COLUMBUS (TNS) — About 75,000 currently receiving benefits from the School Employee Retirement System will see cost-of-living increases in their pension checks frozen for three years starting in January.
In addition, the SERS board voted Monday to seek legislation to enact the same freeze for the first three years of an estimated 125,000 future retirees’ benefits.
“SERS engaged in a two-year process for determining the best way to address the system’s short-term and long-term financial challenges that was open and inclusive for all of our stakeholders,” said the pension fund’s executive director, Richard Stensrud, in a news release after the special meeting on a state holiday.
“The board considered a number of proposals that would have addressed the board’s goals, but in the end they were in agreement that this was the best course of action. I want to thank our advocacy group partners for their input at all stages of this difficult but necessary process.”
Pension officials said the move, which applies to all benefit recipients, is designed to improve the fiscal condition of the pension fund that covers non-teaching such school employees as cooks, treasurers and bus drivers, while limiting the impact to retirees and benefit recipients as much as possible.
The COLA freeze was approved to help the SERS board achieve a pair of financial objectives: raising the system’s funded status to 70 percent by next year, and to 90 percent 2032. It currently is about 67 percent funded. The plan allows the retirement system to continue offering health-care benefits, which are not mandated but viewed as highly desirable by pension fund leaders.
The board also wants to delay the start of COLA increases for future retirees and benefit recipients until the fourth anniversary of their allowance or benefit so that future retirees face the same three-year freeze and those currently on the rolls. However, SERS needs special permission from the legislature for that action.
The SERS is the 61st largest public pension fund in the country, with more than $12 billion in assets. More than 90 percent of its retirees live in Ohio; together they receive more than $1 billion in benefits per year.
Reach Darrel Rowland at firstname.lastname@example.org or on Twitter @darreldrowland.