Board shaming by Suzanne Laird

Suzanne Laird's speech to the STRS Board

May 17, 2018

Chairman Hill, Members of My Board:

Good morning. My name is Suzanne Laird. I retired after 30 years of hard work.

I wear black today; in mourning for my COLA.

-- The COLA that was promised to me each time I met with my STRS advisor and was told, "you must retire in 2013 in order to SAVE your COLA."

-- the COLA that was stipulated in Ohio Revised Code 3307.67

-- the COLA that was summarily stripped away from hard working , dedicated educators while you, our Board, approved and accepted extravagant bonuses

-- I'm in mourning for a Board, MY Board, which apparently has NOT ONE member with the integrity to say, "This is wrong."

-- Shame. Shame. Shame. Shame. Shame. Shame. Shame. [Pointing at each Board member with each "shame"]

-- Just as every teacher must provide accountability every quarter, I demand that you, my Board, provide quarterly reports defining WHEN the COLA will be restored.

Until then, I'm in mourning for my COLA.

Thank you for your time.

Retirees at STRS May 17, 2018

Click to enlarge.

Dean Dennis: The STRS Board or Ohio’s Legislature Should Freeze all STRS Bonuses and Salaries

Dean Dennis to the STRS Board, May 17, 2018

Assume that you take in money for 30 years for investment purposes. Then for the next 25 years you have to make annual payments off the investments. So you take in money for 30 years, then pay out for 25 years. Divide 25 by 30, and you get a ratio of 83%, which indicates that you have the monies for pure investment purposes about 17% longer than your payout liabilities.

Now let’s make teachers work 5 years longer. You now take in monies for 35 years for investment purposes, but now only have to pay out for 20 years. Divide 20 by 35 and you get a ratio of 57%, which indicates that you have the monies for pure investment purposes about 43% longer than your payout liabilities. From these two examples, you have gained over 25% in your investment margins. This obviously will significantly decrease your long term liabilities. STRS, by doing this, secured an insurance policy. It was done at the expense of teachers yet to retire. They then secured another insurance policy by withholding their COLA for their first 5 years of their retirement. This is wrong.

Let’s couple the above facts with these undisputed facts. Over every 30 year funding period in the history of STRS, they have exceeded returns of over 8%. So how can they justify lowering their 30 year earnings assumption to 7.45%? This is why our COLA is gone. STRS lowered their achievement standards. Can teachers lower their standards and expect their B students to get C’s, and then reward themselves when they earn a B?

Last year 94 members of the STRS investment department earned annual bonuses in addition to their salaries. Thirty-seven of these bonuses exceeded $100,000. Eight bonuses were over $250,000. Here we are, retired teachers, some with annual COLAs less than $1,000, and STRS is withholding COLAs. Most of us will lose 8 years of COLAs that were promised to us before STRS even reviews reinstating the COLA again in 2022.

Teachers, their families and friends, demand that the STRS Board or Ohio’s Legislature freeze all STRS bonuses and salaries until STRS can come up with a plan to restore our COLAs and make us whole. How STRS is rewarding themselves and treating retired teachers is simply wrong.

How much you are REALLY losing without your COLA

How Significant Is Losing Your COLA?

By Dean Dennis, Bob Buerkle and Mary Ronan
May 17, 2018

Many retirees assume that having their COST of Living Adjustment (COLA) reduced and then frozen amounts to losing only a thousand-plus dollars a year. Many don’t take the time to calculate just how much they are losing. By May 2022, the earliest that STRS will consider restoring your COLA, you will have lost a lot of money. For an idea, see the chart below.

If you retired prior to July 2012, STRS promised you a simple 3% COLA. STRS has reneged. First, they froze your COLA for a year. Next, your COLA was reduced from 3% to 2% for three years. Now your COLA is frozen for another 5 years. In short, you will be losing 8 years of a promised 3% COLA. The actions of STRS will be reviewed in 2022 by STRS. There’s no guarantee you will ever live to see another Cost of Living Adjustment again. You were lied to, and now are being robbed. A COLA was built into your pension formula, and at every step you were told you would receive a COLA. Below is an example of a retiree with a $50,000 pension who should be receiving a simple 3% COLA; three percent of $50,000 is $1,500.

Click image to enlarge:

Go to restoreourcola.com to sign the COLA petition, and keep the date of 06/21/2018 open to join in a mass protest at the STRS Board meeting. WEAR A BLACK SHIRT/BLOUSE and be there by 10:00 a.m. for speakers. After the speakers finish, we plan to exit and march the 33 blocks to the Statehouse and protest there also. TV stations will be there for coverage. Make up signs that refer to fairness for teachers, retirees and the importance of COLAs to maintain purchasing power.

Bob Buerkle breaks through the smoke-and-mirrors in his COLA speech to the STRS Board

Bob Buerkle to the STRS Board May 17, 2018

Breaking Down the “Cost -of-Living Adjustment” or COLA

During the 1970s, inflation was high. As a result, compensation-related contract benefits used COLAs to protect against inflation.

The Bureau of Labor Statistics (BLS) determines CPI-W, which is used by the Social Security Administration (SSA) to compute COLAs. The COLA formula is determined by applying the percentage increase in the CPI-W from the third quarter of one year to the third quarter of the following year.

Congress ratified a COLA provision to offer automatic yearly COLAs based on the annual increase in CPI-W that went into effect in 1975. Prior to 1975, social security benefits were increased when Congress approved special legislation. In 1975, COLAs were based on the increase in the CPI-W from the second quarter of 1974 to the first quarter of 1975. From 1976 to 1983, COLAs were based on the increases in the CPI-W from the first quarter of the previous year to the first quarter of the current year. Since 1983, COLAs are dependent on the CPI-W from the third quarter of the previous year to the third quarter of the current year.

Inflation levels ranged from 5.7 to 11.3% in the 1970s. In 197555, the COLA increase was 8%, and the inflation rate was 9.1%. In 1980, COLA reached the highest level in history at 14.3% when the inflation rate was 13.5%. In recent years lower inflation rates have prompted small COLA increases averaging 2 to 3% per year and 3 years with no COLA.

**STRS will not pay any future retiree a COLA for their first five years in retirement. What this really means is that the average retiree will lose a minimum of 155 COLA values times $1500 for a total of $232,500 (the actual lost value over an average retiree’s life expectancy). See page 27 of STRS Brochure “Service Retirement and Plans of Payment” on Cost of Living Adjustment rules.

Of the Five Ohio Retirement Systems;

1. Only STRS increased employee contributions by 40% (from 10 to 14%).

2. Only STRS also increased the minimum career requirement for a full pension by five more years (from 30 to 35 years).

3. Only STRS devised a devious plan to permanently eliminate their obligation to pay any pension to future retirees, by delaying their first pension payment, for five to nine years of time! (STRS began this phase-in beginning with 2015 and will continue through 2026. The loss imposed by this rule alone will cost the average teacher retiring after 2026 between $350-$630,000 in 2018 dollar values. STRS will never have to pay this because they are delaying the teachers’ ability to retire by 5 to 9 years.)

4. Of the Five Ohio Retirement Systems, STRS is only behind OPERS in pension system funding strength at 75% vs. 80%. (Twice the KY strength.)

5. Why does STRS use the lowest Earnings Assumption Rate of all 5 Pension Plans? (To justify their actions of eliminating our COLA benefit. It makes it look like STRS is short the necessary funds to pay for COLAs.)

6. Only STRS convinced Legislators to give them the authority to eliminate the STRS Retiree COLA increases for as many years as they see fit (currently 8 years lost through 2022 which will cost the average retiree another $500,000 in lost pension income even if a 2% COLA is restored after 2022).

Conclusion: Ohio Teachers and Retirees are having financial sacrifices imposed upon them that are 5 to 10 times more costly than the states of Kentucky, West Virginia, Oklahoma and Arizona. However, Ohio Teachers and Retirees have yet to mount a mass protest, mainly because it was done in such a convoluted way that is difficult to fully understand since the most devastating pension losses will come nearer to the end of your life.

Dean Dennis: STRS Rewards Employees While Retirees Go Without COLA

PETITION UPDATE

https://www.change.org/p/ohio-state-house-respect-ohio-s-retired-teachers-restore-their-promised-cola/u/22755230?recruiter=4990641&utm_source=share_update&utm_medium=facebook&utm_campaign=facebook_link 

STRS REWARDS EMPLOYEES WHILE RETIREES GO WITHOUT COLA

Dean Dennis

Cincinnati, OH

MAY 16, 2018 — STRS has seen fit to give annual performance bonuses to 94 employees. Believe it or not, 37 of these employees received bonuses of over $100,000 and 8 employees received annual bonuses of over a quarter of a million dollars. All this was in addition to their annual salaries. Could STRS see fit to give us our annual simple COLA? Of course not. The message STRS sends to us is, "let them eat cake." Ohio's Legislature needs to intervene and send a message to STRS.

We should all demand that the STRS Board, and our legislators, freeze all STRS salaries and suspend all STRS bonuses until STRS restores our COLA. This will certainly be brought up at the May 17th, STRS Board Meeting when the public is invited to speak. It is our contributions that are paying for their large bonuses.

STRS has created this problem. Keep in mind, STRS has always earned over 8% for every 30 year funding period on their investments. They created this paper shortfall by claiming they are only going to earn 7.45% going forward. This downward projected caused our COLA to be suspended; but not their bonuses. Incidentally, STRS earned 14.29% last year.

Heads up all STRS members: Mass protest scheduled for June 21 at STRS and the Ohio Statehouse

From Bob Buerkle:

If you can, keep the date open for 06/21/2018 to join in a mass protest at STRS at the Board Meeting. WEAR A BLACK SHIRT/BLOUSE and be there by 10am. Speakers start soon after that.

After the speakers finish we plan to exit and march the 3 blocks to the Statehouse and protest there also. We will get the TV Stations there for coverage.