On May 8, the Ohio Senate approved Senate Bill 342, which contains the changes in the benefit formula, contribution and salary calculation and cost-of-living increase as approved by the STRS board:
* Beginning in 2015, eligibility for full benefits will begin a phased-in transition to age 60 and 35 years of service, with no age component until 2026. Ability to retire with full benefits at age 65 with 5 years of service is unchanged.
* There will be a gradual increase in employee contributions from 10 to 14 percent of pay.
* Lowering of the COLA rate for current retirees, from 3 to 2 percent, with a freeze during FY 2014.
* Change in the benefit formula in 2015, to 2.2 percent for each year of service, with the final average salary calculated on 5 years of salary rather than 3.
STRS’ funding situation is critical. Without these changes, which are endorsed by OEA, STRS will eventually run out of money to provide benefits. The Ohio House has indicated they will not act on pension legislation until after a study commissioned by the Ohio Retirement Study Council. That study is expected in July, and final action on this legislation may not take place until after the November election. Continue to watch your CEA Voice for updates.