Dan MacDonald to STRS Board: Actives need their benefits enhanced and retirees need their 3% COLA restored

Dan MacDonald's speech to STRS Board 

September 16, 2021

Good morning. I am Dan MacDonald, an STRS retiree, 38 years service, plus the Executive Director of NEO AFT retirees, Local 279R. 

It is good to see the professor on the board. Please, sir, seek and demand information. I have noticed that since the STRS August e-update that the communications department has reframed the general fund. In the past the general fund has been stated, at say, $94.8 billion. Starting this August, I have noticed the fund broken down and the reporting is “Please recall only $87.5 billion of those totals are defined benefit assets. Approximately $2.4 billion of the total belongs to Defined Contribution Plan members and about $9.4 billion are dedicated to the STRS Health Care Program for benefit recipients. 

One final note on assets, these figures are all after we paid over $7.5 billion in pension benefits and retiree health care expenses” during FY 21. Re-packaging? I hope the new approach is for clarity to active and retired members and not a new approach to sleight of hand. Also remember that of the $7.5 billion spent in member benefits is why STRS exists and that $3 billion came from active contributions and their employers.

The STRS 2019 Actuarial Update had an estimated funding shortfall of about $24 billion. No breakdown. I am eagerly waiting for STRS and Cheiron to share the current funding shortfall. In 2019 the ROR had been reduced from 7.75% to 7.45%. Now the projected ROR might soon be 7% again enlarging the fund shortfall, just as it did in 2019. One would expect a shortfall of under $8 billion. Please, Board members don’t allow an STRS/Cheiron sleight of hand.

Finally, elected active Board members, a Wisconsin Legislative Council’s pension study showed that only STRS, out of 87 pension funds, demands 14% of income and receives a benefit worth 10.65%, a negative 3.35% loss of moneys. 86 other pensions receive more than they pay. Current teachers are paying a dollar for a benefit retirement worth seventy-six cents. This Board forces an active to work 35 years for a full-pension that actuarily lasts 20 years, while, of course, STRS staff get yearly merit-based pay raises, PBIs and an OPERS pension with COLA. The Board has allowed STRS Ohio to be unique and self-serving.

Actives need their benefits enhanced and retirees need their 3% COLA restored.

Thank you.