Tuesday, July 10, 2012

Ohio pension report recommends higher contributions, delayed benefits

Business First
By Jeff Bell, Staff reporter
July 10, 2012
Ohio’s pension system for public workers is structurally sound, and changes pending in the state legislature will shore it up even more, according to findings in a new report issued Tuesday.
The report, commissioned by the Ohio Retirement Study Council, is seen as key to getting the Ohio House to sign off on pension reform bills passed this year by the Senate.
The proposed plan changes came from the five state retirement programs, including the State Teachers Retirement System and Ohio Public Employees Retirement System. All are based on 30-year plans to keep the systems adequately funded and include changes such as increasing age and service requirements for retirement and boosting pension contributions by employees.
The report, conducted by Colorado-based Pension Trustee Advisors/KMS Actuaries, said the reform plans proposed by the retirement systems are a “major positive step” and will put each in a much more solid financial position than under current state law.
The report also said that unlike most states, Ohio and its taxpayers have not issued a blank check for increased employer pension costs to cover unfavorable investment returns by the retirement systems.
In addition, the report said benefit changes included in the Senate-passed bills may need to be adjusted further because of lower-than-expected investment returns since the retirement systems introduced their 30-year plans in 2011.

Staff reporter- Business First
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