Dean Dennis: Am I Missing Something?

From Dean Dennis

April 8, 2022

OEA candidates and McFee and Rhodes state it's a MYTH that our active members are currently projected to receive less that they are currently contributing with their Employee Contribution. Then the next day, STRS also states the 77 cents for every dollar is also wrong. This certainly had the appearance of supporting the OEA candidates. You can bet I called STRS to complain.

For the 2020 Fiscal Year, Cheiron, our STRS Actuarial firm, stated the Normal Cost for our DB members was 10.86%. Simply divide 14% (Employee Contribution) into 10.86% and you get 77 cents as the value compared to $1.00. This is a negative return. I'm going to assume maybe STRS said the 77 cents was wrong because in Fiscal Year 2021 Cheiron stated the Normal Cost was now 12.06%. Perhaps McFee and Rhodes also used the 2021 Normal Costs to call the 77 cents as a MYTH but, that is still LESS than what active teachers are projected to receive on their 14% contribution when they retire. 

WHERE DOES THE OTHER 2% OR 3% go? It goes towards the unfunded liabilities created by STRS underperformance and the lowering of the discount rate. OEA candidates and STRS don't explain this, do they? Apparently, they think it's acceptable for members contribute 14% for a pension they project to cost less. 

Elect candidates who will be transparent and look out for you. 

Lastly, Mr. Rhodes and Mr. McFee also are telling you for every $1 you contribute it will result in $23 when you retire. No one I've talked to has been able to explain that math!