Ohio pension changes lead to retirement rush

Wave of teachers may step down by July 1

1/22/2013

COLUMBUS — The first wave of public-employee retirements struck during the last three months, a dash to the exits before changes to the state’s public pension systems took effect last week.

Another wave is expected, this time from teachers and other school staff members.

Changes in the teachers pension system will influence those who can retire this year to do so, said Ohio Education Association spokesman Michele Prater, and more baby boomers will be eligible. There’s no way to tell how many more teachers will retire this year.

Changes in the cost-of-living rules for the State Teachers Retirement System give teachers across the state a strong incentive to retire by July 1. Those who retire before then will begin receiving 2 percent cost-of-living increases to their pensions in 2015.

Those who retire after July 1 will have to wait until 2018 to begin receiving increases. From then on, retirees will wait five years for their first cost-of-living increase.

Experts also are projecting another wave of retirements by 2015, when the age and years-of-service requirements for full benefits would gradually rise.

“It’s something we have to deal with over the next two to three years,” said David Varda, executive director of the Ohio Association for School Business Officials.

Similar changes to the Ohio Public Employees Retirement System led to a glut of retirements at the end of 2012, that system reported. For example, 1,486 workers sent retirement applications to OPERS in December, up 82 percent from December 2011. There were similar increases in October and November.

Officials with the School Employees Retirement System and the State Teachers Retirement System say they’ll have a clearer picture of retirement numbers in coming months.

So far, counseling appointments with the State Teachers Retirement System office are up 7 percent from last year, spokesman Nick Treneff said. He noted that appointments were down 3 percent last year from the previous year.

He said a steady economy can play a role in teachers’ decisions. STRS saw a surge in retirements eight years ago when the economy was more stable, he said. But during tough economic times in 2008 and 2009, the number of retirees dipped.

“As some of those baby boomers are aging into retirement age, they are going when they can afford to do it,” Mr. Treneff said.

The state overhauled all five public pension systems. In general, employee contributions went up, new final-average salaries were computed, longer service is required, and cost-of-living adjustments were reduced.