The Ohio House of Representatives today took a significant step toward responsible pension reform with the bipartisan passage of a series of legislation aiming to improve the solvency of the five state retirement systems.
Senate Bills 340, 341, 342, 343, and 345 make sweeping reforms to the Ohio Police and Fire Pension Fund (OP&F), the School Employees Retirement System (SERS), the State Teachers Retirement System (STRS), the Public Employees Retirement System (PERS), and the State Highway Patrol Retirement System (SHPRS), respectively. These reforms strive to allow the systems to reduce their unfunded liabilities so they can bolster their health care funds, ensure that retirees and future retirees receive their benefits, and offer much-needed stability.
“These reforms make adjustments to benefits that will pay the unfunded liabilities of the pension systems and bolster the health care coverage for its members,” said Rep. Schuring (R-Canton). “The plans ensure long-term stability of the pension systems and protect retiree benefits and contributing members in the future. The committee process was a productive collaboration of lawmakers and interested parties. What passed today was a transformative plan for the sustainability of our state pension systems, which will benefit Ohioans for years.”
Among the provisions included in the substitute bills are measures to:
• Delay the “discretionary board authority” by 180 days. The bills, as passed by the Senate, allowed pension boards unilateral authority to change pension requirements and benefits. The substitute bill calls for the bipartisan Ohio Retirement Study Council to study the potential impact of board authority and its alternatives. By delaying discretionary board authority, the House has helped to maintain proper checks and balances and better safeguard the solvency of the pension system.
• Increase the base amount of earnable income for service credits, a provision that the House mediated between stakeholders and PERS.
• Include clarifying language that changes regarding the purchase of PERS service credits for military service.
• Specify that the vesting provisions do not apply to cost of living adjustments granted after the PERS pension reform bill is effective.
“I would like to commend the members of the subcommittee and the full committee for giving these bills the ample consideration, time and attention that was needed for such a critical set of reforms,” said Chairman of the House Health and Aging Committee Lynn Wachtmann (R-Napoleon). “The diligence and bipartisanship during this process made a challenging situation manageable and more conducive to the improvement of these retirement systems.”
Each public pension reform bill received a total of nine hearings by the Retirement and Pensions Subcommittee, and two hearings by the Health and Aging Committee. The committees heard testimony from more than 25 stakeholders from across the state and worked in partnership with the Ohio Retirement Study Council, the pension systems, and the stakeholders to craft significant amendments to the legislation.
The subcommittee hearings in particular were scheduled in the afternoon and evening in an effort to give Ohioans the opportunity to express their support or concerns with the pending reforms.
“The meaningful reforms that are included in these bills lay the foundation for long-term solvency of Ohio’s state pension systems and are a good first step in this effort,” said Speaker of the Ohio House William G. Batchelder (R-Medina). “Chairman Wachtmann and Chairman Schuring did an outstanding job incorporating suggestions from the actuarial study and reaching out to the public on the issue.”All five bills had passed unanimously from the Health and Aging Subcommittee on Retirement and Pensions as well as the full Health and Aging Committee.
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