Ohio Senate bill 5 question

[kongmen]

I may be reaching to try and find the answer to my question here but maybe someone can lead me in the right direction.

My dw is currently drawing on a 30 year pension from the state of Ohio and just recently interviewed for a job back at her former department and was told by the interviewer that her reemployment may adversely affect her retirement. We are unsure if he meant her current pension benefits or the annuity she would be contributing to if hired. Could this be a situation like were if you have a pension your social security benefits would be reduced? IE her monthly payments would be reduced on her current pension income. BTW she won't be getting SS.

If anyone has an opinion please chime in or if you have a better place for me to look please post. Thanks.

 

[Gone4Good]

I'd place a call to the benefits office and talk to someone who is knowledgeable about your specific pension. And I'd also ask for whatever documentation is available (if I didn't have it already) and read it for myself.

 

[youbet]

I may be reaching to try and find the answer to my question here but maybe someone can lead me in the right direction.

My dw is currently drawing on a 30 year pension from the state of Ohio and just recently interviewed for a job back at her former department and was told by the interviewer that her reemployment may adversely affect her retirement. We are unsure if he meant her current pension benefits or the annuity she would be contributing to if hired. Could this be a situation like were if you have a pension your social security benefits would be reduced? IE her monthly payments would be reduced on her current pension income. BTW she won't be getting SS.

If anyone has an opinion please chime in or if you have a better place for me to look please post. Thanks.

We don't know what the interviewer meant by "reemployment may adversely affect her retirement." The reference may have referred to cuurent pension rules or perhaps to the new legislation. Did your wife ask the interviewer?

In any case, there are often provisions in state pensions to prevent "double dipping" where employees retire briefly and then go back to the same or a similar job collecting both a salary for current work and a pension for past work. I've seen situations where (1) reemployment is not allowed, (2) the reemployed time does not accrue additional pension benefits or (3) the current pension is suspended or reduced while the reemployment is occuring. Your wife's pension plan documents likely clearly spell this out and I strongly suggest you review them in detail. If the plan documents themselves are confusing or full of legal mumbo-jumbo, go to the plan website and look for a Q and A section.

 

[kongmen]

"the current pension is suspended or reduced while the reemployment is occurring".

I would think that the funds off which she is drawing would no longer be controlled by the employer in any way (they are no longer contributing on her behalf).

I will get in touch with (OPERS) Ohio Public Employees Retirement System and find out if they would reduce retirement payments based on reemployment. I'm thinking the only way this could happen is if OPERS initiated it not from the employer or through legislation. The interviewer stated he would not no if this is fact or rumor until July 1 at which time more will be known about the new law (Senate bill 5).

In this state when a person double dips they cannot contribute to the same retirement system in the same manner they contribute to a separate annuity were the employer contributes on the employees behalf but the employee does not benefit from the employer contribution when they retire again those funds go toward first time retirees. I'm thinking there might be some sort of prevision in the new legislation to "effect" this annuity.

 

[GregLee]

"the current pension is suspended or reduced while the reemployment is occurring".

I would think that the funds off which she is drawing would no longer be controlled by the employer in any way (they are no longer contributing on her behalf).

I don't understand that reasoning. The state controls the retirement fund and payments out of it. If they decide to suspend retirement payments to those who return to work, then they can do that. They don't have unbridled power, since they could be sued and perhaps forced to change that decision, but that doesn't stop them from doing it in the first place. Hawaii has a law requiring state pension payments to be suspended for those returning to work for the state, under certain conditions.

Edit: I found this on the OPERS web site:

In most instances, re-employed retirees will continue to receive their retirement
allowance during re-employment. However, if you become re-employed anytime
within the first two months after your retirement benefit effective date, you will forfeit
your retirement allowance during this two-month period. Contributions remitted during
the two-month forfeiture period will not be included in the calculation of a Money
Purchase Plan benefit. This penalty will apply even if you waive your salary for this
two-month period or volunteer for the period of re-employment. Forfeiture of your
monthly benefit payment will interrupt your retiree health care coverage.
https://www.opers.org/pubs-archive/retirees/RH-reemployment.pdf

 

[kongmen]

I was aware of the two month prevision however; I assumed (and we all know what can happen when we do that ) that OPERS was a separate entity from the state. Further; I assumed the two month provision was initiated by OPERS not the state or legislation initiated by the state. I can see how this action could benefit the state if in fact the retirement funds are part of the state's coffers but if not I don't see how the state could benefit. If these funds are part of the states coffers then this is one reason among many why they should be separated. I believe now 401ks' are separate from a company's coffers to prevent employees from losing there retirement funds in the event of a bankruptcy.

 

[thamedaeous]

retiree reemployed

There is a new bill in the Ohio House introduced by the republican who replaced Mr Seitz when he objected to SB5. I believe it is HB 202. In this bill anyone who comes back to work for the state after retiring and earns more than $14,160, will forfeit $1 for every $2 they earn above that number. It will be subtracted from your retirement check.
It hasn't become law yet so you all can write your congressman and tell them to not consider this ridiculous measure. State employee retirees don't make that much to begin with to punish them for wanting to keep contgributing.....Good Luck..

 

[kongmen]

thamedaeous

WOW, that was a shock to say the least. It appears as though this is not limited to just state workers it also includes municipalities and townships as well. No collective bargaining, no reasonable annual increases in retirement, no social security, the inability to go back to what you know and supplement your retirement income and drum roll please.....a decrease in your final average salary to determine pension benefits, no reason to be a public servant any more. I guess it's time to go out and get one of those high paying privet sector jobs. Good luck with your public sector service state of Ohio.

 

[2B]

The answer is obvious. Don't go back to work for the state. Get a job in the private sector if you want to get additional income.