STRS Ohio Legislative News

Ohio Retirement Study Council Cancels October Meeting

The October meeting of the Ohio Retirement Study Council was canceled at the call of the Chairman, Senator Kirk Schuring (R-Canton). It is anticipated the Council’s next meeting will be held on Nov. 14.

New Members Join the Ohio House and Senate

In June, Legislative News reported that changes in the membership of the Ohio House and Senate were continuing well past the installation of members elected in November 2018. The trend continues. The House Republican caucus recently selected D.J. Swearingen to fill the vacancy created when former Rep. Steve Ardnt retired. Rep. Swearingen, a resident of Huron who practices law with a Sandusky-based firm, was sworn into the House on Aug. 1. He is not, however, the most junior member of his caucus. That distinction, for the time being, will be shared by Reps. Cindy Abrams (R-Harrison City) and Jason Stephens (R-Kitts Hill) who have been tapped by the House Republican caucus to become its newest members. Rep. Stephens is replacing former Rep. Ryan Smith who departed the Legislature after being named president of the Rio Grande Community College and Rio Grande University. Rep. Stephens has been the Lawrence County auditor since 2011 and prior to that had been one of the county’s commissioners. Rep. Abrams was the lone applicant to replace Louis Blessing (R-Cincinnati) who moved to the Senate. Prior to joining the House, Rep. Abrams served on the Harrison City council and was a police officer in Cincinnati from 1996 to 2003. She had commenced a campaign to succeed now Sen. Blessing who was facing term limits in the House. He was selected by the Senate Republican caucus to replace former Sen. Lou Terhar (R-Green Township).

Other changes in the Senate roster include the addition of Dr. Terry Johnson (R-McDermott), who had previously served in the House, but was not a current member when selected to assume the seat held by Joe Uecker (R-Miami Township). Uecker left the Senate to accept a position within Gov. Mike DeWine’s administration. STRS Ohio Governmental Relations staff has met with Rep. Swearingen and plans to do the same with the other new members.

On Capitol Hill

Second bill targeting Windfall Elimination Provision introduced in U.S. House

On Sept. 28, House Ways and Means Committee Chairman Richard Neal (D-MA) introduced legislation to reform the Windfall Elimination Provision (WEP). It was previously reported that Texas Republican Kevin Brady has also brought forward legislation designed to change the WEP, which is part of the Social Security statutes. The WEP recalculates the Social Security benefit for individuals who have a pension from work that is not covered by Social Security. This includes public sector workers in Ohio. The WEP calculation lowers the Social Security benefit amount.

For years, people affected by WEP have been advocating for a change as the equation used to calculate it has largely been viewed as being arbitrary. Both the Neal bill (H.R. 4540) and the Brady legislation (H.R. 3934) would replace the existing WEP approach with a new, proportional formula, as well as provide a rebate to those currently affected by WEP.

The provisions of H.R. 4540 provide that current beneficiaries, as well as those turning 62 before calendar year 2022 who are affected by the WEP, will receive up to $150 a month as a rebate, not to exceed their current WEP reduction, and continuing for as long as they are receiving Social Security. Future retirees (those turning 62 in year 2022 and later) will be eligible for a new benefit formula, which will calculate benefit amounts based on the proportion of lifetime earnings actually covered by Social Security. It is also intended to ensure no one receives a lower benefit as a result of the new approach.

The bill also requires annual Social Security Statements be sent to all workers, informing them of their projected benefit amounts, to show non-covered, as well as covered earnings records, and to use the new proportional formula for calculating the projected benefits for workers likely to be subject to it.

The two bills differ primarily with regard to the amount of the rebate and the application of the new proportional formula in the future. Under H.R. 3934, a flat monthly $100 rebate payment would be provided for individuals 60 and older in 2019 who are affected by the current WEP. Individuals age 21 to 59 in 2019 would receive the higher of the Social Security benefit as reduced either by current law or by the new proportional formula. Individuals age 20 and younger in 2019 would ultimately receive a Social Security benefit as reduced by the new proportional formula, regardless of whether it would be more or less than under the current WEP approach.

Appendix

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.