Republican House leaders shut down hearings on legislation to reduce benefits for Ohio’s largest public retirement system after running into fierce opposition from retirees.
The measure would implement recommendations by the Ohio Public Employees Retirement System — or OPERS — aimed to shore up the $90 billion fund.
“We’re not having anymore hearings on House Bill 413,” Rep Kirk Schuring, R-Canton and No. 2 leader in the House, said Thursday.
After a handful of hearings, the bill did not have enough votes to pass. In addition to complaints by retirees, it was opposed by many Republican and Democratic lawmakers — even the state representative sponsoring the bill was skeptical about the plan.
“I have concerns about it,” the bill’s sponsor, Rep. Gary Scherer, R-Circleville, said following a recent hearing. “In order to move ahead — if it is to move ahead — it will require changes.”
The Ohio Retirement Study Council, a bipartisan panel that typically evaluates and makes recommendations on such proposals, never formally reviewed the bill.
OPERS executive director Karen Carraher sad she was disappointed by legislators’ decision and cautioned that doing nothing was not a solution.
“Based on advice of outside actuaries we felt that the proposal to update the OPERS cost-of-living adjustment, contained within House Bill 413, was the responsible way to preserve the benefits we provide to our more than 1 million members and retirees,” she said in a statement.
“The COLA issue is not resolved at this time, and OPERS will continue to pursue changes in the future to meet the retirement needs of all of our members and retirees.”
The plan would reduce annual cost-of-living adjustments from a fixed 3 percent to the percentage increase in the Consumer Price Index, subject to a 2.5 percent cap. The change was expected to reduce the system’s unfunded liabilities by $4 billion.
Retirees complained to lawmakers that they based their decision when to retire on the expectation of receiving a certain amount in benefits. The proposed cut, they noted, was on top of recent reductions in health-care benefits.
Carraher previously told lawmakers that the fund was in a strong financial position, with 2017 returns expected to exceed 16 percent, but cuts were needed to eliminate $19 billion in unfunded liability.