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big disappointment in ohio public pension!
Old 07-18-2013, 04:19 AM   #1
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big disappointment in ohio public pension!

With the new legislation l will be going from 41.25% of my final average salary for 25 years and 55 years old to 27.5% Unbelievable!! And no health care till 60 years old. I have just over 5 years to make up some ground. This is just your basic public service position not law enforcement it is ohio public employees retirement systems (OPERS) version of early retirement 25 years of service and 55 years old.
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Old 07-18-2013, 05:30 AM   #2
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Are your already earned credits being reduced in value? Or just the credits you will earn between now and retirement?

That is, if you have ten years with OPERS, are those ten years still being credited with the old formula and only your remaining fifteen years will be worked under the new, reduced formula?

Or is this just a change in the rules for early retirees?

Have they done anything that would reduce the pensions of folks who are already retired?

I'm asking all the questions because Illinois is in the midst of "reforming" pensions and I'm curious as to whether any other state has already set precedent regarding reducing the value of already earned pension credits or reducing the pensions of already retired folks.
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Old 07-18-2013, 06:40 AM   #3
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MA reformed their public pensions last year, but only for new hires. The retirement age went from 55 to 60 and the COLA was reduced, but the pension amounts weren't changed.

They are now looking at retiree medical and suggested changing the vesting from 10 to 20 years and increasing the retiree premium payment from 25% to 50%. It would apply to most current employees. There was a lot of push back and the legislation is on hold and looks as if it will be significantly modified, maybe so that the changes only apply to new hires and aren't quite as drastic.
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Old 07-18-2013, 06:54 AM   #4
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MA reformed their public pensions last year, but only for new hires. The retirement age went from 55 to 60 and the COLA was reduced, but the pension amounts weren't changed.

They are now looking at retiree medical and suggested changing the vesting from 10 to 20 years and increasing the retiree premium payment from 25% to 50%. It would apply to most current employees. There was a lot of push back and the legislation is on hold and looks as if it will be significantly modified, maybe so that the changes only apply to new hires and aren't quite as drastic.
Yeah..... It's tough. Here in Illinois, the gov and the speaker want to make some fairly serious cuts to the pensions of already retired folks. This is driven by the need to skip pension fund contributions for a few years close in. Just reducing pension benefits for new hires (which they have already done some of) doesn't allow them to skip contributions now, which they say they need to do and indeed have been doing.

I'm always looking for precedents where other states have or have not cut the pensions of already retired folks as a predictor of what might happen here.
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Old 07-18-2013, 07:14 AM   #5
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Yeah..... It's tough. Here in Illinois, the gov and the speaker want to make some fairly serious cuts to the pensions of already retired folks. This is driven by the need to skip pension fund contributions for a few years close in. Just reducing pension benefits for new hires (which they have already done some of) doesn't allow them to skip contributions now, which they say they need to do and indeed have been doing.

I'm always looking for precedents where other states have or have not cut the pensions of already retired folks as a predictor of what might happen here.
In MA there's been no mention of reducing benefits for already retired people.
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Old 07-18-2013, 07:29 AM   #6
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Yeah..... It's tough. Here in Illinois, the gov and the speaker want to make some fairly serious cuts to the pensions of already retired folks. This is driven by the need to skip pension fund contributions for a few years close in. Just reducing pension benefits for new hires (which they have already done some of) doesn't allow them to skip contributions now, which they say they need to do and indeed have been doing.

I'm always looking for precedents where other states have or have not cut the pensions of already retired folks as a predictor of what might happen here.
Well, the latest thing the so called gang of 10 have come up with is a new proposal from the universities which call for a 2% change in employee contributions for current workers. They want to do a COLA change for current retirees which would be 1/2 of CPI. This COLA change would be worse than the previous SB1 they came up with previously.
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Old 07-18-2013, 07:57 AM   #7
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I think, but I'll have to go look as my morning memory isn't so hot, that it's 1/2 of cpi, capped at 3% and not compounded. So, it's a cola super-light. If somebody just retired and was counting on their pension more or less keeping up with inflation for 30 years, this would be a killer.

Now, all in all, it may still be a decent pension. But, if the retiree made his plans using FireCalc and checked the "cola'd" box, his 95% success rate will now drop significantly. Whether a pension is cola'd or not is a huge factor in your success rate.
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Old 07-18-2013, 08:15 AM   #8
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I know one thing I would not have ER'd had I known they were going to change the rules in the middle of the game. Whatever they come up with their will be a constitutional challenge that will go to court. My hope is that they execute a stay of the present benefits. This way I may get 1 or 2 more COLA increases.
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Old 07-18-2013, 08:30 AM   #9
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I know one thing I would not have ER'd had I known they were going to change the rules in the middle of the game. Whatever they come up with their will be a constitutional challenge that will go to court. My hope is that they execute a stay of the present benefits. This way I may get 1 or 2 more COLA increases.
I'm thinking one more 3% hit is likely. After that, I don't think it's looking very good.
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Old 07-18-2013, 08:40 AM   #10
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Well, I had to wait 3 years for my first which was this year. One more I guess would be nice. Plan B will probably start soon.
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Old 07-18-2013, 08:45 AM   #11
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Yep, seeing that retired City of Chicago employees will be transitioned into Obamacare in 2017 Plan B is definitely going to come into effect.
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Old 07-18-2013, 09:42 AM   #12
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Maryland has had no changes for current retiree's. This years COLA is slightly over 2 percent
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Old 07-18-2013, 11:02 AM   #13
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I know one thing I would not have ER'd had I known they were going to change the rules in the middle of the game. Whatever they come up with their will be a constitutional challenge that will go to court. My hope is that they execute a stay of the present benefits. This way I may get 1 or 2 more COLA increases.
Constitutional challenge? Good luck with that.
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Old 07-18-2013, 11:08 AM   #14
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Maryland has had no changes for current retiree's. This years COLA is slightly over 2 percent
Is that compounded or simple interest?
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Old 07-18-2013, 11:17 AM   #15
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Originally Posted by kongmen View Post
With the new legislation l will be going from 41.25% of my final average salary for 25 years and 55 years old to 27.5% Unbelievable!! And no health care till 60 years old. I have just over 5 years to make up some ground. This is just your basic public service position not law enforcement it is ohio public employees retirement systems (OPERS) version of early retirement 25 years of service and 55 years old.
Will you also get Social Security?
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Old 07-18-2013, 11:40 AM   #16
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Originally Posted by youbet View Post
Yeah..... It's tough. Here in Illinois, the gov and the speaker want to make some fairly serious cuts to the pensions of already retired folks. This is driven by the need to skip pension fund contributions for a few years close in. Just reducing pension benefits for new hires (which they have already done some of) doesn't allow them to skip contributions now, which they say they need to do and indeed have been doing.
In other words, they want the current pensioners to make the pension contributions the state should be making.
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Old 07-18-2013, 11:42 AM   #17
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I know one thing I would not have ER'd had I known they were going to change the rules in the middle of the game.
You can handle this. Just get into your time machine and go back and redo about 25 years of our life.
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Old 07-18-2013, 12:01 PM   #18
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In other words, they want the current pensioners to make the pension contributions the state should be making.
The "state" cannot make them. They must be made by taxpayers or pension plan members or by expanding debt.

Ha
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Old 07-18-2013, 12:02 PM   #19
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With the new legislation l will be going from 41.25% of my final average salary for 25 years and 55 years old to 27.5% Unbelievable!! And no health care till 60 years old. I have just over 5 years to make up some ground. This is just your basic public service position not law enforcement it is ohio public employees retirement systems (OPERS) version of early retirement 25 years of service and 55 years old.
My DH is retired in the OPERS pension system. For current retirees nothing changed except the health care (never promised, never guaranteed....) subsidy changes coming in 2016. Since he's already retired he keeps his 3% COLA. There's that transition group that starts with the 3% COLA and then the COLA changes to an adjustable % based on an index. Are you in the transition group?

I followed closely the changes for current retirees and also the changes affecting workers beyond 5 years from retirement because our 29 year old son is in the same system. I think he will need 32 years for full retirement and it will be based on highest 5 years FAS instead of highest 3 FAS like DH had.

As for the health care changes, the new rules are based on age at enrollment with a minimum of 20 years of service, where it used to be a minimum of 10 years of service.

www.opers.org has a lot of info on the new changes and their calculators are helpful.
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Old 07-18-2013, 01:14 PM   #20
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Originally Posted by Sue J View Post

My DH is retired in the OPERS pension system. For current retirees nothing changed except the health care (never promised, never guaranteed....) subsidy changes coming in 2016. Since he's already retired he keeps his 3% COLA. There's that transition group that starts with the 3% COLA and then the COLA changes to an adjustable % based on an index. Are you in the transition group?

I followed closely the changes for current retirees and also the changes affecting workers beyond 5 years from retirement because our 29 year old son is in the same system. I think he will need 32 years for full retirement and it will be based on highest 5 years FAS instead of highest 3 FAS like DH had.

As for the health care changes, the new rules are based on age at enrollment with a minimum of 20 years of service, where it used to be a minimum of 10 years of service. Are you sure you can't enroll before age 60 if you have 20 years of service?

www.opers.org has a lot of info on the new changes and their calculators are helpful.
Being a pensioner from another state, I was curious to why the apparent big drop in payout for OP. looking at your link provided, I assume it is the current funding status of the system? In 2007 it was almost 100% funded, and now it has been mired in the upper 70% range since then. I am surprised there hasn't been a bigger "bounce back" in funding status of the system.
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