Lynn Hoover put on the hot seat at Bowling Green Town Hall

Math doesn’t add up – Retired teachers denied 3% COLA increases while some STRS staff get huge bonuses

By Jan Larson McLaughlin

BG Independent News

December 5, 2023

The images of smiling retired teachers on the screen painted a different picture than the reality faced by Kathy Foster, who retired after teaching 32 years in Findlay.

Despite promises from the State Teachers Retirement System of Ohio, Foster said she has received only one 3% raise since retiring 10 years ago.

“I got one cost of living wage,” said Foster, who lives in Wayne.

Meanwhile, the STRS investment staff has been handsomely rewarded for their work, she said. 

“They have gotten millions of dollars in bonuses,” Foster said. “They lost billions of dollars last year, and they are still getting bonuses.”

“We haven’t gotten the money we were promised. I just want the 3% that I was promised,” she said.

STRS is not being good fiduciaries, said Foster, who in retirement has taken on a part-time job at the Wayne Public Library to make ends meet. “I’m not going to be able to work forever,” she said.

“They keep asking the members and the employers for even more,” while the system is spending money on the slick public relations blitz showing teachers seemingly thrilled with their retirement benefits, Foster said, shaking her head.

Foster was far from alone in her frustration Tuesday evening in Bowling Green during an STRS meeting for retired teachers and those nearing retirement in the region.

Put in the hot seat to answer questions was Lynn Hoover, the acting executive director and chief financial officer of STRS. Hoover was quickly moved to that position last month when an anonymous letter to the board accused the former executive director of impropriety.

Hoover talked about the challenge of providing pensions for so many retirees over such extended periods. She mentioned the oldest retiree in the system at age 108.

“We have to plan for a very long time horizon,” Hoover said.

STRS pays out about $6 billion annually in pension benefits. In Wood County alone, there are 1,983 benefit recipients with total benefits of $100,260,321 annually.

Hoover said she is often asked why changes were made to the pension system, and she points to the burst of the dot-com bubble and the Great Recession. Those left the pension fund at 55%, “which was a pretty scary state,” she said.

That created a need to cut benefits, and resulted in liabilities far greater than assets, Hoover said.

At this point in the presentation, Peg Baker, of Bowling Green, raised her hand. She suggested that Hoover wrap it up with the numbers and charts and instead address the issue that brought nearly 90 people to Tuesday’s meeting.

“Why do the people in Columbus get raises, when the teachers don’t?” Baker asked.

Hoover said she would get to that topic, but first wanted to finish her presentation. She

explained that STRS used to have two active teachers for every one retiree. Those numbers have since flipped, with the system now having one active teacher for every one retiree.

In 2011, investment consultants projected the system would run out of money by 2040 unless pension reform was undertaken. Retirement was pushed beyond 30 years, and COLA raises were put on hold. 

“We never want to go through a pension reform again,” Hoover said.

She then addressed the issue that didn’t require a math teacher to understand and be angered – the large bonuses given as incentive compensation to eligible investment staff at STRS. Hoover said if the investors didn’t perform well, they weren’t rewarded with hefty bonuses.

This year, those bonuses added up to approximately $9 million.

Retirees asked how such raises could be given, when retired teachers were being denied their 3% COLA increases.

Hoover said STRS has looked at outsourcing its investment program to money managers, but found it would cost far more. She said STRS has been discussing bringing in more money by asking school districts to pay more per employee.

One teacher responded by saying school districts won’t be thrilled to do that when they see the bonuses being passed out.

“People aren’t going to be on board with that,” the teacher said.

Another retiree said it’s easy to see why Ohio has a “state full of upset teachers.”

A man who said he is the human resources director for a local school district said asking schools to pay more into STRS for their employees will make it difficult for districts.

“It’s going to come out of our general fund, and I’m not going to be able to hire teachers,” he said.

As he was leaving the meeting, Perrysburg teacher Bill Hilt said the public gathering was valuable to make sure people aren’t comparing oranges and apples.

Read the rest of the article here.

https://bgindependentmedia.org/doesnt-add-up-retired-teachers-denied-3-cola-increases-while-some-strs-staff-get-huge-bonuses/