Ohio teachers’ pension board votes to reduce years needed to retire, gives bump in monthly payments

The Ohio teachers’ pension fund board has voted to increase the money in the monthly checks given to their retirees, as well as reduce the number of years active educators need to work before retiring with full benefits.

With the cost of everyday essentials going up, every dollar counts.

“We’re all trying to keep up with inflation, right?” retired educator Melissa Cropper, who is also the president of the Ohio Federation of Teachers, said.

The education system’s retirees will get some relief this summer.

Cropper cheered that the majority of the State Teachers Retirement System (STRS) board voted to increase the cost-of-living adjustments, or COLA, from 1% to 1.5% for eligible pensioners.

“Having a COLA means that there’s more money in your pockets to be able to keep up with inflation, when paying your everyday bills, buying your everyday groceries, all those types of things,” she said. “It’s a move in the right direction.”

Due to a new funding policy adopted in 2024, roughly $2 billion was able to be allotted under the board’s sustainable benefit plan.

In a board meeting last week, the board’s advisor informed them of the available money, but also explained how a temporary option could include a future increase in retirement eligibility requirements.

Former STRS Chief Actuary Brian Grinnell, who handled risk management, warned that this could put the nearly $100 billion fund in jeopardy.

“They’ve gone ahead and committed to spending this $2 billion on enhanced short-term benefits, and they’re doing this in the face of financial markets that are looking very, very challenging for this year,” Grinnell said.

Since January, the state’s pension funds have lost a significant amount of money due to the volatility in the global economy, he said.

He doesn’t trust the STRS board to handle this situation carefully.

“It’s reasonable to question how much faith you should put in this board at this point in time,” he said.

For the past year, we have dug into — and exposed — the controversy swirling inside STRS, which is the fund for more than 500,000 active and retired public educators in Ohio.

In summary, there has been constant fighting, two board resignations, and allegations of both a public corruption scheme and the mishandling of funds. There has been a senior staff dismissal and at least two senior staff resignations.

Attorney General Dave Yost is currently suing to remove the board chair for allegedly colluding with an investment firm startup attempting to “contract steer” billions in a scheme that would benefit him.

“I don’t think this board has inspired a lot of confidence that they are thinking about the long term and are taking their fiduciary responsibilities to all of the pension members seriously,” Grinnell continued.

He also argued that this move by the board won’t truly benefit educators, since it only gives an additional $50 per month for each retiree.

“There needs to be a COLA for these retirees in some form,” he said. “That COLA needs to be funded, though.”

The board is setting a precedent of raising benefits while losing money, he said, which will actually hurt the majority of the pensioners.

“There is an imbalance where the funding to pay the retiree benefits is, in part, coming at the expense of the active teachers,” he said.

Cropper argued that the active teachers are getting a fair deal, since the board also voted to reduce the number of years to get full retirement benefits from 33 to 32.

“We have board members who are looking to still keep the system stable, but to find a way that they can restore benefits among both actives and retirees, so that they’re equally sharing the loss and equally sharing the gain in this process,” she said.

The STRS board is also trying to lobby the state lawmakers to increase the contribution rates from employers.

But with the controversy, and with the board’s choices lately, several Republican legislative leaders say they don’t trust the board to use the proposed additional money wisely.

“I think that the state needs to make sure that the funds are valid or sustainable and that they’re not just blowing money — if there’s any indication that they’re making bad decisions right now,” Ohio Senate Education Chair Andrew Brenner, R-Delaware, said.

State Rep. Adam Bird, R-New Richmond, is the chair of the Ohio Retirement Study Council, and doesn’t think any request to the legislature will be fruitful.

“I feel pretty confident in saying that an employer contribution rate doesn’t have any support in the General Assembly — or enough support,” Bird said.

He continues to monitor the STRS situation closely, he added.

“I think it’s important for my colleagues and I to remember that we established a pension system and we are in charge of it — and if we decide there needs to be changes, as a body, we should make changes,” Bird said. “I think it’s important for the General Assembly to always keep a close eye on what the five pension systems are doing.”

In previous reports, Brenner and other Statehouse leaders suggested changing the STRS board structure.

Asked whether he has any interest in reforming the pension systems and how they function as a board, Ohio House Speaker Matt Huffman, R-Lima, said in March, “The short answer to that question is yes.”

He proceeded to explain that the G.A. did pension reform in the early 2010s, and it is likely the time for another fix.

“The question is, are the folks who are serving on those boards, are they truly experts in pensions?” Huffman said. “I think those are all things that need to be reviewed on those five pension boards.”

Asked if he was looking at changing the STRS board, Bird responded, “No comment.”

Previously, the state’s other pension funds rejected any change within their structure. Officers within the Ohio Police and Fire Pension Fund (OP&F) told the lawmakers to leave them out of STRS’ chaos.

This article was originally published on News5Cleveland.com and is published in the Ohio Capital Journal under a content-sharing agreement. Unlike other OCJ articles, it is not available for free republication by other news outlets as it is owned by WEWS in Cleveland.

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