Julie Sellers to STRS Board: Until some of our cuts are restored, you must rein in your spending

Julie Sellers' speech to STRS Board

May 16, 2019 

State Teachers Retirement System

Board Meeting

May 2019 

Good Morning Members of the Board, 

My name is Julie Sellers and I am the President of the Cincinnati Federation of Teachers. I am here today to request that the Trustees fulfill their responsibilities of managing the pension funds for Ohio's Teachers in a transparent manner. I also understand the legal necessity to preserve the fiscal integrity of the pension fund and make sure it is solvent for every retired AND active member. But make no mistake, I believe that the STRS Board needs to hold the employees of STRS responsible to make sound investments with our hard earned dollars. I do not believe that this has always been the case; employees for STRS have consistently received bonuses in six figures while active members are working longer, contributing a greater percent of their earned income (14%) and getting less in return. That does not make sense. Until some of our cuts are restored, you, STRS, must rein in your spending. 

Current teachers must now work until they are at least 60 years old AND have 35 years in the system. This means that many teachers begin their careers when they are just 21 or 22 years old, so actually they MUST work 38 or 39 years before they can retire. That adds up to a combined score of 98 or 99 for most people. That is well above other states; most have a required score of 70-80. Teachers' future life expectancy will not be greater than it is today. Currently, members were mandated with the changes would not have received a COLA for 5 years, so their clock was already ticking towards that 5 year marker. The changes to the actives did not seem fair to me when the initial changes took place, and they still do not seem fair. Teaching is a hard job, and it can suck the life out of you. This is making a teaching career one that many are walking away from, which is further destabilizing the fund. 

But on the other hand, as I look around this room, I see many retirees. Is it fair or realistic that they will not receive a COLA increase indefinitely? During the recession and with Ohio's draconian cuts to education, almost everyone in this room went for 5, 6, 7 years without a raise. This was difficult for every family paying into this system. Not only did we have pay freezes, but you were increasing the employee contributions by 1% per year, so employees were taking home less each and every year! Now as these folks are in retirement, you are again mandating for them to take another freeze. 

I attended a board meeting about a couple years ago when you were trying to justify the 5 year COLA freeze; you gave data that most retirees have multiple income streams. I have talked to many teachers since that meeting, and most have not been able to save for retirement like they had hoped, due to the years of employee contribution increases and freezes on our salaries. Many younger employees are in a lifetime of student loan debt, and are still trying to purchase their first home. I do not think that you should make the assumption that the COLA freezes will not impact the lives of our current or future retirees. 

I also believe that you are not using accurate investment returns and actuarial projections. You should not be waiting for five years to revisit the COLA issue. I would like to remind you that the STRS funds are not your money. These funds belong to the current retirees and active members, and we need for you to look out for the financial well-being of us all. 

Recommendations: 

This must be a delicate balance between actives and retirees. 

1. The mandatory age of 60 AND 35 years of service must be decoupled to address the many diverse options that teachers have; address second careers, young beginning careers or older beginning careers. 

2. The 13th check should not be an option. When this was paid it cost billions of dollars that wouyld have made our current system today more solvent. 

3. It is not realistic to NOT give a COLA for 5 years or more. Check the assumptions annually. 

4. ANY school that receives vouchers of public funds should be mandated to pay into the pension system for their certificated personnel. 

5. Any Charter School which has not paid for their employees' funds into the system should be shut down, and any property or resources should be used to repay STRS, because this disrupts the system. 

6. Stop investing in Hedge Funds. Their fees are too high, and you have to pay if the investment makes money or not. This is not a good return on our investment.