Thursday, June 29, 2017

Dean Dennis: STRS COLA action draconian and unprecedented

The Reality of Losing Your COLA (Cost-of Living)
By Dean Dennis

In 2012, Ohio's legislature permitted STRS Ohio to reduce the COLA of teachers from 3% to 2%. Effective in this retroactive action were teachers whom had previously retired.  Additionally, STRS was permitted to freeze retirees COLA for a year. This action was both draconian and unprecedented. Within the legislative language was another dagger that would eventually stab retirees. Ohio's legislatures granted STRS Ohio permission to bypass the legislature to make additional COLA changes going forward.
On April 20, 2017, Ohio's retirees felt the knife again. This time our COLA was completely eliminated (0%), only to be reviewed in July of 2022. If our COLA isn't reinstated at this date, the next slated date for review becomes July of 2027. It seems STRS doesn't care if we die poor, as long as they can bank enough money to offset future bad investments. We are their low hanging fruit. STRS thinks the COLA we earned and were promised; is theirs. Their presentations attempting to explain why they are robbing our COLA instead reveal a stubbornness to explore real long term solutions. From observing those who attend to speak at STRS Board meetings against COLA changes, it becomes obvious that retirees are on our own. Below is the reality of how Ohio is thanking retirees for their 30-35 years of public service dedication in educating Ohio's children.
For simplicity, let's assume an inflation rate of 3% per year to go along with our promised 3% simple COLA we  paid for during our careers under the Defined Benefit Plan. We'll assume a FAS (final average salary) of $75,000 and a pension of $50,000. Share this with your legislators. They need to see what STRS is doing to us.
(Click image to enlarge)

* As anyone can see, our ability to purchase such basics as a car or take a vacation will be extremely difficult. It used to be said that although teachers sacrificed in salary, that they had a decent retirement plan. Not now, even Social Security has a COLA and it is compounded.  Making changes is one thing, but making changes to those of us who are already retired and are out of options is inexcusable. The STRS actions are a total betrayal to retirees. The STRS Board has a fiduciary responsibility to protect retirees and their property.

June 29, 2017
Larry KehresMount Union Collge
Division III
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