OPERS eyes tax reform

Pension fund works to keep changes out of legislation

By Chris Collins, Ohio Public Employees Retirement System

Jan. 4, 2018 – For the past couple of months, it seemed like we couldn’t even turn on the radio or television without hearing something about “federal tax reform.”

Questions continue about how the final package will impact individuals across the economic spectrum, but there was one provision of the Tax Cuts and Jobs Act that was of particular interest to OPERS. This provision would have subjected tax-exempt public retirement systems to the unrelated business income tax.

This change, had it been included, would have impacted our investments in asset classes such as private equity, real estate and securities lending, and resulted in additional administrative costs. We would have had to assess and report the new tax, and restructure many of our investments to account for the tax. OPERS maintains significant investments in the affected asset classes, and as a result, this tax could have detrimentally impacted our mission to provide secure retirement benefits to our members.

Because we’ve already made or contemplated benefit changes in recent years in order to improve our financial situation, we urged members of the Ohio congressional delegation to oppose this new tax on state and local retirement plans. We are especially grateful to Ohio Congressmen Pat Tiberi (R-Westerville) and Jim Renacci (R-Wadsworth), who serve on the House Committee on Ways & Means and were very responsive to our concerns. Additionally, a special thanks goes out to Sen. Rob Portman (R-Cincinnati), who served on the conference committee that assembled the final bill and also helped ensure the tax provision was not part of the final package.

OPERS, like other public retirement systems, is under continual pressure to meet its actuarial assumptions, including investment returns, member longevity and wage growth. Despite the current historic bull market, we must prudently plan for the future by periodically revisiting our benefit structure to ensure we remain strong.

At best, subjecting public plans to a new tax would have resulted in a drag on investment returns, thereby reducing the likelihood that these plans would achieve their assumed investment returns. The tax would have affected OPERS’ investment decisions moving forward and would have made it more difficult to provide secure benefits to the families who depend on us.

The conference report representing the compromise version of the tax bill passed both the House and Senate in mid-December and was signed by the president just before Christmas. Some of the bill’s provisions will begin at the start of 2018, while others won’t take effect until 2019 and beyond.


  • Christopher Collins,
    I am truly grateful that you and OPERS found the time to discover this tax item and have it removed. Congratulations on doing an excellent job!!

  • Thank you to OPERS and the elected officials that were able to keep this provision out of the tax reform bill.

    Correct me if I am wrong, but was this issue addressed earlier with OPERS members? I can find no mention of this in recent publications and I would think that we could have helped by voicing our concerns also.

    • Thank you for your offer of support. When this issue first arose, we discussed engaging our members, but because the tax reform legislative process was very short, there wasn’t adequate time to reach out to OPERS members and retirees for assistance. We appreciate when our members and retirees are actively engaged in such matters. We will continue to keep you updated on state and federal legislative issues and, when possible, seek your assistance with our future advocacy efforts.

      Julie, OPERS

  • Thank you for working with Congress to remove this detrimental aspect of the new tax reform bill and for reporting this information to us.

  • Seems like yet another battle in the war on old people by the feds. Looks like we won this one. More to come when they attack “entitlements” I suspect – and those will be hard battles to win. Keep the pressure on them.

    It’s a shame that retirement systems have to be so politically active, but it is good that OPERS is on top of this stuff.

  • Thank you for doing a great job to protect the pentions of the retired public servants of Ohio. It Seems every time we turn around someone somewhere is trying to , And sometimes succeeding in taking away money from our retirement pentions. Be it government greed or healthcare incerases. Continue to PRAY, and keep up the good work to protect our interests.

  • Now please work on getting the Draconian bill to severely cut the COLA’s of current retirees removed from the the agenda of the Ohio State Legislature!
    Please post this instead of deleting out of hand as you have in the past. This is the United States and there is nothing offnesive in this post.

  • Wonderful job, Christopher Collins!! Thank you for your close attention to the pending law and quick action to get our representatives to work on eliminating this portion of the new tax law!

  • No cuts to cola some of us cant make it with out it or talk the federal government and not take taxes out for people that have disabilitys

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