Ohio's public employee pensions in good shape, study says

From RH Jones, January 14, 2008
Subject: Ohio's public employee pensions in good shape, study says

To all:

With the Dec. 19 article below, it seems to me that there would be NO reason that the OSBA or the OASBO should be against HB 315 (The employer/employee increase for retired teacher health care.) Should the bill now (Jan.14) advance out of the FIRES Committee?

RHJones, Retired STRS Member

Ohio's public employee pensions in good shape, study says

Cleveland Plain Dealer, December 19, 2007
Stephen Koff
Plain Dealer Bureau Chief

Washington- Unlike some counterparts in private industry, Ohio's teachers, highway patrol officers and other public employees need not worry about their pensions being solvent, according to a new study.

"Ohio has done a very good job keeping up with required contributions for its public employee pension system," said the 50-state study released Tuesday by the Pew Center on the States.

The total coming due for Ohio public pensions over the next 30 years is $139 billion, according to Pew, part of the nonpartisan, nonprofit Pew Charitable Trusts, which studies issues ranging from the environment to good government. Of that, Ohio has 81 percent set aside, and pension investments were assumed by the state to be earning an 8 percent return in 2006, the year studied.

Most experts consider a pension fund healthy if it has at least 80 percent of funds set aside that it will need. Twenty states, including Kentucky, Indiana and Oklahoma, have less than 80 percent set aside.

Ohio may have to make adjustments to meet future health-care costs for state retirees. Over the next 30 years, the state will have an estimated $32 billion in retiree health care and related costs. The pension fund only has 35 percent of that $32 million set aside, but Ohio is in better shape than most. The vast majority of states have put aside an average of 3 percent of future health costs, the Pew study found.

Ohio lawmakers are considering options ranging from higher employee contributions to setting a higher age at which some teachers could collect retirement benefits.

"None of the pensions are in any trouble," said Aristotle Hutras, director of the Ohio Retirement Study Council, an independent oversight body. "Now they are working very hard to continue that very important retiree health-care benefit."