Friday, June 22, 2018

Representative Bill Seitz to STRS: Never in my wildest dreams did I expect the STRS Board to reduce to zero the retired teachers’ COLA

Below is the text of a letter from State Representative Bill Seitz. No date was given, but it sounds like it was very, very recent.
Columbus Office
Vern Riffe Center
77 S. High Street
14th Floor
Columbus, Ohio 43215-6111
(614) 466-8258
(800) 282-0253
(614) 719-0000 (Fax)
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; we did not grant this power to the OPERS system, which did not ask for it. 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 which was offered to those who retired before the effective date. Even Social Security allows an annual modest COLA – and most teachers are precluded from participating in Social Security, or have their eligible benefits reduced or offset by their state pension.
I recognize that there are some retirees who have prospered by reason of prior STRS COLA payments that were in excess of the inflation rate. I also recognize that STRS must act to ensure continued solvency, though recent years’ investment performance and the requirement of 35 years of service should go a long way to achieving that goal.
But what is unreasonable is a zero COLA. I have offered numerous ideas to STRS about how to tackle this problem. None have been favorably responded to. What I find particularly unfair is that OPERS is still paying a fairly decent COLA, and its recent legislative proposal to make only modest reductions in that COLA (to 2.5 % or inflation, whichever is less) failed to receive any favorable legislative action. This signals to me that if STRS is not prepared to offer SOMETHING by way of a COLA, even on a targeted basis to those recent retirees who never really benefited from the COLA’s of the past, or those most in “need”, or those willing to waive health care in return for 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.
Thank you for considering my views and the pleas of the many retirees.
William J. Seitz 
Larry KehresMount Union Collge
Division III
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