Over the past year, the Ohio Conference has reported on potential changes to the STRS and other statewide pension systems that are being considered by the Ohio General Assembly via the Ohio Retirement Study Council (ORSC).
Early on in this year's legislative session, two pieces of legislation were introduced - House Bill 69 (Wachtmann) and Senate Bill 3 (Faber) - that, if passed, would have made changes to the five statewide pension systems.
Ohio requires public retirement systems to have a "30-year funding period," which means that the system must be able to pay off all pension obligations within a 30-year period. Reforms to the pension systems are being considered to ensure that the retirement systems are meeting this mandated fiduciary responsibility.
At this time, it is uncertain what reforms may be enacted, but changes could include: increasing the number of years needed for retirement; requiring additional employee contributions; or reducing benefits.
Sen. Keith Faber, sponsor of SB 3 and Chair of the ORSC, announced in June that he wanted to bring in an independent actuary/policy advisor to provide an objective perspective and analysis to Ohio's pension reform process.
Just days ago at its November 16 meeting, following a request for proposals and screening process, the ORSC unanimously selected Pension Trustee Advisors (PTA) to conduct the independent actuarial review. PTA is expected to complete their work by July 2012.
Because of the complexity of the issue, it is most likely that we will not see serious movement on pension reform until late next year (2012), after the PTA report is issued and studied. And since legislators will be focused on their re-election bids throughout the calendar year 2012, it is very possible that pension reform may not be taken up at all until early 2013.
The Ohio Conference will continue to provide updates on this issue as events unfold.