The Ohio Police and Fire Pension Fund became the latest to seek an increase this week. Board members voted 6-3 to ask lawmakers to approve a plan that would increase pension contribution rates for workers and employers over the next five years, raising $75 million more a year when fully implemented in 2011, the Associated Press reported.
The plan would also require more out-of-pocket health care expenses from retirees. The fund hopes to make the changes in January.
“It’s the health care that has primarily put them in a pinch,” Aristotle Hutras, executive director of the Ohio Retirement Study Council, which oversees the state’s five funds, told the Associated Press . “Everybody’s had to do something.”
The funds are obligated by law to maintain income to pay pension costs over the next 30 years, while health care is optional. Boards reluctant to slash health care benefits are seeking ways to shore up both sides of the retirement system.
Contribution rates, controlled by caps set in law for each fund, have been stable for years – some have not increased since the 1970s, Hutras noted. Raising rates now “could be a fix for a good while,” he said.
« Bad Hires a Big Cost to Employers