Thursday, June 23, 2011

From John Curry...........................

Wednesday, June 22, 2011

Michigan charter schools are short changing their educators' retirements and.....

.....thank you former Senator Sue Morano (D-Lorain) for standing up for STRS and public educators......
From John Curry, June 22, 2011
...too bad you are still not in the Ohio Senate!
Of course, you aren't surprised, are you? And, of course, the Fordham Foundation is just happy as pie, aren't they? I wonder if they are bragging about it? Wanna' bet?
P.S. Following this article is a little story about the Fordham Foundation bashing Ohio STRS several years ago. I'm sure this right-wing organization would be perfectly happy if all defined benefits retirement systems disappeared off the face of the earth. I wonder how many educators are aware of this? What do you bet less than 1%? Proof of the previous statement can be found at the end of the last article in this email.....believe me!
Charter schools save money by opting out of state retirement system for 401(k) plans
Jackson Citizen Patriot, June 22, 2011
by Bob Wheaton
Charter schools — including many in Michigan and at least two in the Jackson County area — have saved money by opting out of the state’s retirement plan, according to a report released today. The schools have instead provided a 401(k) or other retirement plan for employees.
Charter schools are publicly funded schools that do not have to meet all of the same requirements as traditional public school districts, including mandatory participation in the state retirement system.
The report is from the Thomas B. Fordham Institute, an education policy think tank that is also an advocate for and sponsor of charter schools in Ohio.
Paragon Charter Academy, 3750 McCain Road, provides its employees a 401(k) instead of contributing to the state pension plan, a spokesman said, and White Pine Charter Academy in Leslie previously provided a 401(k). The Leslie school recently dropped the employer match of its 401(k) to avoid cutting salaries, according to an email from Amanda Olberg, one of the authors of the Fordham Institute study.
White Pine Academy contributed a 3 percent match to employee 401(k) plans, Olberg wrote. According to the Fordham Institute report, the annual employer contribution rate to the Michigan Public School Employee Retirement System was 9.7 percent of the employee’s annual salary in 2009.
Joe DiBenedetto, a spokesman for National Heritage Academies, the company that runs Paragon Charter Academy, said he could not immediately provide the employer match toward the 401(k) plan at the school.
Despite report, pension funds are in good hands
Columbus Dispatch , February 2, 2008
It is disappointing to see the Thomas B. Fordham Institute's well-known support for Ohio's failed charter-school experiment drive an effort to undermine confidence in Ohio's public retirement systems. Fordham has previously been content to criticize public schools in its efforts to explain away deficiencies in the oversight and management of charter schools. Fordham's new strategy, however, seems to open a new front in its attack on public education by claiming mismanagement and excessive costs in Ohio's retirement system for teachers and other public employees.
Thus, it is very interesting that Fordham researcher Emmy L. Partin's Jan. 19 letter to The Dispatch asserts that Ohio's State Teachers Retirement System pension funds are in peril, facing a $19 billion shortfall in teachers' pension obligations. As an Ohio legislator and member of the Ohio Retirement Study Council, I often think about the coming tide of retiring teachers and public employees. This coming tide, however, is something that is anticipated, and our public retirement systems are preparing the best they can for an aging population.
When the Fordham Institute first released its report in June asserting these same figures, I asked STRS and the study council, Ohio's regulatory body that oversees all five of Ohio's public employee retirement systems, whether the Fordham Institute was correct in characterizing STRS as having these "staggering" unfunded liabilities. Their response? Not so.
Both the study council and STRS confirm that the system's unfunded liability for pensions was $19 billion on June 30, 2006. But updated numbers released in March 2007 demonstrate that the systems have been on a steady course to achieve a 30-year solvency period within the next two to three years. STRS anticipates that 2007 will again be a year of significant decreases in unfunded pension liabilities, following last year's $688 million decrease. These savings are not a result of more strain put on teachers and local districts, but rather, for the most part, careful and consistent management and favorable returns on pension-fund investments.
This claim was recently corroborated by the report "Promises with a Price: Public Sector Retirement Benefits," released by the Pew Center on the States, rating Ohio as a top performer in saving for our pension and health-care-benefits bill coming due. It's true that the rising cost of health-care coverage and a population with an ever-increasing life expectancy can potentially strain public employees' benefits, but Ohio's retirement systems have demonstrated a great degree of insight into the volatile health-insurance market. In fact, Ohio is just one of 13 states that have set aside irrevocable trusts for retiree benefits such as health and dental coverage and life insurance. Additionally, Ohio has set aside significantly more than any other state: Compare our $11.1 billion to the distant-second Alaska with just $2.2 billion.
School districts are pressed to strike the right balance between managing costs and recruiting and retaining good talent in their classrooms. There are often proposals in the General Assembly to help local school districts strike such a balance, but let me reiterate that our public pension funds, especially benefits for our public schoolteachers, are in adaptable and prudent hands. What are not helpful are persistent efforts by seemingly ideologically motivated players such as the Fordham Institute to distort the true financial conditions of Ohio's retirement systems.
13th Ohio Senate District Lorain

P.S. #2 Guess what, Sen. Sue Morano (the author of the above letter) was recently defeated in the last election BY AN OHIO EDUCATOR (Gayle Manning) by less than 6,000 votes! I wonder if Gayle would want to retire with only a 401-K plan? Maybe she would opt to refuse her current retirement contribution by Ohio taxpayers for her Ohio Senate seat and, instead, only accept 3% from her employer to go for HER retirement instead of the current OPERS 14%? And Sue Morano.....well.... she had to leave office representing Ohioans and go back to her occupation as an ER nurse in Lorain. Thanks, Sue, for the memories! It was nice to see a politician really serve the people instead of serving private interests.


STRS and Ohio Police & Fire Pension Fund Executive Directors Speak Up!

From John Curry, June 22, 2011
"It's cost-prohibitive, it's time-prohibitive," said Michael Nehf, executive director of the State Teachers Retirement System.

State panel delays voting for pension-fund reviews
Cost, time they will take are concerns
Columbus Dispatch, June 21, 2011
Darrel Rowland
Stop the speculation about spending hundreds of thousands of taxpayer dollars for an independent look at Ohio's public pension systems, state Rep. Kirk Schuring says.
The Canton Republican was responding today to testimony by leaders of those retirement systems that the outside probe could cost more than $1 million and take a year or two.
"I'm very sensitive to the costs and timeline," Schuring said. "We're not going to go into this thing with a blank check." He said he hopes the study can be wrapped up this year.
Instead of taking action today as planned to approve a Request for Proposals to conduct the study, the subcommittee of the Ohio Retirement Study Council chaired by Schuring plans to decide on Tuesday. The council is expected to act at its June 30 meeting.
The five systems - battered by the Great Recession, rising health-care costs and baby-boomer retirements - have drawn up fiscal-solvency plans.
But the General Assembly wants an independent consultant/actuary to examine those plans and numerous related issues before the legislature approves them.
The executive directors of all the systems expressed frustration today with the delay in implementing their solvency proposals, which would raise retirement ages, reduce cost-of-living adjustments and make other cost-saving moves. And the quintet warned that hiring a consultant would hold up implementation even more, duplicate much work already completed, and waste taxpayers' money.
"It's cost-prohibitive, it's time-prohibitive," said Michael Nehf, executive director of the State Teachers Retirement System.
William Estabrook, head of the Ohio Police & Fire Pension Fund, said he envisions the study lasting well into 2012. He wrote letters to the Senate president and speaker of the House asking them to halt the plan for a consultant.
Schuring asked Estabrook if he truly wants an independent review, "or do you just want us to act unilaterally and do as you see fit?"

Tuesday, June 21, 2011

Ohio pension directors question the need (and expense) for an additional audit

From John Curry, June 21, 2011
Ohio public-pension review seen as useless, wasteful
Systems' directors say that legislative proposal would delay necessary reforms
Columbus Dispatch, June 20, 2011
Darrel Rowland
A plan for an independent review of Ohio's five public pension systems would cost taxpayers millions and duplicate work that's already been done, as well as delay change that is needed now, the heads of those five systems said in separate letters today.

The remarks came on the deadline for comments about a legislative plan for an outside actuarial review of the retirement systems. The Ohio Retirement Study Council's draft request for proposals to conduct that review was unanimously panned.

The proposal "duplicates studies already completed and millions of dollars already spent to comply with existing reporting or regulatory requirements at both the state and federal levels," said Michael J. Nehf, executive director of the State Teachers Retirement System, which he said has laid out $2.2 million on such studies during the past five years.

"We believe undertaking a study of the magnitude proposed in this (request for proposals) for all five systems could take years and run into millions of dollars."

Karen Carraher, interim executive director of the Ohio Public Employees Retirement System, said her system "has already spent in excess of $700,000 to develop its current recommendations. The draft (request for proposals) seems to suggest that the independent consultant will re-create that process and expense."

Lisa J. Morris, executive director of the School Employees Retirement System, wrote: "Without a fixed fee, every hour and additional question posed by interested parties (and we agree that this should be a highly public process) will drive up the cost with no barrier to cost." The school employees system already has spent more than $150,000 in actuarial costs.

Several of the pension system leaders noted that they submitted plans to restore fiscal solvency almost two years ago - with updates to some at the beginning of 2011 - but the legislature has done nothing to implement the changes.

"This plan was presented to the Ohio Retirement Study Council in September 2009 with an expectation of prompt legislative action," said Dan Weiss, executive director and chief investment officer of the Highway Patrol Retirement System, who said the patrol's proposal cost $60,000.

"Almost two years later, in spite of a record-breaking stock market recovery, long-term solvency is evasive, because it requires deliberate plan modifications. Further delays in enacting pension reforms will only necessitate more drastic changes at a later date."

William J. Estabrook, executive director of the Ohio Police & Fire Pension Fund, balked at turning over retirement system information, including confidential material.

"We will provide our materials to (the study council), but not to the vendor," he said. "OP&F would like an explanation on why the contractor needs to be on our premises. Who will determine what data and information is public information? Additionally, who is responsible for leaks of proprietary information?"

Mike Nehf's response to Senator Faber's comments

From Laura Ecklar, June 21, 2011
Dear Ms. Bracy:
I understand that there is a posting on your Web site regarding comments recently made by Sen. Faber in a letter to a constituent. Below is information we recently sent to a member who inquired about these comments. You may find it helpful. Thank you.
Laura Ecklar
Michael Nehf, our executive director, has asked that I respond to your e-mail regarding Sen. Faber’s recent comments. In our review of pension contribution shifts proposed by the Legislature and their impact on the Retirement Board’s proposed plan, a 15% member/12% employer pension contribution scenario, plus the board’s other recommended changes, results in a 30.5-year funding period. A 12% member/12% employer pension contribution scenario, plus the other recommended changes, results in a 45.6-year funding period due to a 3% lower pension contribution rate and larger member refund values due to shifting 2% of current contributions to members.
We have been communicating this information to our members via our e-mail news service and postings on our Web site…the most recent being on Wednesday, June 15. I hope this information is helpful to you. Thanks.
Laura Ecklar
Director, Communication Services [STRS]
[View Sen. Faber's comments here.] said it well only 2 minutes and 15 seconds!

From John Curry, June 21, 2011
The Truth About the Economy
(Click image to enlarge)

Monday, June 20, 2011

Who is Courtney Combs?

Learn more here:

Thanks to Dan Kemper, 6/19/11

Sunday, June 19, 2011

So, who is stretching the it Sen. Faber or is it Executive Director Nehf?

From John Curry, June 19, 2011
A fellow STRS retiree was sent the letter below by Senator Keith Faber. Notice the accusations Faber makes in this letter. Someone is stretching the truth, aren't they? Please share this letter with other STRS stakeholders.
From: Senator Faber
Sent: Wednesday, June 15, 2011 11:22 AM
Subject: Pension Provisions
Thank you for contacting my office regarding the pension provisions of the biennial budget. I always appreciate hearing from my constituents.
The reports that the so-called “12/12” provisions of the budget will result in an increase of 15 years to the amortization period for STRS are the result of misleading statements from persons who should know better. During the Senate Finance Committee I asked the Executive Director, Michael Nehf, what affect the 12/12 provisions had on their amortization period. Mr. Nehf conceded that all other factors staying the same, the contribution shift from 10/14 to 12/12 would only add one half of a year to the amortization period. This is a small change that pales in comparison to other unfunded liabilities of the pension system, and is a far cry from statements made to the media and STRS members about the effect this provision would have on the system’s solvency.
Although the 12/12 provision was removed from the budget in the House Finance Committee, this issue will continue to be examined as a part of pension reform. Furthermore, statements by retirement system representatives suggesting such shifts have a detrimental impact on the solvency of their systems appear to be incredibly misleading and only serve to create unnecessary confusion.
Again, I want to thank you for your thoughts. I can assure you that as we move forward with the budget and pension reform we will keep in mind the financial security of retirees and all Ohioans. Please do not hesitate to contact my office if you have any additional questions or comments
Keith Faber
President Pro Tempore
12th Senate District

[View Mike Nehf's response here.]
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