Dayton Daily News: Market losses may cut pension benefits for retirees

From John Curry, May 17, 2009
Market losses may cut pension benefits for retirees

Some 1.7 million public workers and former employees may see changes in their pensions.

By Laura A. Bischoff
Staff Writer
Dayton Daily News, May 17, 2009

After losing billions on Wall Street, Ohio’s five public pension systems are considering changes to the benefits for 1.7 million workers, retirees and former government employees.

The systems may have to water down the perks of public pensions because health care costs are skyrocketing and their investment portfolios have been plummeting. The changes could affect pensions for teachers, police, firefighters, state troopers and other government workers.

“National health care would go a long way toward fixing the problem,” said Aris Hutras, director of the Ohio Retirement Study Council, a bipartisan oversight board. “The pension funds combined pay over $2 billion annually in health care, probably $2.2 billion. And over 40 percent of that is for prescription drugs.”

The systems are beginning talks about what to do: bump up the eligible retirement ages, change the factors used to calculate monthly pension checks, reduce the annual cost of living adjustments or other changes.

Another option is to have taxpayers kick in more toward the employer contributions for future pension checks. But local governments already are setting aside 24 cents for every $1 paid to firefighters to go toward retirement.

“There are going to be some very tough decisions on everybody,” Hutras said. “The pension systems are in the real world and there are real world problems. Everybody is struggling with health care costs and keeping their pensions solvent into the future.”

Contact this reporter at (614) 224-1624 or lbischoff@DaytonDailyNews.com.

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