Dennis Leone: Board's 'solution' to future pension solvency falling disproportionately on the backs of retirees
The STRS Board voted 7-3 a few days ago to revise its STRS pension solvency plan that's going forward for Legislative consideration. A few major changes: Instead of changing the ill-advised 88%/35-year rule at any time in the immediate future, the NEW plan protects teachers by slowly phasing it out by 2023. This is positively ridiculous. The original plan called for its being gone by 2015. In other words, it's okay in the Board's eyes to immediately cut retirees' Cost of Living Adjustment (COLA) with no gradual phase-out, and with no protection for the oldest retirees who have the least. (The Board "promised" to study this, which was pushed by CORE, at some point in the future.)
Also dropped from the action was the original plan to change the 3-year Final Avg Salary (FAS) calculation to a 5-year FAS. The board adopted language that will merely request the Legislature give the board the power to make needed adjustments in the future, which will translate into OEA getting a delay in that area as well. Voting no on the plan were the Governor's rep (Regina Burch), the rep for the Senate President and the House Speaker (Craig Brooks) and retiree rep Bob Stein. All 5 active teachers on the board, along with retiree rep Jim McGreevy (a long-standing OEA clone), and the State Treasurer's rep, pushed it through. The active teachers on the Board succeeded in protecting their colleagues. State Supt Deborah Delisle's replacement for Steve Puckett on the board has not yet started, therefore there was no 11th vote.
While active educators may cheer the new protection they will have (if something similar is adopted by the Legislature), it is NOT in the best interests of retirees in my opinion. In fact, the situation may get worse for retirees. Left in the Board's action was the plan to raise the contribution level of all school boards in Ohio. If the Legislature says no to this, it could very well be that retirees will get hit harder. If the STRS Board truly was sensitive to this, then the action taken a few days ago should have been different. It wasn't. Instead, it was designed to protect the interests of active teachers. It is my opinion that the "solution" to the future pension solvency problem is falling disproportionately on the backs of retirees. Sad.
STRS Board Member between 2005 and 2009