35/88 - You be the judge!

From John Curry, June 22, 2009

On Wednesday, June 17, STRS's Bob Slater presented two slides in his presentation to the STRS board. He mentioned that the enhanced 35 year/88% payout, since its inception, has resulted in an additional cost of nearly one billion dollars to Ohio STRS's finances.

On Thursday I attended the board meeting and asked Mr. Slater for some documentation re. this cost factor. Mr. Slater then sent me these two slides that he presented during the board meeting which related this situation. His letter (and attached two slides) are included.

Please pay particular attention to slide #2. In the "Accrued Liability" line (of that slide) you'll see the amounts of $87.43 and $86.49. The difference between these two amounts is $0.94. One billion X $0.94 = 940 million dollars. Had STRS not adopted the "enhanced" (35 year/88%) formula this 940 million dollars would not have been paid out.

For years CORE members have asked for this information and told that it was available but neither Herb Dyer nor Damon Asbury produced a copy. CORE members were told that the difference made by the adoption of the 35 year/88% enhanced benefits was really not significant as compared to the original formula when used to calculate the payouts for the 35 year teacher. I'll let you be the judge....is 940 million dollars significant?

John
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