October 2024 Newsletter from ORTA

ORTA Newsletter

October 2024 

From Executive Director Robin Rayfield

Greetings ORTA Members!

 

This month’s newsletter is slightly delayed as we wanted to include any news from the October STRS Board meeting.

 

STRS Update

Significant change is always chaotic. STRS has operated for decades in a fashion that has benefited the staff at STRS and, for the most part, ignored the members of STRS. Changing the culture towards protecting the membership has created chaos for the system. The politicians in Ohio point to ‘red flags’ increase the anxiety level about the pension system. The members of STRS (active and retirees) have demanded change in the way STRS operates. This is evidenced by the elections for seats on the STRS board. Despite calls from the membership for reform, the management at STRS has barreled down the pathway of overcompensating the STRS employees while reducing benefits to retirees and forcing actives to pay more and work longer. At the September STRS meeting one of the presentations included information on the lost purchasing power of STRS retirees. The data show that a person who retired in 2013 has lost 21% of their purchasing power since their retirement. Certainly, such a loss is nearly impossible to manage, however, when we consider that the salaries of STRS employees increased by 17% on average in one year, retirees are understandably outraged. This is truly a situation where the ‘Good for thee but not for me’ principal has surfaced. The STRS board has challenged the management decisions at STRS with increasing strength over the last several months. In fact, without the intervention of Ohio’s Attorney General Yost, the PBI (bonus) program would have been eliminated for the past year.

 

Additionally, the STRS board voted on a motion of ‘no confidence’ in the senior management team in September. Although the motion failed by a 5 to 5 vote with 1 abstention the message was clear. The senior management team did not have the support of the board at STRS. This prompted the acting executive director to announce her retirement. Ms. Hoover will leave STRS on December 1, 2024. Her departure, along with the negotiated departure of Executive Director Bill Neville leaves a void at the top of the STRS management team. STRS is beginning the search for a new Executive Director, and hopefully a new direction for the pension system. What is important to note is that the leadership team in place demonstrated that they were not capable of reforming the system. Decades of thwarting any efforts of reforming the system had broken the trust between the membership and the pension system. The STRS board was put in place by the membership and reflects the will of the membership for reform. Therefore, change was necessary. In other STRS leadership news, the Chief Investment Officer, Matt Worley, announced his retirement scheduled for March of 2025.

 

Politicians and media type people love to hype the narrative that the reform board members have created chaos at the STRS pension system. In the sense that chaos always accompanies real change this is a true statement. Most of us recall the 1960s as a time of change and we recall the chaos that accompanied the changes as a result of the civil rights movement. As educators we probably all used first-hand experiences to reinforce our lessons. Imagine where we might be if people didn’t stand up for a set of principles and endure the chaos that the changes of the civil rights movement triggered. ORTA is proud that we have established a foundation for change at STRS and that the decades upon decades of paying unearned bonuses, with zero accountability for investment staff or management staff can come to a close.

 

In other STRS news, Wade Steen’s term as a STRS board member has ended. STRS members are grateful for Wade’s efforts to reform the system. Jonathon A. Allison was appointed by Governor DeWine to replace Wade Steen. We have no idea about where Mr. Allison stands on the many issues that face STRS, but we are hopeful that he can work with the board to resolve the differences between the status quo board members and the reformers. We will report on Mr. Allison’s actions as an STRS board member.

 

In addition to Mr. Allison, another new person was appointed to the board. This change was made by Director of Workforce Development Steven Dackin and was the seat formerly appointed by the Superintendent of Ohio Schools. Caroline Everidge-Frey replaced Dr. Scott Hunt. ORTA welcomes these people to the STRS board and thanks them for their willingness to serve.

 

At the October 17, 2024, STRS board meeting the board passed a ‘one-time supplemental benefit enhancement’. This is a one-time payment that will be made in December of 2024 going to all retirees for this year only. The decision on COLA for the year has not been made; however, it is unlikely that retirees will receive this supplemental payment and a COLA this year.

 

There will be information coming from STRS on the amount of each person’s supplemental benefit. The formula takes into account years of service and the number of years a person has been retired. ORTA has always voiced preference for a COLA that would be a recurring payment each year instead of a one-time check such as this. While our preference is for a COLA, the supplemental check idea was supported by the board. Board members also voiced hope that the years of service for full retirement benefits can be reduced this year. The board worked very hard to develop a plan that provides some level of inflation protection for the current year while trying to reduce the burden on active educators. ORTA is appreciative of their efforts!

 

ORTA Board Meeting

In addition to the STRS meeting, the ORTA board met last week to review finances and approve the budget for 2025. ORTA remains in good financial shape. The pension defense fund expenditures were covered in detail. We plan to post these documents on the ORTA website.

Robin Rayfield, Executive Director ORTA/Ohio Retirement for Teachers Association