May 9, 2012 (PLANSPONSOR.com) - A sweeping overhaul of public employee pensions in Ohio was proposed this week.
The bills, one for each public retirement system, would require state workers to work longer before retiring, contribute more to their pensions and accept less generous benefits, reports the Dayton Daily News.
Ohio’s five public retirement systems cover 1.7 million workers, retirees and beneficiaries and have $165 billion in combined investments. The systems also offer health care to retirees. The five systems are: Public Employees Retirement System (OPERS), State Teachers Retirement System, Schools Employees Retirement System (non-teachers), Ohio Police and Fire Pension Fund and the Highway Patrol Retirement System. The Senate bills reflect the changes that pension boards requested.
The OPERS reform bill takes aim at curbing abuses such as allowing elected officials to buy service credit at a discounted rate, giving full-time service credit for people working part-time and earning as little as $3,000 a year, and permitting workers to spike their pension benefits by landing big raises in the twilight years of their careers, according to the news report.
For all systems, pension benefits are calculated on the average of a worker’s three highest paid years. The systems want to change it to the highest five years. A bill outlining reforms for the Ohio Highway Patrol Retirement System, the smallest of the five funds, is still in the works. Senate leaders from both parties said they are ready to fast-track pension reform legislation.