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Trustees of the Ohio Police & Fire Pension Fund (OP&F) approved a revised funding plan on Feb. 7 that will bring the system into compliance with the state’s 30-year funding requirement. The plan and detailed recommendations were submitted to the Ohio Retirement Study Council (ORSC) on Feb. 8.
Ohio requires public retirement systems to be able to pay off all pension obligations within a 30-year period. If they fail to meet this 30-year standard, the system must submit a plan with recommendations on how to reach it. While OP&F is fully able to pay its obligations now and for many years to come, it is currently unable to meet this measurement for long-term financial health.
The revised plan lowers the funding period from “infinity” to 30 years, still without using any new taxpayer dollars. The term “infinity” is an actuarial term used to describe a system that will not be able to pay off its liabilities without changes to its funding plan.
“The plan approved by the Board would provide long-term sustainability for OP&F without any additional taxpayer dollars,” said William J. Estabrook, OP&F Executive Director. “I believe we have submitted responsible and significant recommendations that achieve adequate funding into the future while still being respectful to our membership.”
The plan was approved during a special meeting of the Board on Feb. 7, and is a revised version of what was submitted to the ORSC on Jan. 26, 2011. While the initial plan was significant in that it brought OP&F’s funding period to 36 years, legislators urged OP&F to re-examine the plan in order to be compliant with the 30-year requirement.
Most of the recommendations included in the plan require legislative action before they can be implemented. The Ohio General Assembly is currently working on a pension reform bill that would include plan changes to each of Ohio’s five public retirement systems.
The OP&F plan includes:
Click here to view the 30-year funding plan.