Ohio’s retired teachers frustrated with pension fund
TOLEDO, Ohio (WTVG) - Ohio’s retired teachers are fed up with their pension fund. They’re fighting to restore annual cost-of-living adjustments (COLA) meant to offset inflation.
Around 500,000 active and retired teachers are members of the State Teachers Retirement System of Ohio (STRS). The fund is one of the largest in the country with more than $98 billion in investment assets as of June 30, 2021, according to STRS.
It hasn’t dished out a COLA since 2017.
Retired teachers like Robin Frederick, who taught for 35 years in Tiffin City Schools, were told they had to wait five years after retiring to receive a COLA. She ended her teaching career in 2014 and still hasn’t received a COLA.
“I didn’t go into education because I thought it was going to get rich,” Frederick said. “I didn’t go in it for the income I went in it for the outcome. But I I never thought that I would sit here and say, ‘Wow, I can’t believe that I’m not getting what I expected to get when I retired.’”
Retired teachers used to get an annual 3% cost-of-living adjustment (COLA) up until 2012 when the figure was lowered to 2%. In 2017, the STRS board eliminated the adjustments altogether.
The fund was drying up.
It was impacted by the Great Recession. People are also living longer, meaning payments are extended over longer durations to retirees, according to STRS spokesperson Nick Treneff.
Treneff said the retirement system must look out for everyone it supports, including its newest teachers in the classroom and the roughly 200 retirees in Ohio are older than 100.
Current teachers contribute 14% of their salaries to the fund.
Jennine Kramer’s education career in Seneca County is now in its fourth decade. She already retired and started collecting her pension but had to re-enter the workforce as an education consultant to make up for the money she wasn’t getting from a COLA amid increasing healthcare costs.
“I’m dipping into my savings that I had hoped not to do yet,” Kramer said. “I was anticipating as I got older, that that’s what I was going to use to supplement my income. I didn’t anticipate doing that now. That’s a main reason why I’m back working part-time.”
Retired teachers formed a watchdog group to help examine the inner workings of the retirement system. They funded a study that accuses STRS of lacking transparency and paying out large bonuses to employees. STRS responded to the report and disputes its findings.
Treneff said the STRS Retirement Board is considering a one-time 2% COLA that could be voted on as soon as its next meeting set for March 16-18. He added that more one-time COLAs are possible in the future if the fund is still healthy.
That solution wouldn’t satisfy the concerns of many retired teachers like Kramer.
“They may think they’re going to pacify us, but it doesn’t solve the problem. You know, it needs to be a regular cost of living adjustment to for us to be able to you know survive on our pensions.”
Before changes went into effect in 2012, including lowering the COLA and increasing employee contributions, Treneff said the fund had 58 cents available for every dollar it brought in. Today, he said it has 88 cents per dollar. He said the changes, including halting the cost-of-living adjustments, were needed to prevent the fund from further dropping.
Treneff said the fund saw a 29% investment return last year, one of the highest figures in the last four decades. It added another $14 billion to the fund’s bottom line, giving the Retirement Board the ability to explore a possible one-time COLA.
State lawmakers have proposed various pieces of legislation aimed at addressing STRS.
Sen. Teresa Fedor (D-Toledo) introduced a bill to reinstate the adjustments and create a 2% COLA floor. She said she hopes the bills start conversations among lawmakers about the issues surrounding the pension fund.
“It’s something that we must figure out,” Fedor said. “The promise was made years ago. Some people haven’t had their COLA in seven years when they retired early with the promise of a COLA being included...So we need to explore the options to reinstate the COLA.”
Rachel Hopple, who retired in 2013 after working in Tiffin for 35 years and has never received a COLA, said recent spikes in inflation have brought the issue even further to the forefront.
“It makes me boil,” Hopple said. “You look at all these other professions where people are making slow adjustments to their salaries. Here we are sliding backwards. Everything’s getting more expensive. And we’re just going backwards. It’s just very, very sad.”
Ohio Auditor Keith Faber’s office launched a review of STRS last year. The findings haven’t been released.
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