Proposed pension changes may hike costs for teachers

Nick Glunt

Proposed changes to the State Teachers Retirement System of Ohio may increase the contributions from Ohio teachers and universities and lengthen the period of service from teachers for them to earn full retirement benefits.

Shara Bailey, STRS Ohio coordinator of higher education retirement plans, conducted an informational meeting on the proposed changes in Room 204 of the Student Center.

Bailey explained that nothing is finalized because the changes require legislative action and the plan could be modified during the legislative process.

An informational packet provided by STRS Ohio described the current and proposed plans.

Teachers currently contribute 10 percent of their salaries to STRS Ohio while employers contribute 14 percent of total teacher payroll. The proposed plan for teachers would hike that value by 2.5 percent between 2011 and 2015, to a total of 12.5 percent. It would also hike contributions from universities by 2.5 percent between 2016 and 2020 for a total of 16.5 percent.

Currently, retired teachers earn 88.5 percent of their top three average salaries as their retirement pension. If the proposed plan is passed, teachers who have taught between 35 and 38 years would see a pension reduction.

Pension benefits for teachers are determined by their age, years of service and the average of their highest three salaries earned during service. The proposed plan would change it to the average between the top five salaries beginning in 2015. Thus, the average value of pension would likely be reduced under the new plan.

Teachers would also have to teach more years in order to be eligible for full pension benefits as of 2015.

The Cost-of-Living Allowance (COLA) would also be affected beginning 2011. Current retirees would see a drop from 3 percent to 2 percent. Those retiring after July 1, 2011, would receive 1.5 percent COLA each year.

According to the STRS Ohio packet, this proposed change is a result of the declining global market and the current recession. It is designed to raise contributions from teachers and employers by 5 percent.

Contact administration reporter Nick Glunt at [email protected]