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Columbus
Dispatch...
Police, firefighters
could see retirement pay trimmed
Goal is to meet 30-year solvency requirement
Tuesday, Feb. 8, 2011
Firefighters and law-enforcement officers across Ohio would see their
retirement pay trimmed under a plan approved yesterday by the Ohio
Police & Fire Pension Board.
The move during a special meeting in Mansfield means the pension fund
would now meet a requirement in Ohio law that it be able to cover at
least 30 years of retirement obligations.
Chided by state lawmakers last month for coming up with an initial
proposal that would have taken 36 years, the police and fire fund now
joins the other four state pension funds in having 30-year solvency
plans on the table.
“That was the main objective of the decisions at (yesterday’s)
meeting,” said David Graham, spokesman for the fund. “It just depends
on what formula we use to get there.”
State Highway Patrol employees have a separate pension fund.
The revamped plans will go to the Ohio Retirement Study Council and
then to the legislature, where Republican leaders say they hope to pass
a measure by early summer.
In all, more than $16 billion will come from Ohio’s state and local
government workers as the result of later retirement ages, higher
employee contributions to retirement and other changes.
Yesterday’s decision by the police and fire board would cost safety
forces an estimated $793 million. The exact breakdown of that tab is
still being hammered out. One version would limit cost-of-living
increases to the lesser of the consumer price index or 3 percent; it’s
automatically the latter now. But whether that cap would apply only to
the retirements of future hires or to all those with, say, fewer than
15 years of service remains undecided.
The other part of yesterday’s solution would direct a smaller share of
money to health care from what government employers (ultimately, the
taxpayers) provide for retirement. But while that would help the
pension fund, it would put the retiree health-care account on a shakier
fiscal footing.
For instance, using only 4.31 percent of the employers’ share, instead
of the current 6.75 percent, for health care means that fund would have
enough assets to cover obligations only through 2025, instead of the
current 2044. (There is no 30-year requirement for this fund.)
Overall, public employers currently pay 21.59 percent of safety force
employees’ salary into the retirement and health-care funds. The
employees, who are not in the Social Security system, are assessed 10
percent of their paychecks.
The police and fire board already had agreed to increase the workers’
contribution to 12.25 percent, raise the normal retirement age to 52
from 48, delay cost-of-living adjustments until retirees turn 55 and
increase the base years on which retirement pay is calculated to the
average of the highest five years, up from three.
Read the story at Columbus Dispatch
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