A proposal to shift some pension contributions from public employers to employees was left out of the final draft of Ohio’s biennial budget yesterday.
The Ohio legislature’s budget conference committee agreed on final terms of the two-year spending plan late last night. The measure is expected to be voted on by the Ohio Senate today and the Ohio House tomorrow before Gov. John Kasich signs it on Thursday.
Absent in the final report was a proposal to require Ohio public employees to contribute an additional 2 percent to their pension obligation and decrease the employers’ contribution by 2 percent. The Ohio Public Employees Retirement System would like to thank everyone who helped us in this process by contacting your legislators and supporting our position in other ways.
Ohio Public Employees Retirement System Interim Executive Director Karen Carraher twice testified against the rate shift because it would:
- Significantly increase our unfunded liabilities
- Extend the time to pay off those liabilities beyond what is required by law
- Impact health-care funding, which was one of the reasons that our Board of Trustees recommended plan design changes in November 2009
We are studying the budget to understand its potential impact on the pension system. While the conference committee rejected privatization of the Ohio Lottery, its members included a proposal to lease the Ohio Turnpike (subject to approval by the Ohio General Assembly), as well as sell or lease several state prisons. Our actuary has determined that for every 5,000 public jobs that are lost to privatization, we add one-year to our unfunded liabilities.
The next step for us is to continue to educate that meaningful and timely pension redesign is necessary.
The Ohio Retirement Study Council is preparing to hire a third-party actuarial consultant to study the pension proposals of all five public pension systems in preparation for a pension redesign bill. While we support transparency and a review of our Board’s proposals, we have provided the ORSC with suggestions to help sharpen the focus of the study and minimize any duplication of effort. We will work with the council going forward to assist it in this process.
The 2 percent-contribution shift language could come up again as legislators consider the components of pension redesign, so we will keep you updated as matters progress.
In the meantime, thank you again for your support and advocacy on behalf of the Ohio Public Employees Retirement System.
Are they going to mess with the grandfather clause? For those of us getting ready to retire within two years it would be devastating since we changed our investments thinking we were going to be able retire in 2013, any info on the grandfater clause would be great. thank you
I found one item in today’s Columbus Dispatch article concerning the approval of the RFP for the “independent study” of the systems’ pension reform proposals to be amusing: “Legislators hope the actuary tests assumptions by some pension plans that the 2 percent shift could undercut their proposals.”
Well I for one hope that these legislators made sure the RFP included a requirement to test this assumption before it was approved!
What about the COLA for PERS members? Has this changed?
Sandra, our proposal for adjustments to the COLA has not changed. And there was nothing in the budget that affected the COLA.
– Ohio PERS
any info on the grandfather clause?