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