05/18/12 Ohio Senate Passes OPERS Reform Bill
The Ohio Senate has passed SB 343. The legislation includes agreed to recommendations proposed by the Ohio Public Employees Retirement System (OPERS) Board of Trustees to reform pension benefits.
The OPERS Board recommendation includes five key components:
Age and service eligibility: The recommendation would add two years to the current plan, requiring a minimum age of 55 and 32 years of service or age 67 with five years to retire with an unreduced benefit. Changes are also proposed for a reduced benefit.
Final average salary (FAS): The plan would change the FAS calculation from the three highest calendar years of earnings to the five highest years.
COLA: The cost of living adjustment would be tied to the Consumer Price Index, up to 3 percent each year, instead of a consistent 3 percent annual increase.
Benefit formula: For an unreduced benefit, all members would receive 2.2 percent of their FAS for all years of service up to 35, then 2.5 percent thereafter.
Age and service reduction factors: Ohio law currently establishes the factors at 75 percent to 100 percent of the base benefit for members selecting to retire early. The OPERS Board recommends that in the future an actuary should establish these factors.
The OPERS-proposed transition plan for the reform to pension benefits divides its members into three transition groups. The provisions of the bill will impact each group differently. Click here to see which group you belong to and to learn more about the groups. Click here for a analysis of the bill. Click here for the complete text of SB 343.
The bill now moves to the Ohio House of Representatives for consideration. The Speaker of the House has indicated that the House of Representatives will not consider the legislation until after Labor Day.
