Dean Dennis to STRS Board: You'll keep your promises to STRS staff, but not to retirees?

Dean Dennis' message to STRS Board

June 7, 2020

Subject: STRS Staff Increases

STRS Board Members,

STRS Fiduciaries, as you ponder your vote regarding staff salary increases, please consider that most  STRS employees salaries and "salary incentives" are over six-figures.  How does that look to the average STRS retiree?  From watching the May 2020, video conference STRS Board Meeting, I know the Board is split on this issue.  I jotted down a quote from one Board member who was defending the STRS Employee raises, the quote was, "pensions operate to pay benefits expected."  I thought, for members too?

The average STRS Retiree draws a pension around $45,000.00.  They were promised a COLA around $900.00 (many were promised around $1,350 but board members lobbied the legislature to decrease the COLA from 3% to 2%, now it's been zero for 4 years).  The STRS message to retirees seems to be, we can afford increases for  STRS staff, but not for retirees.  We'll keep our promises to STRS staff, but not to retirees.  Mixed messages do breed problems.

The Corona-virus message that, "we're all in this together," is interesting.  It implies during an emergency, let's all sacrifice together.  Contrast the Corona-virus message, to the message STRS is sending to retirees, as STRS investments average earning over 10% over the last 10-year-period, and nearly 8.5% over the last 30-year-period.  The message being: we have designated you to be the sacrificial generation that dies off without receiving promised COLA's so that we might be able to balance our books faster for future retirees. 

Please keep this equation in your mind:  Granting Staff Increases = Granting Retirees COLA

Dean Dennis