Dan MacDonald to STRS Board: Do you know the STRS plan for restoration of benefits for actives or retirees?

From Dan MacDonald

Remarks to the STRS Board

June 15, 2023

PUBLIC PARTICIPATION
DO ANY OF YOU KNOW THE STRS PLAN FOR RESTORATION OF BENEFITS FOR ACTIVES OR RETIREES?

Good morning STRS Board. I am Dan MacDonald, an STRS retiree with 38 plus years of service. I am also the Executive Director of Local 279R, North East Ohio AFT retirees. 

I would like to thank the Chief Benefits Officer and her staff member for her presentation at our local’s June Scholarship Luncheon. It was refreshing to hear a person’s biography and then throwing the floor open to questions and concerns to 140 retirees. No slides, no handouts, just what is on your mind. Very good listening skills were employed. The questions and concerns were clarified and acknowledged. 

Do not worry, no promises were made other than the concerns would be brought back to the senior administrative staff.  STRS was well represented and received. I will say that the coming January 1st switch-over to CVS from Express Scripts is a major nervous point with past transition problems remembered along with concerns on changing costs, delivery, specialty drugs, predeterminations and just getting lost.

On to FY 2024 Budget. Liabilities, expenses, were added last month. STRS senior staff were silent on STRS Board Policy, under Funding, which states that “At 85% or greater, the Board may consider changes that in the determination of the Board’s actuary do not materially impair the fiscal integrity of the system.” 

Why am I bringing this up? Previous Boards have created the Funding policy and the scorecard/dashboard as a visual for the Funding policy. This Board, less one, asked Cheiron to create fiscal integrity tests. They did. Budget failed restorations. 

Bottom line, is there really any STRS plan to restore COLA and restore active benefits in the long or short term? Actives have made it clear they want to get back to 30 years for full retirement. My view currently is that no plan exists since it cannot be articulated by STRS senior staff, Board members, or Board policy.

New Board member [names are not to be used in Public Participation, a Board Policy that should also be changed], you are in real estate. Please use your talent to review the properties held by the investment department. I have read articles that would suggest STRS’s holding might not be as desirable as they have in the past.

Finally, the 2024 PBI policy dates should be altered to determinations made after the fiscal year has ended and the books are totally closed. I suggest, as a Benchmark, using the general funds rate of return goal of 7% for each entity, or, somehow, the Board’s determined ROR, be calculated in benchmarks.

As always, actives need enhanced benefits and retirees need their 3% COLAs restored.