The pension hot potato bills rushed through with lightning speed

From John Curry, May 16, 2012

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Ohio Senate passes public pension reforms in a rush

Joe Guillen, The Plain Dealer 
Posted: 05/16/2012 8:00 PM

COLUMBUS, Ohio -- A set of public pension reforms that include increased contributions by some public employees passed in a blur through the Ohio Senate Wednesday with bipartisan support.
The reforms also would increase the number of work years it would take for some employees to be eligible for retirement. Other changes include a new formula for determining a retiree’s income and a new set of guidelines for cost-of-living adjustments.
“We know the changes are not popular, but they are necessary,” said Senate President Tom Niehaus, a Republican from Clermont County.
While the reforms received little scrutiny in the Senate, the House of Representatives plans to take a slower approach. Speaker William G. Batchelder, a Republican from Medina, wants to review the results of an actuarial study expected this summer before moving forward, a spokesman for Batchelder said Wednesday.
Niehaus said the changes are necessary to ensure the financial stability of the pension funds and to deliver benefits to which the members are entitled. He stressed that the changes were based on recommendations from the funds.
The reforms cover four of the state’s five pension funds. Niehaus said legislation to address the fifth fund, the Ohio Highway Patrol Retirement System, is expected to be taken up next week. The five funds cover nearly 700,000 contributing members and about 400,000 beneficiaries and have combined assets of more than $160 billion.
The bills would increase contribution amounts for members of the State Teachers Retirement System, from 10 percent of members’ salary to 14 percent, and for members of the Ohio Police and Fire Pension Fund, from 10 percent to 12.25 percent. Increases would be phased in gradually over the next several years.
Contributions would not increase for members of the Public Employees Retirement System or the School Employees Retirement System.
The Senate passed four bills, one for each pension fund. The bills were introduced last week and each received only two hearings. But the pension funds recommended many of the recommendations contained in the reforms three years ago.
“I was recently asked, ‘why move forward now after not doing anything for years?’” Niehaus said on the Senate floor. “That is a fair question and, frankly, I am personally embarrassed that we haven’t moved sooner.”
In other business, Senate Democrats were put in the rare position of helping pass a GOP-backed bill. Opponents said the bill, which goes back to the House for concurrence, will lead to higher credit card interest rates.
The bill, which passed the Senate by a 19-14 vote, would allow Ohio-chartered banks and credit unions to avoid an interest-rate cap and charge customers the same interest rates as out-of state banks. Ohio-chartered financial institutions had been prohibited from charging more than a 25 percent annual percentage rate.
Help from Democrats was needed because seven Republicans voted against the bill. Sen. Nina Turner of Cleveland, Sen. Eric Kearney of Cincinnati and Sen. Edna Brown of Toledo were the three Democrats who supported the measure.
Supporters of the bill said eliminating the interest rate cap would help encourage banks to create jobs by expanding their services.