OEA

Part of the mission of the Ohio Education Association is advocating for members and the learners they serve. A vital part of this advocacy is involvement in public policy decisions. This link to the OEA website is where you can learn about current issues affecting public education; the importance of becoming involved; and how to contact your elected representatives to make your voice heard. You may be required to log in to see certain political action content.

PEA can provide a limited number of substitute teachers to members attending lobby days in Columbus as well as reimbursement of the mileage and lunch expense for the day. Contact the PEA office if you would like to attend as appointments with legislators are necessary as well as coordination of rides and substitutes. No experience is necsssary as OEA provides a short orientation and training session the morning of lobby day prior to meeting with the legislators.

Ohio Newspapers to Take Aim at Public Pensions

In early December, a number of newspapers from around the state are expected to run articles dealing with Ohio’s five public employee pension plans. The editor of The Columbus Dispatch was quoted in a recent trade publication about the article, noting that the papers are “Looking at if they (the pensions) are sustainable given the increasing expense and the increased inability of school districts and towns to pay for them.”

At this time, we expect that the same major story plus local stories related to the issue will appear in the daily newspapers in Canton, Cleveland, Akron, Toledo, Dayton, Youngstown and Columbus. We believe the story will promote the idea of shifting public employees away from a defined benefit pension and towards defined contribution plans (similar to a 401(k)).

As these stories begin to run, we encourage members to respond with letters to the editor or comments on the papers’ website that set the record straight about defined benefit pensions. 

Further, this is an opportunity to inform our members about the value of these benefits.  Listed below are some key talking points:

• Defined benefit plans offer greater retirement security. In Ohio, public employees do not receive Social Security benefits. The state pension plans provide reasonable benefits that a member will not outlive. 
• Defined benefit plans are efficient. The cost to deliver the same retirement income to a group of employees is significantly lower in a pension plan as opposed to defined contribution plans.
• For every dollar paid to Ohio retirees, approximately a quarter was contributed by taxpayers.  Investment returns and employee contributions account for the rest.

The vast majority of public retirees still reside in Ohio. Their pension income helps keep them off of public assistance and provides vital fuel to Ohio’s economy.

ORSC Meeting Sheds Some Light on Legislative Timeline

On Wednesday, October 14, 2009, the Ohio Retirement Study Council (ORSC) continued to review changes proposed by the state retirement systems.  The Council reviewed a side-by-side comparison of the proposed changes that were presented by the systems on September 9, 2009. There were no questions from members of the Council.  The Chair of ORSC, Representative Todd Book (D- Portsmouth), indicated that ORSC is working with the Legislative Service Commission to draft legislation based on the proposed changes. Representative Book indicated that such legislation could be introduced toward the end of this year or the beginning of 2010.  All proposed changes to pension benefits would require a change in state law.

At its meeting held September 20, 2009, the OEA Board of Directors voted not to support the plan approved by the STRS Board.

INCREASE CONTRIBUTIONS

Member contributions will increase by 0.5% per year beginning July 1, 2011, to a total of 2.5% on July 1, 2015.

Employer contributions will increase by 0.5% per year beginning July 1, 2016, to a total of 2.5% on July 1, 2020.

INCREASE FINAL AVERAGE SALARY (FAS) YEARS

The FAS calculation will be based on five highest years of earnings beginning August 1, 2015 as opposed to the current three years.

CHANGE ELIGIBILITY FOR RETIREMENT

Beginning Aug. 1, 2015, members can retire at any age with 35 years of service; at age 60 with 30 years of service; or at age 65 with five years of service.

(Members may retire earlier with an actuarially reduced benefit at age 55 with 30 years or at age 60 with five years.)

Members who meet age and service eligibility for service retirement as of July 1, 2015, under the existing rule retain their eligibility.

CHANGE BENEFIT FORMULA

The new formula would provide 2.2% per year for the first 30 years of service; 2.5% per year thereafter, beginning Aug. 1, 2015.

Members with 30 years of service; and are age 55 with 25 years of service; or who are age 60 with five years of service as of July 1, 2015, receive the greater of:

(a) The benefit as of July 1, 2015, under the current formula; or

(b) The benefit upon retirement under the new formula.

The 35-year enhanced benefit will be eliminated as members will require 35 years of service as the new mimimum for retirement at any age.

REDUCTION IN COST-OF-LIVING ADJUSTMENT (COLA)

Current retirees will receive an annual 2% COLA, reduced from the current 3% beginning July 1, 2011.  Members retiring on July 1, 2011, or later would receive a 1.5% COLA each year.

All recommendations require changes in Ohio law and are subject to the legislative process. Additional information may be obtained from STRS Ohio in the September 1, 2009 Board News article.

STRS provides subsidies for retired members to defray the cost of heath insurance and opportunities for group health care purchase for STRS member spouse and dependents.  Information on the impact of Retiree Health Care from STRS http://www.strsoh.org/pdfs/40-304.pdf

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