At 6:30 a.m. today, a group of people planned to meet in the parking lot of McKinley Senior High School in Canton to car- pool to Columbus. Depending on traffic, they should arrive in plenty of time to attend the 10 a.m. meeting of the State Teachers Retirement System board.
They are coming to express their concerns about the spending habits, policies and attitude of the board and its executive director, Herbert L. Dyer.
Ever since the story broke almost two weeks ago that STRS spent more than $15 million over the past three years on staff bonuses, artwork and travel even as the system’s portfolio lost $12.3 billion, a lot of people have reached their own conclusions.
Many have sent them to me in 40 e-mail messages and close to a dozen telephone calls. They have come from as close as Canton and as far away Arizona and Florida. If we printed all of the messages as letters to the editor, they would take up a page and a half in the newspaper. I plan to respond to each one of them, as is my normal practice. Readers should rest assured we are paying attention to their concerns. Here are some of them:
Getting involved: “Is there any sort of ‘grass roots’ movement forming among state retirees in Ohio? I, for one, would love to have an opportunity to fight this kind of impropriety. I worked hard for my retirement and to have it ‘ripped off’ by the very people who are supposed to be protecting it really makes me angry.” [sure is, it's called CORE!]
Sources in our stories can lead to other people interested in the same fight.
Angry in Hiawassee: Most writers were just downright angry, particularly with Dyer. A Georgia writer commented: “As a retired teacher I am appalled at the arrogance of the STRS director and board. What a bunch of spendthrifts and jerks.”
He was not alone. “They played on my money. Impeach every single one of them. There should be no bonuses for anyone. A good job is rewarded with your salary. ... Honesty and common sense. None of the current board members have either one. As far as I am concerned they stole my money.”
Another wrote: “We are just in shock over these reports.”
And this from Canton: “The STRS shenanigans are a travesty! As a retired educator, I am appalled with the arrogance of OUR STRS board.”
A teacher wrote: “I've had my experience with Mr. Dyer. I can't get over the fact that these people feel and truly believe that it is their money to spend and they're damned well going to spend it all. ... I don't get any bonuses for doing my job.”
Health care woes: Many, like this Arizona retiree, worried about their health care: “Under the current plan our health care and medicines will take well over 30 percent of our current pension income. We cannot drop our insurance as I am in remission for cancer and my husband had heart bypass surgery (six times). Our lives depend on STRS and the current board seems to be trying to kill us off by making health care and medicine unaffordable.”
Writing the board and legislators: Some folks want to contact legislators and board members directly. Others already have and are less than thrilled with the experience. Information about board members is available at:
Keep in mind Dyer intercepts their mail.
One who got through had this experience: “Several months ago when I'd asked (health care) questions of Hazel (Sidaway, a board member from Canton), I found her to be quite arrogant, insulting and degrading. She suggested that we go to ‘early bird specials’ and learn to live more modestly! She even suggested that my husband and I move to Florida where we might find (health care) more reasonable!”
The names and addresses of legislators can be found at:
Forget about writing — clean house: To improve STRS, many writers followed this line of thinking: “Things must change with STRS and the first item would be the immediate dismissal of Herb Dyer.” Or this, “Mr. Dyer needs to resign NOW.” Or “Shame on them and fire their sorry butts, maybe even jail time. At least, they should pay back the misappropriated funds and resign.”
Keep reporting: “Down here in West Virginia, when we publish the amounts of public employee bonuses, we don't use titles. We use actual names. I recommend the practice.”
Finally, one writer suggested, “This story should not be allowed to die.”
It won’t.

Friday, June 18, 2010

STRS 2011 health insurance premiums

From John Curry, June 18, 2010
[STRS] Retirement Board Approves Health Care Premiums and Program Changes for 2011

The Retirement Board approved three eligibility changes for the STRS Ohio Health Care Program resulting primarily from the health care reform bill recently passed in Washington, D.C.

  1. Dependent children, as well as incapacitated children, will now be eligible for health care coverage until the end of the month in which they turn age 26, if they do not have access to other employer-sponsored health care coverage.

  2. Upon reaching age 26, the monthly premium charged for a person incapacitated since childhood will be the same rate as the spouse premium.

  3. The waiting period for late enrollees in the health care program will be reduced to 90 days from six months.

These changes go into effect on Jan. 1, 2011.

The board also approved the 2011 premiums for all the plans offered through the STRS Ohio Health Care Program. PDF versions of the 2011 premiums are listed below based on Medicare status and plan eligibility. Current 2010 premiums are also listed in the PDF versions for convenient comparison.

2011 Premiums

small pdf  icon Premiums for Enrollees Without Medicare
small pdf  icon Premiums for Enrollees With Medicare Parts A & B — Eligible for Aetna Medicare Plan (PPO)
(Applies to enrollees with Medicare Parts A & B living in the United States, and family accounts with each individual enrolled in Medicare Parts A & B)
small pdf  icon Premiums for Enrollees With Medicare — Not Eligible for Aetna Medicare Plan (PPO)
(Applies to family accounts that include both Medicare and non-Medicare enrollees; Medicare Part A-only enrollees; Medicare Part B-only enrollees; and enrollees living outside the United States)

Additional information about the 2011 STRS Ohio Health Care Program will be provided in upcoming newsletters and on the STRS Ohio Web site. In late October, all current enrollees will also receive personalized health care plan information in preparation for the fall open-enrollment period, which extends from Nov. 1–23, 2010.

Contact STRS Ohio’s Member Services Center toll-free at 1-888-227-7877 for more information or with any questions.

BP stock and Ohio pension system ownership.....OPERS "ain't" talking!

From John Curry, June 18, 2010
"The largest of Ohio's public pension funds, the Public Employees Retirement System, did not return repeated calls yesterday for information on its BP holdings."
Ohio pension funds split on BP
Toledo Blade, June 18, 2010
COLUMBUS - While those overseeing pension funds in the United States and globally have nervously watched their investments in BP leak red ink with every gallon of crude spilling into the Gulf of Mexico, one Ohio pension fund has been buying.
The School Employees Retirement System, one of five state public-employee pension funds, has apparently seen the recent drop in BP stock value as a chance to pick up a bargain. As of April 15, the fund held no BP stock. As of Tuesday, it held $12.3 million worth, a demonstration of faith in the long-term future of the energy giant.
BY THE NUMBERS •The School Employees Retirement System, one of five Ohio public-employee pension funds, has been buying BP stock. As of April 15, the fund held no BP stock. As of Tuesday, it held $12.3 million worth.
•The State Teachers Retirement System has sold nearly 3 million of the 13.9 million shares it held in BP stock as of April 1 when the total value of the investment was $134 million. The value of its remaining shares is about $55 million. "All of our managers are external," said fund spokesman Tim Barbour. "They have full discretion to purchase when they see fit. They don't need to check with us before they buy."
He noted that the fund's exposure to BP represents just 0.13 percent of its holdings.
While SERS has been buying, the State Teachers Retirement System has been selling. It has sold nearly 3 million of the 13.9 million shares it held in BP stock as of April 1, when the total value of the investment was $134 million. The value of the 10.9 million remaining shares is now about $55 million.
"This lower value reflects both less shares and the almost 50 percent drop in share price during this period," said system spokesman Laura Ecklar. "Throughout this time period, the market value of our BP stock holdings represents less than one-half percent of the market value of our international stock holdings."
The value of STRS international portfolio is between $13 billion and $14 billion.
Ty J. Young, president and CEO of the Atlanta-based "safe money" investment firm of Ty J. Young, Inc., said he would not advise his clients to invest in BP right now what they can't afford to lose.
"Catching stock on its way down to make money is like trying to catch a falling knife," he said. "Sometimes you make money, but most of the time you get hurt."
BP stock is widely held among pension funds in the United States. Although it experienced a rally in the immediate wake of BP's decision to divert future shareholder dividends to help establish a $20 billion compensation fund, the value of the oil giant's stock has dropped dramatically since the fatal explosion on the Deepwater Horizon deep-sea oil rig on April 20.
The value had dropped so rapidly since April that new British Prime Minister David Cameron found it necessary to scold President Obama for his public berating of BP, formerly British Petroleum, because of the adverse impact on pension funds in the United Kingdom.
The Ohio Police & Fire Pension Fund has seen the value of its 2.5 million BP shares plummet.
"Our BP stock is managed by a couple of different managers, who have specific guidelines built in, triggers as to when to sell and when to buy," said fund spokesman David Graham. "That's been a successful operation for us." The fund also holds a BP note expected to be worth $550,000 when it matures in late 2013. It's valued at $498,000.
The largest of Ohio's public pension funds, the Public Employees Retirement System, did not return repeated calls yesterday for information on its BP holdings.
Dan Weiss, executive director of the Ohio Highway Patrol Retirement System, said the smallest of Ohio's pension funds has little direct BP exposure.
"We have no direct holdings in BP and have not since the end of 2009," he said. "We do have some exposure in the index that is fairly incidental."
Mr. Young's opinion of BP as an investment deteriorated with the announcement that it had agreed to create the compensation fund.
"They eliminated dividends [Wednesday]," he said. "They're selling off assets. That takes money out of the hands of BP. They can't run their business the same way. This cuts into profits and hurts stock prices. It hurts their ability to do the right thing in the Gulf."
Contact Jim Provance at:, or 614-221-0496.

STRS FLASHBACK - 7 Years Ago - Betty turns up the heat another notch on Herbie while the legislators start talking the "r-word" (resignation)!

From John Curry, June 18, 2010

“Your public comments have been troubling and insensitive, angering many for the apparent lack of recognition of the issues and their consequences. ... As the Board’s ambassador, you must treat their concerns, as well as those of the legislature and the public, with the respect they merit. Any lack of professional demeanor in dealing with the people we serve is completely unacceptable.”
Betty Montgomery - State Auditor
State auditor blasts teachers’ retirement director
Canton Repository, June 19, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS — Ohio Auditor Betty Montgomery says the executive director of the State Teachers Retirement System abused his authority when he awarded nearly $1 million in bonuses to non-investment staff.
Those 65 bonuses ranged from $52,500 to Robert A. Slater, the deputy director of finance, whose annual salary is $150,000, to the supervisor of the copy center who got a $1,367 bonus on top of an annual salary of $45,580. The average bonus was $13,670.
STRS members, legislators and others have accused the director, Herbert Dyer, and the board of going on a spending spree over at least the past three years that used more than $15 million for staff bonuses, artwork and travel to places such as Alaska and Hawaii. The spending came at a time when the system’s investments plummeted by $12.3 billion and health-care contributions by retirees jumped significantly.
A contingent of retirees and others are expected at a STRS board meeting Friday to complain about the treatment they have received from the director, Herbert Dyer, and board members. They also are expected to criticize the board’s spending habits. The board’s meeting began Wednesday night.
“Mr. Dyer was given some great discretion in awarding bonuses,” said Eric Hardgrove, a spokesman for Montgomery, who as Ohio’s then-attorney general, sat on the retirement board. “Unfortunately, what he had done has not honored that trust. Given the economic climate, this needs to be reviewed.”
Hardgrove said Montgomery “does not shirk her responsibility,” but that she placed her trust in Dyer. The spending of the board and Dyer became a particular concern when the board began requiring retirees to pay more to receive their health-care benefits, he added.
“We need some serious re-evaluation” of policies, Hardgrove said.
Montgomery rebuked Dyer in a letter late last week. She said his attitude in dealing with members of the system, legislators and other stakeholders has been “nonresponsive, abrupt or even condescending.” She said it must change.
“I have seen it myself in your written correspondence and I know my current Board representative (Mary Beth Foley) has discussed this with you,” Montgomery wrote.
Two lawmakers who sit on the Ohio Retirement Study Council, which has oversight of the state’s five retirement systems but does not oversee the day-to-day operations of the five boards, have called for Dyer’s resignation. Sen. Kirk Schuring, R-Jackson Township, and Rep. Michelle G. Schneider, R-Cincinnati, have said Dyer has lost the confidence of the members of teachers retirement system.
Rep. John Boccieri, D-New Middletown, has called for an audit of the board’s books.
Dyer has refused to step down.
Montgomery did not ask Dyer to resign.
Hardgrove said Foley will make a statement on Montgomery’s behalf at Friday’s meeting. He said Foley and Montgomery “have been talking a lot about it. She is aware of the calls for his resignation. The board meeting is the best place to address that. Whatever action is taken, she does not want to harm the funds.”
Attorney General Jim Petro and Ohio Superintendent of Schools Susan Tave Zelman also send representatives to STRS board meetings as ex-officio, nonvoting members.
J.C. Benton, a spokesman for Zelman, said it is premature to ask for Dyer’s resignation but “the board should take a solid look at his performance.” Zelman’s representative on the board, Steven Puckett, will request the same data STRS supplied to Chillicothe Superintendent Dennis Leone, who triggered the investigation of the board’s spending, Benton said.
Benton said Zelman recognizes the need for performance incentives, but wants the board to review its travel and other policies. He said Puckett also will check what investigatory options the Ohio Retirement Study Council has before deciding whether to back a change in state law to allow Inspector General Thomas P. Charles to investigate the retirement boards.
“Zelman is most definitely in favor of increased accountability,” Benton said.
Kim Norris, a spokeswoman for Petro, said he “was extremely aggressive” about pursuing a change of travel policy when he was auditor and that led to changes. Apparently, policies need to continue to be examined, she said.
She said Petro supports performance bonuses, but those at STRS “appear to be out of line.”
Norris said Petro has not taken a position on whether Dyer should resign or whether the inspector general should be able to investigate the state’s retirement boards. The “general feeling” is that a role for the inspector general “is not necessary,” she said.
Montgomery said she regretted having to write the letter to Dyer, but “your public comments have been troubling and insensitive, angering many for the apparent lack of recognition of the issues and their consequences. ... As the Board’s ambassador, you must treat their concerns, as well as those of the legislature and the public, with the respect they merit. Any lack of professional demeanor in dealing with the people we serve is completely unacceptable.”

Since we own 10.9 million shares....let's see how our stocks are doing today.........

From John Curry, June 18, 2010
Moody's downgrades BP ... again
By Aaron Smith, staff
June 18, 2010

NEW YORK ( -- Moody's Investors Service cut BP's long-term rating by three notches Friday, marking the second downgrade in a month, citing the worsening impact of the oil disaster.
Moody's cut BP's senior unsecured ratings and long-term debt securities to Aa2 from A2 and said there could be further downgrades as it continues to review BP's ratings. "Moody's update assessment is that the spill will have a sustained negative impact on the group's free cash flow generation and overall financial profile for a number of years," said the rating agency in a statement.
Also on Friday, Moody's downgraded the senior unsecured issuer rating of BP Finance by three notches to A3 from Aa3 and the senior unsecured issuer rating of BP Corporation North America by four notches to Baa1 from Aa3.
The rating agency had downgraded BP once before, on June 3. On that same day, Fitch Ratings also announced a downgrade of the oil giant. Since then, Fitch announced a second downgrade to just above junk status.
Moody's referred to the BP's agreement to set up a $20 billion escrow to cover damages and liabilities related to the spill as a "mildly positive development."
"Establishing a clear funding mechanism to make payments to injured parties may moderate pressure for the government to pursue more punitive actions," said Moody's.
BP (BP) owns 65% of the well that is spilling up to 60,000 barrels per day in the Gulf, according to government estimates. The problem has been ongoing since April 20, when the Deepwater Horizon offshore rig, which is owned by Transocean (RIG) and leased by BP, exploded and sank, killing 11 workers.
Since then, BP has been unable to plug the leak. The company's chief executive, Tony Hayward, was subjected to blistering Congressional testimony on Capitol Hill Thursday, where he was accused of "stonewalling."
BP's stock has plunged 47% since the accident by Thursday's close. The company was not immediately available for comment. Under pressure from the government, BP has canceled its dividend for the rest of the year.
The company was not immediately available for comment.

Thursday, June 17, 2010

My, my...this is interesting pension news!

From John Curry, June 17, 2010
I see that the New York State Common Retirement Fund, with a whole lot more assets than STRS has (132.6 billion), owns 17.5 million BP shares....STRS owns 10.9 million shares...wonder if we are also considering a lawsuit?
New York Pension Fund Considering Suit Against BP
Wall Street Journal, June 17, 2010
By Jilian Mincer
New York state's pension fund is considering suing BP PLC for its management of the well in the Gulf of Mexico that's been spewing oil for the past two months, a spokesman said.
The New York State Common Retirement Fund, with $132.6 billion in assets, owns 17.5 million BP shares through index funds.
"We've been looking at all our options that we have available, including potential litigation," said Robert Whalen, a spokesman for the fund. "We want to make sure if there was negligence or recklessness that we are made whole appropriately," he added.
BP spokesman Robert Wine said he was unaware of any potential litigation and had no immediate comment.
A lawsuit from one of the largest pension funds in the country would add to the pressures BP is facing. It's already spent nearly $2 billion in the spill response and faces billions more in costs related to plugging the leak, clean-up, fines and potential litigation. It's under criminal investigation by the U.S. government and at least three lawsuits have been filed on behalf of the company's shareholders in recent weeks in state courts, according to lawyers.
BP's shares on both sides of the Atlantic have fallen nearly 50% since a deadly explosion at its Macondo oil well in the Gulf of Mexico on April 20. The stock is widely held by pension funds.
Mr. Whalen estimates the fund has lost about $30 million since the blast as a result of the decline in BP shares. As of Thursday's closing price, of $31.71, the New York fund's holdings were worth $554.9 million.
He said the fund is also reviewing industry practices at other companies in the energy sector in which it has holdings. "We want to not just be profitable this year or next, but to be sustainably profitable."
Under intense political pressure in the U.S., BP took steps to address concerns about its long-term financial health on Wednesday, saying it would suspend dividend payments this year and pay $20 billion over the next three and a half years into a fund to cover claims from the spill. The oil well is still spewing oil into the Gulf of Mexico and has sparked an environmental catastrophe in the region.
"We want our companies to fully identify and mitigate risk and to let shareholders know what they're going to do to protect our investments," said Mr. Whalen.
In contrast, the New Jersey pension fund no longer owns BP stock. It made its last purchase in September 2009 and began selling its 52 million shares on Jan. 15, 2010. It had sold about half its shares by April 21, with the total sale yielding a profit of $5.5 million.
The decision to sell "was based on a really sound portfolio management," said Andy Pratt, director of communications for the New Jersey Department of Treasury. "We made gains, and we wanted to lock them in and not be greedy."

CORE member Linda Meinelt to Nehf and STRS Board

From Linda Meinelt, June 17, 2010
Subject: BP Investments
While scanning my email, I saw one with the heading, "How to Save Your Heart."
We all know the obvious ones- watch your diet, exercise and avoid stress. I am doing my part by eating right and exercising; however, it is impossible to avoid stress and read any information about STRS and its investments. The latest debacle is totally unacceptable. Obviously the Investment Dept. was not being astute in only selling off a fraction of OUR holdings in BP when they saw the handwriting on the wall (or did they not see it since no safeguards are in place as suggested by Dr. Leone?) I say OUR holdings because the retirees and current teachers are the stakeholders and unfortunately, it is OUR health fund and general financial welfare that suffer.
The question begs to be answered-why does STRS still have 10 million shares in BP?
The Investment Dept. does not have the same vested interest in safeguarding the STRS Investments as they would if they were under STRS. Being under OPERS which is more financially sound, they can go home and know they still have a strong plan when they reach retirement.
At this point, Mr. Nehf and Bd. Members, you need to start listening to the concerns of the stakeholders and put some safeguards in place to avoid repeat performances of past bad decisions.
Linda Meinelt

How many shares of BP did you say that we still own?

From John Curry, June 17, 2010
Subject: Re: Response to E-Mail
Thank you for this a friend and fellow retiree said to me, after reading this explanation, "10.9 million shares! With the price dropping and dividends suspended.....WHY haven't they been sold?"
I realize that you are a spokesperson for STRS and not an STRS investor associate so I will "cut you some slack" on this are just the messenger. I am curious, however, as to why the article didn't also include this information of current ownership by STRS of 10.9 million shares of BP. My take, by leaving it out, it sanitized the article and made many people falsely get that "warm and fuzzy" feeling.
Using your words, "to give you some point of reference," 23,000 shares sold, compared to the 10.9 million shares of BP that we still own, represents less than one half percent of our current 10.9 million shares. Holding 10.9 million shares of a loser doesn't do anything for my peace of mind and...... the piece of mind of many other STRS stakeholders. Once again, no stop-loss mechanism (as repeatedly suggested by former STRS board member Dr. Dennis Leone) was put into place at STRS and this caused more millions of dollar losses for our system. Thanks to the lack of this mechanism being passed as STRS board policy, Enron, Fannie, Global Crossing and AIG can welcome a new "kid on their STRS losers block," British Petroleum.
From Laura Ecklar, June 17, 2010
Subject: Response to E-Mail
Good afternoon, Mr. Curry. I am responding to the recent e-mail you sent to Tim Myers regarding our stock holding in BP. In it, you referenced the purchase of BP stock in March 2010, before the oil rig disaster. Your reading of the Board minutes about this purchase is correct. However, the “sell” of 23,000 shares referenced in the article is also in the minutes. You will find it on Page 101 listed as BP PLC ADR. These were shares of BP stock that were trading on the U.S. exchange. We no longer hold any ADR shares. The remaining BP stock we hold is traded on the London exchange.
As you know, the buying and selling of stocks occurs year-round. However, to give you some point of reference, since the beginning of April, we have sold nearly 3 million shares of BP stock and now (mid-June) own about 10.9 million shares that have a current market value of about $55 million. This represents less than one-half percent of the market value of our international stock holdings.
I hope this information is useful to you. Thank you.
Laura Ecklar
Director, Communication Services

STRS/BP and a puzzle to me..........

From John Curry, June 17, 2010

Tim Myers to John Curry, June 17, 2010
Subject: RE: STRS/BP and a puzzle to me..........
That's a good question. I've asked Steve Mitchell to clarify. I am heading to a meeting at Mohican State Park, but I will get back to you as soon as Steve gets back to me if I have internet at the Park. I remember Steve talking about this at the last meeting, but I did not take complete notes.
From John Curry, June 17, 2010
Subject: RE: STRS/BP and a puzzle to me..........Tim,
Maybe you can help enlighten retirees on this apparent difference in figures. ran an article below re. STRS and BP stock owned by STRS. This article advised that STRS "told" (I think they mean "sold") its 23,000 shares of BP before the end of March (2010)." However, in my copy of the STRS Board Minutes of the April 15 & 16, 2010, page 71(scanned in the attachment) entitled, "Board Report PURCHASE 3/1/2010 through 3/31/2010" shows that STRS "purchased" 193,333 shares of BP Amoco for $1,803747.07! My flatbed scanner wouldn't correctly copy the 193,333 shares purchased figure (after I circled it in pen) but I'm sure you have access to this page 71 in your copy of these minutes. 193,333 shares certainly are a lot more than the 23,000 shares stated in the news article.
In looking through the STRS "Sell" stocks for this same time period I see no evidence of STRS selling any BP stock. This appears to conflict with the Cincinnati article. Can you shed some light on this for retirees as the STRS Board Minutes seem to completely disagree with the Cincinnati article below.
Also, how many shares of BP does STRS currently own as of today?
BP cancels dividend to set aside $20B for spill costs
June 16, 2010
BP Plc Wednesday canceled three quarterly payments of its $10 billion-a-year dividend after President Barack Obama demanded it put up cash for victims of the Gulf of Mexico spill.
The previously announced first-quarter payment due June 21 will be canceled, the company said in a statement. No dividend will be paid for the second and third quarters, BP said.
BP said it will consider resuming dividend payments in 2011 when it issues results for the fourth quarter of this year and has a better sense of the full impact of the sinking of a rig it operated in the Gulf in late April and the resulting spill.
The move affects BP shareholders around the world.
An estimated 39 percent of the company's shares are held by U.S.-based companies, mutual funds, pension funds or individuals, some of them with ties to Greater Cincinnati and Northern Kentucky. For example, downtown Cincinnati-based Fifth Third Bancorp held about 800,000 shares of BP at the end of March or about 0.03 percent of BP's outstanding shares, according to regulatory filings. US Bancorp held 4.2 million or 0.13 percent of BP's outstanding shares. The Ohio State Teachers Retirement System, however, told its 23,000 shares in BP before the end of March.
Analysts anticipated some action on the dividend and said the agreement between BP and the White House removed a degree of political uncertainty that had been weighing on the stock.
Because of questions about the dividend, BP shares have been especially volatile over the past week. The company has lost about $90 billion in value since the spill in the Gulf nearly two months ago.
"The dividend is off the table," said Alastair Syme, an oil and gas analyst at Nomura Holdings Inc. in London, before the announcement. "Until they have some clarity on the costs of the spill, they can't do anything."
Phil Weiss, an analyst with Argus Research, said the only surprise for him was the rescission of the first quarter payout.
"I think at this point the board recognizes" the political pressure the company was facing because of the dividend, Weiss said.
At the current quarterly dividend rate of 84 cents per American depositary share, BP's dividend rate is an extraordinarily high 10 percent.
Although the tab for the cleanup and damages will run well into the billions, many analysts agreed with the company that it had the ability to continue to pay its dividend as well as the spill.
BP had $5 billion of cash available, $5.25 billion of credit lines it hadn't used and another $5.25 billion of stand- by bank facilities, the company said in an investor conference call June 4. Fitch said Tuesday it expected BP's lenders to allow the company to use the credit lines if needed.
The company generated $27.7 billion in cash flow from operations last year and posted profit of $6 billion in the first quarter.
Bloomberg News and the Associated Press contributed.
Click image twice to enlarge.

Pop quiz
Highlight the space immediately below each question to see the answer.
1. According to Laura Ecklar (6/17/10), how many shares of BP stock does STRS own, as of mid-June?
10.9 million

2. Since the April 20, 2010 oil rig explosion that marked the beginning of the BP oil spill in the Caribbean, how much has BP's stock dropped?
As of the end of the day, June 17, 2010, BP stock had dropped 47%.

Tom Curtis: Possible topics for an ORTA leadership meeting

From Tom Curtis, June 17, 2010
Subject: Curtis, Re: Mike Nehf speaks to Shelby RTA
A leadership meeting sponsored by ORTA?
What a joke! An oxymoron! That must have been a very interesting meeting, for ORTA has absolutely NO idea what leadership and advocacy is about. Let's start a list of possible topics for the meeting.
1. How to choose a luncheon/dinner site.
2. Determining the winner of door prizes.
3. How to be non-confrontational.
4. How to sit on your hands when important issues are brought to the STRS table.
5. Follow the leader (OEA) and keeping quiet.
6. How to issue statements of good tidings when your stakeholders are getting screwed.

Wednesday, June 16, 2010

Sidney Daily News: STRS executive director addresses Shelby County RTA re: health care

From John Curry, June 16, 2010
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Mismanagement at a pension system(s), that couldn't be, could it?

From John Curry, June 16, 2010
STRS retirees...misery (and a similar pension experience) loves company, doesn't it? Had management at STRS planned ahead, like OPERS did, the STRS retiree spousal subsidy wouldn't have been trashed, would it?
Mismanagement has turned state pension systems into morass
GateHouse News Service, Jun 15, 2010
Illinois’ modern pension systems were created with a simple goal: to help public employees secure their financial futures in the wake of two world wars and the Great Depression.
But a half-century of mismanagement has turned the state’s pension systems into a financial morass saddled with a $78 billion debt. The General Assembly for decades has drastically underfunded the systems while simultaneously sweetening the amounts it pays into the funds — without allowing for the spending increase. Meanwhile, downstate police and fire pensions, created by the legislature but funded with local property tax dollars, only get more generous, sucking up municipal tax revenues and crippling local spending.
Calls for pension reform have reached a crescendo in the state, but it’s been business as usual in Springfield. Today, as the state grapples with a budget crisis of historic proportions, legislators are considering either selling bonds or declaring a pension holiday — forgoing the annual contribution to the funds — neither of which will do anything to remedy decades of chronic underfunding.
Most of Illinois’ pension funds, in fact, are on a collision course with insolvency, threatening not only future benefits but retirees’ current benefits, which totaled $6.5 billion in the 2009 fiscal year.
“This is an unavoidable problem that the state of Illinois should be dealing with now, and it will not be made any smaller by gimmicks like skipping the pension contribution or selling bonds,” said Laurence Msall, president of The Civic Federation, a nonpartisan state government research organization. “The size of the pension deficit has gotten so big that without significant structural reform, the pension system will not be able to continue as an ongoing program."
(Read complete article here.)

Tuesday, June 15, 2010

Hey, STRS....are you still sticking with your 8% figure?

From John Curry, June 15, 2010
CalPERS cuts expected return rates
Pensions & Investments, June 14, 2010
By Randy Diamond
CalPERS lowered its estimate of how much it expects to earn in the 10 years ended 2021.
Return estimates discussed at Monday’s investment committee meeting calculate an annualized return of 7.54% for the 10-year period.
This compares to the 8.3% fund officials previously concluded they could earn. They attributed the drop to changes in the global economy and their increased inflation estimate of an average 3% per year over the period vs. last year’s estimate of 2.5%.
Given inflation, CalPERS real returns for the 10-year period are estimated to be an annualized 4.54%, vs. last year’s estimate of 5.8%.
(Read complete article here.)

Monday, June 14, 2010

RH Jones: Who to vote for

From RH (Bob) Jones, June 14, 2010
To all:
Since ORTA does not endorse candidates for Ohio’s political offices, it is, therefore, in the best interest of retired educators to vote for the OEA/OEA-R endorsed candidates listed below. There is also a Groupsite mentioned you may want to click onto. [To join the OEA Campaign 2010 Groupsite, go to the OEA website,, or: Then create your personal account, and within 24 hours you will be approved to participate.]
Due to the continual ultra-right attacks on traditional public education, they have put the state in jeoporty. We need public-education-friendly politicians in our Ohio Government. This is my opinion.
RHJones, retired OH STRS teacher member
(Click image to enlarge)


RH Jones re: our 3% simple COLA is set in stone.

From RH (Bob) Jones, June 14, 2010
To all:
This message is according to Dr. K. Fluke as he related it to me. Also, you will find some of my thoughts.
“In the year 2002, the Ohio legislators passed a bill that gave us our 3% simple COLA. This, then, is “grandfathered”, accordingly, for those of us educators that are already retired under that law. Any new legislation can only affect new hires. To take away that 3% simple COLA would be a slap in the face of every legislator who put their signature upon it.”
In my opinion, the efforts already made, and agreed upon, in the various committees, that have been meeting in Columbus to find ways to cut the COLA of retired teachers, have not been informed properly of the legal implications involved in this. Previous legislation was passed in good faith for the goal of insuring that Ohio will attract and keep the best teachers for Ohio’s children. The present effort to take away good faith legislative decisions invites decline in the general welfare in this state’s citizenry. A decent teacher retirement is part of the package.
In all due respect,
RHJones, retired Ohio teacher

Did the Atlanta public schools take a page out of STRS's old playbook?

From John Curry, June 14, 2010
Thanks to CORE's Bob Jones we have this article reminiscent of an earlier STRS board's "Travelgate." John
P.S. Lest we forget - included, and after this article, is a documentation of the STRS former board's travel expenses as related by Dr. Dennis Leone to the STRS board on May 16, 2003.
Atlanta schools’ travel tab high
The Atlanta Journal-Constitution, June 13, 2010
By Rich McKay
While school systems are cutting jobs or furloughing teachers to shore up withering budgets, Atlanta Public Schools has spent more than twice as much money per student on travel as most other metro districts.
Atlanta spent more than $1.4 million on travel in 2008-09, the latest year from which complete data was available. That works out to $28.77 per student, far higher than neighboring DeKalb County and more than double per pupil what Clayton, Cobb, Fulton and Gwinnett counties spent on travel, an Atlanta Journal-Constitution investigation found.
And Atlanta was slated to spend even more in 2009-2010 — about $1.8 million, a 28 percent jump.
Atlanta public school officials say travel is important so teachers can get the training they need and bring new skills and insights to the classroom. Much of the travel represents teachers going to education conferences, district officials said.
But budget hawks and many parents say travel spending can easily be trimmed, especially if the choice is between plane tickets and educators’ jobs.
“It looks like they’re just squandering money,” said Atlanta parent Shawnna Hayes-Tavares. “I have four children in the system, from second grade to the 11th. You know I want our teachers to be the best. But if they’re cutting back on folks, then they shouldn’t be jetting around anywhere.”
Kathy Augustine, Atlanta’s deputy superintendent for classroom instruction, defended the spending as a vital contributor to the achievement gains made among the districts’ 48,000 students in more than 100 schools.
“We spend a lot of money on professional development,” Augustine said. “But you have to understand the importance of continuous teacher development. It’s vital for our children to continue to achieve.”
She pointed to gains recently tallied among APS students in the fourth and eighth grades’ reading scores between 2002 and 2008, as reported by the National Assessment of Educational Progress, a program often called the “Nation’s Report Card.” Yet only a small, school-selected sample of students ever take that test.
Atlanta’s travel tab would cover the annual salary of about 45 teachers, based on an average Georgia starting salary for teachers of about $31,000. That’s particularly relevant because Atlanta gave non-renewal notices to 36 teachers this year and is expecting to make reductions of 400 staffers through attrition and retirement to cover a $67 million budget gap.
Amid mounting criticism of Atlanta Public Schools’ management — from suspicions of widespread cheating on standardized tests to allegations of favoritism in its awarding of technology contracts — the AJC looked at the district’s travel spending and compared it to the five largest metro area school systems.
The AJC found:
Atlanta spent more than $118,000 in taxpayer money to send 68 faculty members to a Success for All Foundation conference in January, four hours’ drive away in Nashville. The foundation is a Baltimore-based nonprofit focused on education development and research on the best classroom strategies.
The district spent nearly $30,000 in March and April 2009 for two conferences in New York City, including about $2,000 spent in two days for a limousine company. School records show the money paid for a private shuttle company to take 22 teachers from Times Square to schools in Queens, and to Brooklyn for the Institute for Student Achievement conference. The New York metro commuter train fares cost about $2 per person.
Other trips included education conferences in tourist-friendly Jekyll Island, Las Vegas and Orlando.
Atlanta Superintendent Beverly Hall outspent most of her Georgia counterparts in travel, coming in seventh out of 180 state superintendents with a $10,000 tab, according to the state’s Department of Audits and Accounts. The school district confirmed Hall’s travel tab, but provided almost no details about where the money was spent.
Atlanta spokesman Keith Bromery did offer some insight into why Hall’s travel bill ranked high among her peers.
“The size of the district is not directly related to the amount of travel a superintendent undertakes,” Bromery wrote in an e-mail to the AJC. He said Hall’s decade at the district’s helm has put her in national demand as a speaker and a member of national education committees, including the executive committee of the American Association of School Administrators; the board of the Council of the Great City Schools, where she is chair-elect; and the Harvard University Urban Superintendents Program Advisory Board, which she chairs. Such positions call for her to travel around the country, Bromery said.
In metro Atlanta, only DeKalb County’s recently dismissed Superintendent Crawford Lewis came close to Hall, spending more than $9,000 on travel. Clayton County’s former Superintendent John Thompson spent less than $2,000 that same year. Cobb’s Fred Sanderson spent less than $500.
“It is a matter of our philosophy,” said Cobb schools spokesman Jay Dillon. “In these difficult economic times, we feel it’s critical for all public officials to show restraint when spending tax money.”
Dillon said for the current year, Sanderson hasn’t spent any public funds on travel. He paid his own way, about $500, to attend the Georgia School Superintendents Association conference in April.
An AJC analysis of Atlanta records as well as data from Georgia’s Department of Audits and Accounts showed that Atlanta has outspent all metro districts on a per pupil basis and nearly all in overall travel dollars despite being smaller than the five closest county school districts.
Most of the APS travel money was spent on out-of-town trips for teacher and staff development conferences on reading, math and science, as well as techniques to better motivate students, especially those from poor neighborhoods. More than 76 percent of APS’ students come from families at or below the poverty line, as measured by those receiving free or reduced-price school meals.
Compared to Clayton County, an area school system with similar demographics including many students receiving free or reduced-price lunches, Atlanta spent far more on travel. Clayton spent about a third as much, $560,000 total, or about $11.60 per student in 2008-09.
Cobb County, which runs the state’s second-largest school system, spent less overall on travel, at $1.17 million for the same school year.
Details on Atlanta’s travel spending are spotty because the district provided the AJC with incomplete information even after more than three weeks of public records requests. Such information is supposed to be available to the public under Georgia’s open records laws.
Bromery said those records weren’t kept in a single location and that he had no way to estimate how long it might take to gather that data.
He said Atlanta’s travel spending is “driven by the district’s primary educational mission of escalating student academic performance.”
Lyndsey Collins, a science teacher at Atlanta’s Coretta Scott King Young Women’s Leadership Academy, said her two trips to National Science Teachers Association conferences were worthwhile.
From one session, Collins, 25, brought back a preserved fetal pig that she used in anatomy lessons. Her students nicknamed it “bacon” because it’s a pig on a plate.
“The kids get really excited when they see it,” Collins said. “It’s like that ‘wow’ factor. They can’t believe I have a pig in my closet. It’s showing them something real and they really pay attention.”
“From my experience, it’s money well spent.”
In DeKalb County, Everett Patrick, principal of Martin Luther King Jr. High School, went to several conferences this year, including a $7,000 trip for four nights in Las Vegas with four staffers for the National Council on Educating Black Children .
“We got the idea to infuse the nonviolence teachings of Martin Luther King to help inspire the kids toward better behavior,” he said. “Better behavior leads to better performance for the students.”
But travel, critics argue, is among the easiest spending to reduce or eliminate. More than a year ago Gov. Sonny Perdue singled out travel expenses, including conference attendance, as something all state agencies should cut.
University of Georgia education professor Janna Dresden, whose specialty is teacher training and ongoing development, said it’s not easy to say conferences are worth the money.
“You could sit in a big conference room in your own district or you could fly across America to sit in another room,” she said. “Either one of them could be a fantastic learning experience or either one could be a big waste of time and money.”
John Sherman, a retired businessman and the president of the Fulton County Taxpayers Foundation, is not convinced travel is needed for teachers to get training.
“If they need an expert to train their teachers, why not just buy one ticket? Fly that expert here instead of sending so many teachers out of town,” said Sherman.
“Our money is being wasted, or at the very least, not spent wisely,” he said. “We’re in the middle of a serious recession.”
Staff writer Heather Vogell contributed to this article.
APS vs. counties
Travel figures below are for the 2008-2009 school year, the latest available from Georgia’s Department of Audits and Accounts . The Title 1 federal grant money spent or budgeted travel figures are for the 2009-2010 school year, the latest available from the school districts.
Atlanta Public Schools
Travel ’08-’09: $1.4 million
Per student: $28.77
Title 1 travel ’09-’10: $411,598
Per student: $8.43
Enrollment ’08-’09: 48,147
Potential cuts: 400
Clayton County Schools
Travel ’08-’09: $568,577
Per student: $11.66
Title 1 travel ’09-’10: $96,844
Per student: $1.90
Enrollment ’08-’09: 48,749
Potential cuts: 114
Cobb County Schools:
Travel ’08-’09: $1.17 million
Per student: $11.04
Title 1 travel ’09-’10: $175,400
Per student: $1.65
Enrollment ’08-’09: 106,079
Potential cuts579
DeKalb County Schools
Travel ’08-’09: $1.73 million
Per student: $17.90
Title 1 travel ’09-’10: $364,990
Per student: $3.76
Enrollment ’08-’09: 96,907
Potential cuts: 105
Fulton County Schools
Travel ’08-’09: $956,200
Per student: $11.07
Title 1 travel ’09-’10: $29,000
Per student: 33 cents
Enrollment ’08-’09: 86,380
Potential cuts: 200 to 250
Gwinnett County Schools
Travel ’08-’09: $1.52 million
Per student: $9.70
Title 1 travel ’09-’10: $337,870
Per student: $2.15
Enrollment ’08-’09: 156,484
Potential cuts: 150
Note: The Title 1 travel expenditures were calculated based on 2009-10 student enrollment figures.
How we got the story
The AJC asked for an extensive rundown on APS’ travel spending for 2008-09 and 2009-10, including breakdowns on the top spenders, Superintendent Beverly Hall’s most expensive trips and a delineation on what exactly she spent the money on.
Despite three weeks of requests, Atlanta did not provide most of the information apart from a smattering of trip costs, although the requested information is open to public inspection upon request. Atlanta does provide much of the information to the state Department of Audits and Accounts, from which the AJC acquired the data for 2008-09. The 2009-10 information won’t be available from the state until later this year. Georgia’s travel database does not break down the information on a per-trip basis.
Atlanta offered up a few broad examples of what the district spent in the last school year on a handful of trips. The AJC acquired some details on specific trips through a separate review of purchase card spending.
The AJC got the budgeted 2009-10 Title I spending from the state Department of Education. Title 1 money comes from a federal grant program aimed at improving the education and test scores at schools that have a high percentage of children from poor families. Some of the money can be used to send teachers to conferences, but the Title 1 program doesn’t mandate that it be spent that way. The Title 1 figures are an incomplete picture but provide the best available district-to-district comparison for 2010.
Now....for a trip back in time to see another set of travel expenses, that of STRS board members prior to May, 2003. Thanks to Dr. Leone, we have some facts and figures.
"Travel-Related Expenses for STRS Board Members: According to data supplied by STRS staff, $177,009 is expected to be spent in 2003 on travel-related expenses for Board member/administrator development, training, professional seminars, and conferences, and for investment transactions, plus real estate transactions. In the three previous years, the total amounts spent were $186,116 (2000), $174,167 (2001), and $170,001 (2002). On May 31, 1995, the Cleveland Plain Dealer called into question the fact that Board members were turning in bills for trips to places like Hawaii and Palm Springs, for lodging at the nation's top hotels, for dining at expensive restaurants, and for beach bar bills. The article said that one Board member named Jack Chapman, who is a current Board member, spent $36,736 the previous year all by himself. According to the article, a planned trip by STRS Board members to China two years earlier was cancelled after the State Attorney General Office complained that such a trip would create an image of "junketeering." In recent years, while no STRS Board member has spend money like the Plain Dealer claims Jack Chapman did in 1994, Board members still spend a great deal of membership money on out-of-state travel expenses. The total travel-related expenses and the number of trips requiring airfare over the past 3 years are shown for each Board member below:
[Click image to enlarge]


It's gonna' be a long and hot summer!

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