02/28/2022

Ohio retirees aren’t waiting another year for a COLA

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It’s been more than five years since retired teachers in Ohio have received a cost-of-living adjustment from its pension fund, the State Teachers Retirement System of Ohio. No COLA and rising prices have forced some retirees to tighten their belts or return to work, says Elizabeth Jones, retiree chapter president of the Cincinnati Federation of Teachers. “It’s a choice that they have to make to make ends meet. At this late stage of life, retirees should be enjoying life. People need a COLA to live.”

Retired couplePhoto credit: Getty/whyframestudio

The pension fund’s COLA has been a source of conflict since 2013, when the adjustment was suspended because the pension fund was in financial trouble. In 2017, the COLA was eliminated entirely.

More than 500,000 active and retired teachers are enrolled in the system. In the last five years, there has been a lot of activism by many of those members calling on the administrators of the STRS Ohio to reinstate the COLA. There are five public pension funds in Ohio; all but one, the retired teachers’ pension, is given a COLA. In addition, an independent forensic investigation of STRS found that it had paid more than $400 million in fees to a private equity firm. The report also found that by reducing fees paid to private equity, hedge funds and other alternative investments, STRS could restore COLA benefits.

Legislation to restore the STRS Ohio COLA has been introduced in the state Legislature by state Sen. Teresa Fedor and state Rep. Paula Hicks-Hudson. In the meantime, the STRS board narrowed 16 different options to address the COLA to two. One option provides a one-time 2 percent COLA; another option offers full benefits after 35 years of service.

Ohio educators currently contribute 14 percent of their salaries to the pension fund, the second-highest contribution rate, just behind Missouri, of states with pensions for educators. Without the COLA, many members say they are paying more into the fund than they are getting back. It's no wonder that people are upset, says Jones. “Having a strong defined-benefit plan is important, and we want to protect it.”

Teachers now have to work until they have 34 years of service or are 60 and a half years of age before they can get their pensions. That change has caused a mass exodus of teachers and a drain on the talent, says Jones, who retired from the Cincinnati public schools as an English teacher and guidance counselor in 2005. “It also means that teachers who started later are working 38 or 39 years before they can retire,” says Jones. “I’ve heard different downsides to the new rules—including the fear of having to work all their lives. Removing the age and years of service will help these individuals.”

Jones is one of two AFT Ohio members running for elected positions on the STRS Ohio 11-member board. She is running for the retired teacher seat, and Cincinnati Federation of Teachers president Julie Sellers is running for a contributing member seat. To get on the ballot, Jones had to gather the signatures of 500 Ohio retired teachers. Although it was tricky during the pandemic, she achieved her goal.

“Teachers have worked all their lives to pay into STRS with the promise that they would be able to draw on that pension for life,” says Jones. “If we change the board and vote in people more inclined to ask the tough questions and demand answers from the STRS management about its investments, we can change how they think about those investments,” she says. “I want to be a voice and advocate for those teachers who are finding it difficult to live in today’s economy. I don’t believe anyone should have to work 39 years and get a pension that’s worth less than what they put in.”

[Adrienne Coles]