The unkindest cut of all....the COLA cut!

From John Curry, April 13, 2012

Some are forgetting that retirees are losing a very significant amount EACH YEAR with this proposed COLA cutting plan. This is critical to understanding retirees' losses.

The active teachers are still teaching and have affordable health insurance, we retirees DON'T! We need these lost amounts (COLUMN A-B) to help us pay, especially for medical expenses, as our STRS insurance has high premiums (only to go higher) and high deductibles (only to also go higher) and minimal coverage (only to become more minimal and watered-down just so STRS can claim they furnish health insurance).

If we don't complain, who else is going to go to bat for us? Remember, we only have 2 "retiree" board members on the STRS board and several supposed retiree organizations that certainly aren't going to bat for us at this time. If you think they have gone to bat for us then please send me an article from ORTA or OEA-R that contains the COLA information, like that which is presented below, to their membership so that they can also understand the beating that they are about to take.

Politicians only listen to retirees who complain; if they hear no complaints, they think we will be happy with a 1 year freeze at 0% followed by a 2% COLA for the remaining years. Other states are placing some of this burden on teachers who have yet to be hired into the profession with additional cutbacks so that they know before entering the profession what to expect.....Ohio could also do this.... but won't. Maybe it is about time they did.

Also keep in mind that there are, contrary to what STRS (at one time) even denied existed, thousands of retiree benefits recipients with original pensions between $20,000 and $30,000. Think of the beating they will take with their meager pension payments. The Ohio Highway Patrol retirement system is making exceptions for some of their lowest pension recipients and excluding them from the COLA cut, why can't STRS? Some will not agree with what I have said above....so be it.

I will not lie down and roll over.....will you?

John

Column A shows what is received with current 3% COLA
Column B shows what is received with one year COLA Suspension and then 2% COLA for the following years.
Column A - B (A minus B) shows how much is lost if the new plan is adopted.
ORIGINAL BENEFIT is $40,000
3% COLA = $1,200
2% COLA = $800

A $40,000 pension and the effects of a COLA change from the current 3% (Click image to enlarge.)

A – B shows a LOSS of $30,000 in only 10 years. That is $466,000 - $436,000 = $30,000

OR

ADD all the YEARLY LOSSES in Column A-B to obtain the same figure: $30,000