Some state lawmakers aren’t happy with the State Teachers Retirement System.Members of the Ohio Retirement Study Council continued to grumble this morning about the pension system’s “plan” — the council chairman say it doesn’t even rise to that level — to bring it into compliance with state law.
The teacher pension board expects next week to divert $100 million annually in employer health-care contributions to help shore up the pension plan.
Law requires state pension plans to be able to pay off their unfunded liabilities within 30 years. The teachers’ system hovers at an impermissible 40-year payoff, even following reforms to reduce benefits.
Stronger-than-expected investment returns and other moves will whittle the number to 36 years, legislators were told Thursday morning, with the shift of health-care funds projected to whittle another four years off that number.
Michael Nehf, executive director of the State Teachers Retirement System, heard warnings from legislators on the Retirement Study Council that they are keeping a close eye on the system and its $72 billion in pension assets.
Shifting funds from the flush $3.4 billion health care fund would drop its projected pay-out life span from 49 years to 20 years, Nehf said.
But, the board would only divert the money for a matter of years, not long-term, and then potentially make “catch-up” payments to the health care fund once the pension fund meets the 30-year standard, he said.
Rep. Lynn Wachtmann, R-Napoleon, chairman of the study council, chided the teacher pension system for pursuing what he called “one of the more dangerous solutions” after it rejected any decrease in benefits or increase in contributions.
“I think it is something we need be most watchful of,” Wachtmann said after the meeting. “We’ll see what happens ... I’m not at all pleased with Director Nehf and the board’s response.”
Sen. Dave Burke, R-Marysville, said the teacher pension plan fix-it plan is “not sustainable” and called for it to quickly remedy its problems.
The State Teacher Retirement System serves more than 480,000 active, inactive and retired teachers and college and university professors. Last year, it paid $6.5 billion in benefits to about 149,000 retired educators.
By Randy Ludlow - The Columbus Dispatch, Ohio (MCT)
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