Will STRS rob Peter to Pay Paul....or will it be robbery at all?
The board also discussed withholding another
cost-of-living adjustment — cut from 3 percent to 2 percent annually under the
fund’s pension reform — to shave another 1.9 years off the gap to reach the
30-year level.
However, members showed little appetite for such a
move.
“I have very little stomach to do anything to
cost-of-living adjustments,” said Dale Price, the board’s chair. “Moving the
($100 million) is a good-size change, and it doesn’t really impact
anybody.”
Board’s plan would spare teachers
By Will Drabold
Columbus Dispatch
February 1, 2014
The State Teachers Retirement System’s board says it has found a way to
meet Ohio law without taking more from teachers or giving them less.
Board members might shift $100 million a year that currently supports its
health-care stabilization fund to bolster the much larger pension fund. That
move would bring the overall retirement system closer to the requirement that it
be able to pay off its liabilities in 30 years, from a projected 42.1 years to
36 years.
Much of the rest would be made up by an improved financial forecast for the
system.
But the maneuver also would dry up the health-care fund, which provides
coverage to many retired teachers, in about two decades instead of by 2060,
which is the current projection, board members said.
The board never considered asking for more money from teachers to meet its
30-year goal at its annual retreat yesterday. Members said they would shift the
$100 million back to the health-care fund within the next decade, if they moved
it at all.
“It’s not a permanent change,” said board member Craig Brooks.
The pension fund collected $2.4 billion from about 178,000 active teachers
last year; it paid out $6.5 billion in benefits to about 149,000 retired
teachers, said Nick Treneff, the fund’s communications director.
The difference is made up in investment income.
Like Ohio’s other four pension systems, the teachers fund was revamped in
2012 to improve its financial health by increasing member contributions, cutting
cost-of-living adjustments and increasing age and service requirements for
retirement, among other changes.
Last month, teachers-system officials learned that its plan would take 40.2
years to pay off its liabilities, not the 36.1 years its actuary originally
projected.
The board will meet Feb. 19-21, shortly before a plan is due on Feb. 24 to
the Ohio Retirement Study Council. The council’s chairman, state Rep. Lynn
Wachtmann, R-Napoleon, recently predicted teachers would have to pay more or
lose benefits to make up the difference.
Paul Snyder, the fund’s chief financial officer, said the system’s
investments returned 10 percent for the first six months of the fiscal year; the
fund’s ongoing projection is 7.75 percent.
If that holds, it would take another four years off how long it takes the
fund to pay down its liabilities, Snyder said.
The board also discussed withholding another cost-of-living adjustment —
cut from 3 percent to 2 percent annually under the fund’s pension reform — to
shave another 1.9 years off the gap to reach the 30-year level.
However, members showed little appetite for such a move.
“I have very little stomach to do anything to cost-of-living adjustments,”
said Dale Price, the board’s chair. “Moving the ($100 million) is a good-size
change, and it doesn’t really impact anybody.”
Will Drabold is a fellow in Ohio University’s E.W. Scripps School of
Journalism Statehouse News Bureau.
posted by Kathie Bracy at 4:10 PM
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