Your pension and ....more cuts to come....unless you're in OPERS!

From John Curry, July 11, 2012
http://www.dispatch.com/content/stories/local/2012/07/10/ohio-public-employees-may-see-more-pension-fund-cuts.html

Ohio's public employees may see more pension fund cuts

By Darrel Rowland

The Columbus Dispatch

July 10, 2012

Workers under four of Ohio’s five public employee pension funds may see additional benefit cuts to keep the retirement systems solvent, a long-await report says today.

“Because the 30-year plans were designed (appropriately) to make the least amount of cuts to pensions consistent with the 30-year objectives, and investment returns since June 30, 2011 have been less than actuarial expectations, it is likely that further adjustment will be required,”concluded the 206-page report by Pension Trustee Advisors and KMS Acturaries.

Those “adjustments” would come on top of reductions contained in a sweeping set of bills already approved by the state Senate for the State Teachers Retirement System, School Employees Retirement System, Ohio Police & Fire Pension System and Highway Patrol Retirement System. Combined, those systems have about 330,000 active members.

The state’s largest pension fund, the Ohio Public Employees Retirement System, with more than 350,000 active members, was not included in the list of possible future cutbacks.

“To avoid likely frequent future benefit changes, consideration should be given to providing greater cuts than currently needed to provide a margin for future adverse experience,” the report said. “Alternatively, future favorable experience could be “reserved” for the same purpose.”

The study did say the measures in the Senate-approved revamp “will put each of the five retirement systems in a much more solid financial position than under current law.” The bills would reduce cost-of-living adjustments, raise retirement ages and make a host of other changes that would cost public employees billions of dollars.

Senate leaders urged the House to pass the measures.

"In reference to passing pension reform legislation, the report states ‘We see no valid reason for delay,’ ” said Senate President Tom Niehaus and Democratic leader Eric D. Kearney in a joint news release.

"We appreciate our colleagues in the Senate for taking a bold stand to ensure all the state pension plans are on solid financial footing to protect the retirement benefits of millions of Ohioans. We encourage our colleagues in the House of Representatives to join us in passing this pension legislation without any further delay.”

House leaders said they wanted to see the report before taking action. No further legislative sessions are likely until after the November election.

However, House Speaker William G. Batchelder said the House likely will take action this summer.

“With the release of this extensive and comprehensive report on Ohio’s retirement systems, members of the Ohio House will carefully examine the findings of this report and, if necessary, incorporate these recommendations into legislation,” he said in a release.

“It is of the utmost importance that we use the information collected in this study to further our efforts to make Ohio’s pension systems sustainable and cost-effective.”

Researchers praised the relative stability of Ohio’s retirement systems, compared with those in many other states. State law requires each system to have funding setup to meet obligations within 30 years at the most.

“The current Ohio pension system structure is solid and the 30-year funding requirement is an important feature. Unlike the vast majority of states throughout the country, the Ohio taxpayer has not issued a ‘blank check’ for increased employer pension costs to compensate for unfavorable investment returns and other results.”

drowland@dispatch.com