RH Jones re: Post-retirement protection

From RH Jones, February 8, 2007
Subject: In defense of the 13th check.

To all:

We have to live too! There are those out there who are in doubt that retirees need this hard fought benefit. In particular the new STRS board members, newly retired educators, and those soon to retire, need to be aware of the Post-Retirement Increases for our income protection as enacted, 04/27/2000, by the Gen. Assembly in Sub. S.B. 190:

(1) Comprehensive Retiree Health Care Program
(2) Annual COLA Allowances (I wonder, why not a Compounded?)
(3) Ad Hoc Legislative Post-Retirement Increases.
(4) Variable Supplemental Benefits (Our beloved 13th check).

Unlike the simple annual COLA (No compounding) the 13th ck. is discretionary. When STRS investment earnings exceed STRS funding requirements in any given year, the STRS bd. may allocate up to 25% of the excess investment earnings to pay the benefit. (Note: There is no mention here of "smoothing" over a 4-yr. period -- recently raised from 3-yrs.) To be fair to all retirees, the variable 13th ck. is payable to persons receiving the benefit for at least 12-months. It is calculated, by multiplying the STRS bd. approved unit value, by combining years of service at retirement and the number of years on retirement. Incidentally, there can be an issuance of from 1 to 11-units. Since the bd. can go as low as 1-unit, the check can be modest. However, in the down year of 1987, we got 11-units!

Originally, an enlightened OH legislature wanted to "even the playing field" for teachers with the other State of Ohio retirement systems -- certainly applaudable. But, presently, the STRS benefits do poorly when measured with some of them. And, it is no wonder. In comparison, our employer contribution is low. Hopefully, that will change soon with the passage of the 2.5 employer and 2.5 employee contribution increase.

With well deserved "Kudos" going to the STRS investment staff again this fiscal year, unfortunately, because of the inequitable and culpable decisions in the recent past by some legislators and some in their cabinets, the STRS bd. and some of the STRS employees, never again should we be uniformed. Each retiree must also stay vigilant. We can no longer trust that others will be vigilant for us.

Robert Hudson Jones, Retired STRS member, CORE & SummitCRTA leg. CMTE Mem.