The Ohio board for retired teachers’ pensions gave millions of dollars in bonuses to their investment staff, just a month after pretending to make a group of teachers happy by getting rid of the extra pay.
There is a lot of trouble with the State Teachers Retirement System (STRS). To sum up, there has been constant fighting, two board resignations, and claims of both public corruption and bad money management.
All of this started with a discussion about how STRS should invest its money: in carefully managed funds, like it does now, or in an index fund. Active funds usually cost more and have more managers because they try to do better than the stock market. Index funds try to match the performance of the stock market. They are thought to be less active and usually cost less.
To put it simply, “reformers” want to switch to index funding, while “status quo” supporters want to keep making decisions about the funds. The “reform-minded” members now have a majority on the board thanks to the recent elections.
A cost-of-living increase, or COLA, is what reformers want. Starting in 2017, the COLAs for more than 150,000 retired Ohio teachers were put on hold for five years. They were brought back, but there will be no more raises. This is a big deal for retirees who need this money and are also dealing with inflation.
