Board OKs new membership tier
Group D to offer more flexibility for future OPERS members
By Michael Pramik, Ohio Public Employees Retirement System
Oct. 24, 2019 – The OPERS Board of Trustees approved a proposal at its October meeting to create a new tier of membership in the OPERS Traditional Pension Plan.
Retirement Group D would consist of OPERS-contributing members who are hired in 2022 and beyond. OPERS currently splits its non-retired membership into Group A, B or C depending on age and service criteria.
Group D will have its own eligibility standards, benefit structure and unique member features designed to meet the changing needs of Ohio public workers. It also will help OPERS address expected investment market volatility and adjust to the lack of available funding for health care.
Details of Group D are still in the working stages. OPERS staff has committed to work with stakeholders to iron out details and explore other ideas for this group. A final plan will be presented to the Board prior to seeking legislation.
As with our other retirement groups, there are many aspects that will define Group D. Here are a few of the details put forth thus far and where the plan stood as of the Board vote:
- Contribution rates: Group D state-and-local members will contribute 11 percent of their salaries. One percent will be deposited into a Pension Plus Account, money that will accumulate throughout the member’s career and be invested separately from the Defined Benefit Fund.
- Gainsharing account: Active members will be able to share investment earnings when returns top our assumed investment rate of return and if the group’s funded ratio is above a specified target.
- Retiree Medical Account: Group D members won’t participate in traditional OPERS health care coverage. Rather, a portion of their employers’ contributions will be dedicated to fund an RMA to be used to reimburse the member for future medical expenses.
- COLA: A simple COLA tied to the Consumer Price Index, capped at 2 percent, will be available.
- Benefit eligibility and final average salary: Group D members will take longer to reach reduced or unreduced benefit eligibility and will have an increased number of years for the final average salary calculation.
- Portability: Group D members will be able to direct the investment of funds they roll into the plan from other eligible retirement plans. They’ll also be eligible to purchase a maximum of five years of service credit, with no associated public employment, at the full actuarial cost. And after employment is terminated, funds could be rolled to another eligible retirement plan.
Also under discussion for Group D members is the creation of a proposed Protective Services Division, an occupational classification based on public safety job duties not currently covered in OPERS’ Law Enforcement and Public Safety divisions.
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.
16 thoughts on “Board OKs new membership tier”
Why do you keep using euphemistic phrases like “increases retirees flexibility, etc.” Just be honest and tell the truth that it is needed to keep the plan solvent, etc. While one may question the need or fairness of changes, we all understand that the pension system needs shoring up for whatever reason. Stop the bs.
Why would they be allowed to purchase 5 years of service credit with no associated public service? How does benefit OPERS ? What are the benefits for the employee? Thank you
The details are still being worked out and nothing has been finalized. The proposal would allow members in Group D to purchase a maximum of five years of OPERS service credit for time worked in the private sector or another state. This could be attractive to someone who has worked in a variety of jobs and wants to build retirement security. It could also be used as a way to attract mid-career workers to the public sector. The full cost would be paid by the member.
It would be attractive to me, who has worked most of my life in city / state civil service. Let me purchase 5 years!!
it will be harder and harder to hire quality help with less perks. I see it happening now in some departments.
While hanging out with a friend in the State Highway Patrol retirement system he was telling me how Troopers retirements are based only on their straight salary not with over time! Many People I worked with are getting to game the system on their high three years because of politics drawing 6-7 thousand a month. My First captain told me on my first day of the job that I would have a pension and healthcare for life! Now that is not happening! Now OPERS is changing the rules again repeatedly and threatening me that they are going to take away my health care because I have a part time job that they approved me to work And they OPERS says the employer are supposed to pay for it the health care ! I am 53 no one will hire me full time. at the OPERS seminar they complain about the retiree making $70000.00 and collecting disability. The comments at the last seminar made us feel like we are living to long and OPERS wants us to hurry up and die! I am paying $1400 a month to keep my family insured as is required by Obama Care.
Each pension system is managed independently with their own Board of Trustees, and make policy decisions based on member demographics. Retirement eligibility rules at Ohio Highway Patrol are different than OPERS.
I think it’s wonderful that Group D members will be able to buy up to 5 years of service credit with no associated public employment. Is the same courtesy being considered for Group B & C members who had our life plans disrupted when we suddenly had to contribute 1 to 2 years longer than anticipated? I would ask OPERS staff to consider this a fair and reasonable enhancement as part of the final plan and would especially like to use my deferred compensation account to fund such a purchase.
“They’ll also be eligible to purchase a maximum of five years of service credit, with no associated public employment, at the full actuarial cost.”
This proposal is very intriguing, would OPERS be open to offering this to current members in groups B and C who got affected by the extended service clause of the last reform?
I agree, I think it should be open members in groups B and C. Many of us started mid-career and will never use the health care Benifits of plan . I would rather have service purchase options!
I saw this as I researched Group D for a friend.
I agree, anyone in Group B or C should be eligible to purchase service credit from our years outside the public sector.
We are already seeing the effects of not being able to hire high quality people because of the pension changes.
Maybe OPERS should also be addressing the public offset or windfall elimination provision for its members.
Thanks for your reply. Regarding the WEP, we have consistently shown support for workable solutions at the federal level. Remember, this is a Social Security rule, not an OPERS rule.
Here’s a link to a blog we posted a year ago on this subject.
What is the eligibility age and years of service credit going to be for a person in Group D for and unreduced retirement?
OPERS has three retirement groups — Group A, Group B and Group C.
You can see the eligibility for each group on our website.
I think it’s only fair if group A and B can buy 5 years of credits as well. With no public service. Make it happen.
You’ve responded to a 3-year-old post that has not yet come to fruition.