Thank you for attending recent regional meetings to discuss your pension with representatives of STRS Ohio; your engagement has increased awareness around the issues important to OFT members.
STRS faces many decisions to be made in coming months with regard to health care and investment options. One decision made last week was how to deal with a several billion dollar unfunded liability. STRS has been reviewing forecasts for investment returns that will impact the severity of cuts to member benefits. In a letter last month, OFT and the Ohio chapter of the AAUP called on STRS board members not to base decisions on the strict conservative rates of return offered by staff and actuaries because investment returns in recent months have been much higher than what was recommended. Economic conditions are ripe for maintaining a higher rate of return in the near future. This simply means that cuts to your benefits do not need to be made as deep given the current economic climate.
Staff and the actuary suggested 10-year forecasts be based on a conservative 7.25 percent to 7.35 percent rate of return. OFT with AAUP asked the board to consider a 7.45 percent rate of return. This reduces both the unfunded liability and the severity of cuts needed on the member benefit side.
While STRS Board members agreed Thursday to base forecasts on the number we suggested, 7.45 percent, they have not yet discussed options for changes in member benefits. OFT will continue to monitor this conversation on your behalf and advocate for both our active and retired members.
Your attendance at future regional meetings with STRS Ohio staff and board members will be helpful. The next regional meeting will be held 4:30 p.m. April 6 at the Middleburg Heights Junior High School in Berea.