COLUMBUS, Ohio (WCMH) — It’s been seven years since teachers in Ohio have received a cost-of-living increase to their pension, income that many of them are depending on in their retirement years.
About 150,000 retired Ohio teachers thought they had a cushion that would help them live on their fixed income, but in July 2017, the State Teachers Retirement System took the annual increase away, and teachers said they are fighting for answers while struggling to make ends meet.
“I was given materials — a brochure — that specifically stated that I would be granted a 3 percent [increase] every year for the length of my pension, which is lifetime,” retired Columbus City Schools teacher Pam Million said.
Million said she wasn’t ready to leave the classroom when she retired in 2005, but Columbus City Schools asked higher-paid veteran teachers like her to step away.
“I was called to teach, it was a calling for me,” she said. “I was passionate and I loved my career, and now, I am not being financially compensated for the hard work that I did for 30 years.”
While the average retired teacher receives about a $42,000 pension each year, staff members at STRS have raked in nearly $7 million in bonuses in 2020 alone, according to the Ohio Checkbook. Former Franklin County treasurer Wade Steen, part of the 11-member STRS board, said these bonuses show that the $98 billion pension system is failing in its mission.
“Teachers make a difference to every kid, and when we are not paying them, we’re not keeping that promise,” Steen said. “I can’t even describe what it says to them. You can tell it makes me a little bit angry because we owe it to them.”
Another board member, Dr. Rudy Fichtenbaum, a Wright State University economics professor, said the disparity is a telling sign as to who is prioritized by the pension system.
“When people went into teaching, you know, everybody knew you weren’t going to make a lot of money but that you could really make a difference,” Fichtenbaum said. “And, you know, what you were promised in exchange was to have at least a dignified retirement.”
STRS staff and other board members, however, insist the pension fund is responsibly managed and invested. Board chairman Robert McFee, an active teacher in Cleveland, said a series of reforms in 2012 and 2017 helped STRS become one of the most effective pension funds in the U.S.
“We outperform 90 percent of the public pension funds in the country,” McFee said. “We are one of the top-performing public pension funds.”
About 200 STRS staff members make six-figure incomes, and 50 of them make at least $250,000 a year in pay and bonuses, according to the Ohio Checkbook. At the top of the scale is William Shurman, a regional director who pulled in a $294,000 salary in 2020, topped off with a $293,000 bonus. (Correction: An earlier version of this story underreported how many people work for STRS and incorrectly said they all made six-figure incomes. The story has been corrected.)
Despite his attempts, Steen said he tried and failed to get an explanation for the bonuses awarded to STRS employees.
“Unfortunately, I think the vote was about 9-2 that, ‘No, we were going to vote at that time on that day, and we’re going to approve about $9 million in bonuses to the investment staff,'” he said.
McFee voted for the bonuses and cost-of-living increases for the staff, saying their compensation has to be kept in line.
“I think you have to look at the complete picture when you have that kind of conversation,” he said. “Our investment staff is composed of incredible, hardworking, dedicated professionals, and we at STRS do a compensation study every two years to make sure they are paid adequately for their service.”
Through the internal management of investments, McFee said the STRS investment staff saves the pension fund $117 million a year. McFee said the fund — which currently sits at an 87 percent funding ratio — was at a 48 percent risk of falling below a 50 percent funding threshold just five years ago. Now, that risk has been reduced to 16 percent.
“I’m not sure which critics are saying we have underperformed, but I don’t believe that’s an accurate description,” McFee said.
However, a forensic audit commissioned by the Ohio Retired Teachers Association in June 2021 showed that billions of dollars are also funneled to Wall Street investors, including unregulated equity and hedge funds.
Although the STRS board expressed interest in offering a one-time, 2 percent increase during a January board meeting, Million said a one-time increase won’t make a dent in the tens of thousands of dollars she’s already lost over the years due to the absence of the increases.
And there is some support at the Statehouse for restoring the lost income. State Sen. Teresa Fedor (D-Toledo), a former teacher, introduced a bill in January to make STRS pay the cost-of-living increases.
“I want to send a message to the pension systems, all of them, particularly STRS, that we need to keep our promises for retirement members and retirees,” she said.