Ohio school workers and retirees sue to stop pension benefit cuts


Workers and retirees in Ohio’s School Employees Retirement System filed suit against the pension fund’s move to freeze cost of living allowances.

The suit, filed in Franklin County Common Pleas Court, takes aim at SERS, Ohio Attorney General Mike DeWine and Cavanaugh Macdonald Consulting.

It alleges that SERS squandered its solid financial position it held in 2000 with a series of poor decisions over several years, including spending $852.4 million on outside investment fund management fees between 2007 and 2017.

“The monies spent by SERS for outside investment consultants is at best a disgrace and its worst evidences inept public policy choices, if not outright criminal conduct, by SERS, its management, and actuary,” the complaint says. Joining the lawsuit is the Ohio Association of Public School Employees.

Related: School employees protest planned cuts at Statehouse

SERS said in a statement: “For nearly two years, SERS held several open meetings with representatives from all advocacy groups, including OAPSE, to discuss possible benefit changes and their effects on SERS and its membership. We modeled the effects of numerous combinations of changes before deciding on the COLA changes that were implemented. We are disappointed that OAPSE’s opposition to these changes was not registered during the open process when they could have been addressed with input from all interested parties.”

Unlike Ohio’s larger public pension funds, the smaller systems rely more heavily on outside consultants to help manage investments and assets. SERS hires outside managers to oversee its $14.7 billion in assets.

All five systems suffered steep losses during the 2008 financial crisis that led to the Great Recession. Those losses, along with spiraling health care expenses and people living longer, led the systems to trim benefits in recent years.

In October 2017, the SERS board of trustees voted to freeze the cost of living allowances given to retirees for three years as a means of shoring up its financial position. SERS retirees on average receive a monthly pension check of $1,223 and the COLA would have given them an additional $30.58 each month. Retirees are eligible for COLA bumps after they’ve been retired for four years.

The lawsuit challenges whether SERS trustees had the authority to mandate the freeze, which was scheduled to take effect Jan. 1, 2018.

Membership of SERS includes 158,000 bus drivers, cafeteria workers, janitors and other school employees and 79,000 retirees.

Ohio has five public pension funds representing nearly 1.9-million government workers, retirees and beneficiaries.

Last year, the State Teachers Retirement System of Ohio voted in April to eliminate cost of living allowances indefinitely and the Ohio Police & Fire Pension Fund began restructuring the health care benefits for retirees beginning in January 2019. Ohio Public Employees Retirement System — the largest of the five — is considering COLA cuts.

Lawmakers implemented sweeping pension reform in 2012, forcing workers and retirees to shoulder a heavier burden in keeping the systems solvent.

Ohio’s five public pension systems are defined benefit plans, meaning participants are guaranteed certain pension benefits based on age, years of service and final average pay. The benefits are prescribed by law and each system — not union contracts. Each fund is responsible for its liabilities — not Ohio taxpayers. Funding comes from worker and employer contributions as well as investment returns.



Reader Comments ...


Next Up in News

Record-breaking warmth today; widespread showers expected overnight
Record-breaking warmth today; widespread showers expected overnight

Record-breaking warmth today More showers, storms tonight through Wednesday A wintry mix early Thursday TODAY: Early dry time with temperatures in the 60s. We’ll see broken clouds through the day with highs peaking in the low 70s. The record for the day is 69 degrees, set back in 2016. Expect wind gusts through the day between 20 to 30 mph...
Uber Eats driver accused of killing customer was convicted of battery in 2010
Uber Eats driver accused of killing customer was convicted of battery in 2010

Years before he was accused of killing one of his Uber Eats customers in Atlanta this past weekend, Robert Bivines had been arrested on aggravated assault charges in DeKalb County, Georgia, according to jail records.  But the nearly decade-old offense wouldn’t have been flagged by Uber’s driver pre-screening process...
Uber Eats driver accused of shooting, killing customer claims self-defense, attorney says
Uber Eats driver accused of shooting, killing customer claims self-defense, attorney says

An Uber Eats driver who police said shot and killed a customer in Atlanta turned himself in Monday afternoon and claims he acted in self-defense, his attorney said. Only WSB-TV's Tom Jones was there when Robert Bivines, 37, arrived at the jail with his attorney. The Atlanta Police Department's Homicide Unit secured an arrest...
VIDEO: Florida school shooting suspect Nikolas Cruz shown fighting students in 2016
VIDEO: Florida school shooting suspect Nikolas Cruz shown fighting students in 2016

The man allegedly behind the fatal Florida high school shooting apparently has a disturbing past that is coming to light. A school fight that was captured on camera a little more than a year ago is the latest development. Authorities said 19-year-old Nikolas Cruz killed 17 people at Marjory Stoneman Douglas High School in Parkland. Cruz was ...
Sylvester Stallone assures fans he is 'alive and well' after death hoax goes viral
Sylvester Stallone assures fans he is 'alive and well' after death hoax goes viral

Actor Sylvester Stallone is the victim of a death hoax. A rumor claiming that the 71-year-old actor had passed away recently surfaced on social media — and he was not happy about it. >> Read more trending news  Stallone took to Twitter to express his annoyance. “Please ignore the stupidity,” the &ldquo...
More Stories