On July 11 a final report prepared by actuarial consultants (the “Report”) was delivered to the Ohio Retirement Study Council (ORSC). The Report analyzes the changes previously proposed by the five Ohio public retirement systems and presents proposals that would eliminate unfunded accrued liability of the retirement systems over 30 years, while preserving a reasonable funding of retiree healthcare benefits.
ORSC is an entity created by state law that has members appointed by the Governor, the Senate and the House. The executive directors of the five state retirement systems are also members. A principal purpose of the ORSC is to review laws governing the administration and financing of the Ohio retirement systems and to recommend changes to the General Assembly with respect to pensions and benefits, the sound financing of the cost of benefits and other matters.
The Report recommends a wide range of changes be made to each of the five state retirement systems to maintain responsible funding levels for the systems. There are various proposals to reduce system liabilities by reducing pension and other benefits, including by raising retirement ages and limiting cost of living increases.
The Report also recommends increases in employee contributions, but not in employer contributions. Finally, the Report suggests that the law be revised to provide significant discretion to the boards of each retirement system to reduce system benefits, and to make other changes as the boards may deem necessary to meet responsible actuarial funding standards without legislative approval. The Senate already has passed five bills that would reduce certain retirement system benefits and make other changes. Hearings on the proposed bills are underway. At this point it is unclear how the Report will affect the existing bills.