OPERS Board approves COLA changes

Proposal now heads to Ohio Legislature

By Michael Pramik, Ohio Public Employees Retirement System

Oct. 18, 2017 — The Board of Trustees of the Ohio Public Employees Retirement System today passed a proposal that would change future cost-of-living adjustments provided annually to all OPERS retirees.

The Board acted after listening to feedback from OPERS retirees and stakeholders. We recently surveyed retirees about options to adjust the COLA. More than 76,000 responses were returned, and the final proposal incorporates some of the feedback. We’d like to thank the thousands of OPERS retirees who responded.

The proposal requires passage by the Ohio Legislature to become effective. It would reduce OPERS’ unfunded liabilities by approximately $4 billion and, if enacted, would make the following changes to the OPERS COLA:

  1. Tying the COLA to the CPI: Beginning in 2019, all future COLAs will be based on the U.S. Consumer Price Index, capped at 2.25 percent.
  2. Delaying implementation for some retirees: The new COLA will be delayed two years for OPERS members who retired from 2010 through 2012.
  3. Delaying initial COLAs for future retirees: The first COLA will be delayed for future retirees until their second pension anniversary.
  4. Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.
  5. Including funding triggers: Should OPERS’ required time to pay off unfunded liabilities top 30 years, the COLA will be frozen for the next calendar year. In the event inflation exceeds 3 percent for an extended period of time, the Board could increase the COLA to 3 percent if OPERS’ funding is strong.

For more information as the process moves along, subscribe to the PERSpective blog, and refer to the OPERS COLA Update page on our website.

Michael Pramik

Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.

Michael Pramik

Communication Strategist

  • I feel this new proposal is a fair one. It seems to me you covered all the bases.
    I know it wasn’t an easy decision, but it was a good one.

      • Scott – The proposal was just approved by the OPERS Board. The next step is find a bill sponsor. Stay tuned.

        Julie, OPERS

          • We will keep you updated through the newsletter, OPERS website and social media as we know more.

            Julie, OPERS

      • I am on board with this question. When is the hearing for this? I would think every single member has the right to show up and voice our concerns to the legislature. Not to be mean spirited but really they do work for US……not OPERS. We pay their salary.

        I would like a date and that date should be sent out to all members so we can have advanced notice and make plans to attend.

        • I too would like to know date and time legislature votes on this – I too would like to attend – God knows letters to legislatures and the governor have done no good – most including the governor have not even had the courtesy to respond. They forget they work for us – need to remember election time – take the whole capital = senate and house – shake them all out and vote for the unknown – has to be better. Shame on you opers for what you have done to your retirees!!!!!!

  • Can you provide more details on items 4 and 5? How is 85 percent purchasing power defined? Under what measures, is OPERS’ funding defined as strong enough to increase the COLA to 3 percent?

    • Mr. Borcoman,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit. OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees.

      Julie, OPERS

  • So if you retired prior to 2010, the new regulations will not be delayed? What is the rationale for the delay for those who retired 2010-2012?

    • L.,

      Many of those who retired during those years told us they did so, at least in part, because of the pension changes approved by the Ohio Legislature in 2012. One of those related to the COLA being based on the CPI for those who retired in 2013 or thereafter.

      –Ohio PERS

      • I retired in 2007 and relied on the promised 3% COLA in determining when to retire and how I would meet my future financial obligations. Why were the 2010-2012 retirement years considered to be reliant on a 3% COLA and others were not? It does not seem fair to give a “bonus” to some retirees while others get cuts!

        • People who retired between 2010 and 2013 were caught in a big lie. Some of us would have stayed longer had OPERS told us upfront that our COLA would be cut. We retired thinking we would get the 3% COLA thru our retirement just like you and other retirees before us just to be slapped in the face by this cut after only a few years of receiving the 3%. In other words; when OPERS made huge changed to our benefits in 2012 we were not told the truth and we deserve at least a couple more years of what you got for many years.

          • We’ve made an exception for two years for those who retired with benefit effective dates of Jan. 1, 2010, through Jan. 1, 2013. Their CPI-based COLA would begin in 2021.

            We created this delay after listening to those who responded to our retiree COLA survey. Many said they planned their retirement during those years in part because at the time we were working on our major pension redesign, including basing the COLA on CPI for those who retired after Jan. 1, 2013.

            Julie, OPERS

      • I retired based on what you told me at retirement so where does this make me any different from those who retired from 2010 TO 2012. Thank you OPERS. Guess you fooled us all. Those who say this is fair must be very wealthy.

        • I agree with the majority of the comments ” I retired based on what you OPERS told me”. I retired in 2009. Not only am I not included in that DELAYED COLA group from 2010 to 2013, for reasons that I do not agree with, but who knows what else you have in store for us. I really do not understand the comments from those who think the direction OPERS has taken is “fair”. I guess I’m missing something.

        • Vincent,

          If it’s enacted next year, the first CPI-based COLA would be in 2019, except for those who retired in 2010, 2011 or 2012. Their first CPI-based COLA would begin in 2021.

          –Ohio PERS

          • You never answered by question. Why does OPERS want to punish those of us who relied on the 3% COLA in making our retirement decision prior to 2010 but rewarding those who retired 2010-2012? I am not trying to take away from the 2010-2012 retirees but I think that OPERS should respect the fact that OPERS told the pre-2010 retirees they would get a 3% COLA and we also relied on the 3%.

    • Why are they given preferential treatment of more years of 3%. We all had individual reasons for retirement. Mine being what I was told at that time. No one made any of those workers retire. Each had individual reasons and should have to live with decisions made. Discrimination by OPERS.

    • Why are they given preferential treatment of more years of 3%. We all had individual reasons for retirement. Mine being what I was told at that time. No one made any of those workers retire. Each had individual reasons and should have to live with decisions made. Discrimination by OPERS. Yes I probably already said this and I want to say it again

  • 1. Tying the COLA to the CPI: Beginning in 2019, all future COLAs will be based on the U.S. Consumer Price Index, capped at 2.25 percent.

    Does this impact current retirees, as well? If not, why? Why would only future retirees be impacted?

    • S.T.,

      Yes, the proposal includes all retirees. Those who retired in 2010, 2011 and 2012 will retain the 3 percent COLA for two additional years.

      –Ohio PERS

      • Will cola still be on retired amount , which means cola will be less than 1% and less than the CPI , and less than social security
        Or
        Based on current retiree amount , which would be a true cola. Compared to Medicare and CPI which is 2% in 2018 for example .

        • Mr. Shy,
          OPERS plans to base future cost-of-living adjustments on the U.S. Consumer Price Index for all members beginning in 2019, pending Ohio Legislature approval. We’ve made an exception for two years for those who retired in 2010, 2011 and 2012. Their CPI-based COLA would begin in 2021.

          We created this delay after listening to those who responded to our retiree COLA survey. Many said they planned their retirement during those years in part because at the time we were working on our major pension redesign, including basing the COLA on CPI, for those who retired after 2012. While a combination of factors has led us to now base all pensions on the CPI, we felt it was fair to delay that implementation by two years for this group of retirees.

          Julie, OPERS

  • I applaud OPERS for being proactive to protect benefits for retirees. Being a 2015 OPERS retiree, I will receive my three 3% increase, then increases tied to COLA. This is what I planned on…the change is that the COLA will be capped at 2.5%. I believe this is a reasonable action.

  • I retired in 2016, because of the guaranteed 3% COLA through 2018, and knowing future COLA adjustments would be based on the CPI, with a max of 3%. I think your proposal is a fair compromise, since those who were promised the fixed 3% through 2018 will still receive it, and the chances of the CPI (based on past trends) reaching 3% (or even 2.25%) are very slim. How I looked at it wen I retired is I have 2 years of guaranteed COLA, then probably nothing in the future.

  • opers,tHANK YOU FOR ALL THE GOOD WORK THAT YOU ARE DOING FOR WE RETIREES.iT IS THROUGH YOUR CONSIDERATION FOR US THAT WE HAVE A STRONG SYSTEM AND GROWING STRONGER.tHANK YOU FOR LOOKING OUT FOR OUR RETIREMENT LIVES. SINCERELY a retired ODOT employee

  • This seems to me to be a fair and balanced approach. I appreciate the staff and Board’s apparent genuine interest in developing a reasonable solution.

  • Sounds like a very reasonable compromise. Hopefully the State will agree. Now on to cutting insurance premiums!! Thank you.

    • Donna,

      The new COLA amount will be added each year during the month you first collected your pension. All retirees will receive 3 percent COLAs through 2018.

      –Ohio PERS

      • Why don’t we lower the Retirement age in Corrections? 32 yrs is totally outlandish considering we deal with the lowest scum of Ohio’s population. Killers , Rapists EXC. the toll it takes on a normal persons mind is awful. It’s easy to sit behind a desk somewhere and make laws and not know the effects of it on a person. That’s what pers needs to look at.

  • Can you explain what is meant by “restoring purchasing power” and how is it determined who/or if a retiree is under 85%? Thank you in advance for your response.

      • Ms. Marvin,

        This increase will affect only a small percentage of OPERS retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

        We are still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population – and has not been approved by the Ohio Legislature.

        Julie

  • Is the max of 2.25% cola still based on the retirees’ original benefit? Seems that 2.25% of a number that is 20 years old will end up more like 1%

  • Thanks, OPERS for a job well done. I have been retired for 10 years and pleased with all decisions made. Now, if we could deal with the Windfall Repeal, it certainly would be wonderful.

    • I agree about the windfall. It is very costly for me. Howeve, I doubt it will ever be changed as it would have to be changed by Congress and we all know how efficient they are.

  • What does the following mean>

    Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.

    • Linda,

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades.

      Julie, OPERS

    • You are correct. Let me clarify – The COLA will be tied to CPI with a cap of 2.25% it is not a freeze. Since 1970, there have been 2 years where the CPI-W has been zero or less, in 2009 and 2015. If CPI is less than zero, the COLA will be zero. It won’t decrease.

      Julie, OPERS

        • Christine,

          The COLA will be tied to CPI with a cap of 2.25% it is not a freeze. Since 1970, there have been 2 years where the CPI-W has been zero or less, in 2009 and 2015. If CPI is less than zero, the COLA will be zero. It won’t decrease.

          Julie, OPERS

  • I think this is a fair and well-thought out plan. It takes into account the realities of the financial burden on the system, but also gives those of us who thought we got some promises of a guaranteed amount, time to adjust our own finances based on the changes. I would hope, and expect, that the legislature will approve this.

  • I retired at the end if 2006. How does this impact those of us who retired that long ago? Thank you for all you do to protect us.

    • OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. It is likely to affect only longtime retirees – a small percentage of our overall retiree population — those who have been retired for more than 30 years.

      Julie, OPERS

    • Ms. Eichman,

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie

    • Bonnie — One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

  • Will the new COLA be applied in the same way as the CPI, meaning will the COLA percentage be applied to the previous year’s pension, or will it continue to be based on the retiree’s first year pension? If it is the latter, then our COLA will end up being less than the CPI, and the deficiency will increase every year.

      • So, when you present this change to the Ohio General Assembly, will you tell them openly that the actual COLA received by retirees will be *lower* than the CPI since it is based on the retiree’s first year of pension rather than the previous year, as is the CPI?

        I don’t mean to be snarky, but it seems that OPERS is selling this as fair because the COLA and the CPI will now be the “same.” But, if they aren’t applied the same (i.e., on the previous year’s numbers) then the COLA will always be less than the CPI, and the retirees will always fall further behind inflation.

        I agree that 3% has been too much, but even now, after 7 years of retirement, my “3%” is actually closer to 2.5%. The actual CPI will be too little. Perhaps a compromise would be to have it based on the CPI, but applied to the previous year’s pension rather than the first year of pension. Or, perhaps it could be calculated at CPI + a percentage (1% or .5%) to offset the automatic diminishing affect of having it based on the first year of pension.

  • My question is; when will they quit deducting money from my pension account and send it to the Social Security Office? We should not be responsible for social security benefits and it is two separate matters. Maybe those in favor of deduction of pension monies and sending it forwarding can continue or increase that amount and those who oppose would no longer be required to this deduction.

  • My question is when this takes effect… is the cola still be based on your retirement year, ( which is infact well below 2% for alot of retirees) OR based on the prior year???

  • I agree that this is a reasonable approach. One need only look to Kentucky for an example of a state pension system that is in dire economic conditions and unable to meet its funding requirements. No one wants a COLA reduction but this solution is reasonable in my opinion.

  • c
    Can you explain “restoring purchasing power” and identify who will receive the adjustment and/or how to calculate if I will receive an adjustment and how much the adjustment will be ? Also, if my adjustment is $20, will it be $20 added each month to my pension or just an extra $20 payment one month ?

    • One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      To answer your second question, the CLA will always be based on your original pension amount.

      Julie

  • I think this is a very fair solution. I believe it also helps us keep our health benefits, which certainly is a plus. Thanks for your efforts.

  • With respect to item 3 on the list…when do you anticipate knowing/sharing the date that will establish the change from 12 months to 24 months for the first COLA? This could sway those of us thinking about retiring in 12 to 24 months from now to move retirement forward to before the cutoff date to not miss one COLA installment…or am I reading this incorrectly?

    • Bill,

      It’s very early in the process. The next step is for the proposal to go to.the Ohio Legislature. If it’s enacted next year, the first CPI-based COLA would be in 2019.

      Julie, OPERS

    • Mr. Sarver,

      Changes to the COLA would include all benefit types including Additional Annuity accounts.

      Julie, OPERS

  • What is purchasing power? And how is it determined ? What determines pension adjustment ? Sounds like s fair change in policy. Thanks for your hardwork in protecting our future benefits.
    DJS

    • Thanks, Dea. One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population – as prior ad hoc increases have mitigated much of the past reduction of purchasing power, and more-recent retirees have experienced far less reduction of value.

      Julie, OPERS

  • “In the event inflation exceeds 3 percent for an extended period of time.” Why isn’t that time period defined?

    • Mr. Severns,

      The details will be fleshed out as the COLA proposal goes through the legislative process.

      Julie, OPERS

  • What exactly does this mean?

    Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.

    • Lee,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them.

      Julie, OPERS

    • Going from 3 percent to 2.25 percent max you might get nothing. If you were guarantee 2.25 I could live with that. But with health care going up almost 100.00 a year. You will be so far in the hole you won’t climb out.

  • Right now, the COLA is based on first year retirement wages. So in your 6th year of retirement you still receive your 3% COLA on your first year retirement wages. Will this remain the same formula using first year retirement wages? Or will the 2.25% cap COLA be based on each year retirement wages (compounded)?

    • Linda,

      Compounds COLAs are prohibitively expensive for pension systems to provide. OPERS’ COLA always has been a simple COLA as you describe, and it will remain that way.

      –Ohio PERS

  • “Delaying implementation for ‘some’ retirees, who retired from 2010 through 2012.” What criteria will be used for determining “some” retirees? Does this mean ‘all’ retirees of 2011-2012, or ‘some’ as stated? I retired in 2011 without plans to do so; it just happened.

    • Pat,

      OPERS plans to base future cost-of-living adjustments on the U.S. Consumer Price Index for all members beginning in 2019, pending Ohio Legislature approval. We’ve made an exception for two years for those who retired in 2010, 2011 and 2012. Their CPI-based COLA would begin in 2021. Since you retired in 2011, your CPI_based COLA would begin in 2021.

      We created this delay after listening to those who responded to our retiree COLA survey. Many said they planned their retirement during those years in part because at the time we were working on our major pension redesign, including basing the COLA on CPI, for those who retired after 2012. While a combination of factors has led us to now base all pensions on the CPI, we felt it was fair to delay that implementation by two years for this group of retirees.

      Julie, OPERS

  • Well, if a lot if you think this is fair you don’t understand the ramifications. First, we haven’t been told there is a problem with our long term financing of the system. The Board unilaterally decided to cut benefits with no consideration of the multitude of retirees who didn’t want any change. That survey was reflective of driving toward a cut no matter what was said. We are well funded for the 30 year period required, so I’m not sure whose idea this was.

    • My sentiments exactly….if OPERS can show us the deficit, then I could understand but nobody has yet seen this. In 2011, 2012 OPERS provided a 30 year sustainability budget and was called a model for other retirement boards. OPERS has stated time and time again how healthy OPERS is, what’s changed? Humans are living longer by about 5 years but they are working longer so they can live a decent retirement. Ohio’s teachers union has moved to a 5% cap on their CPI….We have a 2.25 cap. Since 1997 (20 years) the CPI went over 2.25….11 times

  • I feel that the OPERS Board needs to actively continue to seek additional and creative remedies to reduce our unfunded liabilities that will NOT chip away at our pensions!

    What are some other creative remedies that the Board will be giving serious consideration to implement and thereby re-install the 3% COLA?

    How about those OPERS retirees in the Ohio Deferred Compensation Program have a percentage of the mandatory 20% fee transferred into the OPERS unfunded liability fund?

    There has to be creative remedies out there other than the OPERS retirees current and future pension COLA being reduced….or our other retiree’s benefits reduced in the future.

    Were any creative other remedies considered, and if so, why are they not being proposed to the Legislature?

    The proposal should have included creative remedies other than reducing retiree’s COLA.

    Let’s hope the Board will seek and propose for implementation creative remedies in the future that do not reduce OPERS retiree’s benefits.

    Thanks!

  • Where does one find out witch board member voted for and who voted against, what are there names so they can be voted for or against in the upcoming election. I think a lot of us would like to know who voted what in this.

  • Good job coming to a fair conclusion. Thankfully this won’t have to big of an impact for those who receive a modest benefit.

  • This all sounds good but, Each time we get our cola our insurance premiums,out of pocket deductible and co- pay end up absorbing our cola. what is is being done to help make our medical insurance more affordable?

  • I would like the names of each OPERS trustee and how they voted on the proposed COLA adjustment? I assume as this is a transparent process that the information l am requesting will be made available to me and any other OPERS member? Thank you in advance for your anticipated response. Frank Zangara

  • Sorry, this old fool doesn’t understand #4 on your list:

    Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.

    • Jim,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

  • The decision is fair for now, as long as inflation stays low. In the late 70’s/ early 80’s inflation was as high as 15%. 2.25 % would barely be worth our time.

    • Paula,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than 30 years. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit. We are still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them.
      Julie

    • Marlene,
      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

    • Mr. Morris,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.
      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.
      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

    • Joe,

      Yes – we’ve made an exception for two years for those who retired in 2010, 2011 and 2012. Their CPI-based COLA would begin in 2021.

      Julie, OPERS

      • Every current retiree was told of a 3% COLA. If you are going to delay the reduction to 2.25% for retirees from 2010-12 until 2021, you should be fair to ALL the current retirees and delay the implementation of the COLA reduction to ALL current retirees until 2021.

    • Mr. Alger,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit. We are still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees.

      Julie, OPERS

  • Care to explain Ken Thomas comment in the Columbus Dispatch this morning, “There could be more changes down the road. ”

    ???

    • OPERS regularly reviews its plan design, and we don’t wait for a financial crisis to arise to make adjustments. Changes to the COLA will help adjust for longer retiree lives, preserve the long-term financial strength of the System.

      Julie

  • Why did OPERS have a five year plan that was approved a few years ago that included the present COLA, and now you want to change , How was it approved if it didn’t follow projections?

  • I’m a little confused by item 4 in the list of COLA changes that has come out today. It reads:

    “Restoring purchasing power; OPERS will provide a one-time pension adjustment to restore 85% purchasing power for those retirees whose purchasing power is less than 85%”

    What does this mean and specifically how will this be determined? Thanks in advance for your answer.

    • Ruth,

      We will be adding this question to the list of FAQs on the OPERS website today. The increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      Julie, OPERS

  • Could you please give more info on proposal #4?
    :Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.:

    • Keith,

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      Julie, OPERS

    • Jim,

      This increase will affect only a small percentage of our retirees who have been retired for more than 30 years. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population – as prior increases have mitigated much of the past reduction of purchasing power, and more-recent retirees have experienced far less reduction of value.

      Julie, OPERS

  • everyone I have talked to are confused about this—
    Restoring purchasing power: OPERS will provide a one-time pension adjustment to restore 85 percent purchasing power for those retirees whose purchasing power is less than 85 percent.
    What does this mean

    • Dianne,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population – as prior ad hoc increases have mitigated much of the past reduction of purchasing power, and more-recent retirees have experienced far less reduction of value.

      Julie, OPERS

  • No surprise to any of us.

    Are the minutes to this board meeting available online for all to read? I for one would be very interested to read what was said and by whom.

    • Board minutes are posted after they are approved by the Board. October minutes will be voted on at the November meeting.

  • Starting in 2019, will the CPI COLA increase continue to be in the month we retired or will it come at the first of the year for all retirees.

    • Mr. Newman,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.
      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.
      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

  • It doesn’t seem like any of the board members are really looking out for the retirees. Everything is being cut continuously and being done systematically. Then you ask for our opinion. I’m not fooled. Just can’t do nothing about it. You all can believe the board is looking out for your interests if you want!

  • I’m still not happy with this change. If there’s to be a cap, it should be higher then 2.25, and basing inflation on the CPI does not take into account the things senior citizens purchase. Isn’t there another standard that can be used?

    • OPERS has used the CPI-W since it established the COLA in 1970. This index is the measure used by the Social Security Administration as well as other pension systems. Some pension systems use the CPI-U as a basis for their COLA. There’s also an experimental index called the CPI-E, designed for elderly costs. No pension system uses the CPI-E for COLAs. Comparative data shows that all three indices are comparable.

      Julie, OPERS

  • How about doing away with this cola all together and give this same proposed $ amount to the retirees HRA account which is not taxable. Benefitting opers and the retiree.

  • For the record, I am opposed to the changes and believe they are totally unfair. They have come too close on the heels of the major changes five years ago. Something is very wrong. I will do all I can to stop this from getting passed and hope other retirees do so too.

    I am very disturbed by Ken Thomas’ comment to the Columbus Dispatch saying there could be more changes coming down the road. I had a feeling that if we let this pass, they will come back for more.

    People who make the decisions, those people with six figure incomes, have no idea how most of us have to live.

    There have to be other solutions other than taking from retirees.

    I also see that OPERS is letting very few negative comments through. I would respectfully ask that OPERS let all comments through so we can see all opinions, not just the ones agreeing with them.

  • A number of employees at my workplace retired at the end of 2012 because of the upcoming pension changes approved by the Ohio Legislature in 2012, especially those related to the COLA. So even though our last working days were Dec 28 or 29, 2012—OPERS lists our retirement date as 1-1-2013. Please clarify if retirees in this situation would qualify for the extra 2 years of 3% COLA which I thought was the intention of the OPERS Board for those who retired prior to the landmark 2013 changes.

    In the article above: “OPERS Board approves COLA changes”, Michael Pramik lists the proposed changes including: “2. Delaying implementation for some retirees: The new COLA will be delayed two years for OPERS members who retired from 2010 through 2012.”

    House Bill 343 as enacted into law states: “…establishes a January 7, 2013 effective date for the bill as a whole. For those members eligible and deciding to retire prior to the effective date, you must be completely retired on or before December 31, 2012 so that you have a retirement date of January 1, 2013.”
    So based on all of the above, will anyone with a retirement date of January 1, 2013 qualify for the 2 extra years of 3% COLA if this proposal is approved by the Legislature?

    • Mary,

      OPERS plans to base future cost-of-living adjustments on the U.S. Consumer Price Index for all members beginning in 2019, pending Ohio Legislature approval. We’ve made an exception for two years for those who retired with benefit effective dates of Jan. 1, 2010, through Jan. 1, 2013. Their CPI-based COLA would begin in 2021.

      We created this delay after listening to those who responded to our retiree COLA survey. Many said they planned their retirement during those years in part because at the time we were working on our major pension redesign, including basing the COLA on CPI for those who retired after 2012.

      Julie, OPERS

      • Julie,

        You did not answer Mary’s question.
        It is a well written question that affects a lot of people who retired at the very end of 2012. We were told we had to be off the payroll prior to 1/7/13, to retire under the old pension rules. How about answering her question.

        • I’m sorry I thought I was clear. The CPI-based COLA would begin in 2021 for those who retired with benefit effective dates of Jan. 1, 2010, through Jan. 1, 2013, pending approval by the Ohio Legislature.

          Julie, OPERS

  • I would like to publicly thank OPERS Board members Mr. Maurer and Mr. Toth for opposing this COLA reduction proposal. Additionally, I must say I was surprised with the speed at which OPERS managed to bring these proposals and subsequent changes to fruition, notwithstanding coming off the major changes to the pension and health care plans… Very impressive, though the COLA proposals still require legislative action to pass (a forgone conclusion). I still maintain that we (current retirees 2012<) were promised a 3% COLA and I, like thousands of others, based (in part) my retirement and planning on this promised benefit. I also maintain that any adjustment to the COLA should have applied only to future retirees, as they are the only group able to make any changes to their retirement planning while still employed. Employed being the operative word here. We that have already retired cannot. I am somewhat assuaged that the Board decided to postpone any reduction in the 3% COLA for 2010-2012 retires until 2021, and for that I am thankful. However, I continue to be concerned about further reductions in benefits that affect current retirees.

  • I understand the first part of item 5 to mean if the time period for OPERS to pay off its liabilities exceeds 30 years then there will be no COLA increase at all until that time period comes back to 30 years. Is that a correct understanding? If that is correct, could you provide an example of how this would work? Thank you.

  • I was talking with some other retirees the other day and I asked them for their thoughts on the COLA changes. Most of them said “it’s no big deal really, they just lowered the COLA to 2.5 instead of three. When I told them that they just lowered the “cap”; what you actually get each year is the “change” in the CPI, which could be 0%. So, just to be clear: if there is “no change” in the CPI for the year, you will get “no COLA” on your next anniversary date.

    • Mr. Buckenmeyer,

      Since 1970, there have been 2 years where the CPI-W has been zero or less, in 2009 and 2015. If CPI is less than zero, the COLA will be zero. It won’t decrease.

      Julie, OPERS

  • I asked this question before, but did not receive an answer.
    I retired in 2012, my last day of work was on Friday 12/28/12.
    My first retirement benefit received was for January 2013.
    Am I considered to be retired in 2012, and will I receive the 3% for the additional two years after 2018?

    • It comes down to your retirement effective date, not your last day of work. We’ve made an exception for two years for those who retired with benefit effective dates of Jan. 1, 2010, through Jan. 1, 2013. Their CPI-based COLA would begin in 2021.

      Julie, OPERS

    • Since 1970, there have been 2 years where the CPI-W has been zero or less, in 2009 and 2015. If CPI is less than zero, the COLA will be zero. It won’t decrease.

      Julie, OPERS

  • I would like to know please…..are OPERS employees relegated to the same insurance as those of us receiving OPERS retirement pensions? Are you Public Employees?

    I also wonder, what is the average age of the employees at OPERS? Are the people making these decisions that will affect my life and my income in their 60’s? 70’s etc? Or are they much younger?
    Thanks,

      • Thank you for answering my question, but you answered only part of my question. I would like to know the ages or at least the average age of the decision makers who are deciding what benefits I will have? It may sound like a meaningless question to you, but the point is simple: Someone in their 30’s or 40’s has no idea what the struggles are, financially or health wise, for a person in their 60’s or beyond.
        Would you please respond to the second part of my question.
        Thank you,

        • Like any organization, OPERS has staff with a wide range of age and experience. Ultimately decisions are made by the OPERS Board of Trustees, comprised of representatives of active workers, retirees, and investment experts after extensive analysis and discussion with independent actuaries and other advisers.

  • Thank you for the work the OPERS Board has done to help preserve our pension system. I understand the changes proposed to COLA but looking at the big picture, retirees are losing future benefits while healthcare costs increase. To add to retirees of public employment, those who have worked under Social Security and have eligibility for benefits, they lose income by the windfall. I realize the conversation is about COLA , it is also about many aspects of public employment retiree’s benefits. Thank you,

    • Ms. Land,

      One of the changes the OPERS Board of Trustees has approved for the cost-of-living adjustment is a one-time benefit increase for retirees whose purchasing power is less than 85 percent of what it was when they retired. By purchasing power we mean the value of the current pension benefit in buying goods and services, taking inflation into account since the time of the original benefit.

      This increase will affect only a small percentage of our retirees who have been retired for more than three decades. Because of several factors, most notably the historically high levels of inflation through the 1970s, their current pensions have a value of less than 85 percent of the original benefit.

      OPERS is still working out final details of what groups the increase will apply to, the increase amounts and how we will administer them. But again, it is likely to affect only longtime retirees – a small percentage of our overall retiree population.

      Julie, OPERS

    • John,

      The proposal was just approved by the OPERS Board. The next step is find a bill sponsor. Stay tuned — we’ll keep you updated through the newsletter, OPERS website and social media as we know more.

      Julie, OPERS

  • Julie,

    We hope that OPERS will give us timely updates (same day if possible) not rush this through and wait until the last minute to release information.

    Thanks,
    John

  • I’m wondering how many of our OPERS folks know about the “Mitigating Rate”, and I’m wondering why OPERS doesn’t try to get the “Mitigating Rate” increased instead of continually taking from retirees and those of us who are currently working but are covered under OPERS.
    Dear Bloggers: Please read the following which describes the Mitigating Rate:
    Current law provides that a full-time employee (100% FTE) of a public institution of higher education may elect to participate in an Alternative Retirement Plan (ARP) rather than the state retirement systems to which their service would normally be covered.
    An ARP participant is required to contribute the same amount under the ARP as they would to the retirement system to which they would otherwise be covered: 14% for STRS and 10% for OPERS. In addition, the employer is required to contribute the same amount they would otherwise contribute to the retirement system, currently 14%.
    In the ARP, a portion of the employer contribution is diverted to the retirement system to “mitigate” any negative financial impact for both past and current obligations for the members participating in the pension plans with the state system. For STRS, this is 4.47% and for OPERS, this is 2.44%.

    • The mitigating rate is a portion of the employer contributions paid by university employers on behalf of their employees who choose not to join OPERS, and is intended to offset the financial impact of the loss of their contributions. Using the formula established in Ohio law, the rate will be recalculated by OPERS’ independent actuary every five years. Based on this calculation, the rate could increase or decrease. The rate cannot exceed 4.5 percent. The current rate of 2.44 percent went into effect in July, 2017. Previously it was .77 percent.

      Julie, OPERS

      • Hi Julie,
        Thanks for your reply. However, at one time the Mitigating Rate was 6%. Perhaps the employer contributions paid by university employers on behalf of their employees who choose not to join OPERS should be increased and maybe even hedge towards the 6% rate again!
        Regards,
        Cheryl

        • The OPERS mitigating rate was .77% for nine years and was increased to 2.44 percent this year. The rate cannot exceed 4.5 percent.

          • Ms. Graham-Price,
            Either you or I are incorrect regarding the mitigating rate, I believe the rate started at 6%. Please see below and please let me know if this is correct or incorrect…..
            The mitigating rate was established by the Ohio General Assembly to offset the negative financial impact of the public employees’ participation in the ARP. The rate was initially set at 6%- the amount actuarially determined to mitigate the negative impact. Without the mitigating rate the employer’s obligation would fall on the remaining members and employers in the system.

          • Cheryl,

            At OPERS, the mitigating rate was 0.77 percent from 2008 until it increased to 2.44 percent on July 1, 2017. House Bill 520, passed last year, capped the ARP mitigating rate at 4.5 percent for all Ohio retirement systems. For more information on the mitigating rate please visit the OPERS website.

            Julie, OPERS

          • I do not know if Robert Camardo post is correct concerning the legislature turning down the COLA reduction. This is the reply I received from my Representative, Mr. Dever. Alan,

            House Bill 413 is currently being heard in the House Aging and Long Term Care Committee. Although Representative Dever is not a member of this committee, you may reach out to Chairman Arndt at (614) 644-6011 or rep89@ohiohouse.gov for more information and to express your concerns.

            Also this is the second time I have posted something concerning this matter, the first was never posted, and am wondering if they are being censured due to the fact that possibly erroneous information is being posted to keep members from contacting their elected representatives!

    • Hi Mr. Adams,
      I’m also wondering why OPERS only selects posts that shine a nice light on everything they have thrown at our retirees and members. Isn’t OPERS a public entity, and shouldn’t their blog be public? As long as the comments don’t contain profanity or personal information and as long as they are respectful of all, PLEASE POST THEM!
      Regards.

  • Good to see the Legislature turned down the COLA reduction. You folks promised it, then tried to take it away. I personally retired when I did to keep the COLA. Thanks to all the people that fought it.

  • Why has OPERS not posted the fact that, at least for now the scheme to cut the COLA for retirees is stopped.
    I am sure OPERS and the Legislature will try again. I am also sure the blog monitors will not publish this. They have chosen to censure my posts often because they are critical to OPERS.
    I guess the fact that we live in the U.S. doesn’t prevent censorship.
    Obviously its more effective to communicate outside this tightly controlled venue. The people who monitor the site only publish what they are told. I have never seen any giudelines in writing.

  • I was “on the fence” regarding the cola cut. I am not knowledgeable on how to run a retirement system and can only hope that our board of trustees and its staff do. What I do know is that we the members are the ones who have paid for it and when there is a shortfall in funds, we will pay for it again, one way or another. I just hope that that there is a solution preventing a collapse of our system

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