Loading…
Saturday, November 29, 2014
Current Weather
Loading Current Weather....
HomeNewsLocal
Published: Thursday, 1/27/2011

5 Ohio public pension funds make offer to cut benefits

COLUMBUS -- Ohio's five public retirement funds came to lawmakers Wednesday with proposals to raise member contributions and cut benefits in an effort to ensure their long-term viability.

Conspicuously absent from all the proposals this time around was any mention of asking taxpayers, via government employers, to pay more.

"Whether they asked for it or not, employer contributions had zero-percent chance … of passage in this General Assembly," Rep. Randy Gardner (R., Bowling Green), who is a member of the House Health and Aging Committee, said. "It is a good thing that all the systems recognize that and came up with solutions that might be viable for the legislature to consider."

All the pension systems proposed reducing benefits, although in some cases the effects would vary between current retirees, those who are closest to retirement, and those who may have decades of work ahead of them.

Some employees would have to work longer before they will be able to retire with benefits.

Others will see smaller annual cost-of-living adjustments than they've been used to.

And in other cases, less generous formulas will be used to calculate benefits.

Members of the public funds are not eligible for Social Security.

Three of the five systems proposed increasing the contributions that employees pay toward their retirement.

The exceptions were the Public Employees Retirement System that covers nearly 1 million state, county, municipal, and township employees, and the School Employees Retirement System, which covers about 192,000 current and retired nonteachers at schools and community colleges.

"None of this news is going to make anybody happy…," Michael J. Nehf, executive director of the State Teachers Retirement System, said. "But if everyone can pitch in a little bit [and] everybody takes somewhat less in retirement benefits, then we can sustain the system forever."

The teachers retirement board, making decisions affecting about 470,000 active, inactive, and retired teachers, will continue to debate the final details of its plan Thursday.

The pension funds had been instructed by lawmakers to come back with plans that would ensure that their pension funds had sufficient assets to cover their obligations for the next 30 years.

One system, the Ohio Police and Fire Pension Fund, missed the mark with its health-care fund, which would take 6 years longer to pay its obligations.

The committee's chairman, Rep. Lynn Wachtmann (R., Napoleon), called the fund's plan "inadequate" and "incompetent."

Among other things, that plan called for increasing the contributions of what police officers and firefighters pay toward their retirement from 10 percent of their pay to 12.25 percent and raising the normal retirement age for newly hired employees by four years to 52.

Two years ago, the fund had been asking for additional help from taxpayers.

"Your system has had problems for years...," Mr. Wachtmann said. "I can't believe you're here saying what you're saying. …[If] you leave it up to us, we will do it. I don't know what the governor is going to do … [but] this House … is not going to have systems that are going to pass problems on to future people."

William J. Estabrook, the fund's executive director, disagreed with the suggestion of Rep. Jay Hottinger (R., Newark), who suggested that his board was leaving the "dirty work" to lawmakers.

Mr. Estabrook said the fact that the board's proposal would reduce the system's long-term amortization from "so far out into infinity" to 36 years was a "strong statement."

The pension funds first came to lawmakers with reform plans in 2009 that largely landed with a thud, in part because some relied on greater taxpayer participation.

The issue languished during 2010, a gubernatorial and legislative election year when candidates didn't want to be pinned down on what they knew would be unpopular decisions back home.

Mr. Wachtmann now plans to introduce a bill Thursday that largely would serve as a placeholder until final plans are worked out.

Contact Jim Provance at: jprovance@theblade.com, or 614-221-0496.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Points of Interest








Poll