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Independent review likely will push reforms past next election

Posted on | January 4, 2012 | 1,155 views |

Since joining Ohio State in late June as the new vice president of Human Resources, I’ve learned much about the benefits available to our faculty and staff. I recognize the importance of retirement plans to a vibrant workplace and have been paying close attention to proposed changes to the state’s pension plans.

I want to share some recent developments in the legislative process.

As you know, the Ohio legislature is considering several proposals to maintain the solvency of the state retirement system’s defined benefit plans. In summary, the State Teachers Retirement System (STRS) proposal increases faculty contributions to 13 percent (currently 10 percent) and recommends no changes to Ohio State’s contribution rate of 14 percent. The Ohio Public Employees Retirement System (OPERS) proposal recommends maintaining the current contribution rates of 10 percent for staff and 14 percent for Ohio State. Complete details of the proposals can be found on the STRS and OPERS websites.

These changes would also affect the Alternative Retirement Plans (ARP). If employee contributions are increased per STRS recommendations, faculty who are members of the ARP also will see an increase in their contribution.

The next step in this process is an independent, actuarial review of the OPERS and STRS proposals, as requested by the Ohio Retirement Study Council (ORSC). This review will ensure the recommendations are actuarially sound, provide a long-term outlook of the capability and sustainability of the retirement systems’ plans, compare the recommendations to best practices and identify new and innovative approaches.

In mid-November, the ORSC selected a consultant to complete this review. The work is expected to take six months, which pushes any pension reform legislation into next year, most likely after the November 2012 election.

It is important to note that the recommendations put forth by STRS and OPERS are proposals, and changes are possible as a result of this review. It is too early to tell what, if any, changes we will see.

While it is quiet legislatively, we continue to be actively engaged with OPERS and STRS leadership to advocate for the best interests of our faculty and staff and to provide information to the state’s legislators and their staffs. We will keep you informed as we learn of the findings of the review and of any changes to the proposals.

As the legislative process continues, I encourage you to remain informed so you may fully understand how these changes may affect you. You will find up-to-date information on the STRS and OPERS websites. STRS or OPERS and your personal financial advisor are best positioned to offer individual advice based on your specific circumstances.

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