Middletown Journal report on 9/9/09 ORSC meeting
Changes in Ohio’s five public pension systems needed to meet obligations.
By Laura A. Bischoff, Staff Writer
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COLUMBUS — Politicians will soon start wrestling with tough choices: force teachers, cops, firefighters and other government workers to work longer before retirement, cut benefits for retirees, or require taxpayers to shovel more money into Ohio’s public pension systems.
Or, all of the above.
Ohio’s five public pension systems, which represent 1.7 million current or former government workers and retirees, laid out stark choices to the Ohio Retirement Study Council on Wednesday, Sept. 9.
The changes must be made for the systems to be able to cover all their obligations within the next 30 years.
The study council will review the proposals and craft pension legislation for the General Assembly to consider. Here is an overview of what’s on the table for each system.
State Teachers Retirement System
• Increase pension contributions by 2.5 percent for both teaches and districts. Right now, teachers pay 10 percent of their salary and districts kick in 14 percent. • Calculate the pensions on the highest five years of pay, instead of the highest three. This would save the system $750 million.
• Eliminate the enhanced pension for teachers with 35 years of service and set 35 years of service as the new requirement for a full pension. These two provisions would save $2.3 billion.
• Reduce cost of living adjustments from 3 percent to 2 percent for current retirees and 1.5 percent for teachers retiring after July 2011. This would save $6.6 billion.
Ohio Public Employees Retirement System
• Require employees to work two more years to be eligible for retirement and set age 55 as the minimum retirement age.
• Calculate the pensions on the highest five years of pay, instead of the highest three years, and require workers to have 35 years of service, not 30, before a more generous pension rate is applied.
• Tie cost of living adjustments to the rate of inflation and cap them at 3 percent.
Ohio Police & Fire Pension Fund
• Increase worker contribution rates to 12 percent, up from 10 percent and increase employer rates to 25 percent of payroll, up from 24 percent for firefighters and 19.5 percent for police. This is expected to cost $1.5 billion.
• Raise the retirement eligibility age to 52, up from 48, for all new hires. This is expected to save $190 million, but would save significantly more if it applied to anyone currently with less than 15 years of service.
• Calculate the pensions on the highest five years of pay, instead of the highest three. This is expected to save $213 million.
• Reduce the amount of money dedicated to paying for retiree health care benefits and link health care premium amounts to the years of service. This would save $639 million.
School Employees Retirement System
• Raise retirement eligibility rules to age 67 with 10 years of service or age 57 with 30 years of service for a full pension.
Highway Patrol Retirement System
• Decrease the cost of living adjustments to 2 percent, down from 3 percent, except for current retirees over age 65 and receiving less than 185 percent of the federal poverty level. And only give adjustments to retirees age 60 or older, up from the current 53 and older.
• Increase employee contribution rates to 11 percent, up from 10 percent.
• Calculate the pensions on the highest five years of pay, instead of highest three years.
• Reduce the amount of money dedicated to paying for retiree health care.
Contact this reporter at (614)224-1624 or lbischoff@DaytonDailyNews.com.