Thursday, October 18, 2018

Dean Dennis Addresses the STRS Ohio Retirement Board on October 18, 2018

STRS can restore our COLA if they are realistic about what they actually earn and adopt an earnings assumption perhaps .50% less as a safety margin. Currently, STRS has adopted earning 1.15% less than what they are actually earning. This is primarily what has killed our COLA. They are ignoring both historical market earnings and historical STRS earnings.
My name is Dean Dennis, STRS Chair for the CFT-Retirees Chapter, Spokesperson for the Ohio STRS Member Only Forum. I retired with 35 years from the Cincinnati Public Schools.
Today I want to make some points:
First and foremost, the adopted STRS investment return assumption, or earning assumption, of 7.45% is significantly too low. While it might serve STRS employee's with their investment goals; it does not serve STRS members regarding their pension. This too low of an earnings assumption is the primary reason our retired members are going without a COLA and our active teachers will not have a COLA for 5 years upon retirement. 
STRS trustees know STRS is earning 8.6% over the 30 year funding period, this is far above 7.45%. Trustees know that STRS has always earned above 8% for every 30 year funding period. Yet, you are assuming 115 basis points less than you are earning. This isn't okay.
Subtract 7.45 from 8.60 and the difference is 115. Since we have a 115 basis point difference, we can easily add 25 basis points to the earnings assumption and add back $5 1/2 billion to the 30 year period. We can easily add back 50 basis points and add back $11billion. This would still allow for a 65 basis point cushion. 
Trustees will only gain credibility with members, when members see them take into account what they actually earn, and then adopt an earning assumption more in line with reality. 
Adopt an earning assumption 40, 50, or 60 basis points lower as a safety margin. Credibility is lost when trustees adopt an earning assumption 115 basis points below actual earnings. This only punishes those you are supposed to be serving. Are we really to believe you can't provide a COLA?
Review the handouts, I passed out to you. The stock market's 30 year rolling periods average is nearly 10%. The stock market even earned 9.99% during the 30 year period which included: Black Monday, Desert Storm, the Savings and Loan crisis, wars in Iraq and Afghanistan and three recessions. Trustees should easily be comfortable in adjust the earnings assumption upwards from 7.45%
Other suggestions:
Revisit the recent adopted mortality tables. This "new actuarial best practice," adversely penalizes retirees. Today's 75 year old should not be assigned the same mortality rate as a 21 year old entering the system. This accounting falsely skews actual liabilities. It also harms retirees from receiving their rightful COLA.
I know that being only granted 3 minutes, I will run out of time, so I can't go into any depth on avoiding alternative investments, changing the payroll growth assumption rate, seeking legislation to change our 30 year funding period to 35 years, seeking legislation to increase in the employer contribution or increasing the time to present to the Board from 3 minutes to 5 minutes. 
So, I'll switch gears and close with one last thought, having 5 elected STRS board members for active teachers, yet only 2 elected STRS board members for retired teachers deserves attention. This is a disproportionate ratio which does not reflect the number of active teachers compared to retired teachers. 
Since there are 7 elected board members, the ratio should be a 4 /3 split and both retired teachers and active teachers should be allowed to vote for all elected STRS Board members. I hope you give this some thought as well.
Thank you.

Dean Dennis
October 18, 2018


Wednesday, October 3, 2018

Let's Draw Attention to Ohio's Teachers This Midterm Election

Ohio's teachers now contribute more of their salaries than any teachers in the United States but they will not get a COLA for 5 years after they retire after working 35 years. They also will have to be at least age 60. Ohio's current retired teachers were promised a COLA their whole careers but will not receive a COLA for 6 years; unless changes are made. All of this is because Ohio STRS adopted earnings assumptions unbelievably lower than what they actually earn. The STRS staff is doing exceptionally well when it comes to salaries, and bonuses. Ohio's retired teachers are not! 
Recently, the Ohio STRS Member Only Forum joined forces with the Ohio Retired Teachers Association and sent a letter to every member of Ohio's General Assembly explaining the state of affairs for Ohio's active and retired teachers. 

Teachers are also encouraging the public to contact Ohio's gubernatorial candidates: Richard Cordray info@cordrayforohio.com and Mike DeWine info@mikedewine.com and ask "will you support Ohio's teachers in receiving a COLA?" Ask them to post the answer on their website. 
Lastly, Please Share This Petition on Social Media, Numbers Matter. 


Dean Dennis
October 2, 2018

Tuesday, October 2, 2018

Call to Action

By now, all members of Ohio's General Assembly should have received a letter from our Forum and ORTA stating clearly why we are without a COLA and the hardships placed upon Ohio's educators. 
At this time there are two things we can do to move our efforts forward:
1) Email Richard Cordray at info@cordrayforohio.com and Mike DeWine at info@mikedewine.com and simply ask will they show public support for us in the way of public statements or postings on their websites for restoring our COLA and helping Ohio's teachers? We will be watching.
2) There are thousands of us on this forum. If each one of us takes it upon ourselves to get a dozen signatures for our petition, we can reach 20,000 signatures before the mid term elections. It is important to spread the petition on social media and keep it growing.

Dean Dennis
October 2, 2018

Friday, September 28, 2018

Will Our Next Governor Help Ohio's Retired Teachers?

On November 6, 2018, Ohioans will be electing a new governor. 

The next Governor of Ohio needs to know that current Ohio STRS retirees are not receiving a COLA because:

1) Ohio's General Assembly turned over control of our COLA to Ohio's STRS Trustees. 

2) Ohio's STRS Trustees then adopted an arguably low earnings assumption which is 114 basis points (7.45% adopted, 8.59% earned) lower than what they actually earn over the current 30 year, legislatively required, funding period. 

3) In turn, Ohio's STRS Trustees used this unjustifiably low earnings assumption as an excuse to withhold paying out Ohio's retirees their promised COLA. Ohio's retiree's could lose six years of COLA's by May of 2022, the time the trustees stipulated they would revisit the COLA. Any Governor of Ohio should be appalled that teachers who dedicated their lives to Ohio's children are being treated in this manner.

Mike DeWine and Richard Cordray both are making Ohio's children one of their top priorities. 

But are Mike DeWine and Richard Cordray willing to make Ohio's teachers a top priority? 

Will Richard Cordray or Mike DeWine state publicly that Ohio's retired teachers are deserving of their COLA and commit that if elected, they will make sure we have a COLA? 

Let's find out. Contact each one and ask. You can use this information or tell your own story. 

Here are their email addresses, please cut and paste and send them a message:

Mike DeWine: info@mikedewine.com

Richard Cordray: info@cordrayforohio.com

Dean Dennis

September 28, 2018


Monday, September 24, 2018

Respect Ohio's Retired Teachers. Restore Their Promised COLA.

Teachers in Ohio were always promised a simple Cost-of-Living-Adjustment (COLA) upon retirement. It is only through a COLA that  retired teachers can keep up with inflation. Many of Ohio's teachers teach in rural areas and retire with very modest pensions. They rely heavily on their promised and earned COLA. The State Teacher Retirement System (STRS) and elected official have broken their promises to Ohio's retirees and have placed an unfair burden on Ohio's current teachers.
Currently, the COLA is suspended for all retired teachers indefinitely. STRS stated they will not review their actions until May of 2022. There isn't any promise the COLA for retired teachers will ever be reinstated again. The Ohio Legislature created the problem when they relinquished their control of the COLA to the STRS Board of Trustees. The Legislature gave the STRS Board of Trustees the authority to "adjust the COLA." The trustees however, eliminated the COLA. Taking away a promised benefit after teachers have retired is wrong and arguably in violation of Ohio law (see Article II, Section 28). 
The Ohio State Teacher Retirement System (STRS) is not a broken system, far from it. STRS is in good financial condition having 77 billion dollars for investment purposes. In fact, STRS is a 75% fully funded system which is above the national norm. STRS Ohio does well, consistently averaging over 8% returns on their investments for each and every 30 year rolling funding period. Additionally, STRS Ohio has a revenue stream.  They receive 14% from every active teacher's paycheck, which is the highest teacher employee contribution in the nation. Additionally they receive a 14% match from each and every teacher's employer; thereby receiving a whopping 28% in contributions from every teacher's salary. STRS is so well off that they seemingly can afford to provide numerous large annual performance bonuses of over $100,000 plus to 37 members of their investment staff.  Eight individuals receive bonuses over $250,000 dollars, one over $330,000. This is in addition to their six-figure salaries. This one individual's performance bonus alone could pay the average annual COLA for 330 of Ohio's retirees. 
In the years 2013 through 2017, STRS took actions that drastically impacted Ohio's teachers. During these years STRS  first decreased the COLA for retired teachers and then froze the COLA for what will effectively amount to at least 8 years of COLA losses. STRS also sought to make active teachers work 5 additional years in order to receive a full pension. Ohio's Legislature allowed this so Ohio teachers will have to be 60 years of age and work at least 35 years for a full pension. Many of Ohio's teachers will have to work 38-39 years to meet the requirements for a full pension. As if this wasn't enough, STRS  sought action (which was granted by Ohio's Legislature) to withhold their COLA for their first 5 years of their retirement. No other state in the nation has such stringent requirements. 
If the STRS cannot grant Ohio's teachers a simple COLA upon retirement then all STRS salaries should be frozen and all STRS bonuses should be suspended until they can provide a COLA to retirees. Teachers and the public demand that STRS come up with a plan to restore our COLA. TEACHERS will only support legislators and STRS board members who value the profession of teaching!
Note: If you are an Ohio teacher, or retired teacher, these groups have shown their  support, Ohio STRS Member Only Forum (found on Facebook), Ohio's Retired Teacher Association (ORTA), Ohio's American Association of University Professors, the Ohio Federation of Teachers (OFT) and their affiliates. In addition, many of Ohio's retiree chapters have shown support.  If eligible, please consider joining and supporting these organizations.

Sunday, September 23, 2018

Melissa Cropper, President of OFT, Addresses the STRS Ohio Board on September 20, 2018

Melissa Cropper, President of the Ohio Federation of Teachers, addressed the STRS Ohio Retirement Board on September 20, 2018.

As an elected person, I understand that I have certain responsibilities to the people who elected me. I have a responsibility to be accessible. I have a responsibility to listen to concerns. I have a responsibility to be responsive. Sometimes I agree with the concerns that are brought to me, and sometimes I disagree. When I disagree, I have a responsibility to not only explain why but to also listen to the other side and try to come to some understanding or solution. I also take direction from my Board and not the other way around.

We have all seen what happens when people feel like their voices are not heard. We saw the Women’s March on Washington D.C., the teacher walkouts across the nation, and more specifically, the teacher protests over pension issues in Kentucky. These protests all had two things in common. One – they happened because people felt like their concerns were being ignores. Two – they started with a Facebook page.

Our members across the state have been increasingly interested in the decisions and actions of the STRS Board. In fact, their engagement over the time that I have been involved with OFT has increasingly grown. They understand that you all have a very difficult job to do, and they appreciate your work, but they are frustrated that they can’t watch a Board meeting unless they drive to Columbus, and if they do drive to Columbus, they only have three minutes to express a concern with no actual interaction with Board members, and they cannot even send an email directly to a Board member.

Our Toledo President decided to respond to those concerns by inviting elected board members to a meeting with our members about their concerns. You see, our members believe that we have a board that is both appointed and elected for a reason. Appointed members represent the concerns of those who appointed them, and elected members should represent the concerns of those who elected them. Both should listen to the concerns of those they represent, bring them back to the board, and ask the difficult questions on our behalf.

We were shocked when we heard that Board members will not attend that meeting because they have been advised by STRS to not attend any meetings where the COLA is being discussed.

I am sincerely hoping that this has been a misunderstanding or misinterpretation, and since I was not directly involved in those discussions, I want to extend an invitation to you today for our meeting on Sept. 26. If that date doesn’t work, let us know what date will work, and we will accommodate.

Thank you.


Saturday, September 8, 2018

Flashback! Pension Funds Pay Big Bonuses (2008)

The turmoil on Wall Street has sucked billions of dollars out of Ohio public-pension systems, but many of the pension employees who are paid to invest retirees' money still will reap tens of thousands of dollars in bonuses. 

This year, 10 investment officers for the State Teachers Retirement System pulled in bonuses of $200,000 or more, and two crossed the half-million mark in combined salaries and bonuses.

Thirteen investment officers for the teachers' pension could reach $500,000 in total pay next year under a bonus plan approved by the pension board, although many will fall short unless the market recovers.

While a depressed market will pinch the performance bonuses somewhat, it doesn't necessarily spell the end of six-figure jackpots for pension officers who oversee declining portfolios. A pension officer whose assets lose value -- but less value than average for a comparable portfolio -- still qualifies for a bonus, in some cases reaching into tens of thousands of dollars.

In all, the State Teachers Retirement System paid nearly $6 million in bonuses to 89 investment officers this year, most of whom have base salaries of $100,000 or more.

The pension fund affects 449,000 people, including about 180,000 active teachers, 140,000 retirees and 120,000 beneficiaries. Some retired teachers are fuming about the bonuses at a time when their pensions are bleeding value.

"When retirees are struggling to pay for groceries, there's so much insensitivity to see millions and millions of dollars going to pay for bonuses," said Molly Janczyk, a retired Columbus school teacher. "No one faults them for bonuses, but it kind of rubs salt in the wounds to see these kinds of bonuses during the economic downturn."

The bonuses have touched off a brush fire of criticism among members of a group called Concerned Ohio Retired Educators, which formed in late 2003 in response to perceived extravagances at the teachers' pension system.

A Web log run by a member of the activist group, retired Columbus teacher Kathie Bracy, has been abuzz with comments on the bonuses.

"Retirees think it's only fair that (investment officers) pull in their belts the way we all have to pull in our belts," Bracy said.

The teachers fund's top earner, assistant director of investments Mary Ellen Grant, took home $529,200, including a bonus of $259,200.

That's nearly as much as her counterpart in California. Christopher Ailman, chief investment officer for the California State Teachers Retirement System, took home a bonus of $295,000 this year. Ailman oversees $147 billion in assets for the nation's largest teacher pension, compared to $63 billion for the Ohio system.

Although the California teachers' pension has a larger investment staff, only 15 officers qualify for performance bonuses, a spokeswoman for the system said.

Officials from the Ohio system defend the merit pay, saying the bonuses pay for themselves several times over in improved performance of the system's portfolio. They also note that while many investment officers clear $200,000 a year, that's still far less than they would be paid in the private sector.

"In order to attract and retain quality people at STRS Ohio, and you need to have the best and brightest to have the kind of investment performance you want, you have to have these kinds of incentives," said Michael J. Nehf, executive director of the pension system. "The money we pay in those bonuses is repaid many times in terms of our investment performance."

Nehf is paid $225,000 a year and does not qualify for a performance bonus, meaning that many of his subordinates earn more than he does.

The teachers' pension fund is by far the most generous public-retirement system in Ohio when it comes to merit pay.

The Ohio Public Employee Retirement System, which is slightly larger than the teachers' fund, paid about $1.3 million in performance bonuses this year. The largest was $125,742 and went to Robert G. Cowman, the system's chief investment officer. His bonus was less than those of 16 investment officers for the teachers' system.

Human-resources managers for the Ohio Public Employee Retirement System said the bonuses are an important part of recruiting and retaining employees, although they said there hasn't been an exodus to the pricier teachers' system.

Why the discrepancy?

Officials from the teachers system note that they manage about 80 percent of the pension's assets in-house, compared with about 62 percent for the Ohio Public Employees Retirement System. Even with employees pulling down six-figure bonuses, it's still cheaper to manage funds internally than to farm them out to Wall Street firms, experts said.

The Ohio pension systems that pay out the least in employee bonuses rely the most on Wall Street fund managers. The State Highway Patrol Retirement System paid no bonuses; its investment decisions are made by external managers.

Those external managers often get bonuses that dwarf those of public pension officials, although private-sector money managers also have to hustle to make sales, said Alan Johnson, a Wall Street pension compensation specialist.

He said that's the dilemma for systems like the State Teachers Retirement System of Ohio: pay what appear to be whopping bonuses to internal investment managers, or go outside the system where compensation is not public record.

"Ohio could invest with any of the largest management organizations and pay would not be an issue at all, because you wouldn't know what it was," Johnson said.

James Nash
jnash@dispatch.com
November 2, 2008
Columbus Dispatch

Wednesday, September 5, 2018

Why STRS Can Afford To Restore Retirees COLA and Why Ohio Legislators Should Intervene

One of the biggest fears of retirees is that Ohio STRS is having financial difficulties and restoring the COLA benefit will jeopardize the pension. This is not the case. Below is a list of reasons why the Ohio's Legislature must restore the COLA to all retires who retired under Ohio's statutes that stated a COLA shall be paid.

1) We were told that in a Defined Benefit Plan the employer assumes all the risk. A Defined Benefit Plan is like a contact where contribution monies from the teacher and teacher's employer is given to STRS. STRS then exclusively invests the monies for the defined benefit pension plan to provide your pension benefits. Teachers who retired prior to July 2013 met all of their Defined Benefit obligations and STRS Ohio met all their 30 year investment goals (earnings assumptions) over every 30 year funding period. A 3% COLA was built into their actuarial table as a pension benefit along with the base pension payout. It goes without saying this COLA should be paid, as promised, as it was a consistently stated benefit. STRS also offers a Defined Contribution Plan; but in this plan the risk is assumed by the employee's investment selection. All teachers financially harmed by the COLA loss, were a part of the Defined Benefit Plan. Reneging on paying out the earned COLA erodes the underpinnings of Ohio's Defined Benefit Plan. Teachers are learning a lesson that they cannot trust STRS after decades of having to hand over their hard earned monies.

2) STRS Ohio created their own problem but teachers are being asked to take the fall. We understand STRS needs to have enough money to pay your pension and promised benefits. They do this by taking your contribution and your employer's contribution. They then invest the monies over your employment period prior to retiring. If they meet their earnings goal, they'll have enough money. So in order to pay out your pension and benefits they project a rate of return on their investments that they will need over the time period you work. This rate of return is referred to as their earnings assumption rate. The period of time you work prior to retiring is often referred as the funding period. Since the average person used to have to work 30 years to get full retirement benefits, the funding period is a 30 year period. So, STRS has a funded period which is blended with an earning assumption rate estimate (so basically it is what percent do they expect to earn on investments from the collected employee and employer contributions). It becomes easy to see the higher percentage rate STRS earns, the better off the funding is for your pension. Additionally the higher earnings
assumption STRS projects, provides STRS with more latitude in increasing pension benefits. However, when STRS lowers earnings assumptions, problems can be created. And this is what STRS did, they lowered their earnings assumption down to 7.45% from 7.75%.

When STRS lowers their earnings assumption even slightly, it creates significant projected liabilities over the 30 year funding period. This is because STRS has billions of dollars (currently 77 billion) to invest. It's important to understand that the earnings assumption is simply a projection. In reality, STRS has always earned over 8% in returns over every 30 year funding period. STRS always earns a higher rate of return than their projected earnings assumption rate over the 30 year funding period. So when STRS lowers their earning assumption rate, they must project billions of dollars of less money in their coffers 30 years out. As a result, STRS must figure out how to make up the artificial deficit on paper.

Since they have very little choice other than to ask the legislators to raise the employers contribution tax rate, they look to you. Retirees became the low fruit and that is why your COLA is unethically being held. This is why current teachers now have to be 60 years old and have at least 35 years of service in order to avoid an actuarially reduced pension.

All this happened because STRS lowered the earnings assumption from 8%, then down to 7.75% and now down to 7.45%. STRS created the 27 billion dollars paper deficit over the 30 year funding period but teachers are taking the hit. The COLA was the low hanging fruit. If STRS restores the COLA to 7.75% it wipes out most of the paper deficit and makes it hard for STRS to argue they can't restore our COLA.

Again, why STRS's actions are unethical: STRS's actions do not match their financial reality. STRS has always earned over 8% on investment returns over a 30 year funding period. Here's a question, why do the investment advisers for the Ohio Police and Fire retirement system project their earnings assumption to be 8.25% while STRS investment advisers project our returns to be 7.45%? Are Ohio's teachers lesser in importance?

3) STRS Ohio has a goal to be 100% funded. This sounds noble, but their goal comes at our expense. Currently STRS is around 75% funded. This means in simplistic terms that without any earnings from investments they can pay out pensions and benefits for approximately 20 years. To put this into perspective Kentucky is 37% funded and in the news, but Kentucky's legislature is allowing current retirees and all current teachers vested with 15 years to go though their state retirement system without any reduction of benefits. Again, all of Kentucky's retirees are not being impacted in any manner.

4) STRS Ohio is taking advantage of you. Our Legislature needs to review their actions and intervene. Recently, STRS requested drastic changes to our pension system, some legal but arguably unethical. Some were arguably illegal.

Here is what is illegal: Prior to 1/07/13, ORC Statute 3307.67 states the COLA shall be 3%. This wasn't honored. Ohio's Constitution, Article II Section 28 which addresses Retroactive Laws, states Ohio's General Assembly shall have no power to pass retroactive laws. This means they didn't have power to change your promised COLA benefit after you retired, but they did. Then they gave their legislative power away and allowed STRS to have control over your COLA. Also violated was ORC 3307.14. This provision states in clear terms that if STRS Ohio cannot meet its financial obligations, the burden falls on the employer not the employee. ORC 3307.14 would have to increase the employers contribution to cover our COLA loss if the STRS books clearly demonstrated there was a financial crisis. While perhaps unpopular, increasing the employer contribution would be fair in light of it has been fixed at 14% for 34 years while the employee contribution has increased 100%. Thus the legislators only real decision should be, should they raise the employers tax, or have STRS increase the earnings assumption rate back to 7.75% to undo the paper loss. STRS could have approached the General Assembly with this option but likely don't want to draw negative attention to themselves.

Here's what they did that was legal but questionable. STRS sought actions drastically impacting the pension system. As a result retirement requirements now require a teacher to be age 60 with 35 service years for full retirement. Additionally current teachers retiring are not provided any COLA for the first 5 years of retirement. They saved a fortune by doing the aforementioned. All legal, but is this what we want for Ohio's teachers.

5) STRS has paved the road to being 100% funded off the backs of Ohio teachers. Some simple math and common sense reveals STRS did not have to seek the authority to rob retired teachers of their COLA from the legislature.

First, STRS has 77 billion dollars in investments. STRS pays out around 7 billion annually in pensions and benefits, but STRS takes in close to 3.5 billion dollars annually from the employee and employer contributions. If STRS just earns a 5% return on the 77 billion dollars they invest, they'll covers expenses. However, knowing they actually average earning over 8% on their investments over all 30 funding periods, there is a disconnect as to why they project 7.45%. Note, the S&P has averaged 9.8% over all 64 rolling 30 year periods.

Second, let's take a moving forward look at their finances. In the past, a teacher worked and paid into STRS for 30 years in order to obtain their pension and benefits. This teacher likely retired at age 55 and lived to age 80. So STRS collected contributions for 30 years and paid out retirement benefits for 25 years.

Currently, a teacher has to work 35 years to obtain their pension and benefits. This teacher must be at least 60 years of age and have paid into STRS for at least 35 years. So STRS will collect contributions for 35 years, but only pay out pension benefits for 20 years. Additionally, STRS will not pay out any annual COLA benefits during this teacher's first 5 years of retirement. Seems unfair. STRS has drastically reduced their long term liabilities by around 25%. STRS takes in monies 5 years longer yet pays out 5 years less. They will get to their 100% fully funded goal at the expense of Ohio's teachers.

6) Nero fiddled while Rome burned. The average retired teacher's pension in Ohio is less than $50,000 for decades of service. The average promised simple COLA benefit is less than $1,500. Compare that to the salaries of the STRS staff (which pays into PERS). A typical annual salary bonus in the investment department, bonus not salary, can be around $150,000. Here's a thought, STRS bonuses could cover many thousands COLA's. We pay for STRS raises and bonuses while they take away our COLA. Something wrong?

7) Action please! In summary, The State of Ohio has relinquished control of their teacher's COLA to STRS. This action has resulted in retirees promised COLA being lost for what might effectively be a 8 year period for the majority of retirees. By relinquishing control to STRS, the legislature has violated many of their own statutes. This caused great financial hardship to retirees, financial hardship that was arguably unnecessary. That said, when will the legislature address STRS's mismanagement, take back control of the COLA and restore the promised and COLA benefit? Until the legislators, or STRS, can restore retirees COLA and make retirees whole, it is only proper that the Ohio's legislature should take actions to:

A) Freeze all STRS salaries
B) Freeze all STRS bonuses
C) Freeze all STRS hiring
D) Legislatively move all STRS employees from PERS into STRS
E) Review selling STRS assets and real estate or
F) *Restore the COLA by increasing the Employer's Contribution Rate (ORC 3307.14) or by increasing the Earnings Assumption Rate to reflect accurate historical returns

Dean Dennis, Spokesperson
Ohio STRS Member Only Forum


Monday, September 3, 2018

Respect Ohio's Retired Teachers, Restore Their Promised COLA

Teachers in Ohio were always promised a simple Cost-of-Living-Adjustment (COLA) upon retirement. It is only through a COLA that  retired teachers can keep up with inflation. Many of Ohio's teachers teach in rural areas and retire with very modest pensions. They rely heavily on their promised and earned COLA. The State Teacher Retirement System (STRS) and elected officials have broken their promises to Ohio's retirees and have placed an unfair burden on Ohio's current teachers.
Currently, the COLA is suspended for all retired teachers indefinitely. STRS stated they will not review their actions until May of 2022. There isn't any promise the COLA for retired teachers will ever be reinstated again. The Ohio Legislature created the problem when they relinquished their control of the COLA to the STRS Board of Trustees. The Legislature gave the STRS Board of Trustees the authority to "adjust the COLA." The trustees however, eliminated the COLA. Taking away a promised benefit after teachers have retired is wrong and arguably in violation of Ohio law (see Article II, Section 28). 
The Ohio State Teacher Retirement System (STRS) is not a broken system, far from it. STRS is in good financial condition having 77 billion dollars for investment purposes. In fact, STRS is a 75% fully funded system which is above the national norm. STRS Ohio does well, consistently averaging over 8% returns on their investments for each and every 30 year rolling funding period. Additionally, STRS Ohio has a revenue stream.  They receive 14% from every active teacher's paycheck, which is the highest teacher employee contribution in the nation. Additionally they receive a 14% match from each and every teacher's employer; thereby receiving a whopping 28% in contributions from every teacher's salary. STRS is so well off that they seemingly can afford to provide numerous large annual performance bonuses of over $100,000 plus to 37 members of their investment staff.  Eight individuals receive bonuses over $250,000 dollars, one over $330,000. This is in addition to their six-figure salaries. This one individual's performance bonus alone could pay the average annual COLA for 330 of Ohio's retirees. 
In the years 2013 through 2017, STRS took actions that drastically impacted Ohio's teachers. During these years STRS first decreased the COLA for retired teachers and then froze the COLA for what will effectively amount to at least 8 years of COLA losses. STRS also sought to make active teachers work 5 additional years in order to receive a full pension. Ohio's Legislature allowed this so Ohio teachers will have to be 60 years of age and work at least 35 years for a full pension. Many of Ohio's teachers will have to work 38-39 years to meet the requirements for a full pension. As if this wasn't enough, STRS  sought action (which was granted by Ohio's Legislature) to withhold their COLA for their first 5 years of their retirement. No other state in the nation has such stringent requirements. 
If the STRS cannot grant Ohio's teachers a simple COLA upon retirement then all STRS salaries should be frozen and all STRS bonuses should be suspended until they can provide a COLA to retirees. Teachers and the public demand that STRS come up with a plan to restore our COLA. TEACHERS will only support legislators and STRS board members who value the profession of teaching!
Note: If you are an Ohio teacher, or retired teacher, these groups have shown their  support, Ohio STRS Member Only Forum (Facebook), Ohio's Retired Teacher Association (ORTA), Ohio Conference of the American Association of University Professors (OCAAUP), the Ohio Federation of Teachers (OFT) and their affiliates. In addition, many of Ohio's retiree chapters have shown support.  If eligible, please consider joining and supporting these organizations. 

Friday, August 17, 2018

Dean Dennis Addresses the STRS Ohio Retirement Board - August 16, 2018

My name is Dean Dennis, I am the STRS Chair for the CFT-R, I am also the spokesperson for the Ohio STRS Member Only Forum on Facebook. When I addressed you in June we had 3,000 members, we now have over 6,000 members.  Additionally, I am the administrator of the Respect Ohio's Retired Teachers, Restore Their COLA. When I last addressed you the petition had  5,500 signatures, the petition now has over 12,000 signatures.
Retirees and their families are upset that the COLA that was promised to them is now being withheld. People make painstaking decisions on whether to retire, when to retire, and contemplate what life will be like in retirement. It's not easy adjusting to life on a fixed income after working decades. A slight bit of comfort was knowing that your pension would increase very slightly every year, because of the meager simple COLA. Now, that is taken away. 
Board Members need to understand that retirees are questioning why Board Members continue to grant STRS staff raises, and approve annual $100,000 plus incentive bonuses to select STRS staff; yet can't grant a modest simple COLA to those who elected them.  To put this in perspective, of the many who earn performance incentives,  four STRS staff received $1.2 million in incentive bonuses; this is enough money to pay 1,200 annual COLA's of teachers who retired with a $50,000 pension and were promised a 2% COLA.   
How upset are retirees? Let me share a recent poll.  
ORTA asked retirees this simple question, "Do you think elected official do enough to protect our pension systems, like STRS?" The results, 97% checked "NO."
Let me share a handful of the reasons people stated when they signed the Respect Ohio's Retired Teachers, Restore Their COLA petition within the last few weeks.  
"I'm signing because:"
  • This doesn't just impact currently retired teachers. If this continues then my family will be directly impacted
  • I recently retired and was told no COLA for 5 years. That's a long time with no adjustment."
  • If we as teachers promised our students something and we didn't come through, we would have lost all respect.....hmmmmm...
  • I was told 3% per year when retired . With inflation it’s impossible to keep up with expenses.  Look at the cost of cable TV electric your gasoline your gas for your home and all the other expenses .
  • My husband and I are retired teachers and finding it increasingly difficult to maintain a budget when prices keep going up and we keep falling behind. Cost of living increases are necessary for us to survive not to mention that we have earned it.
  • For the love of God, do the right thing and pay retired teachers the COLA they deserve -- they worked hard and paid into STRS for most of their working lives.
  • Social Security recipients receive at least some sort of increase annually, so sad that we don't. I always thought I was lucky because I had STRS to depend on....well you all know the rest of the story.
  • Politicians shouldn’t be allowed to change the terms of a retirement system after people have been contributing to it for decades, and have relied on cost of living adjustments to make ends meet after retirement. We also should stop lining the pockets of administrators.
  • My wife and I are both retired teachers. Our retirement decisions were based entirely on the promises made by STRS. We have already lost thousands of dollars. It is time for the State Legislature to intervene.
  • I was born and spent my early years in Ohio. My Grandmother worked her whole life in Ohio, some of it as a teacher. How dare they cut vital funds to those who cared for and taught the children of Ohio. Shameful.
  • We must take care of our teacher's as they dedicate so much of themselves in caring for our children.
  • We must honor our commitments to retired teachers because treating people with fairness and respecting their innate dignity is right and just.
  • Because as a young teacher, I know how hard this job is. Let’s take care of the teachers who took care of our communities’ babies for so long.
  • There is no justification for teachers pensions not keeping pace with inflation. They are already hugely taken advantage of in this country.
  • From the United States Department of Labor under "What are the responsibilities of plan fiduciaries?" "Acting solely in the interest of plan participants and their beneficiaries, with the exclusive purpose of providing benefits to them;" and "Paying only reasonable expenses of administering the plan and investing its assets. "Paying 6-figure salaries AND bonuses does not seem to be a requirement!
  • My mother in law is 92 years old and living on her late husband's teacher pension. That pension would now qualify for public assistance. Restore the COLA now.
  • Ohio is my home State. I have many family members who are teachers. This should NOT be happening to them!
  • This is very wrong! You need to uphold your promises to retired teachers!
  • You have no right to change what is part of the retirement plan! Aside from a professional lifetime of unfair low pay, it is important that retired teachers be able to take care of themselves adequately. Please stop tampering with our retirement benefits. 

Thank you.

Dean Dennis
August 16, 2018

Thursday, August 16, 2018

Dr. Dennis Leone Addresses the STRS Ohio Retirement Board - August 16, 2018

Members of the Board, my name is Dennis Leone. I served on this board in 2006, 2007, 2008, and 2009. I recall some of my fellow board members not taking their oversight responsibility seriously. I remember board members pretty much blindly accepting the recommendations and conclusions of staff and outside “expert” consultants on very important matters pertaining to payroll growth assumptions and investments. Are board members still doing this today, when perhaps they should not? It is so easy to accept, isn’t it, what you are being told by staff and so-called “experts.” It is lot harder to call into question what you are being told, and to say, “no, I do not accept this and it is my conviction that we need to do better.”

I recall vividly in 2008, when the total STRS assets hit $81 billion, and when the DOW stood at 14,400. Yes, the stock market went south and we went down to $65 billion, but isn’t is curious to the board that today – 10 years later – the DOW stands at 25,000, but we STILL are not quite where we were in 2008 when the DOW reached a high of 14,400. 

Here is something I do recall from 2008, and you need to listen to this: We lost a ton of money with our Enron stock. I recall asking during board meetings in this room why we had not bailed from Enron, when so many others had. The answer the board was given by the staff was “no, our consultants tell us that is not the right things to do………we need to hang in there.” So we didn’t bail, as we should have, and we lost millions and millions more. I recall pushing for a new policy in 2008, which I could not get, that would have required STRS to pull back from stocks that were losing a certain percentage of their value. No, the staff and “expert” consultants did not want to do that either, so we didn’t. 

The data and recommendations the board accepted in the past for annual payroll growth assumptions have been embarrassing. In the 8-year span between 2005 and 2013, we received a miserable annual average of 1.33%.....not even close to the 3.5% assumption the board was told by staff and “experts” to use. Did the staff survey Ohio superintendents or treasurers and ask them to share what they thought might be the base raises and step increases during those years. Never, not once. In my 23 years as a superintendent in Ohio, I never once received such a survey from STRS. The board, instead, accepted conclusions from staff and outside “experts,” who – quite frankly – did not know what the hell they were talking about in this area.

Are there investment recommendations you have accepted that you should not have? Is it wrong for you to conclude that we should being doing better, and producing more investment revenue to support retirees and undo the board’s absolute broken promise to 143,000 retirees for an annual COLA. The has been the only way many retirees have been able to keep up with increased costs for home insurance, car insurance, and health insurance. It is sinful that you have given bonus checks to staff when you have given no increase, nothing, to retirees. But I guess if you continue to accept what you are told that the bonuses are necessary in order to keep the best and the brightest employees, then indeed you have fallen for the same malarkey that many board members did during my 4-year term.

Please study carefully the attached Bloomberg report, which offers 5 meaningful suggestions for pension boards to juice up their investment returns. 

But my suggestions are more simple. As board members, YOU need to take a leadership role and provide better oversight, which means not just questioning, but challenging and requiring meaningful improvements to help retirees receive the COLA they were promised and so very much deserve.

Thank you.

Dennis Leone
August 16, 2018

Monday, August 6, 2018

Attend the STRS Ohio Board Meeting on August 16, 2018

The August 16th STRS Board meeting is quickly approaching. We hope that many of you have already made plans to attend this meeting to show your support for restoring our COLA by the STRS Board. During the time between now and this meeting, we strongly encourage every Forum member to contact fellow retirees and active educators to also attend this meeting.
We must use this opportunity, as well as every available opportunity, to let the STRS Board members know that those they represent are not happy. The continued cuts being made to current retirees and future retirees, while at the same time awarding large bonuses to staff, is unacceptable. It is important that they see and feel the concern by those they represent. 
At this meeting, Dr. Dennis Leone will be addressing the STRS Board at 11:00 am along with other individuals. Those addressing the Board need your support.  Your remaining at the meeting to hear Mike Nehf's remarks is also very important. We want him to have an audience to hear what so far has been a litany of unacceptable excuses and nothing more than a smokescreen to justify the actions of the STRS Board.
These are the times that count. These are the events that matter in shaping our future. If we have less than a good representation of members, they will consider us weak and continue their past and current practices. If we have a good showing, they will feel the pressure and know that we are not going away anytime soon.
We encourage all those that have already made plans to attend the meeting to be there before 11:00 am. Please wear black to show unity and sit together as close to the front of the room as possible. The Board and staff can then see the real "Stockholders" of STRS...who have been ignored by the STRS Board and staff for way too long..
Please be reminded to email each STRS Board member with your concerns. Click here for a list of STRS Ohio Board members and their email addresses. Let them know according to the ORTA (Ohio Retired Teachers Association) poll that 97% of those responding did not think that elected officials do enough to protect our pension system.
Lastly, but certainly not least, everyone needs to sign the Restore COLA Petition before the August 16, 2018 STRS meeting. To those that have recruited members to our forum, please contact them and remind them of the meeting and the need to sign the petition if they have not done so already.
In closing, there is no single event or action that is unimportant in our ongoing efforts to Restore COLA and Restore STRS. If you can take time from your busy summer schedule to attend this meeting, please do so! We need to support those forum members that are working tirelessly behind the scene to move our cause forward in getting a broken promise made good by restoring COLA.
The time us to act is now! If not now...when?

Joe Lupo, Administrator

Friday, August 3, 2018

Summer is Slow but Things are Happening

Dean Dennis
August 3, 2018

Contact has been made with Ohio Retirees Teachers Association (ORTA), Ohio STRS Board Members, and union leaders.
Additionally, the Ohio STRS Member Forum Only, has drafted a letter that will go out to all of Ohio's General Assembly members. The General Assembly will be surveyed and asked directly if they feel retired teachers deserve a COLA. The Ohio STRS Member Forum Only has invited ORTA to team together in sending out the survey. There will be a meeting between the two organization on August 16, after Ohio STRS Board Meeting. Combined the two groups represent well over 30,000 retirees
Lastly, there will be help from the Cincinnati Federation of Teachers (CFT).  CFT President, Julie Sellers, shared when school starts, she will encourage Cincinnati's teachers to get involved. In light of the Janus Supreme Court decision, we're expecting when schools starts, most teacher unions will post this petition to their website.  In the meantime, let's keep getting more signatures. Please get on FB and ask your friends to post the petition www.restoreourcola.com There are over 10,000 of us who have signed this petition; let's see if each one of us can find 5 additional signatures and sent a message to the STRS Board.  And again if you are an Ohio STRS member, please the below group.

Thursday, August 2, 2018

Do you think Ohio's elected officials do enough to protect our pension systems, like STRS?

The Ohio Retired Teachers Association has posted a poll on their Facebook page.

Do you think elected officials do enough to protect our pension systems, like STRS?

Click on the link below to go to the ORTA Facebook page to answer the poll question.

https://www.facebook.com/OHRetiredTeachers/





















Wednesday, July 25, 2018

Attend the STRS Ohio Board Meeting to Protest the Suspension of Our COLA

Please attend the STRS Ohio Retirement Board meetings to support our colleagues, as they address the board on our behalf, and to protest the suspension of our COLA.  

Meetings start around 8:30 AM. Members can address the board at around 10:00 AM. Please wear black and bring signs. After the meeting, there will be a rally at a location to be determined.

WBNS 10TV was there on June 21st to report on the protest outside the STRS Ohio building. We expect them to be there again in August. 

We would like to have 50-100 teachers at every board meeting. The members of the board need to be reminded that we are not numbers on a spreadsheet. We are real people whose lives are impacted by their decisions. They need to be reminded that we are still watching and that our numbers are growing. 


Facebook users can RSVP at https://www.facebook.com/events/428000967716219/.

Contact us at ohiostrsmemberforumonly@gmail.com.

Petition Reaches Over 10,000 Signatures, Keep it Rolling!

A thank you for signing and supporting Ohio's teachers. 

For those who are Ohio STRS members, don't forget to join our Facebook group: Ohio STRS Member Only Forum. 

Our goal is to restore the cost-of-living-adjustment which will so drastically impact the financial future of Ohio's teachers. Why would anyone enter teaching when having a modest cost-of-living-adjustment is in doubt? 

The best way to assure teachers they will receive a modest cost-of-living-adjustment upon retirement is to garner as many signatures as possible for our petition; www.restoreourcola.com 

For every 100 signatures a push notice is generated to Ohio's legislators. It was due to legislative action, that STRS now has total control of teacher's COLA. 


Each petition signature inches teachers closer to their COLA being restored; especially now that STRS can no longer claim a valid financial reason to withhold their hard earned money. 

Again, anyone in the public can sign so try to obtain as many signatures as possible.  

Dean Dennis
July 20, 2018

Thursday, July 12, 2018

ACTION NEEDED: STRS Board of Directors Has Run Out of Excuses

As of this posting the Respect Ohio's Retired Teachers petition has 8,920 signatures. While good, more signatures are needed. A goal of 10,000 signatures is desired before the end of August when the Ohio Legislature returns back to session and before the Ohio STRS Board meets on August 16. While everyone who is receiving this Update has signed the petition, we are asking everyone to try their best to share the petition www.restoreourcola.com on their social media pages such as Facebook. Here is why. The Ohio STRS fiscal year just ended on June 30, 2018. Over the past two years, STRS investments respectively earned a return of 14.29% for 2017, and a return of 9.5% for 2018. However, STRS only projected investment earnings return of 7.45%, for each of the past two years. The current STRS Board of Directors allowed STRS management to deliberately underestimate their historical investment earnings projections. The earnings are always above 8% for their required 30 year funding period. But, the STRS Board of Directors allowed STRS management to assume 7.45%. In turn, this allowed STRS to claim they needed to withhold retired teacher's promised cost-of-living-adjustment. The result, retired teachers were wrongly being robbed of $1,000's of dollars that they will never recover. Then shockingly, the STRS Board of Directors approved huge annual performance incentive bonuses, dozens, exceeding $100,000 to STRS employees. On August 16, with your help, we will attempt to end this nightmare for Ohio's retired teachers. The STRS Board of Directors will once again be confronted, but this time more people will be watching. Let's see if they can find it within themselves to vote to restore the COLA for retired teachers. Again, please share the petition, www.restoreourcola.com

Dean Dennis
July 12, 2018