Columbus
Dispatch...
Pensions may cost
state workers 2%
By Darrel Rowland
Friday, May 13, 2011
State and local workers may have their pocketbooks lightened in the
state budget after all.
The Senate appears ready to restore a plan canceled by the House that
would shift 2 percent from public employees’ pay to their employers to
help cover their pensions.
In contrast, a plan to revamp Ohio’s five public-employee retirement
systems - including such proposals as delaying retirement ages,
increasing employment pension payments and cutting cost-of-living
increases - will be delayed until at least late this year.
Gov. John Kasich frequently cites the “tools” being handed to local
governments to help ease the sting of more than $1 billion in state
budget cuts. One of those tools, for example, is the 2 percent pension
shift, which the administration says would save Ohio schools alone
nearly $230 million a year.
Sen. Keith Faber, the No. 2 Senate leader, said yesterday that
Republican leaders will give strong consideration to restoring a
priority item for the GOP governor.
When the House stripped the pension shift from the budget, there was
talk that it would land in companion House and Senate bills that would
make sweeping changes to restore financial stability in the retirement
systems.
However, that legislation now won’t be considered until after an
independent actuarial study examining the effects of proposals from the
five systems, Faber said after a meeting of the Ohio Retirement Study
Council.
“We want to make sure we have solid, reliable actuarial-policy advice,”
the Celina Republican said. “I think it’s more important we do it
right, rather than we do it fast.”
The systems have proposed a variety of moves to conform with state law
requiring them to be able to pay off their obligations in a maximum of
30 years.
Faber said while the study council does not distrust actuarial work by
the pension systems, members want an outside review to test the funds’
assumptions. For example, calculations by three of the funds show that
the pension shift would undercut their plans to conform with the
30-year requirement.
The council will develop a request for a proposal for a firm to conduct
the work. Faber said he hopes the pension revamp can be done by the end
of the year.
The retirement funds cover virtually every state and local employee,
from desk workers in the state office towers to teachers, firefighters,
police officers, park rangers, prison guards, school cooks,
environmental engineers, state troopers, sanitation crews and many
nurses.
Leaders of two retirement systems presented annual budgets to the
council; both proposed raises to end pay freezes.
The State Teachers Retirement System wants raises averaging 1 percent,
up to a maximum of 3 percent, the first after a three-year freeze. The
School Employees Retirement System seeks raises averaging 3 percent,
after going with no increases since 2008.
Read it at the Columbus Dispatch
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