Saturday, July 17, 2010

So...what does the headstone really mean?

From John Curry, July 17, 2010
Note from John...what this means is that the recent Health and Pension Advocates "push" for the 2.5% school board and the 2.5% contribution from the active teacher has been trashed! That means that healthcare will not get a "shot in the arm," and will continue to be funded by a miserable 1% contribution of the school board's donation to STRS for every dollar they pay their teachers. 1% paid toward health for retirees is the lowest contribution paid by any of the 5 state retirement systems. Do you hear (in the terminology of a past Presidential candidate) a "giant sucking sound?" I do!
[Click image to enlarge]
It also means that now, STRS will be having to deal with how to adequately fund the healthcare stabilization fund BUT...AN EVEN BIGGER EVENT WILL CHALLENGE THEM EVEN MORE! WHAT IS THAT? WHY, HOW TO CONTINUE FUNDING OUR PENSIONS WITH A SLOW ECONOMY AND MASSIVE TEACHER LAYOFFS ACROSS THE BUCKEYE STATE! Can't you just see all those school boards across Ohio hopping on board to make sure that STRS gets this additional funding for our pension by urging their taxpayers to do it for the teachers? Am I being a little bit sarcastic? You bet but.....you do see the problem, don't you? Here, read it in Laura's words:
Laura Ecklar, an STRS spokeswoman, said the proposal developed before the Great Recession would have generated $500 million annually for the health fund. Ecklar said STRS has dropped that proposal. The new plan addresses only pensions. ''The board recognizes that a separate solution will be
needed for the health-care fund. In fact, this fall, the board will begin a strategic planning process to evaluate its options for the health-care fund,'' Ecklar said.
Ecklar acknowledged that delaying retirement eligibility would reduce health costs by shortening the time period before Medicare begins to provide coverage at age 65, but that's not good enough. ''Unfortunately, the health-care fund has only about 11 years of solvency left,'' she said. ''Changing the retirement age is not the solution to the health-care fund's solvency. Pension fund solvency and health-care fund solvency are two separate issues that will require different solutions.''

Dennis asks an AIG Question.....WHY?

From Dennis Leone, July 17, 2010
Subject: AIG Question
Glad to see the $1 billion settlement with AIG. Here is my question: Why, when STRS was suing AIG in 2004 for fraud that began in 1999, did STRS continue to buy AIG stock – even AFTER 2004. AIG collapsed in 2008, and STRS was still buying AIG stock at that time. It seems as though while some advisors were pushing STRS to sue, other advisors were saying buy, buy, buy. Go figure.
Dennis Leone

Friday, July 16, 2010

Now, maybe more will understand why CORE had this gentleman as our guest speaker at our June meeting!

From John Curry, July 17, 2010
Class-action settlement is largest in Wall Street crisis, Cordray says
Attorney General Richard Cordray
Columbus Dispatch, July 16, 2010
By James Nash
Attorney General Richard Cordray said today that Ohio pension funds and others will receive $1 billion in a settlement with disgraced insurance giant AIG.
The settlement -- much of which will go to three of Ohio's five pension systems -- is the largest class-action sum reached between any unit of government in the country and a financial firm since the Wall Street crisis broke in 2008, Cordray said.
American International Group Inc. was accused of violating antitrust laws by dividing markets with competitors, committing accounting fraud and manipulating stock prices. The alleged misconduct occurred between October 1999 and April 2005.
"This historic settlement is an excellent result for all shareholders harmed by AIG's misconduct, including Ohio's teachers, firefighters, police officers and public employees. Ohio is determined to send a strong message to the marketplace that companies who don't play by the rules will pay a steep price," Cordray said in a prepared statement.
AIG spokesman Mark Herr said in a statement: "We are pleased to have resolved this matter. This settlement ends a long-standing lawsuit, allowing AIG to continue to focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders."


................................................................................

Laura....a question

From John Curry, July 16, 2010
Laura...please pay particular attention to the boldface below. Has, in fact, STRS really given up on the 5% plan for the healthcare fund? I ask this because of this quote from the news service below:
"Ecklar said STRS has dropped that proposal."
If this has been dropped, was this "dropping" announced at an STRS meeting or was it voted upon to be dropped by the STRS board?
Thank you,
John Curry
STRS STILL LOOKING AT SOLUTIONS TO PENSION FUND PROBLEMS
STRS, as part of the long-term solution, wants lawmakers to require public employees to work at least 35 years or to age 60 and 30 years' service or face significant benefit cuts. This comes a decade after STRS and the other funds said too many employees were retiring after 30 years, placing a financial burden upon the system. As a solution, STRS in 2000 persuaded lawmakers to provide a generous 11.5 percent bump in benefits for those working to 35 years. The plan was flawed because it also opened the door to thousands of teachers still retiring early. By 2004, in its annual report, STRS warned of trouble, and among the long-term causes were rising health costs, early retirements occurring at a rate faster than projected and the continuing trend of members living longer.
STRS wants to eliminate the 11.5 percent enhancement, which means an educator will have to work as many as 39 years to reach a similar payout. The plan also reduces from 3 percent to 2 percent the cost-of-living adjustment (COLA) - a provision that offers a sense of long-term security to retiring early. STRS estimates that pushing retirement to 35 years and eliminating the 11.5 percent bump will each remove nearly $1 billion from the $40 billion in unfunded liabilities. The COLA reduction would be huge, cutting another $8 billion.
All of these measures are designed to strongly encourage STRS members to pay into the system longer before they begin to withdraw funds in retirement. But that fix understates the gravity of STRS' trouble. In 2006 - two years before the market crash - STRS called for the 5 percent increase in contributions for a different reason: To cover shortfalls in the health account.
Laura Ecklar, an STRS spokeswoman, said the proposal developed before the Great Recession would have generated $500 million annually for the health fund. Ecklar said STRS has dropped that proposal. The new plan addresses only pensions. ''The board recognizes that a separate solution will be needed for the health-care fund. In fact, this fall, the board will begin a strategic planning process to evaluate its options for the health-care fund,'' Ecklar said.
Ecklar acknowledged that delaying retirement eligibility would reduce health costs by shortening the time period before Medicare begins to provide coverage at age 65, but that's not good enough. ''Unfortunately, the health-care fund has only about 11 years of solvency left,'' she said. ''Changing the retirement age is not the solution to the health-care fund's solvency. Pension fund solvency and health-care fund solvency are two separate issues that will require different solutions.''

Thursday, July 15, 2010

Shirlee Zerkel: More questions for Laura

From Shirlee Zerkel, July 15, 2010
Subject: Re: New questions
Dear Ms. Ecklar:
I still have some questions about the reduction-in-force. I know that the following information that I am asking for should be public knowledge.
1. Reduction in force employee # 1 What was his/her monetary amount, other benefits and length of benefits in the severance package?
2. Employee # 2 What was his/her monetary amount, other benefits and length of benefits in the severance package?
3. Employee #3 What was his/her monetary amount, other benefits and length of benefits in the severance package?
4. Employee #4 What was his/her monetary amount, other benefits and length of benefits in the severance package?
5. Employee #5 What was his/her monetary amount, other benefits and length of benefits in the severance package?
6. Employee #6 What was his/her monetary amount, other benefits and length of benefits in the severance package?
7. Employee #7 What was his/her monetary amount, other benefits and length of benefits in the severance package?
8. Employee #8 What was his/her monetary amount, other benefits and length of benefits in the severance package?
9. Employee #9 What was his/her monetary amount, other benefits and length of benefits in the severance package?
10. What is the savings to STRS with this reduction in force?
Thank you,
Shirlee Zerkel

MO - Only newly hired will see additional deductions for retirement system reform

From John Curry, July 15, 2010
Mo. lawmakers approve state pension system changes
(AP) – July 14, 2010
JEFFERSON CITY, Mo. — The good pension perks of government work are about to lose a bit of their luster for new Missouri employees.
State lawmakers gave final approval Wednesday to legislation requiring new state workers to pay a portion of their wages toward their pension funds and to stay on the job longer before drawing their retirement benefits.
Supporters said it was an essential move to stave off a future insolvency for Missouri's main pension funds, which currently are financed exclusively by investments and state subsidies. Opponents equated it to a tax on state workers, who already have been targeted with layoffs and denied cost-of-living raises to try to balance Missouri's budget.
The retirement system changes — effective only for workers hired beginning in 2011 — are projected to save the state $659 million over the next decade. Part of those savings are intended to offset a 10-year cost of up to $150 million for new automaker tax breaks authorized under a separate bill passed Wednesday.
The retirement legislation passed the House 84-53, getting just two more votes than the required minimum. It passed the Senate 25-5 and now goes to Gov. Jay Nixon.
Under the bill, new state employees will need to contribute 4 percent of their pay toward their pension benefits. They also will need to spend at least a decade working for the state to qualify for a pension, instead of the current five years.
And the state's standard retirement age would be increased from 62 years old to 67 years old. State employees currently also can retire when their age plus the number of years working for state government equals 80, so long as they are at least 48 years old. That option would be increased to a sum of 90, with workers needing to be at least 55 years old.
But lawmakers and other elected state officials would continue to get more favorable treatment. The bill increases their own standard retirement eligibility from age 55 to 62, with six years of service necessary for lawmakers and four years for executive branch officials.
The bill passed by lawmakers scrapped an idea of creating a special board to oversee investments for the Missouri State Employees' Retirement System and a separate pension plan for the Highway Patrol and Department of Transportation.
House members — some of whom were skeptical of the necessity of pension changes — were particularly concerned about creating the investment board. Rep. Jim Viebrock, who handled the pension changes in the House, has said the investment board unnecessarily expanded state government.
Nixon, who backed the pension changes, helped resolve disagreement over the legislation by declaring that creating an investment exceeded his agenda for the special session. Missouri governors are allowed to specify what topics can be discussed during special legislative sessions.
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Retirement bill is HB1.

Dennis Leone: Who could possibly offer better deals to employees than STRS?

From Dennis Leone, July 15, 2010
Subject: RE: New questions
At the risk of my memory not being quite 100%, I seem to recall that most of the planned severance checks were going to be in the $9,000 - $12,000 range. I definitely recall that STRS said it would cover the health insurance for the laid-off employees, but I do not remember for how long. I objected to that also. Why? Because in 2003, I closed 3 schools and laid off 50 employees in Chillicothe in order to keep the school district afloat financially……..nobody got severance checks and nobody got extended health insurance beyond the end of the month of when the layoff took effect.
The financial principles used by school districts are not used at STRS because, in the eyes of the executive staff and the Board majority, such would restrict the ability of STRS to hire and keep “the best and the brightest.” I recall personally speaking with STRS employees, who – while I served as a board member – had external interviews and explored alternative employment. Some asked me to be a reference, which I agreed to be if I felt they were doing a good job. What did nearly all of them find out? They found out that the grass was not greener on the other side of the fence.
Who could possibly offer better deals to employees than STRS? Perhaps Major League Baseball, the NBA, or the NFL – and perhaps Hollywood, and maybe Bernie Madoff.
Dennis Leone
From Shirley Zerkel, July 15, 2010
Subject: Re: New questions
Thanks, Dennis, for your quick answer. From your answer I gather that the severance is generous. How generous would you say? Do they also receive health care benefits for several months after employment is over?
Shirlee

Dennis Leone re: STRS severance checks (BOARD, ARE YOU LISTENING?)

From Dennis Leone, July 15, 2010
Subject: RE: New questions
For sure, the 9 got severance checks that (in the education field) are reserved ONLY for those who are retiring at the end of their career. I objected to this notion while I served on the board, but was alone in my objection. I was told repeatedly that such severance checks were needed to keep the affected employees from bolting early and in order to be “fair.” After all, staff said, some of these staff members have “car payments and college savings accounts for their children.” Once again, it is an example of more sensitivity for the STRS staff than for retirees of the system who pay them their wages, benefits, and severance checks.
Dennis Leone

Tuesday, July 13, 2010

Shirlee Zerkel: Questions for Laura Ecklar

From Shirlee Zerkel, July 13, 2010
Subject: Question about STRS layoffs
Dear Ms. Ecklar:
I commend STRS for saving some money with their layoffs last month. You said that it was a review of operating efficiencies and procedure that led to this reorganization and layoff in the member (retiree) benefits department.
Was this due to your new computer software? If so, would it be possible to also lay off that many in the staff benefits department since both departments deal with benefits for either members or staff?
Sincerely,
Shirlee Zerkel

From Laura Ecklar, July 14, 2010
Subject: RE: Question about STRS lay-offs
Dear Ms. Zerkel:
In reply to your e-mail below, there are no other reductions-in-force planned at this time. Thank you.
Laura Ecklar

From Shirlee Zerkel, July 14, 2010
Subject: New questions
Dear Ms. Ecklar:
Thanks for your very prompt answer.
How many staff member did we have in the members benefit department?
How many do we now have after the lay-off?
What areas of the members benefits department was cut?
What was their severance package and for how long?
I am asking because I am interested in the impact it will have on members.
Sincerely,
Shirlee

From Shirlee Zerkel, July 14, 2010
Subject: Fwd: New questions
Wonder what severence for staff was approved by the board?! Below is Laura's answer to me about the 9 employees who were dismissed from the staff.
Shirlee

From Laura Ecklar, July 14, 2010
Subject: RE: New questions
Dear Ms. Zerkel,
In reply to your e-mail below, the reduction-in-force was done six weeks ago after a review of operating efficiencies and procedures resulted in some reorganization in the Member Benefits Department. A reduction-in-force is not the same thing as a layoff. With a layoff, there is a possibility that employees may return to their positions if business improves, demand increases, etc. A reduction-in-force means that the positions have been eliminated. That is the case with STRS Ohio. With the reorganization, the work formerly done by these nine associates was redistributed to other associates. Consequently, there has been no impact on service to STRS Ohio members. The Member Benefits Department now has a total of 174 associates. The board-approved STRS Ohio Severance Policy was followed; severance packages vary based on the years of service for each affected associate. Thank you.
Laura Ecklar
Director, Communication Services

Do you think the good Senator just doesn't want to address this issue?

It's been one year and I am still waiting for a reply! Do you think the good Senator just doesn't want to address this issue? John
John Curry: Letter to Senator Keith Faber
From John Curry, July 12, 2009
Subject: Ohio Retirement Study Council decisions
Dear Senator Faber,
I am writing to you, as you are a member of the Ohio Retirement Study Council. Soon, changes will be made to most, if not all, state retirement systems. The downturn economy has affected all Americans as well as just Ohioans.
I am asking your particular attention to be aimed at the State Teachers Retirement System of Ohio and a comparison to your retirement system, the Ohio Public Employees Retirement System. There are vast differences between the benefits currently provided by these two systems.
As a retiree in the STRS (I retired from teaching in 2000 with 30 years) system, I am currently looking at a 2010 monthly healthcare premium (for an 80/20 PPO Med. Mutual) that will be over $1,150 per month (my cost) for my spouse and myself. This is the same healthcare package that you would be eligible for through OPERS had you retired in the year 2000 for less than $100 per month next year. In other words, STRS rates will be over 14 times as much as the OPERS rate next year. This is not equitable nor is it fair to Ohio retired educators.
At the same time that the STRS monthly healthcare insurance rates for a person who retired in 2000 will be over 14 times as much as OPERS, STRS continues to pay out, for 35 years of service retirees, 88% of their final average salaries...a percentage rate that OPERS retirees could only dream of since, with 35 OPERS years, one would only be eligible for a 77% payout of their final average salaries. STRS never could afford the 88/35 benefit and still (more than ever) can't afford this vast difference in FAS payouts.
There are tens of thousands of STRS retirees in my shoes who are facing and will continue to face this vast inequity. For their sake and mine, I beg of you to not touch our retirees' current 3% Cost of Living allowance. ...it is all we retirees have left to fight inflation and increased healthcare costs. If you need to cut anywhere, at least make the STRS 88% equal to your retirement system's 77% for 35 years of service. Current active educators will have time to plan and make life/job decisions as they are younger and have time to do what is necessary for their future. Retirees of my age (61) have far fewer options and far more health problems that would prevent them from making similar decisions.
In any event, please considering grandfathering, something STRS didn't do when they "trashed" all subsidies for spouses of retirees in the STRS system in the early part of this decade and, unlike OPERS, didn't resume the spousal healthcare insurance subsidy at age 55 for the spouses of OPERS retirees. Our system lost far more than five former board members and a former executive director to criminal convictions of Ohio ethics violations, we also lost the foresight that could have been given by fiduciaries who really cared about my future and the future of my fellow STRS retirees. They were fiddling while Rome burned. We are now paying the price.
Thank you for your consideration in this matter.
Sincerely,
John Curry
Wapakoneta, OH

Some additional thinking on the 'small print' by RH Jones

From RH Jones, July 13, 2010
Subject: Fw: My, my...look at the small print!
To all:
John, your message makes one wonder why ORTA and OEA-R have not notified their memberships about OPERS current retirees, due to "grandfathering", are being exempted from the COLA cut? And, could the Ohio Retirement Study Council (ORSC) be discriminating against retired teachers by encouraging a 1% COLA cut from STRS while, at the same time, exempting OPERS?
Also, could perhaps both ORTA and OEA, who are members of the ORSC, be setting themselves up for liability for their voting to exempt OPERS, and at the same time voting to penalize STRS retirees?
Further, this type of voting makes one wonder if it is due to OPERS having a majority of male retirees while STRS has a majority female? Why can they not just do the right thing and leave the STRS retiree simple 3% COLA as it is now? One final question: Could the STRS officials be mistakenly calculating the figures in order to justify taking away 1% of our promised 3% COLA?
Whatever the facts of this matter are, it is extremely poor public relations to favor OPERS over STRS. And it could create pension envy among STRS retirees. However, the STRS 3% COLA promise to retired teachers was made legal ORC ( law ) by the our Ohio legislature. I do not think it takes a Philadelphia lawyer to figure out that one!
RHJones, retired teacher

OPERS wants grandfathering for their "current" retirees...why not STRS?

From John Curry, July 13, 2010
The summary below came from the OFT website wherein they relate summaries of several Ohio pension systems' recommendations to the Ohio Retirement Study Council. Notice how OPERS is recommending the grandfathering of the 3% COLA for their current retirees? They also considered retirees when they initiated the 3 tier scale for healthcare premiums for their retirees several years ago (something STRS did not)! Pay particular attention to what is highlighted in yellow. John
The text below was taken from the OFT website today - here is the link:
P.S. Why hasn't ORTA pushed for this "grandfathering" to be included in the STRS recommendations to the Ohio Retirement Study Council?
Ohio Federation of Teachers, AFT, AFL-CIO
OPERS special report Jan 2010
Special Update on the Ohio Public Employee Retirement System January 2010
During the economic downturn of the last two years, Ohio's public pension systems have suffered investment losses that threaten the stability of the systems. As a result, the Ohio Retirement Study Council has called for the systems to design pension reform plans that were due last September. Two of the systems – PERS and SERS - are still below the 30 year funding period required by law, but submitted plans to further strengthen their longterm stability.
The Ohio Public Employee Retirement System has already, over the last few years, made some changes to address the fund’s stability and make health care a viable option for its retirees. The benefit changes submitted to the ORSC would need approval of the legislature and include the following:
Age & Service Eligibility - 32 years of service, minimum age 55 or age 67 with five years of service for an unreduced pension. For a reduced pension, retirement at age 57 with 25 years of service or age 62 with five years of service.
  • Benefit Formula – Maintain the current 2.2% x Final Average Salary (FAS) but increase the time frame that the multiplier increases to 2.5% from 30 years of service to 35 years.
  • Final Average Salary (FAS) – Change the FAS calculation from the three highest calendar years of earnings to the five highest calendar years of earnings.
  • Cost of Living Adjustment (COLA) – Replace the current 3% simple COLA with a simple COLA equal to the change in the Consumer Price Index up to 3%. This change would not apply to current OPERS retirees.
  • Contribution Rate – No change in the current contribution rates, which are Members (10%) and Employers (14%).

Layoffs at STRS? Looks like it!

From John Curry, July 13, 2010
Teachers pension system lays off nine employees
Columbus Dispatch, July 13, 2010
By James Nash
The State Teachers Retirement System of Ohio has slimmed down.
The pension system for retired teachers, university professors and other educators laid off nine employees last month, a spokeswoman confirmed.
The layoffs were not related to the wobbly economy, which has battered the investments of all five of Ohio's public pension systems, said Laura Ecklar, a spokeswoman for the retirement system. None of the people who lost their jobs was involved in investment decisions; they were part of the member-benefits team.
The staff reduction "was done after a review of operating efficiencies and procedures that resulted in some reorganization in this area," Ecklar said
Some retired teachers have suggested that the retirement system is bloated with workers, particularly managers.

Monday, July 12, 2010

RHJones' thoughts on ORTA

From RH Jones, July 12, 2010
To all:
As a Life Member of ORTA, I protest the ORTA President, Bob Dengler, and ORTA Director Ann Hanning's lack of support for maintaining our modestly calculated 3% flat COLA. In the ORTA, Summer 2010, Quarterly, there was no mention of it except to meekly publish and go along with Ohio Retirement Study Council (ORSC) Director Aristotle Hutras' quote, appearing , "Thus, changes in the COLA are going to be part of the legislation."
The expensive, slick ORTA Quarterly publication in vivid color is 14-pages long! It seems to me that our dues money could have been better spent in securing a law firm to contest this perhaps unlawful cut of our promised remuneration of the 3% COLA. And, now, the ORTA officials have the audacity to ask for a dues increase!
The Quarterly also mentioned the two retired teacher STRS board members, McGreevy and Stein, as being supportive of our STRS management's legislative goals of retired member cuts when, in fact, we have already been severely cut by the increased retired teacher costs of HC/Rx. It is ironic, that at a time when retired teachers have had extremely high inflation in our HC/Rx costs, the coalition between the ORTA and our STRS retiree board members in supporting the COLA cut is particularly very unfortunate for us. This is happening now at a time when the U.S. Attorney General has recently stated that such promises cannot be cut! The expensive, slick ORTA Quarterly publication in vivid color is 14-pages long! It seems to me that our dues money could have been better spent in securing a law firm to contest this perhaps unlawful cut of our promised remuneration of the 3% COLA. And, now, the ORTA officials have the audacity to ask for a dues increase!
In the not too distant past, previous STRS board members and ORTA officials worked very hard to get the COLA and other retiree income protections passed through the Ohio legislature. Therefore, without a stand for us now, the ORTA, the 2- STRS retired board reps, and the state reps may think that they can get away with cutting our defined benefits -- better known as delayed compensations. Many retired Ohio teachers may ask, how in the world will those who advocate cutting our COLA be able to explain their thoughtless position when the other states will have wisely voted to retain their retiree COLA? And, if in the Ohio legislature does happen next November and causes the 1% COLA cut, regardless of political party, I can guarantee that all of those legislators that voted so irresponsibly to cut our COLA, will hear from us in the voting booth. And the ORTA officials and the others who "ganged up on us" will feel our wrath, as well.
Already, California has cut only future retirees; but, that is not the answer either. Here in Ohio, the legislature has to raise the employer rate. Since it has been reported that mental health is the number one reason for disability retirements of Ohio teachers caused by the increasingly extreme public pressures placed on current and future teachers, I can see no way that Ohio can escape paying out even higher active teacher disability payments. To remain competitive in the world business environment Ohio must "bite the bullet" and pay what is needed to grow the seed money to make the STRS once again the "Cadillac of Pension Systems". There is no other reasonable alternative.
Please forward this message to your Ohio legislator, the OEA, the OEA-R, the ORTA officials, and all of the STRS board members.
RHJones, ORTA Life Member

Sunday, July 11, 2010

Well....it's been over one year and I still have not received a reply!

From John Curry (to Ann Hanning), July 11, 2010Nor have I seen or heard an ORTA official stand up and speak out re. keeping our 3% COLA in tact since this letter was written to Ann on 7/9/09....have you?
John
From: John Curry
To: ahanning@orta.org
Sent: Thursday, July 09, 2009 12:44 PM
Subject: Ann...it's time to step up to the plate
Ann,
In perusing the ORTA website (http://www.orta.org/sitebuildercontent/sitebuilderfiles/25goodreasons60th.pdf) I came across this page which lists "25 good reasons why you should join your local Retired Teachers Association and the Ohio Retired Teachers Association (ORTA)."
Reason #7 on that list is, and I quote, "7. Promotes cost-of-living increases."
Well, Ann, the time is now overdue for ORTA to step up to the plate and publicly fight to keep our COLA. ORTA has not been vocal at STRS Board meetings re. this topic or other reform topics. When was the last time an ORTA official speaking as an ORTA official stepped up to the podium in the 3 minute speaks portion of the board meeting to do such? I can't remember that happening in the past 6 years or so that I have been either attending STRS board meetings or listening to the CD's of STRS board meetings. Where has ORTA been? On that same webpage ORTA touts itself as, and I quote, "ORTA, the voice of Ohio's retired teachers." Boy, you surely could have fooled me!
Almost a decade ago I joined the Allen County Retired Teachers Association and, at that time, I had a choice (thank God) to join or not to join ORTA. At that time I told Allen County member George Doyle, "No, I do not wish to join ORTA as I am not impressed with them." Well, Ann, I still am not impressed with ORTA and neither are thousands of other retired educators who have been let down by ORTA's lack of representation.
When will your organization really begin to fight for retirees? Too many of your members who have no access to the internet have in no way been able to see what they have been missing that has transpired at STRS and your organization has done nothing to keep them abreast of what really has happened at STRS. Those "uninformed" have been happily enjoying meatloaf and green beans at monthly meetings which should have contained enlightenment by ORTA as to what was going on at STRS. Then again, if they had been informed....they probably would have lost their lunches! Thanks for keeping them in the dark.
John Curry
a retired STRS stakeholder
a Proud member of CORE

Ruling expected soon on the Colorado class action suit against the State for cutting COLA of public service retirees.......

From John Curry, July 11, 2010
Ruling on PERA bill expected shortly
THE COLORADO STATESMAN, July 11, 2010
By Marianne Goodland
The effort to overturn Senate Bill 1, the law passed in February that seeks to shore up the Public Employees’ Retirement Association (PERA), is now in its fourth month with a ruling on the first round of motions expected shortly from Judge Robert S. Hyatt of the Second Judicial District in Denver.
Three days after Gov. Bill Ritter signed SB 1, members of SAVE PERA COLA filed suit against the state and PERA, attempting to overturn a portion of the SB 1 law dealing with PERA’s annual Cost of Living Adjustment (COLA). The original motion was amended in March in part to add named plaintiffs who come from PERA’s four divisions. The lawsuit, which seeks class-action status, now names as plaintiffs Gary Justus, a retired Denver Public Schools teacher who testified against SB 1 at the state capitol in January; Kathleen Hopkins, a retired state employee; retired Judge Eugene Halaas; and Lisa Silva-Derou, a current employee of the Colorado Department of Public Health and Environment. Silva-Derou, according to the amended motion, is eligible to receive a full service pension benefit from PERA because she has met PERA’s age and service requirements.
The lawsuit charges that SB 1 is unconstitutional “because it impairs the retirees’ contractual rights to receive pension benefits at the level promised” when employees retired or were eligible to do so. The lawsuit wants to stop PERA from eliminating the COLA in 2010-11 and to prevent implementation of lower adjustments in future years.
Under SB 1, the 2010-11 adjustment that would have gone into effect on March 1 was instead cancelled. Beginning in 2011, the COLA will drop to the lower of 2 percent, or indexed based on the Consumer Price Index for Urban Wage Earners (CPI-W). The COLA also could drop to zero if PERA experiences a negative investment return year, as was the case in 2008.
Both the state and PERA filed motions in May asking the court to dismiss six of the eight claims contained in the plaintiffs’ case. The state is represented by the Attorney General’s office; PERA’s lead attorneys are Mark Grueskin and Edward Ramey of Isaacson Rosenbaum, PC.
In their motions, the defendants noted that the basis for the lawsuit is that the COLA could never be adjusted, despite the fact that it has been adjusted numerous times. “All of the Plaintiff’s claims are premised on their singular objection to the Legislature’s modification of the [COLA],” according to the motions.
The state and PERA motions point out that the COLA has changed a dozen times in the past 40 years, ranging from a low of 1.5 percent from 1970 to 1973 to a high of 3.5 percent from 2001 through 2009. In addition, the COLA has been set to compound only since 1994; prior to that it was a non-compounding adjustment. Of interest in that 2001-2009 period is that the CPI-W was only at or above 3.5 percent twice, in 2005 and 2007. During the other seven years the CPI-W ranged between a low of -0.7 percent in 2009 to 2.7 percent in 2001. So a cost-of-living adjustment for seven of the nine years exceeded the rate of inflation.
But for most of the years presented in the defendants’ motion inflation has been higher than the COLA. Out of the 40 years presented, only in 13 of those years was the COLA higher than the CPI-W. For 24 of those years, inflation was well above the COLA, including 12 years in which the CPI-W was double or more the COLA increase.
The state and PERA asked that the court dismiss the plaintiffs’ claims regarding violations of the state constitution as it pertains to changes to pension benefits. According to the amended motion filed by the plaintiffs, sections 19 and 20 of SB 1 illegally reduce the benefits of PERA members whose rights to a pension had already been vested. The motion noted that the Colorado constitution says that, “no obligation or liability of any person, association, or corporation, held or owned by the state, or any municipal corporation therein, shall ever be exchanged, transferred, remitted, released, or postponed or in any way diminished by the General Assembly.” In their response, the state and PERA both said that the constitution only prohibits the Legislature from modifying an obligation owed to the state, not by the state.
The state and PERA motions also seek dismissal of due process claims from the plaintiffs. In their amended complaint, the plaintiffs note that the state and PERA have deprived retirees of vested pension benefits in violation of the right to substantive due process guaranteed by the 14th Amendment. The state and PERA responded that pension benefits are not fundamental rights protected by the United States Constitution, and that the plaintiff’s conceded there was a rational basis for the Legislature to enact SB 1 to order to address PERA’s unfunded liabilities.
Attorney Steve Pincus, representing the plaintiffs, said that even if Judge Hyatt rules in favor of the state and PERA on their motions, the lawsuit would still go forward on the lawsuit’s contracts claims.
The contracts claims put forth by the plaintiffs point to state constitution language that says the General Assembly cannot make laws that would impair the obligation of a contract. Hence, the “Contract Clause of the Colorado Constitution forbids the State from enacting laws that adversely affect vested pension benefits of public employees,” the amended motion states. Consequently, the motion says, plaintiffs are entitled to the benefits at the levels specified under Colorado law when their pension rights were vested or when they actually retired.
In addition, the motion states that the General Assembly’s actions were “neither reasonable nor necessary” and that “alternatives were available to shore up PERA funding without breaching the contract rights of the plaintiffs.”
Neither of these claims was challenged by the state or PERA in their motions to dismiss.
The lawsuit puts PERA and its plaintiffs into a growing club around the nation: lawsuits filed against public pension plans because of benefit changes enacted by state legislatures in response to the 2008 market collapse.
At least five states are now being sued by current or former public employees: Colorado, Massachusetts, Minnesota, New Hampshire and South Dakota. Of the five, lawsuits in three states (Colorado, Minnesota and South Dakota) are fighting changes specifically to cost of living adjustments for retirees. All of the lawsuits are being handled by a Pennsylvania law firm that is working on the Colorado case: Stember, Feinstein, Doyle, Payne and Cordes, LLC, of Pittsburgh, which has a long history of working on class action cases involving pension and retiree health care benefits.
Even a state with a top-rated and fiscally healthy pension plan made changes in its benefits in 2010, and as a result is getting sued by its retiree members. In South Dakota, a lawsuit filed June 14 that represents four retired public employees is challenging recently-enacted legislative changes to their COLA.
Prior to the signing of SB 10-20, South Dakota retirees received an annual adjustment of 3.1 percent. For 2010-11, it would drop to 2.1 percent and beginning July 1, 2011 it would change to a range of 2.1 percent to 2.8 percent. It could only go back to 3.1 percent if the pension plan was fully funded. As of June 30, 2009, the South Dakota public pension plan was funded at 91.8 percent.
According to a February report on public pension plans issued by the Pew Charitable Trust, South Dakota’s public plan was ranked 7th out of pension plans in the 50 states and was cited as a “solid performer,” the highest ranking in the survey. In contrast, the Pew report, “The Trillion-Dollar Gap,” rated Colorado’s plan as one with “serious concerns,” the lowest ranking in the survey. Colorado’s rating was based primarily on its funding status; at 68 percent, based on 2008 data, the Pew report said Colorado falls below the 80 percent funded status that the U.S. Government Accountability Office says is preferred by experts. The report also noted that between 1999 and 2008, PERA’s pension liabilities grew 115 percent while assets grew only by 46 percent.
Pincus told The Colorado Statesman that the Minnesota and South Dakota cases differ from Colorado in one aspect; in those two states only retirees are suing their state pension plans; in Colorado the lawsuit includes current employees who are eligible to retire but not yet retired.
Finally, while the lawsuit moves through the courts, all eyes interested in PERA may be focused later this month on PERA’s board room, as a special meeting of the Board of Trustees will be held to release the 2009 Comprehensive Annual Financial Report, or CAFR. According to PERA spokesperson Katie Kaufmanis, the report will not only detail the results of 2009 investments, but will include an analysis of the impact of SB 1 on PERA’s future unfunded liabilities. The date for that special meeting has not yet been set.
The CAFR and an annual independent audit of PERA’s financial controls is scheduled to be reviewed in August by the Legislative Audit Committee.

STRS FLASHBACK - 7 Years Ago - The day the reporters followed Debbie to the restroom and Paul misspelled Laura's name!

From John Curry, July 11, 2010
"I get dirty looks from the people at STRS. Board Chairwoman and first-grade teacher Deborah Scott refused to answer questions Wednesday and looked as if she wanted to smack my knuckles with a ruler. She probably wanted to send me to detention like Professor Delores Jane Umbridge did to Harry Potter in the latest J.K. Rowling book.
"When Scott left the hearing room of the Ohio Retirement Study Council, several reporters followed her all the way to the women’s restroom. I suggested the only female reporter with us follow Scott into the restroom for a pool interview, but she declined.
"STRS spokeswoman Laura Ecklar is getting a bit testier every time I ask for more public documents. I suggested that she get a bonus for having to deal with me all the time. She laughed, but it hasn’t helped speed the time it takes to fill my requests.
"Here’s what I don’t understand: Ecklar was quick to point out when I misspelled her name in a story, which has since been corrected. But getting the figure right for the amount of bonuses awarded to STRS staff in 2000, 2001 and 2002, never resulted in a call. “It’s always been wrong,” she said Wednesday of the $14 million figure we reported for two weeks.
"The correct figure is $16.76 million. When the $2.1 million awarded this year is tacked on, maybe it’s easy to understand why she wasn’t in a hurry to correct it."
Canton Repository, July 11, 2003
All STRS, all the time
By PAUL E. KOSTYU Copley Columbus Bureau chief
COLUMBUS -- Problems crop up when a reporter spends time on one story like the State Teachers Retirement System, putting in more hours than he cares to count, day after day and, now, week after week.
First, because he’s not home much, he may tend to forget what his kids look like, nevermind their names.
Second, trying to help the team out in the church softball league is difficult when he can’t make the games. Of course, maybe he is helping the team.
Third, it’s really hard to write a column about something else.
Last week, I didn’t write a single story about STRS after two weeks of nonstop material. Some of you probably thought I was holed up in a garage somewhere talking to the STRS version of Watergate’s Deep Throat, collecting information for a blockbuster story.
Dare I say it? I was in Michigan. OK, for some of you diehard Buckeye fans, Michigan may compare easily to a smelly, decrepit garage.
I was on vacation, which is sure to get me in trouble with Gov. Bob Taft because I wasn’t spending money in Ohio. But Republicans should be happy to know that I had a chance to read a novel by Christopher Buckley, the son of conservative columnist William F. Buckley. The satire takes a humorous slap at Washington politics, lawyers, the Clintons, the press and various other subjects. I actually may read one of his other books.
After a break, a reporter hopes either that the story he has spent so much time on has gone away or that he hasn’t missed anything. By the looks of things this week, there’s plenty more going on with STRS.
Here’s some of the stuff you haven’t heard.
There was a resignation in one of state retirement systems. No, it’s not Herbert Dyer, executive director of STRS. Instead, Thomas R. Anderson, executive director of the School Employees Retirement System, is retiring after 32 years in Ohio public service and as the SERS leader since 1979. His resignation is effective Jan. 1, 2004.
STRS has put Sen. Kirk Schuring, R-Jackson Township, in situations he doesn’t often find himself. First, he called a press conference to show off all the lawmakers, at last count 105, who backed his call for Dyer’s resignation. He rarely calls press conferences, and he even showed up late after getting stuck listening to a Senate debate.
Second, he’s helping organize a march on STRS headquarters on Aug. 15, the next regularly scheduled meeting of the board. He’s checking out a permit from Columbus City Hall; he has to decide a route (this should not be difficult because STRS is just three blocks from the Statehouse); he might have to arrange for security; and he’s trying to figure out which other lawmakers may be going along and how many people are actually going to show up.
If nothing else, the STRS debacle has provided Schuring with all sorts of exposure and name recognition. That could be particularly helpful if he gets a chance to run for Ralph Regula’s congressional seat whenever the powerful longtime congressman from Bethlehem Township retires.
I get dirty looks from the people at STRS. Board Chairwoman and first-grade teacher Deborah Scott refused to answer questions Wednesday and looked as if she wanted to smack my knuckles with a ruler. She probably wanted to send me to detention like Professor Delores Jane Umbridge did to Harry Potter in the latest J.K. Rowling book.
When Scott left the hearing room of the Ohio Retirement Study Council, several reporters followed her all the way to the women’s restroom. I suggested the only female reporter with us follow Scott into the restroom for a pool interview, but she declined.
STRS spokeswoman Laura Ecklar is getting a bit testier every time I ask for more public documents. I suggested that she get a bonus for having to deal with me all the time. She laughed, but it hasn’t helped speed the time it takes to fill my requests.
Here’s what I don’t understand: Ecklar was quick to point out when I misspelled her name in a story, which has since been corrected. But getting the figure right for the amount of bonuses awarded to STRS staff in 2000, 2001 and 2002, never resulted in a call. “It’s always been wrong,” she said Wednesday of the $14 million figure we reported for two weeks.
The correct figure is $16.76 million. When the $2.1 million awarded this year is tacked on, maybe it’s easy to understand why she wasn’t in a hurry to correct it.

Pension reform without trashing those already retired and a West Virginia Senator who speaks common sense!

From John Curry, July 11, 2010
"Another potential barrier is determining who would be affected by comprehensive pension reform. There are clearly significant political and legal challenges to addressing the benefits of active and retired employees, so it is not surprising that in the compromise reached recently in California, only the benefits of new hires were changed. This has been the pattern in other negotiated agreements around the country."
Dan Foster: Time to change pension system
I AM STILL amazed at Sen. Robert Byrd's relative vigor and relevance at such an advanced age. I have seen this in my parents, as well, and in their contemporaries both here and in my hometown. This has led me to develop a newfound appreciation for the personal impact of pensions.
Promises were made that have been kept and have helped people to thrive into their golden years.
As Americans and West Virginians, we always try to keep our promises, but times have changed. Rather than breaking promises, we just may have to make some new ones. Although education reform has been getting most of the media attention recently, governments at all levels are facing long-term financial disaster because of health care costs and retirement liabilities.
The hope is that with the processes put in place by federal health care reform legislation, we have a real shot at dramatically slowing the growth of medical costs, which, coincidentally, could also have a beneficial effect on debt caused by Other Post-Employment Benefits. Unfortunately, the future for pension cost control is not so rosy.
Although we are often reminded that West Virginia state pensions are among the worst funded in the country, virtually every state has made unrealistic promises. Just a few weeks ago in California, Gov. Arnold Schwarzenegger reached an agreement with four major state employee unions to roll back pension guarantees. An editorial in the Santa Cruz Sentinel noted that, "the time is now for state and local governments to make inroads on unsustainable pension benefits".
Perhaps the most frequent suggestion has been that governments should eliminate financial risk by changing from defined-benefit or traditional pensions to defined contribution or 401k-type plans. This has become common practice in the corporate world and may seem to be a logical response. Yet, while the responsibility of a business with a 401k plan ends at the employee's retirement, in general, when retirees run out of money because they do not have a consistent monthly income, the use of various taxpayer-supported assistance programs can be expected to increase. This will then create more financial burden for local and state governments. This perception has undoubtedly hindered the move to defined contribution plans in the public sector.
Another potential barrier is determining who would be affected by comprehensive pension reform. There are clearly significant political and legal challenges to addressing the benefits of active and retired employees, so it is not surprising that in the compromise reached recently in California, only the benefits of new hires were changed. This has been the pattern in other negotiated agreements around the country.
What then can be done that is legal, could be considered fair to our employees, and will provide future sustainability for our state plans? Recognizing that only newly hired employees will probably be impacted, here are a few of the possibilities:
1) Increasing employee contribution levels, particularly if they are less than half of the normal cost of the pension benefit, makes sense. This allows employees to have some skin in the game if the time ever comes for future benefit increases.
2) With longer life expectancy of the average West Virginian and with Social Security retirement age now up to 66 and 67, encouraging workers to retire later would seem logical.
Other than the special cases of public safety personnel, where exposure to danger would justify an earlier retirement age, it shouldn't seem unreasonable or unfair to wait until at least 60 or 62 to get full retirement benefits with the opportunity to retire earlier with reduced benefits.
3) Adjusting the formula for determining final average salary (FAS), which is the basis for calculating traditional pensions, also has merit.
It has become commonplace to use the average of only the last few years of employment to make this determination. This has the potential to increase the base to a level that some may consider excessive. Perhaps, we should be more balanced and include more than just a handful of years in making this calculation.
4) As pension benefits are calculated by taking the product of the FAS and a "multiplier," making it also one of the keys to the size of the monthly payment, revisiting the size of this "multiplier" is a commonly mentioned strategy. Ten years ago when the American economy was flying high, many public plans around the country awarded generous increases in the "multiplier." A quick calculation will show that when combined with Social Security, an individual who retired and received a pension after working 30 years with a "multiplier" of 2 percent would in most cases be able to maintain his or her pre-retirement lifestyle. If the "multiplier" goes up to 2.5 percent, the pension would be increased by 25 percent. How high does it really need to be?
Some of these issues were addressed in recent reforms for municipal police and fire pensions. Affected employees realized that there was a real danger of default of these plans. Without major reform, the local governments that employed them could be severely restricted in the services they could provide.
The analogies to our state's predicament are obvious.
It could be that we will all have to work a little longer, save a little more, or even spend a little less - certainly not the end of the world.
We may not get the same deal that our parents got, but we are a resourceful people who understand the concept of shared sacrifice, and I believe that most of us strive for the ultimate success of this state and country.
It may take a little work, but I'm convinced that we will find an equitable solution that could be looked upon as merely a remake of "The American Dream."
Sen. Byrd just may be our inspiration.
Foster, a Charleston surgeon, is a state senator from Kanawha County

Wilmington newspaper takes a stand re: double dipping

From John Curry, July 6, 2010
Wilmington News Journal, July 6, 2010
OUR VIEW: Double dipping is bad for Ohio
It’s called double dipping — the practice of hiring retired teachers and school administrators, allowing them to earn a salary and collect a pension at the same time. While it’s entirely legal, and strongly defended among the ranks of education professionals, the practice threatens to stick Ohio taxpayers with a big bill. As a result, we believe a line must be drawn against new double dipping and action taken in Columbus to reform the system that allows it.
In individual cases, a savings can be realized at the local school district. The teacher or administrator will accept a lower salary because he or she will receive both a salary and pension. The school district realizes additional savings by not having to pay benefits that the retirement system pays. At the same time, it is argued by supporters of the practice, the district continues to benefit from the work of an experienced educator.
But a statewide problem looms. When the educator retires, his or her contributions into the State Teachers Retirement System can stop. That system has suffered investment losses, has $40 billion in unfunded liabilities and is seeking a taxpayer bailout. The Ohio Department of Education reports that there are 3,305 Ohioans with credentials to be superintendents. While experience is beneficial, it can also be argued that school districts could be well served by the new ideas and practices of new educators.
Double dipping is especially prevalent among school superintendents. More than 25 percent of Ohio’s 614 school superintendents are drawing full retirement benefits. Superintendents and teachers in Clinton County have been double dippers in recent years. The latest superintendent in Clinton County to seek being rehired after retiring is Ron Sexton, a 30-year veteran of Wilmington City Schools who has served the past three years as superintendent. He has said that, under a preliminary new contract, Wilmington City Schools stands to save $28,000 a year. His anticipated new salary would be $113,000, less than the $115,379 he receives currently. The majority of savings will come from the district not having to pay for benefits it currently pays.
As much as elements of double dipping appear out of balance with the rest of the nation’s work/retirement realities, so is the level of compensation the state gives to school administrators. A February study by the Brookings/Greater Ohio Policy Study Center found that Ohio ranks ninth among states in the tax dollars spent on administration. At the same, the state is 47th in the amount of money going into classrooms. Ohio’s share of spending on administration, the study found, was 49 percent higher than the national average. The State Teachers Retirement System has more working retirees than any of the five Ohio pension systems and paid out $741 million in 2009 to 15,857 retirees. That’s an average benefit of $46,800.
There is much for residents of Wilmington City Schools to consider, and they should be provided ample opportunity to ask questions and raise their concerns publicly. The scheduling of a public hearing today at the inconvenient hour 7 a.m. was the wrong move by the board. Such a hearing should be conducted in the early evening. We urge the Wilmington City School Board to hold at least one more public hearing in the evening prior to its scheduled vote on the matter July 26.
Ron Sexton has served Wilmington City Schools well. It’s double dipping that’s the problem.
Larry KehresMount Union Collge
Division III
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