September 2003 News

FROM THE PRESIDENT

It's Annual Meeting time again. The Green Bay section is hosting and they've put together a
great weekend for members. The mailings are out now all you need to do is respond! This is
a great opportunity for members and their families to spend a weekend away and get
recharged. If you didn't get a mailing contact your section president for information.
I've written previous articles about privatization and this continues to be an issue that needs to
be addressed. The Governor and Legislature have both stated they want to cut state
employee jobs, but they haven't said anything about cutting the workload.

It is interesting when you think about it. Normally companies lay people off when the demand
for service or good decreases and they no longer need to produce them. At the State we have
record levels of work if not increasing demand, so we should have a layoff? Ok I know, it is
being proposed to simply cut employees to balance the budget? Ok, everyone knows that is
not going to work, because they are going to simply hire private firms, pay them more, and get
less. Dilbert lives at the taxpayer expense! We need leadership that will change this trend - it
may be politically popular but again it is at the taxpayer expense. It is waste and waste is the
greatest tax of all!

Problems come along with privatization. Consultants are in business for one thing - profit.
Consultants continue to compete to get projects, which means profit. This is where the
relationship with consultants can be dangerous. Especially, if it goes beyond a professional
relationship. Sometimes when consultants are competing to secure jobs it leads to clearly
inappropriate behavior. They try to pay for golf, drinks, game tickets, a picture, etc. This
behavior is all designed to "buy" favor or in other words a project or a permit, etc. This type of
conduct, whether engaged in by management, bargaining unit employees, or other union
employees is a great disservice to the taxpayers, our mission, and can get you in trouble.

If a consultant approaches you with some type of gratuity turn it down, document it, and turn it
into the management so they may address this. At a minimum management should keep a list
of consultants who behave like this and censure them. The State of Wisconsin should not be
supporting this type of business environment and neither should you.
Remember to be professionally and technically the best you can be at your jobs! It is how you
can best serve the taxpayers of the State.

Respectfully,
Timothy R. Hanley
SEA President

The Dual Choice period for 2004 will be October 6 through October 24, 2003,
and the Dual Choice books should be available the last week of September 2003.
Your health care choices are made more difficult this year because the cost to
you may have to be determined by your present SEA contract and not the 3-tier system
that will apply to all non-represented state employees.
SEA EMPLOYEES NON-REPRESENTED EMPLOYEES

In each county, 105% of the lowest cost Tier One Single $25~ Family $62
HMO or 90% of the Standard Plan will Tier Two Single $50~ Family $125
be covered by the state of Wisconsin.

See Section 13/1 Health Insurance. Tier Three Single $100~ Family $250
Section Presidents and SEA Board members have copies of the costs for each plan for
2004 ~ also a list of plans county by county. The only way the tier groups would apply to
SEA represented employees, including the employee contributions, would be if SEA
settled the new contract before January 1, 2004.

There may be more information available after the SEA Board Meeting on September 27,
2003. Check with the Section Presidents who also have copies of newspaper articles
and handouts from ETF.

Tier Two Plans: GHC Eau Claire
Valley Health Plan
Humana - Eastern
Compcare Blue Northeast

Tier One Plans: 17 plans including SMP (State Maintenance Plans)

Tier Three Plan: PPP (Standard Plans converted to Preferred Provider Plan)

The only two plans qualified for out of state are: SMP and PPP.

Other benefit programs and status reviewed by the Group Insurance Board:
1) Life Insurance Annual Report with recommended rates.
2) Income continuation and long term disability insurance programs.
3) Legislative Update.

Copies of the above are provided 10 all SEA Board members.
The next ETF Group Insurance Board Meeting will be held on November 18, 2003.

Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative

SWIB MEETING Septemeber 9, 2003

SWIB Performance - Year to Date:

                                        End of June     End of July     End of August     Benchmark

Balanced Fund (Fixed)     + 9.7%           +10.1%         +12.0%               11.6%

Variable Fund                  +12.1%           +14.9%         +17.6%               17.l.%
                                                                                      (est.)
Balanced Fund                  50.23 Billion   50.38 Billion    51.34 billion

Variable Fund                   5.05 Billion      5.18 Billion     5.32 Billion

External Money Management - July 31, 2003

                                                Balanced Fund 9.5%

                                                Variable Fund 8.4%

                                                                                   Policy Limit

                                                Total 9.4%                 15%

The small cap stocks are doing very well. The Russell- 3000 is up 35%.
Revenues are increasing and there is no inflation. The only problem institutional
investors have is the job market. The third quarter looks good.

Ken Johnson reported on the remodeling project for the building SWIB purchased,
which they occupy, and it is ahead of schedule.

ETF gave a complete report of the Wisconsin Retirement System to the SWIB.
Dave Mills provided a general overview of the WRS liability structure of the
system. He also covered the factors considered by the actuary in determining the
long range contribution rates necessary to maintain the funding level of the WRS
between 90% and 110%.

Robert Willett, the ETF comptroller, then provided a complete financial. report
of the WRS for the year 2002 ending December 31st. The report was very complete with
many charts as follows:

WRS Participants from 1993 through 2002

Annuity Payments from 1993 through 2002

Annuitant Population and Projections 1980 to 2046

Fixed Fund Cash Flows 1993 -- 2006

WRS Funding Assets vs. Liabilities 1983 -- 2002

WRS Funded Ratio 1983 -- 2002

WRS Market Value Funded Ratio 1983 -- 1983 -- 2002

Fixed Fund Investment Returns 1992 -- 2002

Fixed Fund Reserve Balances 1993 -- 2002

Variable Fund Reserve Balances 1993 -- 2002

Post Retirement Adjustments compared to CPI 1964 -- 2002

Post Retirement Adjustments compared to CPR 1999 -- 1965

WRS contribution Rates 1983 -- 2008

Next on the program was the guest speaker, Keith P. Ambachtsheer, of K.P.A.
Advisory Services LTD., Toronto, Canada. He has been advising SWIB for many
years, and SWIB has participated in past studies he has completed.

For anyone interested, I have provided a copy of his handout to all SEA
Board members for review.

Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative

WI COALITION OF ANNUITANTS (WCOA) MEETING - AUGUST 20, 2003

We were provided the information for the ETN program on health insurance
with Bill Kox on October 14, 2003 from 9:00 a.m. to 11 :00 a.m. You all will have an
opportunity to participate in this statewide teleconference. Contact your county
extension office for the location. I will try to obtain a copy for the SEA Board (or
include it in this Newsletter).

The new state drug purchasing system is moving forward, and most of you have
received the ETF information on the Pharmacy Benefits Program to be administered by
Navitus Health Solutions of Appleton, Wisconsin. Everyone will receive their Navitus 10
card in December 2003 to be used for drug purchases starting January 1, 2004
Navitus Health Solutions

Phone: 866-333-2757 (toll free)
Web site: www.navitushealth.com

Franz Pool of SWIB has experience in the following areas of investment:
Private Equity, Venture Capital, Mezzanien Debt and Hedge Funds. He supervises
two people who manage 500 million investments.

SWIB's Venture Capital investment program is part oftheWisconsinPol1folio.
Initial approval was for $50 million to be invested in Venture Capital, and last year the
Legislature increased the amount by $100 million.

The first $50 million currently has $45 million out on the market with consultants;
only $22 million actually invested. The additional $100 million approved last year with
$90 million out to two consultants: Beard Group of Milwaukee ($30 million) and Frasier
Group of Seattle, Washington ($60 million), who are establishing an office in Madison.
None of these $90 million are invested as yet. It is difficult to find businesses that meet
SWIB's criteria before an investment is made.

The final item discussed was the legislative shift of the Retirement Research
Committee shift to the Joint Survey Committee on Retirement Systems and the Legislative
Council. This move would completely remove the independence of the RRC function and
put full control in the Legislature with no independent review. I'm preparing a Jetter for
our President to communicate SEA's position to the co-chairs of the JSCORS.
The next WCOA Meeting will be held on September 17, 2003

Melvin B. Sensenbrenner,
SEA Retirement & Health
Insurance Representative