STRS Ohio Seeks Technical Changes During Lame Duck Session
During the lame duck session, STRS Ohio is working with the Chairman of the Ohio Retirement Study Council (ORSC), Rep. Kirk Schuring (R-Canton), to have a list of technical changes compiled by staff added as an amendment to legislation that appears to be on its way to becoming law. The clean-up language was shared with numerous stakeholder organizations, staff for the ORSC and key legislative staff in preparation for inclusion in a legislative vehicle. In the ORSC staff analysis and recommendations, all of STRS Ohio’s changes were recommended to the Council members for approval. The vetting process is very important when the standing committee considers the amendment. It is a rare occurrence for a legislative body to effectuate a change in the governing statutes of any of the retirement systems that has not been reviewed by ORSC or has been recommended against inclusion by the ORSC.
The amendment was added to House Bill 572, which pertains to nonteaching staff employed by Ohio’s county Developmental Disabilities agencies. The bill was amended to include the changes sought by STRS Ohio in the Senate Insurance and Financial Institutions Committee which is chaired by Sen. Jay Hottinger (R-Newark) who is a member of the ORSC. Upon approval by the Senate, the bill heads back to the House for a vote on whether to concur with Senate amendments. At the time of the writing of this report, the House had yet to take up the changes to H.B. 572. Assuming the House agrees to the Senate changes, the bill then goes to the governor for his consideration.
Joint Select Committee on the Solvency of Multiemployer Pension Plans Misses Deadline
A committee comprised of members of the U.S. House and the U.S. Senate was unable to meet a Nov. 30 deadline to offer a solution to the financial problems plaguing certain private multiemployer pension plans. The committee was established via the Bipartisan Budget Act enacted in February. It consists of 16 members of Congress: four Republicans and four Democrats from both the House and Senate. To successfully report out legislation, a minimum of five of the eight members of both parties would have to support it.
Ohio Sens. Sherrod Brown (D-Cleveland) and Rob Portman (R-Cincinnati) served on the Select Committee. According to information from their offices, the Select Committee’s work is designed to address the funding issues with pension funds such as the Central States Pension Fund (approximately 48,000 Ohio pensioners), the United Mine Workers of America 1974 Pension Plan (approximately 6,000 Ohio pensioners) and the Iron Workers Local 17 Pension Plan (approximately 2,000 Ohio pensioners) as well as the Pension Benefit Guaranty Corporation (PBGC). The PBGC, created by the enactment of the Employee Retirement Income Security Act (ERISA) in 1974, is effectively the insurer to which these private plans are required to contribute and is tasked with paying benefits to the retirees of plans that become insolvent. The multiemployer plan component of the PBGC is facing its own solvency challenges that will presumably be addressed by the Select Committee.
About 110 multiemployer pension plans are considered in critical and declining status, and that number is increasing. The Central States Pension Fund is projected to become insolvent by 2025. Further, according to press reports at the time of the Select Committee’s establishment, more than 60,000 Ohioans face drastic pension cuts to pennies on the dollar if the PBGC becomes insolvent.
STRS Ohio had been monitoring the work of the committee out of concern that any legislation brought forward might also contain language not supported by the public pension community. In statements from both senators, it appears they will be pressing for work to continue toward a solution, and STRS Ohio will continue to monitor the situation.
Ohio Retirement Study Council Approves Omnibus Amendment
The Ohio Retirement Study Council met on Dec. 4 and reviewed several pieces of legislation.
Staff reviewed an omnibus amendment containing language that makes technical changes to STRS Ohio (see story above), as well as to the School Employees Retirement System of Ohio (SERS), the Ohio Public Employees Retirement System (OPERS) and the Ohio Police & Fire Pension Fund (OP&F). Staff recommended approval of all of the STRS Ohio proposed changes and the Council voted unanimously to approve the amendment.
Staff also reviewed two bills (House Bill 621 and Senate Bill 296) regarding the Ohio Public Safety Officers Death Benefit Fund. Staff recommended approval of those bills with an amendment. The ORSC voted unanimously to approve staff’s recommendation.
Additionally, the Council reviewed OPERS’ and Highway Patrol Retirement System’s 2019 operating budgets and administrative rules submitted by those systems. Further, they reviewed disability reports submitted by STRS Ohio, SERS and OP&F.
The Council approved a staff recommended standardization of the Health Care Report that all five Ohio public retirement systems are statutorily required to submit to the ORSC.
The final piece of business for the year was to thank Rep. Dan Ramos (D-Lorain) for his service to the Council. Chairman Schuring noted that legislation approved while Rep. Ramos served on the Council moved in a bipartisan fashion due to Rep. Ramos’ involvement. Rep. Ramos is leaving the legislature due to term limits. Additionally, Sen. Edna Brown (D-Toledo), who was not in attendance at the meeting, will also be leaving the legislature due to term limits.
The Council is scheduled to meet next Jan. 10, 2019.
View a report from the National Association of State Retirement Administrators (NASRA) on reforms to public pension plans in progress around the country. We will include this report monthly as part of the Legislative News.