STRS. It’s been a while since we updated you on the proposals under consideration by our State Teachers Retirement System regarding the pension formula, employee contribution, and health care. The STRS is taking a long hard look at the solvency of our pension system which has been affected by record numbers of retirees, reverses in the market, and reduced contributions due to layoffs and private school vouchers. Keep in mind, the STRS plan is a proposal only. The state legislature will need to act for any changes to be implemented.
·Retirement Eligibility: Age and service requirements would increase to age 60 and 35 years of service which would be phased in between 2015 and 2023.
·Formula: As of August 2015, retirees would receive 2.2% for each year of service. The enhanced benefit of 88% of final average salary (FAS) for 35 years of service would be eliminated.
·Final Average Salary would be based on an average of the 5 highest earning years (currently 3 highest earning years).
·Contributions: Employee contributions would increase 1% per year over 3 years beginning July 1, 2012 which is a 1% reduction in net pay for each of the next 3 years.
·Health Care: STRS is considering eliminating the health care subsidy until a reitree comes within 5 years of medicare eligibility. The change would go into effect in 2016 This is particularly problematic for those who would retire before age 60 as they would be on their own totally for health care coverage. It could get worse if the Medicare eligible age is raised by the Feds.
While we understand the need for some pension reforms, the requirement to be at least age 60 and have 35 years of service in order to have a regular retirement benefit is unacceptable. The most expensive teachers will have to teach longer and will collect their pensions for a shorter period of tme (an unpleasant but actuarilly sound reality). We will continue our lobbying efforts in opposition to this provision. In addition, we will actively push for a better solution to the health care dilemma which could be impacted by the President’s Patient Protection and Affordable Care Act in terms of access to affordable health insurance.
Event Reminder. The Cleveland Teachers Union will host a forum featuring Diane Ravitch, author of “The Death and Life of the Great American School System How Testing and Choice Are Undermining Education”. This will definitely be an event worth your time.
Here are the details:
Date: Thursday, February 2, 2012
Time: 5:30pm Registration 6:00pm Program
Location: Pilgrim United Church of Christ 2592 West 14th Street; at Starkweather in Tremont.
(Parking is free).
If you want to know what Ms. Ravitich is all about, check out this link:
In Union,
Tom Schmida, President