Trina Kay Prufer: We are being cheated because STRS assumes teachers are ignorant and still live in a paternalistic world.

From Trina Kay Prufer

August 27, 2023

Why STRS is able to cheat us - In 1973, despite having a full-time job, I was unable to get a credit card and would not have been able to purchase a home in my own name. In short, the world I grew up in was paternalistic, as it assumed that men were the breadwinners and women needed someone to take care of them.

Despite it being 2023, STRS still operates on the premise that teachers, mostly women, know very little about finance. The STRS big secret is that 30-40 years of retirement contributions, invested in the market, should produce an amount equal to 7-10 times its original worth. This is possible because of the power of compounding on investments over very long periods of time. This amount is hidden from us, denied, never mentioned. As we are not paid all at once, our lifetime contributions continue to earn money for STRS.

STRS still functions as if we are in that paternalistic, simplistic, seemingly safe world of the 1970s. Back then, teachers were led to believe STRS would provide "financial security" in retirement and were lulled into a false sense of complacency. What happened is that Wall Street, politicians and STRS figured out that teachers' savings could be a cash cow, and every trick in the book was used to separate us from our money. Examples from the STRS playbook include: "the cola is an enhancement” , “you will get back what you paid in” ”the cola was never guaranteed” and “STRS is a premiere retirement system”. All of these statements assume we are stupid... just watch the videos STRS puts out.

The amounts we contributed during our working years were guaranteed to include inflation protection, as long as we put in the 30-35 years, which was fair and reasonable. It still is. Increasing the contribution rate to 14%, putting all the employer contributions towards the unfunded liability, spending outrageous amounts on employee perks and bonuses, having actives work 4 more years, removing the cola after teachers had already retired… that’s theft on a grand scale. It’s 2023; teachers understand the grift. The loss to membership is so great, it's criminal.

The current system should be illegal. There is nowhere else in the financial world where a contract is only binding on one side. We are being cheated because STRS assumes teachers are ignorant and still live in a paternalistic world. They get away with it because the state legislature is willfully blind, complicit and profits from our loss. It will end, either when the upcoming litigation is decided in our favor, or the next generation refuses to be duped.