Ohio State Teachers Retirement System, Columbus, has directed staff to study the feasibility of providing a supplemental benefit check to retirees in December to assist with inflation protection.
The $94 billion pension fund’s board approved the motion at its May 16 meeting, according to a webcast of the meeting.
The supplemental benefit check would be a potential alternative to a specific cost-of-living adjustment for the upcoming fiscal year beginning July 1, because actuarial consultant Cheiron has said a COLA for the upcoming fiscal year would materially impact the fiscal integrity of the plan. Ohio state statute requires that the pension fund’s actuarial consultant must approve any COLA voted on by the board.
The supplemental benefit check would not be dependent on the actuary’s approval. Board member Pat Davidson proposed the idea of a total $450 million to be distributed in that supplemental check, which would equal the cost of a 1% COLA. The key difference in the eligibility of retirees is that participants need to be retired for five years to be eligible for any COLA and anyone retired for 12 months would be eligible for the supplemental benefit check.
Separately, Cheiron said its actuarial valuation for the current fiscal year ending June 30 will be completed in October and should be able to provide a de minimis amount for the board in November to determine whether a 1% COLA may be feasible for July 1, 2025.
The May 15-16 board meeting is the first overseen by a 6-5 majority of self-proclaimed reformers who have been elected to their positions over the past several years as a result of a grassroots movement of active and retired teachers angered over diminished and/or eliminated COLAs since 2012.
Before 2012, there was a permanent 3% COLA until a law signed that year by Gov. John Kasich gave the STRS board the authority to set an annual COLA based on actuarial approval.
