I recently listened to the STRS Board as they met in a virtual setting again in September. The news is not good. Although the stock market has rebounded from most of the COVID losses, our funding level has not improved. Remember, STRS has in place a policy that states there will be no benefit increases until the system is funded at 85%. We are currently in the mid 70%range. Some positive news, however, is one STRS Board member did ask directly, what is going on with the COLA issue.
It seems like a very long time ago that the Board took away our guaranteed benefit increase (2017). For many STRS retirees, they have not received any increase since 2014. For all retirees, we have experienced a loss of what was promised for 5, soon to be 6 years! Wade Steen asked the “experts” offering advice to the investors at STRS several pointed questions. In one exchange Mr. Steen asked if the benchmark that the alternative investment group had established was unrealistic or is that group of investors underperforming? Although the advisor would not say that the group was underperforming, the advisor did say the benchmark was a realistic and appropriate benchmark.
Mr. Steen is currently my favorite STRS Board member. I sense that he recognizes that retirees cannot live forever without any benefit increase. At one time he pointed out that under the current projections provided by the STRS staff, the pension system does not reach the 85% level required for COLA consideration before 2037. That is right; the chart used during the discussion went out to 2037 and the funding level remained below 80%.Mr. Steen said something to the effect that “we need answers and suggestions as to how the system can reach the level to provide increases to retirees”.
ORTA remains engaged in the fight to “get more of what we were promised” after a career of serving the children of our state. We are currently investigating what more we can do to shed light on what is happening with our retirement. It seems like every time I listen to a presentation by STRS, I hear that STRS is in the top quartile of pension systems in the country. The highly paid “external advisors” also inform us that our system is very highly rated. What troubles me is that the highly paid external advisors do not really “audit” STRS. Instead, they report what STRS provides them in the way of performance and offers praise. I am all for recognition of excellence; however, if a pension system cannot provide the promised benefits to its members, how great can it be? One thing ORTA might do is seek an “outside and independent” review or audit of the STRS system. We are currently investigating what such an audit would look like, and what we might learn.
From ORTA’s September 2020 newsletter. Dr. Robin Rayfield is Executive Director of the Ohio Retired Teachers Association.
<< Home