September 2021 OEA Retirement Systems Update

STRS Posts Investment Return Over 29% for FY 2021

For the fiscal year ending June 30, 2021, STRS reported a net investment return of 29.16%. This figure is net of all management fees, carried interest and other costs. Additionally, the fund beat its investment benchmark by 1.18%. This means that active management of the fund, as opposed to investing solely in index funds, added approximately $790 million (net of costs) over the fiscal year.

This rate of return was the highest for STRS since 1983. STRS total fund assets increased by over $17 billion with a market value of $98.8 billion. This is welcome news as it will increase the long-term stability of the pension fund. Further, OEA believes that as financial conditions improve, STRS should take action to reduce the contribution rate for active teachers and work to restore the cost-of-living adjustment (COLA) for retired teachers.

OEA, in collaboration with the Health Care and Pension Advocates (HPA), urged the STRS Board to establish a plan with clear financial guideposts for restoring benefits. The Board adopted a policy that once the system is 85% funded, they will consider changes that do not materially impair the fiscal health of the pension plan. The annual actuarial valuation in October will show how close this brings the plan to 85% funded.

Walters Appointed to Fill Vacancy on STRS Board

During the August meeting of the STRS Board, Rita Walters was elected by a majority of the Board to fill a vacancy as a retired member. Walters recently completed a four-year term on the Board and had finished third in the election for two retiree seats. Robert Stein, who had finished second in the election, resigned his seat before beginning his new term.

Walters is a retired language arts teacher from the Switzerland of Ohio School District and a member of OEA-R. She was elected by the STRS Board to a one-year term, September 1, 2021 through August 31, 2022. An election will be held among STRS benefit recipients to elect a representative for the remaining three years of the term.

STRS Responds to Seidle Report

Earlier this year, the Ohio Retired Teachers Association (ORTA) commissioned a third-party “forensic audit” of STRS. A report was released by Edward Siedle entitled The High Cost of Secrecy which was critical of STRS investment practices and operations. The report alleged that STRS is not sufficiently transparent in providing information on investment fees and suggests that changes in STRS investment strategies could save money in a way that could help contributing and retired members of the system.

OEA urged the STRS Board to take the Siedle report seriously and fully investigate the claims. Further, OEA asked that STRS communicate openly with its findings, whether deficiencies have been found and what is being done to address them.

On Thursday, August 19, 2021, STRS staff and consultants presented to the Board a detailed response to the Siedle report. The response refuted the claims in the report. STRS notes that the report is not in fact a forensic audit as its author is neither an accountant or auditor and not bound by professional standards. Further, the report overestimates, misstates and miscalculates various fees and performance costs of the system—including double-counting fees on alternative investments. The full response can be viewed here.

OEA has confidence that the elected members of the Board will continue to closely monitor STRS investment practices. Investment returns are the primary driver of paying future pension benefits. Active and retired teachers rely on STRS to invest these assets prudently

SERS Board Passes Motion to Pursue Pension Legislation

On Friday, September 17, 2021, the SERS Board unanimously voted to pursue legislation that would allow the Board to set a Contribution Based Benefit Cap (CBBC). If enacted, the legislation would allow the SERS Board to set a cap on how much greater a member’s pension benefit can be than a single life annuity based on the member’s total contributions. The concept is similar to a policy adopted by OPERS. Such a cap is designed to keep the majority of members from subsidizing benefits of a few members with irregular contribution histories.

SERS staff presented the Board with information on applying a range of CBBC factors. Modeled on recent retirements, a factor of 4.5 would impact 6.3% of retirees whereas a factor of 5 would affect 2.5% of retirees. Those who converted to retirement from a disability benefit would be excluded from such a cap.

The Board motion authorized SERS staff to work with stakeholder groups on the concept and to pursue the introduction of legislation. The Board’s intention is for the legislation to grant them authority to set the CBBC factor rather than setting a number in statute. The discussed timetable was to have something introduced early in 2022.

Click here to download a copy of this September 2021 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

Correthers, Stein and Fichtenbaum Elected to STRS Board

Two out of three of OEA’s endorsed candidates were re-elected to the STRS Board. In the election of one board member representing active educators, Carol Correthers (OEA endorsed) was re-elected to the Board. In the election of two retiree representatives, Robert Stein (OEA endorsed) was re-elected, and Rudy Fichtenbaum was elected for the first time. Rita Walters, OEA’s other endorsed candidate, finished third in the retiree election.

The results of the active member election were as follows:
Carol Correthers – 7,470 (elected)
Benjamin Pfeiffer – 5,357
Matt Sheridan – 2,877

The results of the retired member election were as follows:
Rudy Fichtenbaum – 21,339 (elected)
Robert Stein – 19,592 (elected)
Rita Walters – 17,114
Elizabeth Jones – 15,926

OEA would like to congratulate the elected members on their victories and thank all members who worked on this election effort and took the time to vote. The new four-year terms on the Board officially begin on September 1, 2021.

SERS Board Discusses Contribution Based Benefit Cap

During the May SERS Board meeting, the Board continued its ongoing discussion of plan sustainability. A large topic of conversation was the notion of a contribution-based benefit cap (CBBC) aimed at addressing spiking concerns. Such a cap would potentially limit a member’s calculated formula benefit if their contribution histories do not adequately support that benefit level. Several examples were given of situations where hypothetical members contribute small amounts over most of their career but have much larger contributions in a few years resulting in an inflated benefit. Utilizing a CBBC would place an upper limit of annual benefit based annuitizing accumulated contributions and interest and multiplying by a factor to set a benefit cap. The examples presented to the Board illustrated factors of 5 or 6 times the annuitized contributions.

The use of a CBBC is still in the exploration phase but Board members expressed some interest in preventing spiking to keep the majority of members from subsidizing others. There was also discussion of a tiered benefit formula that would have a lower multiplier in the early years of a member’s career and a higher multiplier later. This was discussed as a potential way to reward career service.

Click here to download a copy of this June 2021 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

SERS Changes Actuarial Assumptions, Lowers Assumed Rate of Return

On the advice of its actuarial consulting firm, the SERS Board voted to change the actuarial assumptions for the SERS pension and health care plan during its April meeting. Changes were made to the economic and demographic of the plans. The actuaries recommended lowering the inflation assumption from 3.00% to 2.40%. This change was the primary driver of the recommendation to lower the assumed rate of return from 7.50% to 7.00%. The lower assumed rate added nearly $185 million to SERS unfunded liabilities.

Other changes to the economic assumptions included a decrease in the payroll growth assumption from 3.50% to 1.75% and a reduction of the assumed increase in the cost-of-living adjustment (COLA) from 2.5% to 2.0%. Changes to demographic assumptions (retirement and withdrawal rates, mortality, etc.) were also made based on SERS plan experience. The SERS Board voted unanimously to adopt all of the actuary’s recommended changes.

Despite the drop in the assumed rate of return for the pension plan, the funding status of the system was projected to drop only slightly to 70.87% funded with a period of 26 years to pay off the unfunded liabilities. The Board also voted to raise the assumed rate of return for the health care plan to 7.00% from 5.25%. This contributed to a projected increase in the funding status of the health care fund to just over 38% funded.

STRS Reviews Proposed Changes for Health Care Plan

At the April STRS Board meeting, staff presented several proposed changes to the STRS health care plan for calendar year 2022. The proposed changes are designed to have a positive impact on premiums to offset expected rate increases.

The proposed changes include: decreasing maximum out-of-pocket limits on prescriptions to $5,100 from $6,500 for the Medicare plans; fully funding hospital coverage for Medicare enrollees with Part B-only; changes to formularies to provide greater rebates; and reducing the copay for some specialty drugs.

The STRS Board is expected to vote on these proposed changes at its May meeting. Staff will also provide an initial look at 2022 health care premiums at that time

Click here to download a copy of this May 2021 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

OEA Endorses Correthers, Walters and Stein for STRS Board

On April 1, 2021, STRS members will be mailed a ballot for this year’s election for the STRS Board. Active employees who contribute to STRS will vote for one representative on the Board. There are three candidates for the active seat and OEA has endorsed Carol Correthers. Current STRS benefit recipients will vote for two retiree representatives on the Board. There are four candidates for the retiree seats and OEA has endorsed Rita Walters and Robert Stein.

When it comes to the oversight of retirement funds for Ohio’s teachers experience matters. OEA’s endorsed candidates are current members of the STRS Board running for re-election. They are hard-working, knowledgeable, and committed to acting in the best interest of all STRS members. Their primary goal is ensuring that STRS is strong and stable for the long haul. More information on each candidate appears below.

Carol Correthers (active seat)

Carol Correthers is an intervention specialist with over 20 years of experience in the Lorain City Schools. She is active in her local association and a former member of the OEA Board of Directors. Carol has served on the STRS Board since 2009. During this time, the funding level of the STRS pension plan has improved significantly. This makes the future benefit payments for active teachers more secure.

Rita Walters and Robert Stein (retiree seats)

Rita Walters retired with 35 years of experience as a classroom teacher with Switzerland of Ohio Schools. As an active teacher she also served as president of her local association and on the OEA Board of Directors for 12 years. Rita was elected to the STRS Board Ohio in 2017. Robert Stein is a retired teacher from Strongsville City Schools and was also a Praxis III assessor with the Ohio Department of Education. Bob has served on the STRS Board since 2009.

During their time on the STRS Board, the solvency of the STRS retiree health care program has vastly improved. Once, projected to run out of money in a few years, the health care plan is now over 100% funded. Additionally, STRS continues to be recognized as a premier public retirement system and the over 90% of retirees have favorable views of STRS.

Members will have three ways to vote when they receive their ballots: by mail, phone or online. The deadline for voting is May 3, 20021, however, OEA recommends that you cast your vote upon receiving your ballot.

STRS Receives Positive Marks on Member Satisfaction, Investments, Member Service

At the last two meetings, the STRS Board received reports on the views members have of the retirement system, investment returns, investment costs, and the quality of member service. These reports reflect positive views of members towards the system and high performance relative to other public retirement systems. A brief summary of this information appears below:

Member satisfaction: The Board reviewed results of a November survey of STRS members conducted by public opinion research firm Saperstein Associates. The survey included a random sample of STRS retirees and active members. A vast majority of members—more than 90% of retirees and more than 80% of actives—have positive views of STRS. About eight out of 10 retirees see the amount of their contributions relative to the benefits they receive as an excellent of good value. Large majorities of both groups think that STRS has earned the trust and confidence of its members and have favorable impressions of the STRS Board.

Investments: At the March meeting, the STRS received a report from CEM Benchmarking comparing STRS investment performance and investment costs to those of other pension systems. In total, STRS posted a 5-year return of 8.2% which was in the top decile of fund performance. Further, benchmark cost analysis showed that in 2019, after adjusting for fund size and asset mix, STRS had lower investment costs than other pension systems. By utilizing internal investment staff and securing lower fees, STRS net investment costs were .414% as compared peer costs of .554%. This difference of .14% equates to over $108 million in savings to the fund.

Member Service: CEM Benchmarking also released fiscal year 2020 survey results of 49 American and Canadian pension system that showed that STRS had the top service level of the group. STRS has had the highest service level in five of the last six years. Areas of high service included pension payments, call center, member presentations, benefit statements and disaster recovery.

SERS Board Continues Sustainability Discussions

On Friday, March 19, the SERS Board continued ongoing discussions about sustainability of the pension plan. Through these discussions, the Board looks at plan design with a goal of ensuring the system is in position to withstand adverse changes in member demographics or investment returns. Areas of discussion included pension formula, definition of years of service, and pension spiking controls.

On pension formula, SERS staff presented information on systems that start with lower benefit formula and increase it as the employee reaches certain years of service thresholds. It was noted that such a formula would be difficult to implement with existing employees and could only be considered for new hires. Other practical questions include assuring adequate contributions and benefit levels for career employees.

The staff also presented information on the definition of years of service. SERS currently defines a year of service at 120 workdays and prorates service at lower amounts. Changing to a year based on 180 workdays was discussed. Such a change would result in over 16,000 SERS members who would receive less than a full year of service. It was posited that many employees who fall below the 180-day threshold are coaches, part time staff or substitutes and should not be earning a full year of service credit.

The Board also discussed concerns with pension spiking. Spiking is an increase in benefits by substantially increasing the final average salary beyond what is expected from normal salary increases. This results in a pension that is underfunded by contributions and thereby subsidized by all other members. Staff indicated that SERS could benefit from tougher anti-spiking rules. Like all changes discussed, a change in state law would be required. The Board indicated willingness to take a staff recommendation on pension spiking and seek such a change in the near term, separate from the broader sustainability discussions.

OPERS Posts Double-Digit Return

OPERS posted double-digit invest returns for calendar year 2020 for both the defined benefit plan and the OPERS health care fund. The defined benefit fund returned 12.02% for the year exceeding the assumed rate of 7.2%. The health care fund increased by 10.96%, compared to the assumed rate of 6.0%. The OPERS fiscal year ends on December 31, whereas STRS and SERS operate on a fiscal year that ends on June 30.

OPERS manages investment assets of over $98 billion in the pension fund and a health care fund of over $13 billion.

Click here to download a copy of this March 2021 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

OEA Endorses Correthers, Walters and Stein for STRS Board

When it comes to the oversight of retirement funds for Ohio’s teachers experience matters. The OEA Board of Directors has endorsed the candidacy of three current STRS Board members for re-election. Carol Correthers is running for re-election to an active member seat on the Board. Rita Walters and Robert Stein are seeking re-election as retiree representatives on the Board. They are all committed to acting in the best interest of all STRS members and ensuring that STRS is strong and stable for the long haul.

In early April, ballots will be sent to all STRS members. Active employees, those currently paying into STRS are eligible to vote in the election for the active member seat. STRS retirees, are eligible to vote in the election for the retiree seats. Below is information on OEA’s endorsed candidates.

Carol Correthers (active seat)
Carol Correthers is an intervention specialist with over 20 years of experience in the Lorain City Schools. She is active in her local association and a former member of the OEA Board of Directors. Correthers has served on the STRS Board since 2009. During this time, the funding level of the STRS pension plan has improved significantly. This makes the future benefit payments for active teachers more secure.

Rita Walters and Robert Stein (retiree seats)

Rita Walters retired with 35 years of experience as a classroom teacher with Switzerland of Ohio Schools. As an active teacher she also served as president of her local association and on the OEA Board of Directors for 12 years. Walters was elected to the STRS Board Ohio in 2017. Robert Stein is a retired teacher from Strongsville City Schools and was also a Praxis III assessor with the Ohio Department of Education. Stein has served on the STRS Board since 2009.

During their time on the STRS Board, the solvency of the STRS retiree health care program has vastly improved. Once, projected to run out of money in a few years, the health care plan is now over 100% funded. Additionally, STRS continues to be recognized as a premier public retirement system and the vast majority of retirees have favorable views of STRS.

Three SERS Board Members Re-Elected Without Opposition

Current SERS Board members Barbra Phillips, James Haller and Frank Weglarz were the only candidates to qualify for the ballot to be elected to the SERS Board of Trustees. Because there was only one candidate for each open seat, no election will be held. Barbra Phillips works for Ashland City Schools as a bus driver for disabled students and is president of OAPSE Local 233. She is serving her fourth term on the SERS Board and her candidacy was endorsed by OEA. James Haller is a custodial/maintenance worker with Lima City Schools serving his first term on the Board. Frank Weglarz retired from the Cleveland Heights-University Heights City Schools after 23 years of service. He is serving his second term on the Board and his candidacy was endorsed by OEA. New four-year terms on the Board will begin on July 1, 2021.

Additionally, James Rossler and Daniel Wilson were reappointed to the SERS Board for their fifth terms. Rossler is the Treasurer of the Rossford Exempted Village schools and was appointed to the SERS Board by the Speaker of the Ohio House and the President of the Ohio Senate. Wilson was re-appointed to the Board by Governor DeWine and serves as the Chief Financial Officer of the Mentor Exempted Village schools.

Action Required for OPERS Disability Recipients

Current OPERS disability benefit recipients are required to complete an annual statement on employment and earnings. This document was mailed in February and is a report of income from employment during the previous year. The statement must be completed even if there is no income to report. However, OPERS will waive the statement submission for those over age 70 as of December 31, 2019, who reside in a skilled nursing facility or are under legal guardianship.

The deadline for submission is April 15 and failure to do so will interrupt monthly OPERS disability payments and terminate health reimbursement arrangement (HRA) payments.

Click here to download a copy of this February 2021 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

STRS Receives Actuarial Report on Pension and Health Care Plans

On Thursday, October 15, 2020, the STRS Board received annual reports on the funding status of the pension and health care plans. The reports were presented by Cheiron, the STRS Board’s contracted actuarial firm.

Results of the actuarial valuation of the pension plan are as of June 30, 2020, the end of the fiscal year. According to the report, the actuarial value of STRS pension plan assets were $76.4 billion. This differs from the actual market value of assets because gains and losses are smoothed over a four-year period in the actuarial valuation to reduce volatility. The actuarial liabilities were $98.7 billion. The pension plan’s funding ratio is 77.4%, up from 76.1% last year. The funding period (the amount of time needed to pay off the unfunded liability) is calculated at 14.9 years, an improvement from 16.6 years in the last valuation.

The valuation of the STRS retiree health care plan continues to show that health care is fully funded. Health care fund assets as of June 30, 2020 were approximately $3.9 billion and actuarial liabilities were around $2.1 billion for a funded ratio of 182%.

STRS Board Approves Health Care Premium Rebate

The STRS Board unanimously passed a motion to issue a $250 rebate for each enrollee in the STRS health care plan as of October 2020 (retirees, spouses, and dependents). The rebate payments will be made in the December 2020 pension payments and are non-taxable. The total cost of the refund will be approximately $29.1 million. The funded ratio of the health care plan is expected to remain over 180%.

SERS Board Sets 0.5% COLA for 2021

At its September meeting, the SERS Board unanimously approved a 0.5% cost-of-living adjustment (COLA) increase for eligible retirees in 2021. SERS has not granted a COLA for the past three years to improve the long-term finances of the pension plan.

Under state law, SERS will base its COLA upon the yearly change in the Consumer Price Index for Urban Wage Earners (CPI-W), with a range of 0% to 2.5%. However, the Board may deviate from the change in CPI-W if its actuary determines the change would not materially impair the fiscal integrity of the system or is necessary to preserve the fiscal integrity of the system. The change in CPI-W for the fiscal year ending June 30, 2020 was 0.5%.

The COLA increase will be effective for those whose benefit effective date is prior to April 1, 2018. Those who retired on or after that date must wait until their fourth anniversary date before receiving a COLA.

Click here to download a copy of this October 2020 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

STRS Posts 3.14% Return for FY 2020

STRS has reported a total investment return of 3.14% for the fiscal year ending June 30, 2020. The return, while positive, fell below the assumed rate of return of 7.45%. Additionally, despite the positive return on investments, total assets fell during the year by about $1.8 billion due to negative cash flow. STRS made benefit payments of about $7.5 billion in fiscal 2020 exceeding total contributions and investment returns during the period.

In October, the Board’s actuary will present the results of the annual pension valuation report. The report will show the actuarial impact of the investment return as well as how other economic and demographic factors affected the funding status of the pension plan.

SERS Board Continues to Discuss Pension Sustainability

On Thursday, August 20, 2020 the SERS Board held an online meeting to continue discussions about potential benefit changes aimed at enhancing the long-term sustainability of the pension plan. All discussions are preliminary in nature and many would require a change in state law to take effect.

One area of discussion was the cost of living adjustment (COLA). COLA payments for SERS retirees have been frozen for the last three years. Beginning in 2021, the COLA is to be based inflation, using the Consumer Price Index (CPI-W), capped at 2.5%. However, state law gives the SERS Board authority to adjust COLA payments if its actuary determines such a change is necessary to preserve the fiscal integrity of the retirement system.

During the Board meeting, John Garrett of Cavanaugh MacDonald Consulting (the actuarial firm hired by the Board), provided information on how some other states handle COLA payments. Pension plans in several states tie COLA payments to the investment performance of the fund, increasing or decreasing amounts based on market returns. Several Board members expressed interest in this concept while noting that SERS should place an upper and lower limit on COLA payments.

Potential changes to service credit and final average salary were also discussed. Currently, under state law, SERS bases a year of service credit on at least 120 workdays. Board member Daniel Wilson expressed support for basing a year of service credit on 180 days. Such a change would lead to about 10% of current employees being reduced from a full year of service credit to a prorated amount. Changes to the calculation of final average salary from the three highest years to the five highest years or three highest consecutive years were also discussed. Changes to service credit or final average salary would require a change in statute and cannot be made by the SERS Board.

OPERS Announces 2021 COLA Payment

OPERS has announced the cost-of-living adjustments (COLA) payments that will be made to retirees in 2021. For those who retired on or after January 7, 2013, the COLA is based on the Consumer Price Index (CPI-W) compiled by the US Bureau of Labor Statistics. This is the same index that Social Security uses; however, the time periods used are different so the rate might not always match up. The OPERS COLA for 2021 is based on rate of inflation from June 2019 to June 2020–0.5%.

OPERS retirees who retired prior to January 7, 2013, were grandfathered in OPERS pension reform legislation, and continue to receive a 3% COLA.

Click here to download a copy of this September 2020 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

OEA Endorses Andrew Smith for STRS Board

The OEA Board of Directors has endorsed Andrew Smith for the upcoming election for an active member seat on the STRS Board. Andrew is a school social worker in the Sheffield-Sheffield Lake City Schools. He is a dedicated association and community leader with 20 years of service in STRS.

OEA Endorses Beverly Woolridge for SERS Board

SERS is currently holding an election for a retiree seat on the SERS Board of Trustees. The OEA Board of Directors has endorsed Beverly Woolridge for election to the SERS Board. Beverly has 39 years of service with the Akron Public Schools and is a former member and leader of the Akron Association of Classified Professionals. She has previously served on the SERS Board from 2009-2013 as an active member and from 2015-2019 as a retiree member. An OEA screening committee of SERS members interviewed Beverly Woodridge and current Board Chair Catherine Moss and recommended Woolridge for endorsement.

OPERS Announces Planned Health Care Changes

In January, the OPERS Board of Trustees voted to make several changes to the OPERS health care program. These changes will be effective beginning on January 1, 2022. Unlike pension benefits, health care benefits are guaranteed but subject to revision by the OPERS Board without a change in state law. The stated purpose of the changes is to extend the life of the health care fund which currently receives contributions because incoming revenue is needed to fund the OPERS pension benefits. OPERS had stated that the expected life of the health care trust fund prior to the change was only 11 years.

Click here to download a copy of this February 2020 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.

SERS Fills Employee-Member Vacancy

At its November Board meeting, the SERS Board elected Matthew King to fill a board vacancy for an open employee-member seat. King is the treasurer and chief fiscal officer at East Central Ohio Education Service Center. He has previously served as treasurer for the Barnesville Exempted Village School District and as an assistant auditor for the Ohio Auditor of State. King’s term for this seat will run through June 30, 2020. The same seat is up for election next year.

Additionally, members of the SERS Board will select someone to fill a vacancy for an open retiree-member seat on the Board. Three candidates have been selected to be interviewed for this vacancy. The candidates are Robert Hancock, Timothy Penton and Frank Weglarz. The Board will interview candidates and discuss their qualifications at its December meeting. The candidate who receives a majority vote of the Board will fill the open seat with a term running through June 30, 2021.

OPERS Board Considers Health Care Allowance Changes

The OPERS Board continues to consider changes in the health care plan that would take effect in 2022. At its November meeting, the Board heard a presentation from OPERS staff regarding future Medicare and pre-Medicare allowances for health care.

Regarding Medicare retirees, OPERS staff noted that the average balance of an OPERS retiree’s health reimbursement account is over $3,700. More than two-thirds of the Medicare eligible retirees are enrolled in a Medigap plan with premiums that range from $152-$240. Approximately 25% enroll in a Medicare Advantage plan with the most popular plan being the Humana Choice PPO with an average monthly premium of $155. OPERS staff is recommending
lowering the monthly base allowance for participants in the OPERS Medicare Connector from $450 to $350.

Regarding pre-Medicare retirees, the Board has been discussing converting to market-based coverage rather than continuing to sponsor health care coverage. Currently over 25,000 retirees are enrolled in OPERS-sponsored coverage. Most receive an allowance of 75% of the $1,306 premium, meaning they pay $327 a month. OPERS staff is recommending an initial base allowance of $1,200 that may decrease over time. It should be noted that premiums in Ohio range from $570-$1,235 with higher costs in rural counties.

The OPERS Board will continue its discussion on all components of health care in January in preparation for a vote early in 2020.

Click here to download a copy of this December 2019 Report to the OEA Board of Directors