Gov. John Kasich signed a new Ohio law Wednesday that will bring numerous changes to five of the state’s public pension systems, costing workers millions of dollars but letting them keep defined-benefit plans.
Kasich said the members of the funds and retirees now can “have a real sense their funds are going to be solvent,” reported the Columbus Dispatch
The changes will increase employee contributions, require longer service, reduce cost-of-living adjustments, and compute new final average salaries — all to make sure the pension systems can meet a state requirement that unfunded liabilities be paid off within the next 30 years.
The state House and Senate passed the bills nearly unanimously earlier this month. They represent plans the various pension boards proposed up to three years ago.
The bills had bipartisan support, and were sponsored by Republican Senate President Tom Niehaus and Democrat Senate Minority Leader Eric Kearney, who stressed that the measures may not be popular but they’re necessary for the pension fund to move forward.
The Ohio Public Employees Retirement System, which is the state’s largest fund, has estimated it has lost $1 million every day the changes it proposed back in 2009 are not implemented.
“Our members and retirees really understand the changes, and they understand the reason for it, and they strongly believe the changes are necessary,” said OPERS Executive Director Karen Carraher.
The five new bills will go into effect on Jan. 7, and for all systems except for OPERS, the bills allow pension boards to make some future adjustment without needing to first get legislative approval. Carraher said OPERS will keep working to get its members in agreement on the idea.
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