Medicare retirees probably will see the STRS subsidy increase by 3-4 percent

Submitted by Richard Williams, the WSURA board representative to OCHER

Now that changes to State Teachers Retirement System (STRS) pensions have been finalized, the focus of the STRS Board is on the health care fund.  A basic question is how to treat the under-65 retirees since, without Medicare, their heath insurance costs are much higher.  Several pathways are being explored including (a) freezing the subsidy for non-Medicare retirees, (b) capping the amount the subsidy would increase each year for non-Medicare retirees, (c) give the Medicare subsidy to non-Medicare retirees without further increases, or, (d) stop giving a subsidy entirely to non-Medicare retirees.  The last option would mean non-Medicare retirees would be paying $927 per month for the Aetna health care plan!  Fortunately for this class of retirees the last option was eliminated by the STRS Board at their August meeting. The Board is likely to be voted on at the October STRS Board Meeting and the most likely outcome is:

1. Medicare retirees probably will see the STRS subsidy increase by 3-4 percent with any increase above that amount paid by retirees.
2. Non-Medicare retirees would continue to receive the 2018 subsidy.  Future increases in cost would be 100 percent paid by retirees.

STRS won’t re-examine changing the COLA from its current 0 percent until the ratio of assets to liabilities is well above 70%.  Furthermore, the assumed rate of return of 7.45% may be optimistic.  Many experts think the assumption should be reduced to around 7%.

Notes from other university retirees associations:

• University of Akron Retirees Association gives two $2,000 scholarship yearly.
• Bowling Green reports Fall enrollment is down 2.4 percent mostly in their two-year program and foreign graduate students.  Retention rate is up to 75.8 percent.  The Retirees Association has 335 members and gives out two $700 book scholarships annually. The university does not provide any subsidy for the retirees association.
• Cleveland State reports 150 paid members and sponsors six events a year with average attendance of 25. The attendance at their annual lunch is about 60.