Dan MacDonald to STRS Board: The fight seems to me to be de minimis moneys and not a game plan for the next 20 years.

Dan MacDonald's remarks to STRS Board

March 21, 2024

Mr. Chair and members of the Board, good morning.   I am Dan MacDonald, an STRS retiree with 38 plus years of service.  I am also the Executive Director of Local 279R, Northeast Ohio AFT retirees. 

      

It’s my birthday today.  Turn 78.  Gladly collecting my pension. My wife ticked that I am here for two days and not home to celebrate.  Actuarily. How many years do I have left? CH-UH and I paid into STRS for at least 40 years.  As March, April, and June pass, the core infrastructure of STRS, outside consultants, and this Board make momentous decisions that affect STRS staff, actives, retirees, and my own situation.   

So where are we all headed? I understand discount rates, treadwater, di minimis, plus performance-based incentives, merit-based raises, formularies, and COLAs. These are some components of a puzzle called a financial plan.  

 As I have asked before, is there a financial plan for actives and retirees at STRS Ohio or actually is the plan for actives and retirees, the de minimis plan? Treadwater, budget, and de minimis. These three months are working the now. Reactive. Squeezing the most, out of the least, to please actives and retirees while STRS itself flies along.  Well, we will see on the flying with the 2025 budget.  

With this divided Board and senior staff participation, what better time to air and then formulate a financial blueprint where actives retire at 30 years and have a decent retirement pension and retirees have cost-of-living on an annual basis. Also, there is a need to address those long-retired retirees who have lost the most in purchasing power. Sometime since 2014, a document was presented that addressed the buying power for each year of retirement. It needs to be prepared and seen again. Air what is desired for actives and retirees and see where Board members stand on the levers that affect treadwater and benefits. The fight seems to me to be de minimis moneys and not a game plan for the next 20 years.  

[Ran-out-of-time, so not stated]: Topic jumping, one more thought floating through my mind. STRS’s yearly merit-based pay raises compound. The raises are based on the amount of earnings now. COLAs, when they happen, are based on a static first year of retirement pension. Both affect treadwater. The plan is certainly STRS heavily weighted. 

As always, actives need enhancements.  Retirees need purchasing power.  STRS needs to look closely at itself.