![Suzanne Laird holds a sign that she says she’s brought to STRS board meetings for years, after the board voted to suspend cost of living adjustments for benefit recipients. STRS says it pays out over $7 billion in benefits each year to more than 152,000 retirees, survivors and others. [Karen Kasler / Statehouse News Bureau]](https://npr.brightspotcdn.com/dims4/default/b5217d1/2147483647/strip/true/crop/4032x3024+0+0/resize/840x630!/format/webp/quality/90/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2Flegacy%2Fimages%2Fnews%2Fnpr%2F2022%2F08%2F1118042393_1848871406.jpg)
The State Teachers Retirement System of Ohio, which oversees pensions for Ohio’s retired public school teachers, has lost more than $3 billion in the last year. But the board will vote tomorrow to award 90 of its investment managers nearly $10 million in bonuses.
Advocates for retired teachers oppose that action, saying educators living on pensions right now are hurting, especially due to the rising cost of goods.
Rudy Fichtenbaum, STRS board member, said retired teachers deserve the bonuses, not the investment managers.
“Giving a record-high of $10 million in bonuses for losing only $3 billion would be an insult to every retired teacher who is struggling with out-of-control inflation,” Fichtenbaum said.
Fichtenbaum said STRS suspended cost of living adjustments in teachers' pensions in 2017 and he said inflation increased 22% during that same period of time. Retired teachers were awarded a 3% cost of living increase beginning in July of this year but that hasn't kept pace with inflation.
Nick Treneff, communication services director for STRS, said the staff who made the investments for the plan exceeded the goals that were set for them. And he said, because of their work, STRS investments performed better than others in the downturn of the stock market.
"The bottom line is the stock market was down, the bond market was down. It's hard to produce positive returns in that environment. So we task our investment staff to out perform the benchmark," Treneff said.
Treneff said employees eligible for this bonus are those who are in charge of the investments, but other STRS management and staff are not. He said the investments made this past fiscal year outperformed the board-approved benchmarks and netted about $1.8 billion and he said that number is even higher over the past five years. He said the STRS investment managers save the system millions of dollars.
"We have an outside group, CEM Benchmarking, that estimates STRS saves about $100 million per year through the use of the internal management to the level that we do it," Treneff said.
Treneff said rewarding good investment strategy is necessary to get the system into better financial health so it can eventually afford to restore an annual cost of living adjustment for retirees.
Scott Schertzer, Democratic candidate for Ohio Treasurer, said if he's elected, he would do more to help all of Ohio's public pension systems, including STRS.
"On day one, I would initiate a comprehensive compensation study of the State Teachers Retirement System because we have to ensure our pension funds are strong and stable in the short and long run. We owe this to the people who put their lives on the line every day in each community across our state. Our neighbors work with dignity so they should be allowed to retire with dignity," Schertzer said.
Republican Ohio Treasurer Robert Sprague's campaign has been contacted for a comment on the situation but has not yet responded.
Dan Lusheck, Ohio Republican Party spokesman, said in a statement, "Instead of trying to score quick political points, Scott Schertzer should learn what the state treasurer does."
Ohio’s retired teachers are generally ineligible for Social Security benefits. The pension received each month is based on the amount a teacher was earning at the end of their career. Because of that, some are living on $1,700 a month right now.
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