STRS Board approves one-time COLA for retirees and eases those lousy restrictions they had placed on active teachers

 

March 18, 2022

Retirement Board Approves Benefit Plan Improvements that Benefit Both Active and Retired Educators At the March meeting of the State Teachers Retirement Board, the board approved a set of much anticipated benefit plan improvements that have been in the planning and review stages for the past several months. The changes benefit both active and retired members of the system. The board’s actuarial consultant, Cheiron, is required by law to evaluate proposed benefit changes and they determined that the approved changes will not materially impair the fiscal integrity of the system. Following the vote, Board Chair Robert A. McFee thanked his fellow board members for their thoughtful deliberation and noted that future benefit enhancements will be evaluated each year going forward. “This is just the first step in the right direction,” said McFee. He indicated the board will continue to keep the long-term sustainability of the pension fund as its primary goal, but will also look for the opportunity to make future benefit enhancements for active and retired members as the financial condition of the fund allows. The approved changes take effect on July 1, 2022, and include: A one-time 3% cost-of-living increase (COLA) will be paid to eligible benefit recipients. The COLA will be implemented as applied under current Ohio statute — that is: An increase of 3% of base benefit will be added to the monthly payment in fiscal year 2023 for benefit recipients who began receiving benefits on June 1, 2018, or earlier, and will apply to future monthly payments. The date of the increase is the anniversary date of retirement, which always falls on the first of the month. For example, any teacher who retired effective July 1 (2017 or earlier) will receive a COLA on July 1, 2022. A teacher who retired effective June 1 (2018 or earlier) will receive a COLA on June 1, 2023. Members who retired July 1, 2018, or later are not eligible for a COLA at this time (must have received benefits for 60 months to be eligible for COLA). For active members, elimination of the age 60 requirement for retirement age and service eligibility that was set to take effect in 2026. Now, the final change to the phased-in age and service requirements will be made Aug. 1, 2023, when 35 years of service will be required for an unreduced retirement. STRS Ohio will soon share with each individual retiree who is eligible to receive a COLA when they can expect their cost-of-living increase to be in their monthly benefit check (the anniversary month of retirement). The motion passed by the board also signals the Retirement Board’s intent to review benefits again, no later than spring 2023, to evaluate whether additional enhancements are possible in accordance with the laws in effect at that time.