Unhappy about the loss of cost of living allowances, retired teachers plan to protest at the State Teachers Retirement System of Ohio trustees meeting in Columbus on Thursday.
STRS trustees voted in April 2017 to suspend the cost of living allowance as a means of shoring up the $75-billion fund. The move impacts 490,000 teachers and retirees.
“Teachers and retirees must band together like those in West Virginia, Kentucky, Oklahoma and Arizona have recently done,” said retiree Bob Buerkle, who is hoping to muster hundreds of protesters for the meeting. “If they need more funding sources to provide our retirement benefits then they need to increase employer contributions to do so, not steal our earned, paid for and promised COLA…”
Related: Retired teachers to lose cost of living increase
Trustees agreed to review the matter in 2022 but there is no certainty that the allowance will return. STRS is Ohio’s second largest public pension fund.
A 2012 change in state law allows pension fund trustees to change cost of living allowances, rather than leaving that to lawmakers to decide.
STRS members used to receive a 3 percent COLA but later it was trimmed back to 2 percent, starting on the fifth anniversary of retirement.
Buerkle argues that for teachers who retired before July 2012 when the COLA was 3 percent, the elimination of the bump in pension checks adds up year after year.
STRS isn’t alone in its need to trim costs. In 2017, the Ohio Police & Fire Pension Fund began restructuring health care benefits for retirees starting in January 2019, the Ohio School Employees Retirement System decided to freeze COLAs and the Ohio Public Employees Retirement System began considering COLA cuts.
Related: Ohio’s public pensions shift more health care costs to retirees
Like in other states, Ohio’s public pensions are defined benefits systems. The pension benefit is based on age, years of service and final average salary and it’s guaranteed. Defined contribution plans, such as 401(k) funds, are more common in the private sector.
Public employees in Ohio do not participate in Social Security. The pension benefits are prescribed by law and each system — not employee union contracts.
In 2012, Ohio adopted sweeping reforms for its five public pension systems, impacting nearly 2 million workers, retirees and beneficiaries. The changes brought significant cuts to pension benefits and required employees to work longer. The overhaul was needed to shore up the finances of the systems.
Last year, the systems reported solid earnings on investments that collectively total nearly $210 billion.
Related: Big returns help bolster Ohio’s five public pension funds