Senator Keith Faber responds to retirees re: COLA

From: Senator Faber SD12@senate.state.oh.us, February 24, 2010
Subject: RE: COLA

Dear Mrs. Wampler,

Thank you for contacting my office in regards to your concerns with the State Teachers Retirement System of Ohio (STRS). It is always helpful to hear from my constituents in the district.

This particular situation that you bring up is very important to me and I am working hard to act in a way that will serve in the interest of all Ohioans. Due to the economic environment that we are facing, all retirement systems have been forced to reevaluate their future and the STRS is no exception. These varying factors, including market downturn, the accompanying recession, and the projected gradual economic recovery, have made it apparent that serious changes need to be made in order for STRS to maintain its statutory 30 year funding model. While STRS currently is able to pay dispense funds to its members, the future is not so certain. If no changes are made to the plan, STRS will not be able to pay future benefits. Acting now will save the state, and Ohioans, a substantial amount of money by not having to act later when the problem intensifies and is more immediate.

In attempts to help resolve the current issue facing STRS, they too have made drastic measures to save money. The operating budget for fiscal year 2010 represents a $10.9 million decrease, or 11%, from the previous year’s budget and is the lowest budget in four years. Further, STRS has instituted a salary freeze for its employees for FY 2010 as well as a headcount freeze. Consequently, STRS is at its lowest number of employees in a number of years. Even with all of theses changes within STRS, they need nearly a $9 billion reduction in liability and that liability comes from the members. This is why a lot of the proposed changes put forth affect the members.

Thank you again for contacting my office with your thoughts on this issue. If you have anymore questions or comments please do not hesitate to contact me again.

Sincerely,
Keith Faber
State Senator
12th District

From: Keith and Nan Wampler, February 23, 2010
Subject: COLA

Senator Faber,

Please do what you can to help us retired educators keep our 3% COLA. As health care costs and premiums increase, along with other costs of living, we are already falling behind inflation. Some of us may have stayed longer in the classroom if we had known that our income would be reduced. My husband spent 30 years in the classroom in central Ohio while I taught for 35 years.

If changes must be made in the future, perhaps current retirees could be grandfathered. If the COLA amount must be reduced perhaps you could give current teachers at least 5 years to plan ahead so they are not taken by surprise. Are there ways to pare the staff or budget within STRS? I don't understand why only retirees are selected as the way to save money.

Thank you for your concern,
Evelyn Wampler
M. Keith Wampler