Mr. Nehf may also CRUSH STRS COLA

From Mario Iacone, June 22, 2009
The Atlanta Journal-Constitution

Published on: 10/25/07

In 2007, Mr. Nehf, Executive Director of STRS Ohio, stabilizes the Employees Retirement System of Georgia by cutting COLA benefits.

Excerpt from the article.

………………….State retirees are up in arms because, faced with frightening projections about future liabilities, the system's governing board broke tradition this year and approved a cost-of-living adjustment for ERS retirees of 1.5 percent, half the customary 3 percent boost. After legislators started taking heat, the board added another half percentage point to raise the COLA to 2 percent. The cost of living, as measured by the consumer price index, has risen 2.8 percent over the most recent 12 months.

Over seven of the past 10 years, Nehf said, the rate of inflation has been less than 3 percent. Yet the retirement system has continued to pay 3 percent COLAs. Continuing that practice will lead to a $17 billion funding shortfall that another generation will have to pay. Currently, ERS expects to have 94.5 percent of the assets needed to pay promised benefits, leaving a manageable $781 million gap between assets and liabilities.

If 3 percent annual COLA increases continue into the future, however, assets will sink to 48.6 percent of the promised benefits by 2039.

At that time, Mr. Nehf was Executive Director of Employees Retirement System of Georgia