Pension Trustee Advisors Presents Report to ORSC, Recommends Adoption of System Developed Plans
At the July 11 Ohio Retirement Study Council (ORSC) meeting, William "Flick" Fornia presented the results of the Pension Trustee Advisors (PTA) study of the pension plan design changes approved by the boards of Ohio's five statewide retirement systems. The PTA report recommended adoption of the systems' plans, but suggested that the retirement systems' boards be given authority to make further benefit changes in the future, if necessary, to remain within a 30-year funding period. The report also supported the continuation of defined benefit plans for Ohio's public employees, noting the efficiency and low costs of these plans. While some news outlets focused on portions of the report that point to the possible need for additional plan adjustments, PTA encouraged legislative approval of the plans because the boards' recommended changes will put the systems in a much more solid financial position.
The PTA report called STRS Ohio's proposed plan "a reasonable approach given the funded status of the system," while reiterating the recommendation to give the State Teachers Retirement Board authority to make additional retirement benefit reductions, if necessary, to meet funding objectives. The report also projected STRS Ohio's health care fund to remain solvent until 2047, assuming the 1% employer contribution to the health care fund continues.
Council members from the Ohio House of Representatives indicated that the House is prepared to move forward with hearings, possibly as early as mid-July. House Bill 69, introduced in 2011, was assigned to the House Health and Aging Committee. The pension legislation will likely have its next hearing in a Health and Aging Subcommittee on Retirement and Pensions.
STRS Ohio will continue to use its website, newsletters and eUPDATE email news service to keep members up to date with the progress of the legislation.
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