Ohio State Representatives Cindy Abrams and Brian Baldridge introduced the Public Safety Pension Modernization Act on Dec. 2, 2021. The bill has many components, but the most significant change updates employer’s contributions to the pensions of OP&F members.
While the pension’s financial outlook appears rosy, meeting and beating the benchmark 30-year solvency, the forecast is based on a higher-than-industry-average investment returns of 8.0 percent. OP&F’s success so far has also been dependent on $3.2 billion in benefit cuts (which includes a 2.25 percent increase in employee contributions) and an additional $150 million from changes to retiree health care in the last eight years.
It’s important to note that employers’ contributions have remained unchanged since 1986.
Add on new pressures like an increasing number of early retirements and more difficulty recruiting first responders, which limits payroll growth, and the formula is there for future challenges.
Representative Abrams said that the time is now to make these changes.
“This bill is meant to ensure the long-term stability of the pension fund,” Abrams said. “This is good government at its best – looking ahead, acknowledging challenges on the horizon, and answering those challenges in a fiscally responsible way before it’s too late.”
It’s important to note that reducing the fund’s assumed rate of return by just one quarter of one percent moves the fund outside the 30-year required funding window.
Representative Baldridge said that first responders have always deserved and received the support of Ohio taxpayers.
“I’m proud of our commitment to first responders, and I’m glad this pension fund has been a stable source for retirees, but after cuts and increasing what the employee must contribute to their pension, we must look for bigger solutions to ensure the next generation of first responders has our full support.”
The bill has the support of the OP&F Board of Trustees. Additionally, the Fraternal Order of Police of Ohio and the Ohio Association of Professional Firefighters support this bill.
“This is a vitally important issue, and I’m proud that the Ohio Police and Fire Pension Fund is addressing this issue now, said Ohio FOP President Gary Wolske.
“We’re here in solidarity with our police brothers and sisters,” said OAPFF President Mike Taylor. “And we’re here to ensure that the public investment in our retirement fund is equitable.”
OP&F Executive Director Mary Beth Foley praised Representatives Abrams and Baldridge for their help.
“Representative Abrams and Baldridge have been great partners for us as we work to modernize our fund for the next generations,” Foley said. “Their experience as first responders coupled with their commitment to good government should be an example for every member of the general assembly.”
The Public Safety Pension Modernization Act will now pass through hearings and a house vote before going to the Senate.
OP&F’s investment portfolio value:
(Motions voted on by the Board are listed separately)
At its November/December 2021 meeting, the OP&F Board of Trustees approved the following motions:
Posted 12/8/2021
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