Sunday, September 13, 2009

Agreeing with OSBA: say it ain't so

OSBA (Ohio School Boards Association) doesn't believe that property owners should have to pay more taxes in order to guarantee the long-term solvency of the State Teachers Retirement Service. Neither do I.

Look, when times were good and STRS was reaping fantastic returns on their investments, money flowed to retired teachers as STRS expanded and increased retirement benefits. Not a penny went to the taxpayer.

Now that the current financial downturn has hit STRS, teachers and retired teachers have the nerve to ask us for more. Amazing. They never shared their gains with us, but they have no problem pushing their losses back onto our shoulders -- with their hands deeper into our wallets.

Keep in mind that this worldview is the worldview of public education. And it is the worldview that is slowly destroying this nation. It is nothing less than greed -- greed that is fostered by government and the ballot box.

8 comments:

Anonymous said...

I rarely agree with you but on this one I do. They need to survive like every other pension plan and structure their payout accordingly.

Paul said...

Absolutely - I've written about this a couple of times as well.

When it was the STRS practice to pay out a "13th paycheck" to retirees, they stole from future retirees of their system. Their actuarial assumption included making a return on the order of 8%, but if they skim the creme when their current return is high, they remove principle from the fund that helps steady the income when returns are lower - like now.

One more ugly aspect of this story is that the retired STRS members got pretty nasty towards the inhouse investment managers when they got a bonus payout - according to the plan agreed to by the STRS Board - when the fund lost principle.

But since their modus operandi is bullying - be it toward school boards, or teachers who don't want to be union members, or their own employees - they got their investment managers to give back most if not all of the bonus, else risk losing their jobs.

Maybe the investment managers should have gone for tenure instead of bonuses...

PL

Anonymous said...

yeah--retirees went out of the minds when they saw the bonuses beieng paid to the STRS investment officers/ portfolio managers. but, as we found out from our school district, paying bonuses so that everyone gets along is okay.

Anonymous said...

potential liability to OLSD is over $2 mil.....let's not let this get through folks!

Our 401k's took a hit....so should theirs!

Anonymous said...

7:54
So because your account took a hit, you want someone else to suffer too? Very Christian of you.

I also agree with OSBA on this; I don't like how STRS handled this and the 13th paycheck and I also don't like how the retirees reacted to it. But...
Did it occur to you that these retirees might have spouses who have lost jobs or that those spouses have 401 (k) accounts that have lost value, just like yours?
The idea of wishing loss of income on someone is just baffling to me. I can't wrap my mind around that mean-spiritedness even if you don't like how some retirees reacted. Clearly not all of them did.

Anonymous said...

7:37

Oh, so teachers, administrators and retirees are ENTITLED to a government bailout because the market crashed.

Has nothing to do with me being a good Christian. My point is that everybody took a hit in the last year. And everyone will recover at some point.

Making taxpayers make up the difference they lost because of many factors, ie: poor investment strategy, bonuses, 13th check and excessive executive compensation, etc, is where my christian charity stops!

My 401k hasn't been funded all year by me or my company. I haven't funded it to make up for the pay cut I received. I make sacrifices everyday to keep the mortgage and TAXES paid and food on the table.

Why can't any union make a sacrifice for once!

Anonymous said...

9:18:
I never said that teachers, retirees, etc. are entitled to anything; I just found the idea that you want someone else to suffer because you are mean spirited. Don't you think that the investment accounts at STRS suffered the same fate as all others? I never said the government should bail that out. I don't think it should at all. I was merely commenting on the mentality that if you suffer someone else should.
I haven't been able to fun my 401 either, so I understand what you are dealing with as well.

You said the market will recover and people will be fine at some point, which is true. But here's the thing. When other people's 401 accounts recover and they have huge income from other stocks, etc. their incomes will increase proportionately; teachers' and retirees' incomes will not alter.
That is a fact of the way it works. When the economy is great and some people are raking in the cash, teachers don't make those kinds of gains. The trade-off is that when the economy tanks, teachers still do okay. They don't get huge gains in market booms, but they also don't take huge hits in market stalls. No one seems to worry about teachers when they themselves are raking it in, only when teachers don't suffer as much in a downturn.

Anonymous said...

4:16

Unless you consider retire - rehire to be a boom!
Read the Sunday Dispatch article about their 80% of wages retirement, and their new job at full salary...that was their old job before they retired.