The HPA Proposal

Phase in of Retirement Eligibility:

· The HPA proposal calls for the change from retirement with 30 years of service at any age to 35 years of service at any age to be phased in over an eight year period.

· This change would limit the disruption of retirement planning for those who are in the latter stages of their careers while without adding substantially to the funding period.

· The plan adopted by the STRS Board is unfair to members who fall just short of reaching 30 years of service by 2015. They would need to work another five years in order to be able to retire.

· The HPA proposal would allow over 6,800 active teachers with between 21 and 24 years of service to retire earlier than the STRS plan.

COLA:

· The HPA proposal would set a 2% COLA for those who retire after 2011; however the COLA is deferred for 36 months.

· The disparity between the percentage given to those who retire before 7/1/2011 and those who retire after that point would create a “rush to the door” where anyone eligible to retire would be incentivized to do so.

· The rush to the door would be extremely disruptive to Ohio’s schools and campuses. Further, it runs counter the Board’s goals to have a spike in retirements in 2011.

· The deferral of the COLA for 36 months reduces the cost to the system of increasing the COLA rate for future retirees.

Early retirement at 30 YOS:

· The HPA proposal would allow members to retire with 30 years of service subject to an actuarial reduction of benefits.

· Those who reach 30 years of service after eligibility changes would still have the option to retire, albeit significantly reduced benefits.

· There is no negative effect on the funding period.

FAS:

· The HPA plan would grant the Board statutory authority to set final average salary based on three to five years.

· The change to FAS has the least impact on the system. However, this change does have tangible impact individual members’ pension benefits.

· Granting the Board statutory authority to make the change allows for greater flexibility should economic conditions improve substantially.