As you know from our publications last spring, the STRS Board has been reviewing long-term contingency plans to ensure the stability of our pension fund. The Board met last week but made no formal recommendations. As a final plan is due to the Ohio Retirement Study Council (ORSC) by Sept. 9, the STRS Board will be meeting sometime before then to finalize the plan. Keep in mind any and all recommendations are subject to approval by the state legislature.
Here is what we know at this point:
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Current
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Proposed
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Member Contributions
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10%
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12.5% after 5 year phase in beginning in 2011 of 0.5% per year
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Employer Contributions
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14%
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16.5% after 5 year phase in beginning in 2016 of 0.5% per year
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The entire board supports the idea of increased contributions. Because Boards of Education and school district treasurers oppose employer increases, they will put up strong opposition this time. The hope is since they have until 2016 to make the adjustment, they will put up less of a fight. |
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Final Average Salary calculations
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Based on best 3 years
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Based on best 5 years starting in 2015
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The Board is generally in agreement on making the change but is still in discussions about when to make the change.
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Retirement age
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30 years at any age
25 year at age 55
5 years at age 60
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Starting 8/1/2015 no reduction
35 years at any age
30 years at age 60
5 years at age 65
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Starting 8/1/2015 with an actuarial reduction
30 years at age 55
5 years at age 60
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Again, the only argument amongst the Board on this item is the implementation date. Two Board members want to see the above implemented in 2011. |
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Formula
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Year 1-30 @ 2.2%
Year 1-31 @ 2.5%
Year 32 @ 2.6%
Year 33 @ 2.7% and so on until total is 100%
35 years total is 88.5%
38 year total is 97.8%
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As of 8/1/2015
Years 1- 30 @ 2.2%
Years after 30 @ 2.5%
35 years total will be 78.5%
38 years total will be 86%
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The 35 year enhanced benefit is no longer needed to encourage teachers to work longer and is eliminated. Those who are eligible for service retirement as of 7/31/15 would receive the greater of: the benefit under the old formula or the benefit under the new formula. Again the big disagreement is implementation date with two Board members pushing wanting 2011. The teachers on the Board are vehemently opposing an early implementation date because they realize that many teachers have already turned down retirement incentives to reach the 35 year enhancement. |
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Cost of Living Adjustment (COLA)
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3% per year of original benefit amount
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Current Retirees
Up to age 79 - 1.5% per year
After age 80 – 3% per year
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New retirees effective 7/1/2011
Up to age 60 – none
Age 60-79 – 1.5% per year
After age 80 – 3% per year
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The COLA is still a hot button issue along with the implementation dates. Both have resulted in pitting retirees against active teachers |
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OFT is a member HPA (Healthcare Pension Advocates), a coalition of education organizations including OEA and the Buckeye Association of school Administrators. HPA is opposed to this plan and made a presentation to the Board voicing objections and offering recommendations.
We will keep you updated.
Fraternally,
Tom Schmida, President
