STRS Ohio Legislative News

Balderson Looks to Take the Prize in 12th Congressional District Special Election

State Sen. Troy Balderson (R-Zanesville) declared victory the evening of Aug. 7 in an election battle that pitted him against Columbus Democrat Danny O’Connor. The result of the race to replace Pat Tiberi, a Republican who left Congress earlier this year for a position in the private sector, is not official as more than 8,000 absentee and provisional ballots have yet to be tallied. According to the various press reports regarding the election, Sen. Balderson currently has a 1,564 vote lead over O’Connor.

The contenders both defeated challengers in their respective primaries for the right to vie against each other to represent a district that has been a Republican stronghold for decades. The district includes all of Morrow and Licking counties and portions of Delaware, Franklin, Richland, Marion and Muskingum counties.

The Aug. 7 election was to select the person who will serve out the remainder of former Congressman Tiberi’s term, which ends in January. As such, these same candidates will be on the November ballot to represent the 12th Congressional District during the 2019–2020 term.

Assuming Sen. Balderson’s victory holds, the Senate Republican caucus will need to select a replacement. As of the writing of this report, there were no names mentioned publicly yet. Balderson has been serving in the legislature since 2008 and O’Connor was elected to serve as the Franklin County Recorder in 2016.

PEPTA Legislation Re-Introduced by California Congressman

At the end of June, Rep. Devin Nunes (R-CA) re-introduced the Public Employee Pension Transparency Act (PEPTA) in Congress. During the past decade, this legislation has been introduced multiple times by either Rep. Nunes or one his colleagues. Upon introduction, H.R. 6290 garnered four co-sponsors, none of whom are members from Ohio.

As in the past, STRS Ohio and several of Ohio’s sister systems took the opportunity to explain to the members of the Ohio delegation why this legislation is not needed. Not only is it duplicative of requirements in state statute, it would be of great additional expense to each of the systems and would do nothing to benefit members of the public retirement systems or to effectuate positive change regarding the funding of these systems.

Click here to view the letter STRS Ohio Executive Director Michael Nehf sent to the members of the Ohio congressional delegation in opposition to H.R. 6290. STRS Ohio will continue to monitor and report on this legislation.

Committee on Multiemployer Plan Solvency Comes to Columbus

The Joint Select Committee on Solvency of Multiemployer Pension Plans conducted what may be its only hearing outside the Washington, D.C., area in Columbus on July 13. Both of Ohio’s U.S. Senators, Sherrod Brown (D-Avon Lake) and Rob Portman (R-Cincinnati), serve on the Joint Select Committee. The panelists testifying before the committee were all Ohioans and represented a mix of company officials and union members and retirees concerned about the solvency of the multi-employer plans.

The committee was established via the Bipartisan Budget Act enacted in February and consists of 16 members of Congress: four Republicans and four Democrats from both the U.S. House of Representatives and the Senate. The deadline for the committee to vote on a statement of findings and recommendations — and proposed legislation that carry out these recommendations — is Friday, Nov. 30. To successfully report out legislation, a minimum of five out of the eight members of both parties must support it.

According to information from Sens. Brown and Portman’s 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. The PBGC is also tasked with paying benefits to the retirees of plans that become insolvent. The multiemployer pension 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.

A Congressional Research Service summary of the provisions on the law creating the Select Committee indicates the recommendations are subject to consideration under expedited procedures in the Senate, which differ slightly from the procedures the Senate normally uses to process most legislation. These procedures are intended to allow the Senate to reach a timely vote on whether to consider legislation embodying the recommendations of the Select Committee. Under the terms of the act, the Senate is directed to vote on a motion to consider any reported Select Committee bill before the conclusion of the 115th Congress (2017–2018). The support of at least three-fifths of the Senate would be necessary to take up and approve the measure. The act does not provide any special procedures governing House consideration of such legislation.

STRS Ohio is monitoring the progress of the Select Committee and any resulting legislation, as there are concerns it could be a vehicle onto which provisions of the PEPTA legislation — H.R. 6290 — could be added. STRS Ohio staff has expressed those concerns to staff members for both Sens. Brown and Portman.

Public plan detractor testifies at Select Committee hearing

On July 25, the Joint Select Committee held its sixth hearing — this time returning to Capitol Hill where all but the Columbus hearings have been held. In advance of the hearing, pension funds learned that a Stanford finance professor — a long-time detractor of defined benefit plans and a supporter of the aforementioned PEPTA legislation — was scheduled to testify. On the following pages is a report from Leigh Snell, director of federal relations with the National Conference on Teacher Retirement. Mr. Snell’s report provides the rationale for the public retirement system community being concerned and watchful of the Select Committee and any products thereof. We appreciate Mr. Snell’s permission to share his report with you.

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.