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The $104.2 billion Ohio State Teachers Retirement System approved a 1.6% cost-of-living adjustment for fiscal year 2027 at its March 19 board meeting — the fourth COLA in five years for a fund that spent six successive years providing no benefit enhancements whatsoever, and the first board meeting since the removal of former chairman Rudy Fichtenbaum following his Feb. 20 guilty verdict for fiduciary violations, Rob Kozlowski reports.
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- The vote was cleared by actuarial consultant Cheiron, which is mandated by statute to determine whether any benefit change would materially impair the fund's fiscal integrity.
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The approval arrives as the pension fund's funding ratio has climbed to 80.9% as of June 30 — a significant recovery from the 56% level recorded when a 2012 pension reform law was enacted.
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Why it's important. The STRS saga is arguably the most closely watched governance crisis in U.S. public pension history, and this COLA vote is yet another data point in a complex, unresolved story that carries enormous implications for plan sponsors and fiduciaries nationwide. |
- As P&I has previously reported, the controversy has its roots in the 2017 suspension of COLAs, which ignited a social media-driven retiree movement that fundamentally reshaped the board's composition — a board whose reform-minded majority then became embroiled in its own controversy, culminating in the Fichtenbaum and Steen guilty verdicts.
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The ability to grant a COLA while litigation over board governance remains pending — including a constitutional challenge to a last-minute state budget amendment that would have given government appointees majority control — underscores the critical interplay between actuarial soundness, political pressure, and fiduciary accountability at public pension funds.
- For plan sponsors and trustees, the STRS story is a cautionary and instructive case study in how benefit policy decisions, once made, can permanently alter the political DNA of a pension fund.
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The question now is whether improved funding and incremental COLAs can finally bring a measure of stability to a fund that, as P&I previously reported, faces structural headwinds — including a fixed-rate contribution structure that leaves it particularly vulnerable to market downturns.
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ONE THING YOU NEED TO READ TODAY |
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SPONSORED CONTENT PROVIDED BY PHILIP MORRIS INTERNATIONAL |
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We don’t sell combustible cigarettes in the U.S. Instead, we’re putting our weight behind alternative smoke-free products for adults 21+ who still smoke. Our latest earnings release reinforces our belief that offering better alternatives to cigarettes is the correct thing to do for legal-age consumers, for public health, and for our vision of delivering a smoke-free future. |
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The trailing 12-month U.S. high-yield bond default rate came in at 2.7% for February, according to data provided by Fitch Ratings. That’s in line with the rates from 2023 through 2025, which ranged from 2.5% to 2.9%.
U.S. leveraged loans had a 5.1% default rate during this period, compared with 5.3% and 4.8% in 2024 and 2025, respectively.
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MANAGER SEARCHES, HIRES & MANDATES |
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Ohio School Employees Retirement System |
Pension Boards-United Church of Christ, Inc. (PBUCC) |
Investment Grade Fixed Income |
Investment Grade Fixed Income |
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RBC Global Asset Management presents its 2026 Emerging Markets Debt Outlook. This comprehensive overview examines the asset class's maturity through monetary orthodoxy and policy credibility, while exploring the "friend or foe" geopolitics shaping relations and opportunities across local markets, corporates, and transition financing. Read the full report to learn our investment team's perspective on the year ahead in EMD. |
U.S. equity market leadership remains narrow in early 2026, with a small group of stocks driving returns. History suggests concentration alone isn't a reason for concern. Valuations, earnings, dispersion, and active opportunity tell a more nuanced story. Download the latest research from Fidelity's Denise Chisolm, Roy Justice, and Nidhi Gupta where they explore what today's concentration may mean for investors. |
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