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Reforms to bolster, stabilize retirement systems
9/24/2012 3:58:00 PM
By Press Release
- State Representative Richard Adams (R-Troy) has announced that the Ohio House of Representatives today took a significant step toward responsible pension reform with the bipartisan passage of a series of legislation aiming to improve the solvency of the five state retirement systems.
Senate Bills 340, 341, 342, 343, and 345 make sweeping reforms to the Ohio Police and Fire Pension Fund (OP&F), the School Employees Retirement System (SERS), the State Teachers Retirement System (STRS), the Public Employees Retirement System (PERS), and the State Highway Patrol Retirement System (SHPRS), respectively. These reforms strive to allow the systems to reduce their unfunded liabilities so they can bolster their health care funds, ensure that retirees and future retirees receive their benefits, and offer much-needed stability.
“Public pension reform has been a complicated process,” Representative Adams said. “The five systems affect many Ohioans including retirees, public employees, and taxpayers.”
Among the provisions included in the substitute bills are measures to:
Set an effective date of January 7, 2013 to give public employees, teachers and safety workers time to plan for their retirement.
Delay the “discretionary board authority” by 180 days. The bills, as passed by the Senate, allowed pension boards unilateral authority to change pension requirements and benefits. The substitute bill calls for the bipartisan Ohio Retirement Study Council to study the potential impact of board authority and its alternatives. By delaying discretionary board authority, the House has helped to maintain proper checks and balances and better safeguard the solvency of the pension system.
Increase the base amount of earnable income for service credits, a provision that the House mediated between stakeholders and PERS.
Include clarifying language that changes regarding the purchase of PERS service credits for military service.
Specify that the vesting provisions do not apply to cost of living adjustments granted after the PERS pension reform bill is effective.
“The reform plan has earned the support of the boards of the five retirement systems and the organizations representing the public employers,” Representative Adams said. “Taxpayers will not have increased costs as the five funds become financially viable.”
Each public pension reform bill received a total of nine hearings by the Retirement and Pensions Subcommittee, and two hearings by the Health and Aging Committee. The committees heard testimony from more than 25 stakeholders from across the state and worked in partnership with the Ohio Retirement Study Council, the pension systems, and the stakeholders to craft significant amendments to the legislation.
The subcommittee hearings in particular were scheduled in the afternoon and evening in an effort to give Ohioans the opportunity to express their support or concerns with the pending reforms.
All five bills had passed unanimously from the Health and Aging Subcommittee on Retirement and Pensions as well as the full Health and Aging Committee.
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