The Ohio Public Employees’ Retirement System (OPERS) voted last week to cut health care benefits provided to the pension’s current and future retirees beginning in 2022 to try to weaken the imminent threat of insolvency.
If the changes had not been enacted, the pension would run out of money in approximately 11 years, executive director Karen Carraher said during a board meeting, where the measure was passed by a 9-2 vote.
“There is no available funding for health care,” a report from the board said. “All of the employer contribution[s] must be allocated to pension funding until that funding improves. Based on current projections, no funding will be available for health care for 15 or more years.”
Beneficiaries will receive a wide variety of quantitative cuts, depending on their age of retirement, the year in which they retired, and the number of years working in the state. “Surveys indicate members willing to accept changes/reductions in health care in the interest of preserving it,” the board’s report said.
Nearly everyone in OPERS likely will be affected by these changes. The board’s vote constituted the elimination of the pension’s healthcare group plan, and replaced it with a stipend that will help supplement for some members the cost of a new healthcare plan on the marketplace.
“Pre-Medicare group plan is unsustainable for OPERS and members as risk core and costs continue to increase,” the report said. The board “needs to reduce the cost of health care to preserve current health care trust fund until such time funding can resume.”
“Our objective is to continue offering health care. To accomplish this, we need to implement changes that will extend the solvency of the health care trust fund,” the board’s report said.
The OPERS board of trustees is considering an increase in the state retirement age from 55 to 62. The board also voted last September to freeze cost-of-living-adjustments (COLA) for retirees in 2022 and 2023.