Ohio’s largest public pension system this week will consider cutting the cost of living allowance given to hundreds of thousands of retirees as a way to shore up finances.
Here’s a look at what is being considered:
- Ohio Public Employees Retirement System told its 1-million members that they are weighing whether to cap the COLA at 1.5 percent to 2.5 percent. The current cost of living allowance is 3 percent.
- The OPERS trustees are considering making new retirees wait longer before receiving their first cost of living increase.
The system sent a two-page survey to 194,000 current retirees to gauge their support for freezing or capping the cost of living allowance. The survey did not include a box for “no changes.”
With nearly $91 billion in assets, OPERS is the largest of Ohio’s five public pension systems and the 12th largest public pension fund in the country.
Related: School employees protest COLA cuts
OPERS is the latest Ohio retirement system to consider imposing cuts on its members. Ohio Police & Fire Pension Fund is considering revamping the health care package offered to retirees; the State Teachers Retirement System indefinitely suspended the COLA given to retirees; and the School Employees Retirement System implemented cuts to its COLA too.
As in other states, Ohio’s public pensions are defined benefits systems. The pension benefit is based on age, years of service and final average salary and it’s guaranteed. Defined contribution plans, such as 401(k) funds, are more common in the private sector. Public employees in Ohio do not participate in Social Security.