Misinformation or Disinformation?
Conflating an Automatic Fixed-rate Cola with an Ad Hoc Cola
A Bad Faith interpretation of ORC 3307.42 (2008 version)
My name is Trina Prufer. I retired in 2003 as a school psychologist after 30 years of public service. My husband was also a member of STRS and passed away in 2007, prior to retirement, in his 40th year of college teaching.
My intent is to correct the re-writing of cola history by STRS leadership and staff, who proclaim the annual cola can legally be diminished or eliminated, ostensibly because the cola had changed in the past.
On 10/3/23 at a Town Hall meeting in Parma, during the public Q and A, I asked the STRS Executive Director ( Bill Neville) the following question:
What is the meaning of “Actual Benefits will be paid in accordance with STRS Law in Effect at the time of Your Retirement?
He stated quite emphatically that the 3% cola was never considered a permanent part of the benefit as it had changed numerous times in the history of STRS. He insisted the statement meant only the BASE benefit.
After the meeting I talked with the STRS Executive Coordinator (Wendi Ballard), discussing my displeasure at not receiving the cola assured in the benefit plan. She explained that because the specific word “guaranteed” was not in the plan, the cola could not be counted on. When I asked why there were no qualifiers or any mention or the cola not being permanent, the answer was “well, perhaps there should have been”.
So, what does the ORC actually say regarding benefits being paid according to STRS Law at the time of retirement?
ORC 3307.42 (2008 version) is entitled “Acquiring a Vested Right in a Pension When Granted"
The granting of any person of an allowance, annuity or pension as defined in section 3307.50 of the Revised code…. VESTS a right in such person…. to receive the allowance, annuity, pension, or benefit at the rate fixed at the time of granting the allowance, annuity, pension or benefit. It should be noted that the word Vested means a benefit that cannot be withdrawn retroactively.
Additionally, there is a vast difference between an automatic cola and an ad hoc cola. An Ad hoc cola has conditions or qualifiers; an automatic cola does not and is typically fixed. Had the cola been ad hoc, STRS would have had the discretion to adjust the cola, but also would have had the obligation to spell out in no uncertain terms the specific details for adjusting the cola. A lie of omission is still a lie.
Telling members the cola was NEVER an obligation falls into the realm of Bad Faith because STRS leadership has always known the meaning of the statute. What happened put pre-2012 retirees in harm’s way as they were assured of inflation protection, had this security ripped away in retirement, and were left without the years of investing needed to make up the difference. Denying the truth in the statute does not absolve STRS of its responsibility; it only exacerbates the belief that STRS leadership is untrustworthy, and the system does not work for teachers.