PARMA, Ohio — Terry Caskey is a 28-year Parma teacher who is stunned that the State Teachers' Retirement System or STRS is considering a 30% hike in incentive bonuses when retired Ohio teachers have faced restricted cost-of-living increases for several years.
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Caskey told News 5 she believes it's absurd that the STRS pension fund lost 5.3 billion in investments in 2022, still awarded $10 million in bonuses to staff, and is now proposing to increase bonuses by way of an STRS board vote in the next several weeks. Caskey said additional bonuses are especially troubling since Ohio teachers now have to work 35 years to get their pension, moved up from 30 years several years ago.
"30% bonuses for staff, which is ridiculous, they haven’t taken care of the teachers yet, we’re still working longer for less money," Caskey said. "The teachers want to retire at 30 years, that’s what they were promised, the retirees were promised cost-of-living increase and they’re not getting it. They shouldn’t be voting for any bonuses right now, if they’re deserved yes, but right now until the teachers and the retirees are happy with what they have then no bonuses should be in effect.”
Robin Rayfield, Executive Director of the Ohio Retirement for Teachers Association, or ORTA, told News 5 that just as troubling is the move by Ohio Governor Mike DeWine to remove seven-year STRS board member Wade Steen and replace him with new appointee G. Brent Bishop on May 5.
Rayfield told News 5 he believes the move is illegal, and believes the Governor didn't have enough probable cause to replace Steen when his term isn't up until Sept. 2024. Rayfield said Steen was the biggest advocate for teachers and retirees on the board, fighting for the return of consistent cost-of-living increases and the reigning in of STRS staff bonuses.
“From all that we've heard the move by the Governor is illegal and ORTA will fight this legally in the court system," Rayfield said. “What the Governor did is illegal, he has to have cause to remove him, this is foolishness that he missed a meeting or missed more than he should have. Governor DeWine is declaring war on all teachers because he’s attacking our pension.”
Rayfield said ORTA will be filing a civil lawsuit in Franklin County court in the coming days, demanding Steen be returned to the STRS board.
Governor DeWine's office defended the replacement of Steen on STRS board and issued the following statement:
“The State Teachers Retirement System (STRS) oversees an ongoing financial commitment to Ohio’s retired teachers for retirement benefits for their service to our local schools and their students.
“I agree with retired teachers who have voiced their anger and disagreement with recent decisions by STRS regarding investments and benefits. I am in favor of retired teachers getting a cost-of-living adjustment from STRS. I supported Auditor Faber conducting a forensic audit on the system. I’ve questioned how staff have received raises and bonuses when the retirees they serve got nothing. I believe STRS should consider investment strategies to increase returns. And, I believe that changes to investment vendors should be made through a competitive and transparent public process.
“I am not for tipping the scales in favor of select money management firms. Most critically, I am not in favor of board members failing to advocate for our retired teachers and the long-term health of their retirement funds.
“I made a change in my appointee to STRS in part because, since September, this appointee missed three meetings and only partially attended three others. You cannot be a voice for retired teachers if you are not in the meetings to be that voice.
“I was also concerned this previous appointee was viewed as acting as an advocate for a specific investment firm at the expense of a thorough, competitive, and public process.
“Consistent with his fiduciary duties, I advised my new appointee–and I recommend to all STRS board members–to take a fresh look at the investment strategies and vendors employed by STRS, with an eye on the long-term health of STRS funds, reducing waste, and fulfilling the promises made to our retired teachers on issues such as cost-of-living adjustments. If that fresh look results in changes to the money management firms employed by STRS, so be it.
“Ohio’s retired teachers deserve nothing less than full attention to these issues.”
STRS also issued a statement to News 5 defending the proposed 30% increase in staff incentive bonuses.
Investment performance is crucial in both up and down markets for securing the financial condition of the pension fund. During the strong stock market of fiscal year 2021, STRS investment managers achieved a nearly 30% return and brought $22 billion into the pension fund. Like most investors, STRS Ohio experienced losses in fiscal year 2022. But our investment returns exceeded the State Teachers Retirement Board-approved benchmark, net of costs and expenses, and again outperformed the market and preserved around $1.8 billion of teacher's funds.
Still, Caskey and ORTA are hoping additional STRS bonuses will be voted down, investment practices made more transparent and annual cost-of-living increase restored for more than 150,000 Ohio teaching retirees.
“STRS has the worst retirement plan going in the United States, we pay more, we work more, and we get less at the end, Caskey said. “Without cost-of-living increases it’s so hard for them, they need that. Even people on Social Security get a cost-of-living increase. How is it that they make a promise and yet revoke it, yet give bonuses to investors and staff.”
