Toledo Blade: One-time check to be paid to retired Ohio teachers in December

Toledo Blade

October 17, 2024

By Jim Provance

Retired Ohio teachers to get 1-time checks in December

 COLUMBUS — The bigger question of a future cost-of-living adjustment still up in the air, the board governing the Ohio’s pension fund for teachers on Thursday set aside a total of $306 million for one-time benefit payments for retirees.

The State Teachers Retirement System board figures it has room for $882 million for possible distribution but opted to hold back most of that now in anticipation of a vote on potentially restoring a COLA next spring.

The supplemental benefit, credited to the fund's strong investment earnings, would amount to an average boost of $1,720 for retirees, depending on years of service and time collecting benefits.

The payments, subject to tax withholding, would be made in December.

“It is one time, and it is not an ongoing commitment,” said board member Alison Lanza Falls, an appointee of Republican state Treasurer Robert Sprague. “It’s also a positive. ... The major concern I have is setting expectations.”

“... When we have short memories and when there are many people around who remember the phrase ‘the 13th check,’ they remember that 13th check went on for years and years and years ...,” she said. “I just think that’s a risk we can’t ignore, and it’s also a risk we can’t control.”

STRS, one of the largest public employee pension funds in the nation, has assets exceeding $90 billion. While strong investment performance has improved the fund’s bottom line, it is still considered to be 10 years away from being fully funded with enough assets on hand to cover its expected liabilities.

Some retirees are still angry over the board’s decision to do away with automatic annual COLAs and have criticized decisions of the board to pay performance bonuses to in-house investment staff.

The board looked at several options, including a possible combination of a COLA and one-time check. It plans to send notices, possibly with the next checks, to stress that this payment is no “13th check.”

“I want to reinstate the COLA, but I don’t want people to get confused with that,” said Carol Correthers, representing contributing members. “If [the supplemental payment] doesn’t happen again, then they’re going to be saying, ‘Why didn’t you do it again?’”

A one-time payment would be available to all retirees who've retired prior to this year. There is a five-year waiting period to benefit from a COLA.

This month's meeting had two new faces at the table.

Gov. Mike DeWine recently appointed Jon Allison, who served as aide to Republican Gov. Bob Taft, to replace Wade Steen, whose term expired last month.

Mr. Steen, allied with the retiree reformers, returned to the board earlier this year under court order after Mr. DeWine had removed him months earlier. The court found that the governor lacked the legal authority to remove his own appointee in mid-term.

Also new was Carolyn Everidge Frey, appointed by the Department of Education and Workforce to replace Scott Hunt.

Attorney General Dave Yost has sued to have Mr. Steen and current board chairman, Rudy Fichtenbaum, removed, alleging they violated their fiduciary duties to the system by promoting a questionable investment scheme. That case is still pending.

All of this occurs as the board is dealing with the pending departure of its executive director, Lynn Hoover, and the previous resignation of its chief investment officer, Matt Worley.

Read the article online here.