House Committee Holds Second Hearing on COLA Reduction Bill

COLA Bill Has First Hearing in Aging and Long Term Care Committee
December 8, 2017
PERI Supported Removal of UBIT from Federal Tax Reform Appears to be a Done Deal
December 18, 2017

House Committee Holds Second Hearing on COLA Reduction Bill

(December 14, 2017)  Yesterday, the Ohio House Committee on Aging and Long Term Care heard proponent testimony from OPERS Executive Director Karen Carraher on why she believes there is a need to move forward with the proposed change to limit retirees’ COLA to actual inflation capped at 2.5%.  There is nothing new to report in terms of changes in OPERS position or new arguments in support of HB 413.  We are waiting to hear when the committee plans to schedule opponent testimony so that PERI and others will have the opportunity to present our case to the committee.  We have been led to believe this will not occur until the General Assembly returns from their Christmas break in January.

 

On December 12th the sponsor of HB 413, Gary Scherer, met with the PERI Board of Trustees.  The purpose of the conversation was to allow for the exchange of thoughts and concerns as they relate to many elements of the bill.  It was a productive and thoughtful discussion that should prove to be a good lead up to our testimony, once it is scheduled.  PERI members will be notified in the next few days of action they can take by writing letters and making calls to legislators.  Expect to hear more from your chapter officers as we will be communicating directly with them regarding talking points and other information to move this portion of our advocacy efforts forward.

28 Comments

  1. Retiree says:

    Thank you so much for the update and direction!

  2. Ginny says:

    Thanks for the update. It still sounds like OPERS is trying to ram this through. A second hearing in a short period of time shows they are anxious to get this done. Keep us informed when we need to take action immediately.

  3. Donna says:

    Thank you PERI. I read about the Fed rate hike yesterday, and more rate hikes predicted for 2018. The forecast for the economy is strong. There should be no need for a cut to COLA, especially with the incredible bull run the stock market has experienced. Thank you for advocating for us.

    • Gary says:

      You are correct Donna. The stock market is at an all time high and the tax bill the Republicans are going to ram through Congress will drive the market even higher when these corporate tax rates are slashed. The trillion and a half dollars added to the budget deficit will drive runaway inflation and the CPI-W will stay well over 3%. That’s why Carraher is in a rush to get this dirty deal done now. Once our 3 % COLA is stolen from us, it is gone for good.

  4. JERRY M. says:

    Thanks P.E.R.I. for standing up for retirees! Just keep a close eye on the Ohio house and Opers. Opers would love to ram this through before the general assembly leaves for the holidays. I just hope they keep their word and allow opposition testimony after the holiday break in Jan.

  5. Len says:

    Carraher needs to go. She is no friend to public employees…retired or otherwise. All of her high paid cronies need to follow her out the door.

  6. Michael Roberts says:

    I agree interest rates are going to be much higher along with increasing wages and inflation is going way up, just like the 40’s, 70’s, and 80’s. The 40’s were result of World War II. However most of us alive during the 70’s and 80’s remember inflation of 10 percent a year in some of those years. Come on, OPERS and this women have done a terrible job with our investments. And now just when inflation is ready to soar, she wants to reduce our COLA. The economy is booming, but for most of us getting older or with the medical conditions that come with age, we are unable to return to work.

  7. Retiree says:

    Question for anyone of you who knows….
    Who controls whether or not Karen Carraher stays in her job? Who is her boss? I’d really like to know because when I saw this morning that my deferred comp balance has doubled since retiring 6 years ago I can’t fathom how OPERS is doing so poorly with their money that they have to cut our COLA. I’m no market whiz and much of my account is in the guaranteed return which is pretty low. Even with that and the fact that I haven’t contributed to it in 6 years it has still doubled. If OPERS is really hurting in their investments then she needs to go. Now.

  8. Len says:

    If Carraher and her cronies are allowed to perpetrate this travesty at the expense of those whose hard earned salaries have subsidized their bankrolls their is no telling what the fate of current and future retirees will be. They have shown us their true colors and I fear that under their leadership our futures look extremely grim. It needs to stop now.

  9. Michael Roberts says:

    I keep saying that, she was unresponsive to anything or anyone that spoke at OPERS speaks. Cut double dipping off as California has and many states I said because as other states say its draining their pension systems and besides it would open up thousands of jobs for new OPERS members, won’t help she said. Put a cap on wages earnable toward a pension or cap COLA at the average yearly wage in Ohio at 3 percent, less percent if you get more in pension, won’t help she says they will ditch the traditional plans. The women presents no figures but nothing would help except cut our COLA. Stock market up over 30 percent in one year and they invest in poor investments and cry while paying billions out to hedge fund managers and 50 people working for OPERS making as much as the Governor of the State of Ohio. We want answers and her answer is cut COLA period. Google search and see what other states have done and maybe they might have to cut COLA, but they need serious reform in the pension system. The 275,000 a year women will get a huge pension and QEBA which is a rule they put in so that anyone with pensions over 220,000 will get paid even though IRS rules say they don’t have to pay over that. That extra money for people to get that big pension is snuck out of the pre medicare health care – Here you go an article from our representative on the Board – Steve Toth and QEBA – http://www.dispatch.com/content/stories/editorials/2014/07/20/drop-opers-fund-for-highly-paid-retirees.html – this is a 2014 article so of course the pension amount this high earners can collect has increased. They don’t have to pay , remember that, sneak around and ignore IRS rules so that you can drain the pension fund paying out these high pensions.

  10. James says:

    The assault on public pensions and entitlements, has commenced in earnest, thanks to the Republican majorities in Congress and our State Legislature. PAYGO will drastically slash Social Security and Medicare/Medicaid, when the massive deficits occur, an additional 1.5 trillion dollars, caused by the so called tax reform. COLA will now be based on a new inflation gauge called Chained Consumer Price Index, or C-CPI-U, which ultimately reduces retirees benefit$, even more than what’s proposed in the pending legislation. Voters, wise up….rise up. Let’s chant in unison on Election Day, “I’m mad as hell and I’m not gonna take this anymore!” Repeat….repeat….repeat~

  11. Donna says:

    Right. Who is the watchdog for OPERS and Carraher? Who investigates their finances and investment strategies? I agree with Len. Carraher and her high paid cronies need to be shown the door.

  12. Donna says:

    I would also like to add that we need to show OPERS that retirees are not doddering fools. We are educated, informed and a force to be reckoned with. It is our hard earned money that they have been entrusted with and we will not let a handful of overpaid executives take it away from us.

  13. Sherry says:

    I am seriously worried even though I am still working and paying into OPERS. Plus, years ago I rolled funds over into their Additional Annuity Program (which was supposed to receive the same COLA as the defined pension plans). They have total changed the Additional Annuity Plan, and now, I feel like I’m in real trouble. My pension and my additional annuity may become stagnant. They will only increase our COLA if BOTH of the following conditions are met: 1) The % increase in the CPI equals or exceeds 3% for 3 consecutive years immediately preceding the year of the increase, AND 2) Based on the retirement systems most recent annual actuarial valuation, the ratio of the system’s assets to it’s liabilities exceeds 100%! Well, OPERS surely better hire someone who can invest wisely (better that those that we currently have); otherwise, we will never reach #2. I wish there were more that we could do to prevent OPERS from moving forward with this. Why don’t they increase the mitigating rate for those who work at public institutions, but decided to go with ARP instead of OPERS. A promise, is a promise, is a promise — isn’t it?? I agree with “Retiree” — Karen Carraher needs to go, and so does the current OPERS Board of Trustees who vote in all of these things that change the lives of so many retirees.

  14. Sherry says:

    Why is it that OPERS retirees have never organized a class action suit?

  15. Retiree says:

    PERI, just an FYI… the email you sent out went to my spam mailbox. I hope you’ll be sending the info by regular mail also in case many people don’t see the email.
    Thanks for the information. I’ll be calling my representative tomorrow.

  16. Rick says:

    I am having my family members write their Reps as well to show we also have the backing, and votes of family as well, I would like to see others do the same

  17. Rick says:

    Have your family members write their representives as well, it shows we have a lot of support and amplifies the voter impact

  18. Marc says:

    I urge you to discuss that the OPERS cpi caculation is not compounded in the bill, that the cap at 2.25 percent cap was last a minute change without discussion at the board meeting, that OPERS staff argues falsely that the existing COLA method exceeded the cpi-w inflation the majority of time over the last 30 years, (since it is not componded).

    You should present examples using a base of $100.

  19. Jim says:

    I hope that we can get OPERS out of these expensive, high-risk hedge funds before we go the way of Kentucky’s retirement system

    https://www.huffingtonpost.com/entry/kentucky-pensions-hedge-funds-lawsuit_us_5a454dd8e4b06d1621b7b721

    • Michael Roberts says:

      Sounds a lot like Ohio. Stock market up over 30 percent in one year and they are talking reducing COLA’s. A total and complete investigation is in order and not by the Board. Impartial, non-political comprised of a citizens committee to oversee this audit. Way too many hands in the pot.

      • Len says:

        Great idea Michael. What would it take to initiate such an audit?

        • Mark says:

          The ohio attorney general I suspect could initiate an audit however with Gov. appointed OPERS board members, other Republican. OPERS members & 8 out of 10 Republicans in the Ohio Retirement Study Council, etc. they likely aren’t going to investigate themselves manipulating the system. Its a rigged game with peoples lives on the line. My medical insurance went up another $1200 this year additional due to premiums not to mention added deductibles. They aren’t going to be happy until there are ONLY rich & poor people.

        • Michael Roberts says:

          What it would take to initiate an audit is to put doubt in the minds of the legislators and shine the light of day upon them. Such as the high wages of OPERS, 50 people making more than the Kasich. Their investment in money losing investment such as hedge funds and the massive fees paid to those hedge fund managers who are losing us money. The lack of any of cuts if this fails such as cut QEBA, double dipping, cap on wages eligible toward pension, cap on COLA for high pension earners, say average yearly wage in Ohio, around 55,000 at 3 percent. They have a lot to hide and need the sunlight upon their dealings. So keep writing and calling the legislators, tweet them also along with e-mail. It would help if PERI listed the link to all representatives and Ohio senators along with the info to write, tweet, email. I have twitted quite often since it is easy, but also e-mails and calls. Remember government fears sunshine like this organization. They fought not to be included in Ohio checkbook – so we can see what salaries are paid and expenses. And no crying hard times, they give a hoot about your hard times, they only care about their salary and that they keep making the big money. That is why we need to keep pounding their shortcomings home, because they don’t care about how you’re going to pay your bills next month. Make it about their operation and keep reminding them we could privatize them and not look back.

  20. Jerry M. says:

    Just food for thought, Since Karen Carraher has been Exc. Dir, Retirees have witnessed reductions in benefits and a rise in health care costs. The Opers board is the reason she is Exc. Dir. It is time for changes to the Opers board! When retirees receive board election ballots in the mail, Take time to carefully vote and mail the ballots back in. It is important that retirees carefully vote for board members and take the time to do so. We also have a statewide election this November, Your choice of Governor will also impact Opers board members also. The governor also has appointees on the Opers board. Also, carefully vote for members of the general assembly who stand up for retirees this November!

  21. Donna says:

    With the Dow Jones topping 25,000 and talk of another interest rate hike, do you think PERI will have enough ammunition to stop the proposed cuts to COLA?

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