The State Teachers Retirement System of Ohio took a big step toward shoring up its finances for the long-haul when it voted to indefinitely suspend the cost of living allowance given to retired teachers.
The move came after STRS was advised by actuaries and consultants that it should lower its expected annual rate of return and change other assumptions. As a result, unfunded liabilities grew, forcing the system to make cuts.
Related: Retired Ohio teachers to lose cost of living increase
Here are five key things to know about Ohio’s second largest public pension fund:
1. STRS of Ohio was founded in 1919 and covers 490,000 active and retired teachers.
2. The system has more than $76 billion invested and earned 7.8 percent last year.
3. STRS was among the four public pension systems that under went a massive overhaul in 2012 to shore up its finances.
4. Pension benefits are prescribed by state law, not union contracts, and the liabilities are covered by employee and employer contributions as well as investment income.
5. STRS isn’t the only system looking to cut costs. The School Employees Retirement System of Ohio is asking lawmakers for permission to cut the cost of living allowance given to retirees and use that money to shore up funding for retiree health care. And the Ohio Police & Fire Pension Fund is considering eliminating subsidized health care and giving retirees a monthly stipend instead.
Related: Retiree health care cuts looming for cops and firefighters in Ohio