Wednesday, May 16, 2012

Ohio Senate Approves Landmark Pension Reforms

(Columbus) – With overwhelming bipartisan support, the Ohio Senate passed four landmark pension reform bills today designed to provide greater retirement stability for more than 1.7 million Ohioans. The legislation marks a rare occasion when the two highest-ranking leaders, Senate President Tom Niehaus (R-New Richmond) and Senate Minority Leader Eric Kearney (D-Cincinnati) stood together in joint sponsorship of the major legislative reform packages. Due in part to a growing retirement population, rising health care costs and a struggling economy, the funds cannot meet their financial obligations within the 30-year timeframe required by law. For example, the Ohio Public Employees Retirement System estimates that every day the legislature delays approving their solvency plan, costs the fund nearly $1 million. The daily impact is nearly double for the Ohio Police and Fire fund, at more than $650 million annually. For the State Employees Retirement System, the cost of in action stands at $27 million a year. “We have spent the past two months working with each of the five pension systems to move forward with their proposed solvency plans,” said Niehaus. “Our bipartisan agreement requires legislative approval of only the plans ratified by the pension boards and supported by their respective stakeholders, including the labor unions that represent our public employees.” Further delay not only threatens the health of the pension systems themselves but also jeopardizes the collateral benefits they provide to their retirees, such as health care. The legislation individually reflects how each plan addressed their fiduciary responsibilities a little differently. The four pension reform bills head to the Ohio House of Representatives for further consideration.