Message from the Executive Council Chair: April 2025

Greetings, ORTA members.

I want to comment on this month’s STRS meeting. At the April 17th meeting, STRS’s auditor, Cheiron, stipulated that STRS passed all three tests for the Sustainable Benefit Plan for 2025. Passing the three tests allows for restoration of benefits up to the amount determined by the tests. For FY 2026, the number of benefits that could be stored was determined to be capped at $2.04 billion without jeopardizing the fiscal integrity of the pension plan. After much discussion, our Board approved a 1.5% COLA for retirees and a further reduction in years of service for active teachers. The amount spent on the 1.5% COLA amounted to .662 billion for retirees and 1.177 billion to reduce years of service for active teachers.

While retirees certainly won’t object to receiving a COLA, 1.5% doesn’t go far enough, considering inflation has risen 23.3% since 2020. What is disturbing is that in Ohio Revised Code 3307.67, the language states that a 2% shall be paid unless it jeopardizes the fiscal integrity of the pension plan. The actuary was clear that a 2% COLA would not affect the plan. It was disappointing watching our Board approve a 1.5% COLA when a 2% COLA was required by law, and irresponsible that the STRS legal department didn’t intervene with proper legal advice.

In other news, ORTA leadership has decided to weigh in on Senate Bill 69. Senate Bill 69 is a work in progress, and it intends to allow input as to what the five Ohio pension plans might need to help members who pay into them. At this point, ORTA leadership has identified three items.

First item. Social Security benefits are not taxed in Ohio, so why are retiree benefits taxed? Members' contributions are nearly double those of Social Security, yet they receive a tax break while we don’t. It is a matter of fairness.

Second item. The STRS membership is nearly 50/50 between active and retired members, yet the STRS board comprises seven voting members, with five seats going to active members and two to retired members. In the Ohio Revised Code, the Governor can appoint one member. However, since the Department of Education now rests under the Governor’s office, the Governor can appoint two members. ORTA suggests that this seat be converted to a retiree seat, and ORTA will lobby for one active seat to be converted to a retiree seat. This would result in 4 seats for active members and four seats for retired members, and fairly reflect membership composition.

Third item. ORTA joins STRS, OFT, and OEA in recognizing the need to increase employer contributions. Regarding STRS, Ohio’s employer contribution is 50% less than its peer states. ORTA feels strongly that Ohio should join the states that support their pensions by adopting a variable employer contribution component.

ORTA will keep you posted. Please keep visiting our site for the latest news. Also, please click this link and donate to the Pension Defense Fund. ORTA wants to clear the good name of Wade Steen and Dr. Rudy Fichtenbaum. Court cases are expensive, and we certainly appreciate your support.

As always, my best.

Dean Dennis, Chair

ORTA Executive Council