Welcome to our first monthly update on retirement issues! This update will contain information for retired and active members of the State Teachers Retirement System (STRS), the School Employees Retirement System (SERS), and the Ohio Public Employees Retirement System (OPERS).
Please look for the information about the retirement system that you are a member of.
State Teachers Retirement System
The STRS Board has three positions up for election this year. One contributing member seat and two retiree seats.
OFT supports:
- Ben Pfeiffer, President of the Oregon City Federation of Teachers, for the contributing member seat.
- Elizabeth Jones, President, Cincinnati Federation of Teachers Retired, Local 1520-R, for a retired member seat.
- Rudy Fictenbaum, former state and national President of American Association of University Professors, for a retired member seat.
These candidates will work on behalf of active and retired members, but we need to make sure they get on the ballot before the deadline on February 26. If you are an eligible member, please visit this page to download their petitions and learn more.
STRS Audit
OFT's Executive Committee has voted to endorse the STRS Audit that is being organizing by our allies at the Ohio Retired Teachers Association. The Executive Committee also voted to contribute $10,000 to the fundraising campaign for the audit.
STRS is an $80 billion pension fund serving more than 495,000 active, inactive and retired Ohio public educators. For a fund this large and complex, we feel it is beneficial to support a third-party audit and learn more about STRS’s finances; however we do not expect the audit to reveal that STRS is at or near the 85% funding threshold that was previously set as a requirement before considering a reinstatement of the COLA. Read more here about our support for this audit.
STRS Policies We are Monitoring
Rate of Return: We are monitoring what STRS will do with its rate of return. The current expected rate of return on investments is 7.45 percent. Consultants have recommended reducing it to 7.25 or lower. Reducing the rate of return could affect active and retirees because it would project less revenue which would require the Board to make changes to benefits.
Transparency: William Neville, STRS executive director, said that starting in February 2021, STRS would archive the board meetings on their website for a month, with past months available by request. OFT has been advocating for Board meetings to be livestreamed so that members can observe the meetings without traveling to Columbus. OFT had a bill introduced in the 133rd General Assembly that would have directed pension funds to archive their board meetings. The bill did not pass.
School Employee Retirement System
OFT members who work as administrative assistants, bus drivers, food service workers, librarians, maintenance personnel, teacher aides, treasurers and other school support roles are members of SERS.
SERS Elections
This year, SERS had two active members seats and one retiree seat up for election. Active incumbents James Haller and Barbra Phillips and retiree Frank Weglarz had qualifying signatures. They did not have challengers, so there will be no election. They will be seated as if elected when their terms begin in July. All new Board terms run from July 1, 2021, to June 30, 2025.
SERS policies we are monitoring:
COLA: SERS suspended the COLA for 2018, 2019, 2020. At the September meeting, the SERS Board unanimously voted to approve a 0.5% cost-of-living adjustment (COLA) increase for eligible retirees and beneficiaries in 2021.
Transparency: OFT had a bill introduced in the 133rd General Assembly that would have required pension funds to broadcast their board meetings and archive them on their websites. The bill did not pass; however, SERS is working on archiving their board meetings on their website.
Ohio Public Employees Retirement System
OFT members in the Federation of Franklin County Children Services Employees, Local 3143 are members of OPERS.
Updates from the January OPERS Board meeting:
- CEM Benchmarking Principal Mike Heale said OPERS' total pension administration cost of $55 per member and retiree in 2019 was $23 below the peer average of $78. Simultaneously, OPERS had a service score of 84, far above the peer median of 77.
- OPERS provided a 5-year net total investment return of 7.5 percent, which was equal to that of our peers and other pension system universe, at below-benchmark costs.
- The OPERS' 5-year policy return was 7.2 percent, meaning OPERS Investments staff added 0.3 percent, or more than $300 million, of value over the past five years based on a portfolio of $100 billion.
OPERS policies we are monitoring:
Rate of Return/Benefits: We are monitoring potential changes reducing the rate of return for investments from 7.5 percent to 7.2 or 7.0, as well as potential changes to the age and years of service before retirement and changes to the health plan.