State lawmakers are poised to approve a package of public pension reforms this week that would eventually increase pension contributions for teachers, police and firefighters and make several other changes to stabilize the retirement systems’ financial health.
A House committee unanimously approved the changes on Monday, setting up a full vote on the House floor Wednesday. Republican Senate President Tom Niehaus, of Clermont County, said the Senate plans to vote on final passage of the bills later that same day following approval from the House.
The bills would affect 700,000 contributing members and 400,000 retirees throughout Ohio who have waited anxiously for the past few years to learn how their benefits would be affected. Legislative leaders said the changes, while unpopular among some workers, are needed to make sure members get the benefits they deserve.
Rep. Lynn Wachtmann, Republican chairman of the Health and Aging Committee, said he’s expecting “near unanimous” support for the bills in the House this week.
All five pension boards expressed support for changes the bills would make. Julie Graham-Price, communications manager for the Ohio Public Employees Retirement System, said changes are needed for a variety of reasons, including increases in life expectancy and number of retirees. OPERS’ basic structure hasn’t changed since 1935, though retirees now live about 15 years longer and have increased six fold since 1967.
The Cleveland Police Patrolman’s Association, however, opposed changes facing its members.
Jeff Follmer, president of the association, said the increased retirement age requirements would result in older police on the streets. The union also opposed a provision that would exclude certain salary increases from pension benefit calculations. The provision could cost some members $10,000 a year in benefits.
Each of the state’s five retirement systems would undergo some combination of raised retirement eligibility ages, raised employee contribution rates, new guidelines for cost-of-living adjustments or a new formula to calculate benefits.
Pension boards will also be given more power to make slight adjustments within their own funds without legislative approval.
Many of the major changes are designed to have a greater effect on workers with less experience rather than workers closer to retirement. The reforms by and large do not affect current retirees.
The bills would increase contribution amounts for members of the State Teachers Retirement System, from 10 percent of members’ salary to 14 percent, and for members of the Ohio Police and Fire Pension Fund, from 10 percent to 12.25 percent. Increases would be phased in gradually over the next several years.
Contributions would not increase for members of OPERS or the School Employees Retirement System. The Ohio Highway Patrol Retirement System board would have the authority to increase worker contributions to up to 14 percent of their salaries.
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