Pension Dispute Brewing over Funding Requirements
There’s a growing dispute between leaders of a state retirement panel and a public pension system.
Earlier this month, the Ohio Police and Fire Pension Fund sent out a statement claiming it’s in good shape and on track to meet the state’s 30-year funding requirement.
Republican State Rep. Lynn Wachtmann, who chairs the Ohio Retirement Study Council, says that statement was deceptive to its members.
Wachtmann says OP&F is using the wrong formula to determine their funding requirement. He argues the fund takes into account the present-day assets instead of what’s called a smoothing of assets. The latter takes the past four years of investments into consideration. This is believed to create a more reasonable, long-term number. Wachtmann says the pension’s board should be prepared to make changes.
“If they’re not within 30-year funding -- which they’re not -- come their next report, hopefully they will be, but if they’re not, they should bring a proposal forward," he said. "But history shows that they’re not very good at that.”
Since the state just recently implemented major pension reform, Ohio’s Fraternal Order of Police President Jay McDonald is calling for patience from the council and to give the reform time to prove that it’s working.
And as for Wachtmann’s accusation of deception, McDonald says, “I think that’s completely ridiculous. The board on the fund is made up of members, police officers and firefighters, both active and retired. We stand by the board, we trust the board. Nobody wants a solid, stable, solvent fund more than its members, and that includes members that serve on the board.”
Because of the reform deal between the state and OP&F, members will pay out 12.5 percent of their salary for their benefits -- and McDonald says that’s enough.