From John Curry, January 11, 2010
Toledo Blade, January 10, 2010
Not all facts on pensions made clear
It is clear from The Blade's recent series on Ohio's public pension plans that the writers didn't comprehend the 30-year funding model, or how Ohio law applies this tool to the pension systems. For example, a Jan. 3 article stated: "The State Teachers Retirement System and the Ohio Police & Fire Pension Fund are in violation of state law requiring them to have enough money to cover their pension obligations for 30 years." This is simply not true.
The law requires the systems to have a plan in place, submitted to the Ohio Retirement Study Council, that would bring the plans to a full-funding ratio in 30 years. It's up to the legislature to implement that plan. There is no requirement for the pension systems to have 30 years of pension obligations on hand.
The Ohio Police & Fire Pension Fund was created in 1967 with $7 of liability for every $1 of asset. A statewide plan was created because cities defaulted on payments to local pension plans. These employers owed the pension fund hundreds of millions of dollars. Many have still not paid off that debt.
In 1986, employer contribution rates were frozen. This allowed local jurisdictions to more accurately budget retirement costs. The employee rates were increased. Contribution rates have not increased since 1986.
What costs the same today as it did in 1986 aside from Ohio's police and fire pension?
As firefighters and emergency medical service professionals, we are there for the people of Ohio. We are there to literally save lives, and we retire with an average pension of less than $34,000. In retirement, we deserve the dignity and security we earned by our years of dedicated service.
Mark A. Sanders
President Ohio Association of Professional Fire Fighters Cincinnati
Note from John - A well written letter by President Sanders. In an additional note to STRS retirees, we can say, "What costs the same today as it did in 1984?" 1984 was the last time an adjustment was made to the employer deduction for educators. It was changed to 14% in 1984 and has remained there ever since! Don't believe it? Here's your link: