We are approaching a crucial STRS election to reelect Rita Walters, and Bob Stein to the STRS Board. During April, STRS members will be able to vote online or request a paper ballot.
Rita and Bob have been diligent in making sure the STRS funds are secure into the future. Both Rita Walters and Bob Stein are up for reelection. Unlike their opponents, both Bob Stein and Rita Walters have extensive training and experience with the issues facing STRS. Please check their bios at: https://www.bobstein.us/.
The COLA is the big issue in this campaign. Bob and Rita have protected the stability of STRS and believe that providing a COLA now would jeopardize the stability of the STRS system. Read their statements below. Their opponents feel that a COLA should be restored now, unfortunately, they do not have the training or experience to understand that such action now could be disastrous to STRS.
Please read the following statement from Bob Stein —
I first ran for the STRS Ohio board in 2008. The Global Economic Downturn had severely damaged the system and I believed my experience in business and investments could benefit STRS Ohio and its retirees. I’ve continued to run for a retiree trustee seat since then because my service has measurably improved the long-term condition of the system as well as increase the probability that STRS Ohio retirees will recover what was lost in the pension reform following The Global Economic Downturn.
I was a board candidate in 2012 and 2016 to provide continuity to pension reform programs and to work to improve the STRS Healthcare Fund. My thought was that Healthcare inflation is much higher than broad inflation so progress made to slow the rise in healthcare costs would benefit retirees more quickly than if we waited to fix the pension system first. While the board continued its work on pension issues, it was able to move our healthcare fund from “we have maybe 10 years left” to “the healthcare fund is fully funded for 60 year rolling periods” by adjusting and executing a complex plan over most of the last decade. I was part of that from the beginning and I am sure we can do it with COLA and supplemental benefits as well.
Before I was elected in the 2008-9 election, I studied several board governance models and enhanced my understanding of institutional investment concepts. Personal investing, and even economics, are very different from making institutional investment policy. I’ve continued to update my training using professional publications and professional contacts made at conferences and seminars.
I have earned a Certificate of Achievement in Public Plan Policy (CAPPP) from The International Foundation for Employee Benefit Plans and attended workshops, conferences, investment seminars, and many distance courses related to service as a trustee of the State Teachers Retirement System of Ohio. In my first STRS Ohio Board term I served on the Trustee Education Committee for the National Council for Teacher Retirement.
My ongoing interaction with a global network of public service and pension professionals continues to produce policy and program ideas that benefit STRS Ohio. It is interesting that trustees of other pension systems, academic researchers, and the occasional international authority often seek the advice of STRS Ohio board members and staff regarding efforts to emulate the success of our policies and practices. They often ask “why can STRS Ohio make this work but we can’t?” The answer is high quality professionals executing a proven governance model solely in pursuit of the Mission and Vision of the system.
My daily work involves following developments in the public pension field and other industries using several daily newsfeeds. I share my comments on the weekly NCPERS newsletter with STRS retirees and members who have requested this by writing to my STRS email address.
Please read the following statement from Rita Walters —
When I ran for a retired seat on the Board the first time I said my goal for being elected to the STRS Ohio Board was to make sure that the fund was secure and that we can maintain the option of affordable healthcare for all future and current STRS retirees. At this time our healthcare fund is currently funded at 182%. The Board passed a motion at the October Board of Directors’ Meeting to rebate $250 to each retiree that was enrolled in STRS Healthcare on October 1, 2020. That money will be in the December 2020 benefit payment. It is tax free and it is due to a usage level that was below estimates and the rebates STRS received from the government exceeded expectations.
STRS Ohio just celebrated its first 100 years of existence. The fund has been paying benefits to Ohio teachers for many, many years. My goal is to make sure that can continue for the next 100 years. Our responsibility is to all members of STRS Ohio not just the retirees. Would I like to have my COLA restored? You bet your life I would but to ensure that both current retirees and future retirees continue to receive their monthly benefit month after month, year after year, I am willing to forego that for now until we can stabilize the fund. I realize that is not the position of all retirees.
I know there are people out there saying that we received a COLA when we weren’t as well funded as we are now and that we received a 13th check when the funding level wasn’t what it is now but things are a bit different now. The STRS Ohio fund is a very mature fund. STRS Ohio pays out about $4 billion more in benefits annually than it receives in contributions each year. That is called negative cash flow. The difference is made up by investment gains. What happens if investment gains don’t match assumptions? When investment returns do not meet assumptions, the asset level can drop due to negative cash flow. The pension fund needs to be able to weather years when market returns don’t meet expectation. For example 2020 was one such year.
I know there are people who don’t think the Board even thinks about the restoration of the COLA but they are wrong. We know that the retirees have been patient. We want to provide for them some inflation protection even if it isn’t the COLA but that can only be done when it does not materially jeopardize the stability of the system. I am there for the good of the whole, not just the here and now but for the future of all STRS members. The stability of the system is paramount. We have 180,000 Active participants and 157,000 retirees. At one time we had several actives paying into the system for every retiree. That is no longer the case, due to the maturity of the system.