Board Report, December 2023

OP&F responds to opponent testimony; Ohio Senate introduces companion bill

In testimony presented to the Ohio House Pension Committee ahead the Nov. 28, 2023 meeting on House Bill 296, several opponents of the bill seem unaware of the repeated actuarial studies that comment on equalizing employer contributions to the OP&F.

“We are disappointed that our employer partners do not support the public safety forces that keep our cities safe,” said Mary Beth Foley, Executive Director of OP&F. “Most Ohio big cities have a budget well over or approaching a billion dollars and are complaining about a reasonable phased in equalization that they have avoided for nearly 40 years.”

OP&F is seeking a solution to a real problem requiring employers to play a role after already cutting members’ benefits and increasing their own share of the pension. The Ohio Municipal League, in its testimony, accused the pension fund of seeking to put the burden only on employers who haven’t seen an increase in their share since the mid-1980s.

Another assertion from several Ohio municipalities is that the Ohio Retirement Study Council should further examine the reasons why OP&F is facing a future funding shortfall. The independent ORSC actuary has looked at the sufficiency of contributions for OP&F annually for more than 30 years.

Most recently stated in the September 14, 2023, ORSC meeting, ORSC actuary William Fornia stated: “It probably would completely solve the issue if the contribution rates were set to the higher amount.”

Representatives Cindy Abrams and Thomas Hall introduced the updated Public Safety Pension Modernization Act on Oct. 5, 2023. Senator Michele Reynolds recently introduced a companion bill, Senate Bill 194.

The legislation refines a previous one from the last session, compromising with and reasonable changes to modernize and ensure the ongoing solvency of OP&F.

The primary component of the bill, which also marks a departure from two years ago, concerns the employer share of the pension payments for first responders. While this bill maintains the employer share for firefighter pensions at 24%, it proposes to equalize the employer share for police to 24%, ensuring parity for all first responders.

PORTFOLIO UPDATE

Board of Trustees Committee Notes

(Motions voted on by the Board are listed separately)

DISABILITY: The Committee conducted its scheduled reviews and appeal hearings.

PERSONNEL: The OP&F Executive Director provided a year-end review to the Committee. The Chair suggested a Board and staff event for spring 2024. Staff presented the Aggregate Staffing Data and Personnel Strategies on the Succession, Strategic and ERP plans for review and discussion.

FINANCE: The Committee reviewed and approved the 2024 OP&F Operating Budget and Capital Budget and also reviewed the recommended changes to the Administrative Rules.

INVESTMENT: In addition to a review and discussion of the investment portfolio, staff provided the Semi-Annual Proxy Voting Reports for periods ending June 30, 2023. Staff also provided the Private Asset Class Manager Fee Reports for the periods ending Dec. 31, 2022. Investment consulted, Wilshire, presented the Executive Summary of Investment Performance Report for periods ending Sept. 30, 2023, as well as the Private Equity and Private Credit Program Analysis for periods ending June 30, 2023.

HEALTH CARE: OP&F’s retiree health care partner, Alight, presented the 2024 Open Enrollment Update and staff presented the 3rd Quarter 2023 Health Care Stabilization Fund Report.

Motions:

At its December 2023 meeting, the OP&F Board of Trustees approved the following motions:

• Approved 10 Initial Determinations of Disability.
• Approved four appeal hearings.
• Approved one reconsideration hearing.
• Approved one Death Benefit Fund application.
• Approved the Disability Reporting Waivers list.

NEXT BOARD OF TRUSTEES MEETINGS: Jan. 23-24, 2024