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Pension Reform Passes; YES on ISSUE 2; CBC Midwest Regional Meeting Announcement

Pension Reform Bills Pass General Assembly

On September 12, the Ohio House of Representatives passed all five pension reform bills, including Senate Bill 342, which contained the changes to the State Teachers Retirement System (STRS).  The Ohio Senate concurred on the technical changes made to the bills, which means the legislation has now been sent to the Governor for his signature.

We expect that the reforms will go into effect on January 7, 2013. The major reforms, which we have reported to you in previous communications, are reiterated below.

STRS Changes in SB 342:

*Increase in member contributions effective July 1, 2013  Member contributions would increase by 4%, phased in 1% per year beginning July 1, 2013, through July 1, 2016. Members currently contribute 10%; this would take total member contributions to 14% once fully phased in.   *Change in eligibility for retirement, effective Aug. 1, 2015  Service credit requirements for retirement with an unreduced benefit would increase to 35 years of service by Aug 1, 2023, and a minimum age 60 requirement would be added beginning Aug. 1, 2026. Members may still also retire at age 65 with a minimum of five years of service credit.   The service credit requirement for an actuarially reduced benefit would be phased in beginning Aug. 1, 2015, gradually increasing to 30 years of service by Aug. 1, 2023. Members may also still retire at a minimum age 60 with five years of service, but the benefit would be actuarially reduced beginning Aug. 1, 2015.   *Increase in final average salary (FAS) years effective Aug. 1, 2015  FAS calculation would be based on the five highest years of earnings instead of three.   *Changes to the cost-of-living adjustment (COLA), effective in fiscal year 2013   All retirees as of July 1, 2013, would not receive a COLA increase on their next anniversary; effective July 1, 2014, the COLA would be 2%. Members retiring Aug. 1, 2013, or later would also receive a 2% COLA, but it would not begin until 60 months after the date of retirement.   *Change in benefit formula, effective Aug. 1, 2015  The new formula would be 2.2% for all years of service. Members who are eligible to retire on July 1, 2015, would maintain retirement eligibility, and the benefit would be the greater of the benefit calculated under the new benefit formula or the benefit the member could have received had the member retired on July 1, 2015. 
We understand that this plan is not particularly palatable, but it was the best option given a set of extremely difficult circumstances, including mandates from Gov. Kasich that a reform plan could not include any additional employer contributions and that there had to be a 30-year solvency period. We must keep in mind that the alternative was potentially losing the defined benefit option altogether.

This Year It’s YES on ISSUE 2

So much for recycling! It’s time to take off last year’s bumper stickers, because this November, we are voting YES on ISSUE 2!

Issue 2 is the Voters First constitutional amendment to change Ohio’s redistricting system. By voting YES on 2, you will be voting to restore fairness to Ohio’s electoral system. 

The current redistricting system is rigged in favor of the party in power and special interests. Politicians get to draw their own district lines and insulate themselves from having to be accountable to the people.

This is why we see divisive legislation like SB 5; and unless we fundamentally change the system, we will see other anti-union and anti-education bills be put forth in the legislature.

Please visit the “YES on ISSUE 2 Toolkit” on our website for more information, including printable flyers and talking points.

Attend the CBC Midwest Regional Meeting in Dearborn, MI, Saturday, October 13   
The AAUP-CBC will be holding a midwest regional meeting on Saturday, October 13, 2012 at The Dearborn Inn, Dearborn, Michigan. All members of the AAUP are encouraged to attend.As the meeting is scheduled three weeks prior to the 2012 elections, emphasis will be placed on strategies that members can take to assist candidates who support higher education issues.Mark Brewer, Chair of the Michigan Democratic Party, will be the luncheon speaker. The meeting will also include successful bargaining strategies and recent negotiation gains throughout the Midwest.  The full program can be found by clicking here.Reservations at The Dearborn Inn should be made immediately to take advantage of the special meeting rate. Cut off date for that rate is September 24, 2012. Please follow the following link: The Dearborn Inn reservations.The AAUP will be sending out a registration notice in the near future.   

 Ohio Conference AAUP Communications Committee

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Michelle Flanigan for STRS Retirement Board