Ohio STRS’ 1.5% COLA ‘Doesn’t Go Far Enough,’ Says Retirement Group

State law requires a 2% COLA unless it would impair the fiscal integrity of the retirement system.

The State Teachers Retirement System of Ohio’s recent approval of a 1.5% cost-of-living adjustment “doesn’t go far enough,” according to the Ohio Retirement for Teachers Association. According to that organization, the increase not only falls well short of inflation, which has risen 23.3% since 2020, but the adjustment also does not meet the pension fund’s legal requirements.

“What is disturbing is that in Ohio Revised Code 3307.67, the language states that a 2% [COLA] shall be paid unless it jeopardizes the fiscal integrity of the pension plan,” ORTA Executive Chair Dean Dennis wrote in a post on the organization’s website, adding that the pension fund’s actuary made it clear that a 2% COLA would not hurt the plan. “It was disappointing watching our board approve a 1.5% COLA when a 2% COLA was required by law, and irresponsible that the STRS legal department didn’t intervene with proper legal advice.”

At its April board meeting, the $96 billion pension fund’s board approved a 1.5% cost-of-living adjustment for its participants, beginning in fiscal 2026, and reduced the number of years of service required before participants can receive retirement benefits. Retirees who began receiving benefits on or before June 1, 2021, will get a COLA added to the base benefit on their retirement date anniversary and included in their benefit each month after.

The required years of service for an unreduced retirement benefit was lowered to 32 years from 33 years for members who will retire between June 1 of this year and May 1, 2030. The board also lowered the eligibility requirement for a reduced retirement benefit to 27 years of service from 28 years for members of any age. STRS Ohio calculates an unreduced retirement using a benefit factor of 2.2%, multiplied by the total service credit at retirement.

For active participants who expect to retire between June 1, 2030, and May 1, 2032, STRS is temporarily adjusting the eligibility for unreduced and reduced benefits to 33 years of service to receive unreduced benefits and 28 years for reduced benefits, respectively. However, the eligibility requirements will go back to 34 years of service for unreduced benefits and 29 years for reduced retirement benefits, starting on June 1, 2032.

By Michael Katz, Editor Chief Investment Officer May 2, 2025

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