Kevin Kroskey's Ohio Faculty Advisor

(The text below is reprinted from the news release by STRS on 9/12/11.) Earlier this month, the Buckeye Institute issued a misleading report entitled, "Taxpayers on the Hook: Taxpayer Contribution Rates for Ohio Government Pensions Outpace National Averages." The report claims STRS Ohio's 14% employer contribution rate is the ninth highest rate out of 34 states with similar teacher retirement programs. STRS Ohio employers do not contribute to Social Security by state law, making the STRS Ohio pension the only source of retirement income for Ohio's educators. In reality, STRS Ohio's employer contribution rate is below the national average when you factor in the Social Security contribution rate of 6.2% that 22 of those states make on behalf of their public educators. The report only listed the amount those states contribute to the state retirement system and failed to include the additional amount that is contributed to the Social Security program. A mor...

It was announced on July 21st Richard Cordray, Attorney General for the State of Ohio, is jockeying to be the lead attorney in a law suit filed against British Petroleum (BP), seeking class-action status. The law suit was filed on behalf of the state's five pension systems, which incurred substantial losses due to the decline in BP stock after the gulf disaster. "Institutional investors, and the Ohio Funds in particular, have been greatly harmed by BP's alleged misconduct. By forming a partnership between New York and Ohio, we aim to compensate investors for what we believe was securities fraud and effect real change in the way BP and other companies do business," Cordray said. Let me first and very clearly state that I am not in any way, shape, or form arguing in defense of BP in writing this. What I am arguing for is common sense and personal responsibility. I'm no expert in deep-see drilling, but it would certainly appear to me that it might be a bit risky ...

(The text below is a copy of the release from STRS made 09/21/2009) Last week, the State Teachers Retirement Board held its monthly meeting. Following the regularly scheduled meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report each month. The September report follows. SEPTEMBER BOARD NEWS OHIO'S FIVE PENSION SYSTEMS PRESENT THEIR PLANS TO THE ORSC On Sept. 9, all five Ohio public pension systems - STRS Ohio, Ohio Public Employees Retirement System, School Employees Retirement System, Ohio Police & Fire Pension Fund and the Highway Patrol Retirement System - presented their plans for achieving or maintaining a 30-year funding period to the Ohio Retirement Study Council (ORSC). This council serves as the legislative oversight body for the five systems....

As seen from the full post of the STRS announcement , STRS finally came out with their proposed changes to the pension plan. These changes will be presented to the Ohio Retirement Study Council next week in conjunction with the other state pension systems for public employees. These other state pension systems face similar issues as STRS and change within these other pension systems is likely not far behind. It's important to note that state law must actually be changed before these proposed changes can actually be put into force, so there is still considerable length to this process of change. Change in some form is eminent. Private, non-government pension systems have been vanishing over the last decades because in part because as our life expectancy has continually increased over time, the pensions have had to be paid longer than expected. Pensions put an open-ended liability on the shoulders of the private companies and these pensions and healthcare benefits provided to both e...

(The text below is a copy of the release from STRS made 09/01/2009) Today, the State Teachers Retirement Board held a special meeting. Following board meetings, a report titled "Board News" is posted on the STRS Ohio Web site, as well as mailed to a number of members and education organization representatives who have requested it. As a member of STRS Ohio with an e-mail address on file, you will also receive this report whenever it is issued. RETIREMENT BOARD ADOPTS PLAN FOR PENSION DESIGN AND CONTRIBUTION CHANGES Following many months of discussion and after receiving significant input from STRS Ohio members, the State Teachers Retirement Board unanimously approved a multifaceted plan today to strengthen the financial condition of the retirement system. In approving the plan, board members cited the difficulty in making the decision, noting that these changes impact all STRS Ohio members. The plan includes an increase in contributions; an increase in final average salary ye...

As the market downturn has hurt pension plans nation-wide, STRS is conducting various contingency planning scenarios to ensure the pension plan is more adequately funded for current and future retirees. Some of the changes, if implemented, could impact current retirees, potentially reducing or eliminating the COLA--cost of living adjustment--for example. This could pose a difficult scenario for current retirees, as a promised and likely planned-for benefits could be reduced. In a future post, I will discuss the pros and cons of using the PLOP--Partial Lump Sum Option--available through STRS and other state pension systems. The PLOP transfers investment risk to the participant but can reduce the risk of negative changes to the pension systems such as a reduced COLA. Notes from STRS' July Update are shown below. To Your Prosperity, Kevin Kroskey ---------------------------------------------------------------- (From STRS Ohio's July Update) LONG-TERM CONTINGENCY PLANNING WORK CONT...