COLA Reduction Legislation is Reportedly Dead in the Ohio House

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April 3, 2018

COLA Reduction Legislation is Reportedly Dead in the Ohio House

(March 22, 2018)  PERI has heard from multiple sources that HB 413 will not be moved in its present form and for all intents and purposes is dead.  We believe the effort PERI members made to contact their elected representatives made the difference.  Legislators have told us on many occasions over the past four months that they were not aware how much retirees would suffer under the proposal until they heard from us, the FOP, and our many members.  Although we are very pleased with this outcome, we must all remain vigilant.

It is very likely that OPERS will simply wait for another opportunity to present their proposal at a future date.  A new proposal could gain traction in the General Assembly if two conditions were to be realized in the coming year.

First, if OPERS investment returns fail to return at least 7.5% in 2018, a new unrealized actuarial loss will need to be factored in to their funded status and could lower it from its approximately 82% level.  Any level of funded status that falls below 80% would give the General Assembly the rationale needed to force plan design changes including COLA reductions or freezes.

Second, it is possible that OPERS may ask its Board to approve a further reduction in the anticipated annual rate of return from the current 7.5% to a level of 7.25% or lower.  This would make it easier for OPERS to realize their investment target but in doing so, would create another reduction in the funded status of the pension since it’s solvency was initially based on a higher investment target.  As mentioned, either or both of these actions would likely trigger the authority needed to move a new bill reducing benefits.

PERI will continue to monitor OPERS activities this year and keep members informed of any action taken that could result in the COLA issue gaining new momentum.

 

38 Comments

  1. Len says:

    Thank you PERI and all members who were vigilant in writing letters and attending meetings. Perhaps we have temporarily “won the battle” but the war is far from over. I feel that Carragher and her overpaid cronies are firm in their resolve and have shown their true colors. They care nothing about the group they are paid to protect and they will regroup to fight another day. We must stay prepared…our strength is in our numbers and our voice. Thanks again to PERI for their leadership.

  2. Donna says:

    PERI, thank you so much for all your efforts and continued vigilance. Is there anything that can be done to stop OPERS from manipulating the finances? Who is the watchdog? It’s sad that we now have to remain hyper vigilant of an organization that should be looking out for our best interests. After all, they are stewards of the money we have earned.

  3. Jerry M. says:

    I would like to offer P.E.R.I. and all retirees some food for thought. Opers is not going to let h.b. 413 fall by the wayside. Opers will try to convince the general assembly to push this through after the November elections in the lame duck session of the general assembly. Everyone needs to be on alert for this maneuver.

  4. Jerry M. says:

    Everyone needs to be on alert as we move forward. Opers will try this again! If not at the end of this year, It will be attempted again in 2019. Retirees need to remember we will have board elections later this year for the Opers board. Retirees need to vote out these sitting board members. These sitting board members are yes votes for Karen Carraher! Chris Mabe voted yes to move forward the c.o.l.a. reduction proposal. He is an example of why retirees need to vote out all these sitting Opers board members! Retirees can not let their guard down! If Opers investment returns fall below 7.5% for 2018, C.O.L.A. reduction will return! Karen Carraher has already made idle threats pertaining to retiree health care in the Columbus Dispatch article. Karen Carraher has made it clear she is not a friend of retirees. Since she has been Exc. Dir., retirees have seen a reduction in benefits and a rise in health care costs. Karen Carraher has made it clear she is a political axe! Opers will find another reason to revisit C.O.L.A. reduction! Opers has eroded any trust retirees had in Opers as an organization. Retirees need to keep the heat on Opers and the General Assembly!

  5. Jerry M. says:

    P.E.R.I. has made solid points in this web posting. Retirees thanks P.E.R.I. The F.O.P. And everyone else who opposed and stood up to fight H.B. 413! Thank You. Remember,the fight is not over!

  6. Ginny says:

    Congrats on the efforts and outcome. You are correct, OPERS will find another way to try and reduce our COLA. We all must be vigilant and not give an inch. Thanks.

  7. Jim says:

    Steve Toth sent a link to a Columbus Dispatch article. http://www.dispatch.com/news/20180322/ohio-lawmakers-kill-bill-to-cut-pers-benefits

    You can read that OPERS will seek to find a way to circumvent this delay. OPERS is no partner in our future. We need to use this time to advocate for new leadership at OPERS. We need to have a complete forensic audit of OPERS and find out why administrative costs keep rising.

    We must be certain to not elect anyone associated with this attack on our vested rights.

    • James says:

      https://www.nytimes.com/2018/03/05/opinion/investor-class-pensions

      Interesting insights on the ideology behind the dismantling of defined pensions in the above link. In all probability, Schuring will again receive his marching orders from the higher up$, (ramifications, in part, of Citizens United), legislation to gut our COLA will be reintroduced, Carraher will again spew financial forecast falsehoods, and CIO Shafer will continue to invest in those rip-off hedge funds. Ground Hog Day will go on and on and on, until will vote the far- right ideologues, who were the proponents of HB 413, out of office.

  8. Donna says:

    Is there a way we can be proactive rather than just waiting for OPERS’ (Carrahar’s) next move?

  9. SuzieC says:

    Thank you PERI. Yes, we must remain super-vigilant. OPERS and Carrahar will not give up and will probably try to slip the COLA destruction into the end of year lame duck Christmas tree bill.

    Susan Sullivan

  10. Lee Adams says:

    Hope this is true. No the political appointees at OPERS don’t have to care about retirees. They are beholden to the politicians who appoint them. And,yes, the super conservative legislature will try again in November 2018 no matter what the results of the election. Only way to keep this from happening is to elect a Democratic governor who will try to roll back the law once in office.
    This legislature has been going after all retirement systems’ money,retirees as well as public employees for years. Simply another effort to impoverish the middle and working classes.

  11. Jerry M. says:

    After the Ohio House made public the fate of H.B. 413, Karen Carraher made a public statement that was nothing short of an idle threat. As we move forward, Retirees must keep Opers under the microscope and under scrutiny.

  12. Vincent T. Lombardo says:

    Thank you PERI and all OPERS retirees who contacted their legislators! And, yes, the war is not over. We must be vigilant, always. Join PERI!!!

  13. Jim says:

    I’ve created my own survey along the lines of the false Push/Pull COLA survey that we were given by OPERS.

    Please choose from the following:

    A: I have lost ALL of my faith in OPERS acting to protect and preserve my pension and demand that the management and investment staff be replaced.

    B: I have lost MOST of my faith in OPERS acting to protect and preserve my pension and demand that the management and investment staff be replaced.

    C: I have lost SOME of my faith in OPERS acting to protect and preserve my pension and demand that the management and investment staff be replaced.

    Personally, I choose A.

  14. Retiree says:

    Thank you PERI and all my fellow retirees who helped in this fight to preserve our COLA. I am also so grateful to the lawmakers who saw this for what it is, an unnecessary fix for a problem that doesn’t exist. I will say though that I was very unnerved by Karen Carraher’s response to the news in the Columbus Dispatch….

    OPERS executive director Karen Carraher said she was disappointed by the legislators’ decision and cautioned that doing nothing was not a solution.

    “Based on advice of outside actuaries, we felt that the proposal to update the OPERS cost-of-living adjustment, contained within House Bill 413, was the responsible way to preserve the benefits we provide to our more than 1 million members and retirees,” she said in a statement.

    “The COLA issue is not resolved at this time, and OPERS will continue to pursue changes in the future to meet the retirement needs of all of our members and retirees.

    It’s very clear she is hell bent on going after our COLA and doesn’t intend to stop until she gets it. I rewatched what I think was her first video she did on this issue with Michael Pramik where she talks about how the current retirees weren’t impacted by the 2013 pension reform. It’s as if she thinks that it wasn’t fair that we didn’t have to take a hit. She even commented about how we were impacted by the healthcare changes but that so were future retirees. It really looks to me like she just wants to take something away from us for no reason other than she just wants to.
    We need to remain vigilant because I predict it’s just a matter of time before she goes after us again. And seriously, why? Why is it so important to her to try to make our lives harder. All we did was pay into a system our entire careers with the promise of a decent retirement. I don’t think any of us are living high off the hog. We shouldn’t have to continuously worry now that the system that promised us an earned and guaranteed benefit might at anytime try to take it away.

  15. Donna says:

    I have emailed my representatives, including Reps. Schuring and Arndt, thanking them for their help in letting HB413 die in committee. I would encourage others to do the same.

    • Jim says:

      Thank you notes are a nice idea, but remember that this legislation was Schuring’s idea. He just had Sherer sponsor it. Which is not to excuse him either.

  16. Dale Harmon says:

    Remember that the OPERS Special Election for the Board of Trustees Retiree Representative ends tomorrow, March 30, at midnight. Retirees can vote online and do not have to mail their ballot in.

    The biographies for each of the three candidates is online at OPERS and was included with the ballot mailing to retirees.

    Personally, I think it would be foolish to compromise on the legislatively guaranteed vested 3% simple interest COLA for those, such as myself, who retired prior to the 2012 legislation. (The 2012 legislation, which took effect in early 2013, removed the COLA as a vested right for those who retired after the law took effect.) As we are constantly reminded by OPERS, healthcare is not a guaranteed benefit. As such, cutting the COLA, even if it would be legal, in return for the promise of healthcare would be a bad deal.

  17. Ginny says:

    OPERS has not yet addressed this issue on their website. Are they up to something else regarding the COLA?

  18. Len says:

    I think our very next move as a group should be to seek whatever measures are necessary to have to Ms. Carraher removed along with whomever else on her staff responsible for orchestrating this insult to those of us have entrusted them with our financial future and pay their salaries. This includes those members of the board whom Ms Carraher seems to control.

    My question is “how do we begin”?

  19. Dale Harmon says:

    Well I posted earlier, but it hasn’t shown up (yet). Anyway, the OPERS special election for the Retiree Representative closes at midnight tomorrow (3/30/2018). Retirees can vote online. The bios were included in the mailing from OPERS and are available online.

    Those who retired before 2013, including myself, have a legislatively vested 3% simple interest COLA. I certainly do not want to trade that, even if it were legal to do so, for the promise of better/continuing healthcare. Healthcare that OPERS repeatedly reminds us is not guaranteed.

  20. Gary says:

    I clicked on the link in James’ post of March 27 above but I got a message that the link was broken. I will try other ways to bring it up and read it. In response to Donna’s March 23rd post, what about approaching a Democratic gubernatorial candidate, maybe Richard Cordray, and seek a commitment from him to get rid of Carraher and to veto or repeal any future attempts from the legislature to change our COLA or any other reductions in our benefits in exchange for our support in the upcoming elections. 200,000 retirees’ votes plus their family members could make a difference. Another thing we need to think about is for more people to start attending PERI meetings to network and brainstorm with other members face to face and to show support and appreciation to our PERI staff members for the fine job they have been doing for us.

    • James says:

      https://www.nytimes.com/2018/03/05/opinion/investor-class-pensions.html

      Gary, hope this link comes thru now. Interesting $tuff, indeed!

      • Gary says:

        Thanks for redoing the link James. It is a very informative article that all retirees need to read. It shines the light on the motives of the cancer that is Carraher and our equally arrogant Governor Kasich that appointed her.

    • John Williams says:

      I doubt that the exceedingly cautious Cordray would be drawn into this fight. OPERS retirees have a more likely champion in a bomb-thrower such as Kucinich. Since a cabinet officer (the director of DAS) has an ex officio seat on the Board, it might be worth the effort. But in any event, that could have no effect before January 2019. Personally, I would like to see the Board subject Carraher to a no-confidence vote, especially now that various members of the General Assembly have publicly stated that OPERS’ position on HB 413 was a thin tissue of falsehoods, half-truths and misrepresentations. It took generations to built the credibility with its members and the General Assembly that Carraher squandered in this fiasco.

      • Donna says:

        John – Where are these public statements? I would like to read them.

      • Gary says:

        The primary election is weeks away. Any support we could offer would be of little value after the election. If this H.B.413 returns, it will likely resurface in January 2019, when the OPERS earnings reports for 2018 come in. It would be nice to have a friend that we supported in the Governor’s Office at that time. Personally, I never vote for Republicans or any Democrat who tries to infringe my 2nd Amendment rights. Finally, what can we do to make the no-confidence vote happen?

  21. Craig H. says:

    Thank you to PERI, our fellow members, and everyone who helped fight HB 413. We need to stand strong!

  22. Cindy Z. says:

    Thank you to PERI, our fellow members, and everyone who helped fight HB 413. We know this isn’t the end, but at least they know we are not going to sit idly by and accept their bullying.

  23. Jerry M. says:

    I have noticed nothing about H.B. 413 on Opers website. With the general assembly not moving forward, This is a political defeat for Carraher and the Opers board. This attempt left egg on their faces.

  24. Jerry M. says:

    Len, Later this year we have two opers board seats up for election. We need to vote out those sitting board members and vote for their opponents. they did vote for the c.o.l.a. reduction measure to move forward. One of these board seats is the Rep. for state retirees. This seat is occupied by Chris Mabe. He is the president of OCSEA and he voted for the C.O.L.A. REDUCTION MEASURE TO MOVE FORWARD! He is controlled by Karen Carraher. As well as the other sitting board members. Other board seats up for election this year may be the board seat for county retirees or municipal retirees. Retirees need to start researching all the Opers board seats up for election this year.

    • Len says:

      Thanks for the information Jerry…I will begin to do my homework and pay close attention to the candidates.

    • Peri Peri says:

      In the interest of accuracy, Chris Mabe is not the representative for state retirees but is the representative for state government employees. In addition, PERI would like to remind everyone that two OPERS board members, Steve Toth and the late John Maurer, both retirees’ representatives, voted to oppose the reduction in COLA. It is true that all other OPERS board members voted for the COLA reduction. Prior to the vote, both Mr. Toth and Mr. Maurer spoke eloquently about the need to protect retirees benefits.

  25. PERI PERI says:

    Again, in the interest of accuracy, Mr. Desposito was not a member of the OPERS board when the vote was taken on the COLA issue last fall. This blog allows members to post their opinions regarding OPERS issues but due to the emotional nature of the COLA debate, it is important for fact-based information to be posted by those using the website. If there continue to be postings with inaccurate information, those posts will not be uploaded for viewing by the PERI community.

  26. Jerry M. says:

    To obtain info. pertaining to the Opers board, one must dig deep on Opers website to retrieve this info. For intents and purposes, Opers and the Opers board makes attempts to keep board info. and activities as clandestine as legally possible. Info. pertaining to the Opers board should be more accessible to retirees. Perhaps, in the future, P.E.R.I. can make attempts to make Opers board and activities info. more prevalent on the P.E.R.I. website to save any misunderstandings. Retirees and P.E.R.I. must hold Opers and the Opers board accountable as we move forward. Helping retirees to obtain Opers board info. and activities more easily and accurately is just another way that P.E.R.I. can help retirees. Offering this as food for thought is also another way dues paying P.E.R.I. members can help P.E.R.I. be more accountable in the future.

  27. Ginny says:

    The OPERS website recent post denies the COLA bill is dead in the legislature (they say it is in committee). Is OPERS still moving forward despite the opposition to the COLA proposal?

    • Peri Peri says:

      The Republican House leaders shut down hearings on HB 413, a decision to let the bill die in committee. After several hearings on the bill, it did not have enough votes to pass and was opposed by many Republican and Democrat lawmakers. There is a good chance that OPERS will return to the General Assembly with another proposal to cut benefits to retirees at a later date. We need to remain vigilant to protect the benefits earned by OPERS retirees.

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