A proposal to shift some pension contributions from public employers to employees was left out of the biennial budget that Ohio Gov. John Kasich signed on June 30.
Absent in the final document, which went into effect July 1, was a proposal to require Ohio public employees to contribute an additional 2 percent to their pension obligation and decrease the employers' contribution by 2 percent. The Ohio Public Employees Retirement System would like to thank everyone who helped us in this process by contacting your legislators and supporting our position in other ways.
Ohio Public Employees Retirement System Interim Executive Director Karen Carraher twice testified against the rate shift because it would:
• significantly increase our unfunded liabilities;
• extend the time to pay off those liabilities beyond what is required by law;
• impact health-care funding, which was one of the reasons that our Board of Trustees recommended plan design changes in November 2009.
We are studying the budget to understand its potential impact on the pension system. While the budget did not allow privatization of the Ohio Lottery, it included a proposal to lease the Ohio Turnpike (subject to approval by the Ohio General Assembly), as well as sell or lease several state prisons. Our actuary has determined that for every 5,000 public jobs that are lost to privatization, we add one year to our unfunded liabilities.
The next step for us is to continue to educate that meaningful and timely pension redesign is necessary.
The Ohio Retirement Study Council has approved a Request for Proposal (RFP) to hire a third-party actuarial consultant to study the proposals of all five public pension systems in preparation for a pension redesign bill. While we support transparency and a review of our Board's proposals, we have provided the ORSC with suggestions to help sharpen the focus of the study and minimize any duplication of effort. We will work with the council going forward to assist it in this process.
The 2 percent-contribution shift language could come up again as legislators consider the components of pension redesign, so we will keep you updated as matters progress.
In the meantime, thank you again for your support and advocacy on behalf of the Ohio Public Employees Retirement System.
Summary CAFR published
OPERS has published a Summary Annual Financial Report, designed to relay in plain language key financial information contained in our Comprehensive Annual Financial Report (CAFR). You can find the summary report on our website by clicking on this link.