Excerpt from the Pensions & Investments Online
Ohio State Teachers' Retirement System, Columbus, faces a key board election in the spring that could tilt the balance to a group of self-proclaimed reform trustees.
The reformers support restoring a permanent cost-of-living adjustment, funded by cost cutting, including a move to passive investing and significant cuts to the $90.1 billion plan's investment staff.
The reform trustees have been spurred on by a grassroots movement of retirees and active Ohio teachers angry about reduced or eliminated annual cost-of-living adjustments.
In 2012, the state Legislature passed pension reform that gave the STRS board the authority to set the system's COLA. The previous fixed 3% COLA was seen as unsustainable following the financial crisis of 2008, and the board cut the COLA to 2% from 2013 to 2016, and did not provide one from 2017 to 2022.
The board argued that the reduction was necessary to preserve the fiscal integrity of the system.
While the board has since set a 3% COLA for fiscal year 2023 and 1% for fiscal year 2024, the six years of no COLA sparked a wave of protest throughout the state, resulting in a sea change in the composition of the board of trustees in the last several years.
