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) has broken their promise to Ohio's retirees.
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!