Tuesday, January 14, 2014

Now comes the talk of "further cutbacks" for STRS......

Further cutbacks for teachers? Possibility looms
By  Darrel Rowland
The Columbus Dispatch
January 14, 2014 6:29 PM
The 480,000 current and retired Ohio teachers won’t be asked to make additional sacrifices to help their pension fund – for now.
“Nothing on the immediate horizon would indicate a change would be coming along those lines,” said Nick Treneff, spokesman for the State Teachers Retirement System.
But the possibility of further benefit cutbacks or higher employee contributions grew today when it was revealed that a consultant for the pension fund had made a miscalculation in its actuarial study last year.
In November, Segal Co. of Chicago said the teachers retirement system’s funding period was 36.1 years. That was still above the maximum of 30 years required by state law, but pension fund officials projected meeting the threshold if financial projections hold.
However, due to a “programming error,” the funding period actually is 40.2 years, the company now says.
The question is whether the fiscal expectations that would have brought the 36 years down to 30 can now move the 40 years to 30. If not, the only option may be to hit teachers in the pocketbook yet again. Sweeping changes to the system enacted last year saw teachers pay more into the system, increases in both retirement ages and years of service, as well as cuts to cost-of-living increases for retirees.
Since the retirement system is out of compliance with Ohio law, its board already was required to develop a corrective plan – due Feb. 24 with the Ohio Retirement Study Council.
That will be a key topic at an upcoming board retreat Jan. 30 and 31, Treneff said.
The error by Segal, hired to a five-year contract last April, does not affect the pension fund’s reported assets or liabilities, nor does it impact the retirement system’s reported unfunded actuarial liabilities or funded ratio.
“It doesn’t impact our ability to pay benefits,” Treneff said.
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