Retired Ohio teachers to lose cost of living increase


Trustees for the State Teachers Retirement System of Ohio voted 10-1 on Thursday to indefinitely suspend the cost of living allowance given to retired teachers.

Retirees will no longer get a 2 percent COLA bump on their pensions for the foreseeable future.

The fix, though, may not be enough to shore up the finances of the $72-billion fund. “Even if we take this action, it’s only a 50-50 shot that it works,” said STRS trustee James McGreevy, who argued for broader, deeper changes. McGreevy was the only no vote.

Related: STRS Ohio may cut benefits for teachers, retirees

Actuaries calculate that the pension fund has a 33 percent change of hitting all its targets — investment returns, mortality, retirement rates and other assumptions — every year in the next six years. Depending on how far off target STRS is, more changes could be required. Likewise, if investment returns exceed expectations, trustees could decide to revisit the COLA issue.

The move, which impacts 490,000 teachers and retirees statewide, comes after consultants told STRS Ohio to dial back its expected annual rate of return on its $72.1 billion investment portfolio. The rate had been set at 7.75 percent — too rosy. Likewise, consultants and actuaries advised trustees that the system’s assumptions about payroll growth and life expectancy for teachers and retirees were out of whack.

Earlier this year, trustees agreed to change assumptions but in doing so, accrued liabilities ballooned on the financial sheets. Ohio pension systems are required to be able to pay off their unfunded liabilities within a 30-year window. But with the assumption changes, STRS was looking at a 57.7-year window.

Retired Beavercreek teacher Linda Beaver, of Miamisburg, said losing the COLA means “you do more with less.”

“Retirees wil have to decide what is most important and set priorities. Probably less travel, less eating out, just have to make the money go farther,” Beaver said.

STRS trustees agreed that the cost of living allowance issue will be reviewed within five years. Beaver said she would have preferred that the board look at it annually. “Five years is a long time to wait for a review.”

Dean Dennis, a retired Cincinnati teacher, blasted the trustees to listening to public comments — after the vote was taken.

“I paid into that system for 35 years. My employer paid into it for 35 years. They met all their earnings assumptions. They set that money aside for me and now they’re taking it out,” Dennis said. “They’re just robbing my pension.”

Related: Retiree health care cuts looming for cops and firefighters in Ohio

Like in other states, Ohio’s public pensions are defined benefits systems. The pension benefit is based on age, years of service and final average salary and it’s guaranteed. Defined contribution plans, such as 401(k) funds, are more common in the private sector.

Public employees in Ohio do not participate in Social Security.

OTHER EDUCATION NEWS

High school football game video even odder than described

How much do school teachers make locally?

Ohio struggling to get students vaccinated



Reader Comments ...


Next Up in Local

Accused driver who hit, dragged Dayton officer indicted
Accused driver who hit, dragged Dayton officer indicted

A driver accused of striking a Dayton police officer last month at the Summit Square Apartments is facing felony charges. Marcus Blackwell, 21, of Dayton, was indicted today for felonious assault of a police officer. He is ordered to appear Nov. 2 for arraignment in Montgomery County Common Pleas Court. Blackwell is the suspected driver of a blue Ford...
Senate News: Ben Sasse spills Dr. Pepper on Ted Cruz; epic Twitter war follows
Senate News: Ben Sasse spills Dr. Pepper on Ted Cruz; epic Twitter war follows

Texas Senator Ted Cruz has honed his comedic skills on Twitter over the last year; on Wednesday he showed his prowess while dueling on social media dueling with Senator Ben Sasse. According to TheHill.com, Sasse accidentally spilled Dr. Pepper on Cruz during a heated exchange between U.S. Attorney General Jeff Sessions and Minnesota Senator Al Franken...
Avoid the pain, get the gains: 5 most common exercise-related injuries
Avoid the pain, get the gains: 5 most common exercise-related injuries

For those that take their workouts seriously, be sure to add one more fitness goal to the list: avoiding exercise injuries.  Not only does getting hurt in the gym or on the trail cut back on how much time you spend getting fit,  it's also painful and treatment can be costly. Personal trainer Justin Price, M.A. told Men's Fitness...
Amazon HQ2 bonanza includes Cincy/Dayton submission, other Ohio cities
Amazon HQ2 bonanza includes Cincy/Dayton submission, other Ohio cities

Dayton and Cincinnati’s combined bid for Amazon’s second headquarters will be met with fierce competition around Ohio and across the U.S. The e-commerce giant sparked a bidding war when it asked for proposals on where in North America to invest $5 billion in its second headquarters, which it said will employ up to 50,000 people and rival...
Bridge used by 20,000 vehicles a day coming down for safety reasons
Bridge used by 20,000 vehicles a day coming down for safety reasons

A bridge that 20,000 vehicles use daily between Harrison Township and the city of Dayton will be demolished and rebuilt because of safety concerns, Montgomery County Engineer Paul Gruner said. The Keowee Street Bridge over the Great Miami River will close in December, or as soon as the new Helena Street Bridge is opened. Eagle Construction’s...
More Stories