Wayne Clark and Bob Buerkle: More financial inequality in your pension amount?

STRS Board Makes the Same Mistake Four Years Later
(Something Every July-December Retiree Should Know)

In June 2013 I contacted STRS through email to complain about the inequality of how the Jan-June retirees were the only ones being granted the last 3% COLA prior to the one year suspension. I explained to the rep that by not receiving the last 3% COLA a July-Dec retiree with an annual monthly COLA increase of $100 would lose $33 per month for the rest of their life compared to the Jan-June retiree with the same $100 monthly COLA. The rep responded that the 2014 COLA suspension starts at the beginning of the fiscal year which happens to be July 1, 2013. I questioned the rep on why the suspension had to start on July 1st? The rep responded that it had to start somewhere. Realizing that the rep wasn't going to help expose this inequality and feeling there was nowhere else to turn I chose to close the book and accepted the loss of COLA compared to my fellow Jan-June retirees.

Fast forward to April 2017:

After hearing about the STRS Board starting the indefinite COLA suspension at the beginning of the 2018 Fiscal Year (July 1, 2017) I contacted STRS member services again to complain. After explaining to the rep that the Jan-June retirees would be receiving what could be the last COLA ever and by not receiving the same 2017 COLA the July-Dec retirees would again be the victims of inequality. Like in 2013 I was informed by the rep that the suspension has to start somewhere and the first day it will start is the new fiscal year which happens to be July 1, 2017. The rep also assured me the July retirees would be the first to receive the new COLA when it was reinstated and the Jan-June retirees would have to wait a year. I told the rep that might work with a one year suspension, but a multiyear suspension will result in a financial inequality between the two groups of retirees. The rep replied that my concerns would be forwarded to management and the Board for review.  The rep also informed me that the Board's decision was final and they do not expect the Board to revisit their decision regarding the COLA change or the effective date. 

At that point I developed four charts, the first two charts dealt with the financial inequality of the 2013 COLA reduction and suspension. In chart 1-A I showed how by using the "Fiscal Year" calendar method in 2013 the July-Dec retirees lost and continue to lose 1/3 of the 2013 COLA that the Jan-June retirees were granted. (Note: I used an example of a $100 per month COLA with a $33 monthly loss in my communication with the STRS rep in my 2013 email;  on chart I-A I have used a $75 per month COLA with a $25 monthly loss, both examples have a 33% loss of COLA in comparison to January-June retirees.)  In chart 1-B it shows that if an "Annual Calendar" method for granting, adjusting and/or suspending the COLA had been used all retirees would have been treated the same and there would have been no financial inequality in 2013.

In the second set of charts (2-A, 2-B) I point out this year's financial inequality between the Jan-June retirees and the July-Dec retirees.  Chart 2-A reveals how under STRS's current practice by using the "Fiscal Year" calendar method the Jan-June retirees would be receiving a 2017 COLA that could be their last COLA while the July-Dec retirees would be denied the 2017 COLA.  This STRS Board decision will now place the base pensions for July-December retirees 3.0% behind the Jan-June retirees. The 2-A chart uses a hypothetical three year suspension of our COLA to show the financial inequality between the two groups. The last chart 2-B shows how by using the "Annual Calendar" method for granting and suspending our COLA it will allow all retirees to receive the 2017 COLA. Using this method would treat all retirees the same and there would be no financial inequality between the two groups for the current suspension of the COLA. I asked the STRS rep to forward the charts to the STRS Board and the rep responded that all of my concerns and charts would be forwarded to the management and Board for review.

Thinking I can't be the only person upset with this financial inequality, I contacted Kathie Bracy and asked if any other July-Dec retiree had complained to her regarding the financial unfairness of how July-Dec retirees were being treated in regards to the 2017 COLA?   Kathie forwarded my email to Mr. Bob Buerkle, Mr. John Curry and Mr. Dennis Leone. Mr. Bob Buerkle responded to my complaint and said he saw issues with the financial inequality between Jan-June retirees and July-Dec retirees as well. Together we have set out to reverse the Board's financial inequality between the two sets of retirees. We will explore all legal options to resolve this financial inequality.

Wayne Clark 

Click images to enlarge.