Dean Dennis: Words for the STRS Board June 21, 2018, and a strong admonition from Representative Bill Seitz

Dean Dennis' STRS Address June 21, 2018

My name is Dean Dennis, STRS Chair for the CFT-Retirees Chapter; Spokesperson for Ohio STRS Member Only Forum. (nearly 4,000 members). 

I want to share excerpts of an email letter I received.

"Dear STRS Board of Directors,

"I write in support of a growing coalition of STRS retirees, to request relief from the harsh decision made by STRS to reduce to zero, for at least 5 years, the COLA adjustment for all existing and new retirees.

"When the Ohio General Assembly enacted pension reform legislation in 2012, we passed what each of the five retirement systems recommended by way of shoring up the fiscal stability of each fund. We admittedly gave the STRS Board, at its request, the complete power to set and adjust COLAs; Never in my wildest dreams, did I expect the STRS Board to reduce to zero, the retired teachers’ COLA – especially after many teachers and administrators, retired before the bill’s effective date in order to take advantage of the higher COLA ...."

The letter concludes by stating,

" If STRS is not prepared to offer SOMETHING by way of a COLA ....... then the General Assembly may have the appetite to resolve this inequity by taking back, in whole, or in part, its prior authority over COLAs."

Signed:

Representative Bill Seitz,
Ohio House of Representatives Majority Floor Leader

Next, STRS has always earned over 8% for every 30 year funding period. However, you vote to adopt a low, 7.45%, earnings assumption rate. This drastically increased the unfunded liability. Because of this, we lose our COLA, but for some reason STRS employees don't lose their six-figure annual bonuses.

Next, the Board voted to make teachers work 5 years longer for full pension benefits. You'll gain 5 additional years of higher payroll salaries than you'd receive from a new, lower-paid teacher. Nevertheless,

You vote to reduce your payroll growth assumption. This further increases the unfunded liability. It was 3.5%, knowing your payroll growth is going to be higher, you vote to reduce your payroll growth assumption to 3%. You then make over 4%. Surprise, surprise. What is going on? Same thing with the earnings assumptions; you project 7.45% over 30 years, knowing you average 8.4%, surprise, surprise again. By the way, where's our COLA?

Lastly, without a COLA, the average teacher's pension could put them near the poverty level before they die. For example, In 1987 the average teacher retired with a monthly pension of $2,400. Today, $2,600, is the threshold for food stamps for a family of two. Ohio's teachers deserve better than to have to worry if they'll end up on government assistance.

When it comes to protecting our dignity, we are cut out of the same cloth as our neighboring teachers in Kentucky and West Virginia. Our members have been patiently waiting on you to do what is right, but our patience is wearing thin. I hope when you listen to us, you hear us too.

Thank you,