The State Teachers Retirement System of Ohio (STRS) board has approved a $1.84 billion benefits package that will allow teachers to retire earlier and provide a cost-of-living adjustment (COLA) for retirees. The decision came after a closely split 6-4 vote, revealing deep divisions among board members over the financial implications of the package. Under the new plan, retirees who left the profession before June 1, 2021, will receive a 1.5% cost-of-living adjustment (COLA) starting in July.
Active teachers will also be able to retire slightly earlier, with the required years of service for full retirement benefits decreasing from 33 to 32 years. The threshold for reduced benefits will drop from 28 to 27 years. However, these benefit enhancements are temporary and will expire in 2030.
Opponents of the package argued that committing such a large sum amid volatile market conditions was risky for the pension fund, which manages roughly $95 billion in assets but faces an annual negative cash flow of $4 billion.
STRS benefits plan approved
Alison Lanza Falls, the state treasurer’s appointee to the board, said the decision was financially irresponsible.
Board member Carol Correthers, a teacher who has served since 2009, expressed concern that the changes benefit only a specific group of retirees and teachers. Supporters, including board chair Rudy Fichtenbaum and other elected members who have pushed for pension reforms, defended the move as a modest step to reward long-serving educators without compromising the system’s long-term stability. The retirement system’s actuarial staff vetted the plan before it was brought to a vote.
STRS Interim Executive Director Aaron Hood acknowledged the added financial strain, noting the system will now rely even more heavily on strong investment performance to maintain solvency. The decision comes as STRS continues to navigate internal and external scrutiny, including leadership changes, ethics investigations, legal action from the Ohio attorney general, and a shift on the board driven by reform advocates demanding greater transparency. The search for a permanent executive director is currently underway, with the board set to interview three finalists: Christina Elliott, Deputy Director of Member Benefits at STRS; Greg Samorajski, Head of Iowa’s Public Pension System; and Steven Toole, a former Director of the North Carolina Retirement Systems.
Image Credits: Photo by Priscilla Du Preez 🇨🇦 on Unsplash
