More insights from Trina: The Example STRS Sets for Every Public Pension System in the Nation

From Trina Prufer 

June 29, 2025

All eyes should be on the State of Ohio for the precedent it has set in exploiting educators. If other public pension systems were to copy its practices, they would destroy the public pension system in the US. 

Below are some examples: 

1. In Ohio, teachers have no guarantees whatsoever that the retirement plan will be followed. The benefit is not protected by the state constitution, the retirement contract, the law or as a property right. In effect, the type of retirement system STRS operates under is called a “gratuity” pension, which means a gift.
2. The very definition of a defined-benefit has been turned upside down. A public pension defined-benefit is commonly understood to NOT have any financial risk for the member. Paradoxically, an STRS “defined-benefit” is only “defined” by its contribution rate. The payout phase is ALL risk, with the payment of a COLA dependent on something called the “ integrity“ of the system, which does not have a definition. 
3. There is little to no oversight by the State that STRS operates for the benefit of members. Although that responsibility has been assigned to the Ohio Retirement Study Council, audits do not happen on time, half of its scheduled meetings are canceled and obvious transgressions, such as a million dollars wasted on fine art are rationalized as being acceptable.
4. The contribution rate for active teachers is 14%, which is higher than the normal cost of the benefit, which is 11%. The contribution rate for the employer is 14%. The financial model is inadequate to pay obligations and the system pays out more than it takes in. The financial model is designed to fail.
5. All statutes governing STRS can be changed by the stroke of a pen, dependent on the whims of the state legislature and the political party in the majority. 

In fact, its governance structure was just radically changed from member majority to political appointee majority, taking away stakeholders’ ability to have meaningful input. This change was made in the dead of night and as a rider to a budget bill. There was no input from members, no study of its possible consequences and no concern for turning STRS into a sham retirement system. 

STRS is now being run for the benefit of the State, its employees, politicians and Wall Street. Because Ohio is a non-Social Security State, older retirees were made reliant on the benefit assured at the time of retirement. In 2012, the Ohio Legislature determined that pension obligations can be changed after the fact if necessary to “sustain” the system. What followed is that classroom teachers, who were promised an automatic 3% COLA at the time of retirement, must now live on a meager benefit that diminishes with inflation. 

An STRS defined-benefit does not prevent poverty, it creates it. Ohio’s weak (or lack of) pension protections have allowed the state legislature to enrich the coffers of politicians and legalize the theft of members’ contributions. If left to stand, and used as an example for other public pension systems to follow, the defined-benefit model will be dead. Ohio has led the country in exploiting the inadequacies of pension law and impoverishing the very workers its public pension systems were designed to protect.

Trina Kay Prufer

6/29/2025