Robin Rayfield to STRS Board: Not paying the obligations of STRS to the beneficiaries is not a ‘plan to strengthen the system’

Robin Rayfield's speech to STRS Board

September 19, 2019

Greetings STRS Board of Trustees and Staff. My Name is Robin Rayfield and I represent the Ohio Retired Teachers Association. I am a STRS beneficiary, having retired in 2011 after 30+ years of service.

I want to publicly acknowledge the work of the STRS employees throughout the 2018 fiscal year. As reported during last month’s meeting of the STRS Board of Trustees, the investment people added just over $1.1 billion to the assets of our retirement fund. If I understand correctly, STRS earned just over $5.1 billion through its investment activities. With approximately $4 billion going towards paying beneficiaries, the net result of the work of the investment staff resulted in $1.1 billion being added to the assets of our pension fund. 

Although the increase in assets brings the pension system closer to the 85% funding level required by the recently revised funding policy, the system remains well below the level identified for serious consideration of benefit enhancement. Many of our retirees do not have 7 or more years of life left to enjoy prior to receiving an increase in the benefit that they were promised at the time of their retirement.

ORTA encourages the board of trustees to take action to rectify the hardship the loss of COLA has placed on retirees. Two specific actions would demonstrate a commitment to the retirees that STRS Ohio serve:     

1. STRS should seek an increase in the rate of employer contributions. The 40% increase forced upon active educators that resulted from the pension reform efforts put into place in 2012 were not matched with an increase in employer contributions. Similar to the ‘phased in’ increase in employee contributions, STRS should seek a similar increase in employer contributions. It does not make sense for active employees to contribute more, retirees to receive less, and employers to be exempt from the process of strengthening the STRS pension system. 

2. STRS should revise its funding policy to allow for a COLA for retirees providing at least some of what they were promised. Establishment of a minimum level of asset increase, for example $500 million, would allow STRS an opportunity to provide a COLA, although that COLA might be much less that what was promised, to current retirees during the time that the STRS pension system is moving towards 100% funding status. 

I hope that the Board of Trustees will seriously consider actions that will strengthen the STRS pension system while offering retirees more of what they were promised. 

I respectfully remind the STRS Board that simply not paying the obligations of STRS to the beneficiaries is not a ‘plan to strengthen the system’.