Trina Prufer to STRS board: STRS has been shattered beyond recognition as a benevolent manager of retirement savings. The State of Ohio owns this, and needs to fix it, with an increase in funding, going directly into restoring benefits.

Trina Prufer's speech to STRS board

October 17, 2024

My name is Trina Prufer. I retired at 30 years and was a School Psychologist for 20 of those years. My husband passed away before retiring, having taught Anthropology at Kent State University for 40 years.

The title of this short presentation is: The Pottery Barn Rule: “You break it, you own it”

I would like to remind this board that teachers had nothing to do with running up the STRS unfunded liability… that occurred because the organization wasted far too much on mismanagement. Its core responsibility was to pay the benefits obligated by the ORC and it failed miserably in delivering on its mission.

Teachers were assured of a secure lifelong benefit at an adequate percentage of their final average salary (FAS), which in my day was 66%. That was the purpose of the 3% annual, automatic cola, which is a normal component of a defined-benefit pension, in a non-social security state.

So, what does that STRS defined benefit look like today? After ten years without a cola, that 66% FAS diminishes to about 49% purchasing power. After 20 years, which is the official plan to reach 100% funding, the purchasing power reduces to about 36%. Additionally, active teachers are paying 14% for a benefit with a normal cost of 11%. No other public teacher retirement system, in a non-social security state, has ever harmed its members to this degree.

In 2012, STRS the Ohio Legislature took the easiest and most imprudent way out of its funding dilemma. It shifted the blame and responsibility of fixing the pension shortfall onto individual teachers, who are the least able to absorb this enormous cost. Do teachers not have the need to pay for groceries, housing, medicine and support care as we age? Are we not human? Why is STRS even a retirement system if it pushes its oldest retirees into poverty?

STRS has been shattered beyond recognition as a benevolent manager of retirement savings. The State of Ohio owns this, and needs to fix it, with an increase in funding, going directly into restoring benefits. Pay what is owed, restructure STRS to reflect the needs of educators, and rewrite the law, so state workers are protected from financial abuse. The state legislature needs to take responsibility for what it broke, and just do, what needs to be done.