Niehaus Opens Door to Pension Bill Passage this Spring
Senate President Tom Niehaus (R-New Richmond) said Tuesday he'll push his chamber to pass pension-reform legislation before the General Assembly's summer break if the state's five retirement systems can demonstrate support for their proposals from active and retired public workers. "These changes are not being proposed by the Legislature; they're being proposed by the plans. So I want to make sure that the rank-and-file members who are affected by these changes support them," he said.
The demonstration of support could come in the form of public announcements, press releases or other actions, Niehaus said. He's asked the retirement systems to submit plans to him for how they could show solidarity with their beneficiaries. "The longer we wait to make changes to the pension systems, the more difficult the changes become," Niehaus said.
The plans first submitted reform proposals in September 2009, then revised them early last year when newly-empowered Republicans declared their unwillingness to accept any plan that included employer contribution increases. One reason lawmakers have waited this long to act is because the Ohio Retirement Study Council sought an outside consulting firm to give a fresh perspective on possible retirement system changes. The council hired the joint team of Pension Trustee Advisers and KMS Actuaries in December and expects a final report in the summer.
Niehaus said he's seen some preliminary information from the consultants, and said there's no guarantee the eventual recommendations will get approval either from the retirement systems or lawmakers.
It's been two and a half years since the five systems first presented plans to shore up long-term solvency amid longer life expectancies, rising health care costs and the fallout from the 2008-2009 financial meltdown. All that time, involved lawmakers have frequently expressed desire to make changes substantial enough to avoid the need for further legislative action in the short term.
Niehaus said he's heard of one proposal to lessen the need for future legislative action by giving the pension systems to reduce benefits without lawmakers' approval; increases would still require legislation. "The plans have not signed on off on this," he said. "We've asked them to consider that."
Support for retirement system plans by their respective beneficiary populations so far has been mixed in testimony on pension reform bills. For example, the Ohio Fraternal Order of Police and the Police and Fire Retirees of Ohio have offered general support for the Ohio Police and Fire Pension Fund's proposal, while the Ohio Education Association and Ohio Federation of Teachers testified in opposition to the State Teachers Retirement System of Ohio plan.
Meanwhile, the board of the State Teachers Retirement System asked its staff to study ways to change its reform proposal after the board adopted new actuarial assumptions at a meeting last week that had a negative effect on the system's funding outlook. Notably, the system dropped its expected investment return from 8 percent to 7.75 percent.
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