State Teachers Retirement System COLA Fizzles Out
Retired teachers in Ohio will not see a cost of living raise for the next five years. The State Teachers Retirement System board has voted to stop the payment increases after they re-assessed their assets and liabilities.
For almost 100 years, every Ohio public school and charter school teacher has been paying into the STRS pension. Lately, retirees have been seeing annual cost of living adjustments of 2-3% a year. But the Great Recession put a strong hurt on the system’s investments.
Pension spokesman Nick Treneff says several factors made the move necessary.
“So we had to acknowledge our assets were not going to grow as fast as we expected and we had a change in mortality tables. We had to recognize that Ohio teachers are living longer and that’s a trend that’s been going on for some time and it’s expected to continue into the future. “
Treneff adds they also see school districts not replacing teachers who retire and that means fewer members paying into the system.
“We’ve seen a little bit of a trend over the last few years in particular that that number has just come down a little bit. There’s been a lot of retirements, a lot of baby boomer retirements especially in 2013 and 2015 were two especially big years for the system.”
The board changed its estimate of annual return on investments from 7.75% to 7.45%.
STRS takes in $ 3 billion dollars a year from 170 thousand working teachers. The system pays out $7 billion in benefits to 158 thousand retirees. The other $4 billion is earned through investments.