Shirlee Zerkel: Interesting stuff from Ohio Schools

From Shirlee Zerkel, August 6, 2009
Subject: Some info from August issue of Ohio Schools
Dear Retirees,

Page 28 show the members of the OEA Board of Directors for the coming year. Guess who are among the board? Yes, you are so correct! Three members of the STRS Board-Carol Correthers, Tim Myers and James McGreevy. Wonder which Board are they the most loyal to!!

Another interesting article appears on page 5 "OEA joins labor groups to defeat OPERS contribution decrease"

OEA feels that help it gave to OPERS was critical in helping to avoid adoption of the proposal to decrease the contribution to OPERS.

Then the article goes on to talk about STRS: The last paragraph is most interesting.

"STRS Continues to Review Changes to Pension Benefits"

As a result of dramatic investment losses that have harmed retirement system funding, the Ohio Retirement Study Council (ORSC) has taked each of the state's five retirement systems to present a board-approved plan for improving the funding status. ORSC set a deadline of Sept. 9, 2009. During the past few months the STRS Board has considered potential changes topension benefits. Changes under consideration include:

>A 2.5% increase in employee and employer contributions (bringing the employee contribution to 12.5% and the employer to 16.5% of payroll). Increase to be phased in over a five-year period.

> Eligibility for retirement at age 60 with 30 years (with an actuarial reduction in the pension benefit for retirement earlier that age 60) or with 34 or 35 years of service regardless of age.

>Changes to the retirement formula calculation. One proposal would provide 2.2% for the first 33 years and some additional percentage for subsequent years that would provide 88.5% of final average salary at 38 years of service

>Final average salary based on 5 years.

>A 3% cost-of-living adjustment (COLA) for three years, then 1.5% annually for those who are age 65 or older.

The STRS Board is expected to take action on recommendations in August. It is important to note than any of the changes listed above would require a change in state law through legislation, OEA continues to closely monitor this issue and participate in the Board's discussion through involvement in the Healthcare and Pension Advocates for STRS. Additionally, the OEA has engaged in independent actuarial firm to review STRS funding status, assumptions and provide data for possible alternatives.

I know many of you do not receive Ohio Schools and you may be interested in seeing what OEA has to say about the issues that affect us to most.