OPERS Proposed Changes to the COLA August 8, 2017

OPERS Approves Plan for Surviving Spouses
February 15, 2017

OPERS Proposed Changes to the COLA August 8, 2017

PERI is aware of the proposal by OPERS to make changes to the cost of living adjustment (COLA). While we are not happy with this development, rest assured that PERI’s Board of Trustees and staff are working to evaluate OPERS proposed changes. Our Board will be meeting soon to discuss these proposals and will adopt a response.

We understand that OPERS will be sending a survey during the week of August 14th to retirees asking for their opinions on changes to the COLA. We strongly urge every member to respond to the survey and to include comments about how any reduction in the COLA would personally impact you. We encourage you to visit our website frequently for any updates on this breaking issue.


  1. Bob says:

    I don’t know about anyone else, but I never received a survey in reference to a
    change in the COLA. As an OPERS retiree, I assure you that I would have replied
    to a survey on that subject. We gave up a lot on the health care front and were
    told that would stabilize our OPERS finances, now this?? I think we need an independent

  2. Donna says:

    I agree what Bob said. 100%

  3. Jim says:

    I was told that the survey will be coming in approximately 7 days. I agree with Bob we have given up a lot already. More cost for healthcare spouses removed and now this new proposal. Our 3%is based on our retiring salary. After a few years it is actually only 2.5% and keeps going down. It does not compound. And if inflation returns we are all in trouble.

    • Jim says:

      And how come we keep giving back billions and the system is still only 80% funded. What is going wrong? The stock market is a record high.

  4. Jim says:

    One last thought, although OPERS reports retirees are living longer, Bloomberg Business News reported yesterday that we are not… https://www.bloomberg.com/news/articles/2017-08-08/americans-are-dying-younger-saving-corporations-billions

  5. RP MacKenzie says:

    We on a world scale are at the bottom of descending interest rates. Our own Federal Open Market Committee has raised rates twice and will do so again in December. The FOMC will soon start selling securities from their portfolio which will drive general interest rates up even faster. These actions alone will have a deleterious effect on our standard of living. The price of a barrel of oil has also reached its nadir and is heading higher. Any commodity tied to the price of transportation or comfort conditioning (heating & cooling) will go up.

    “Decades of low inflation” are behind us not in front of us. If this executive director is allowed to carry out this blunder, we have only ourselves to blame.

  6. John says:

    Does anyone know the process OPERS would have to follow to reduce the COLA for folk with 30 years OPERS credit? They mentioned going to the General Assembly. Do they have to change a law?

  7. Roy says:

    More current retires should speak up especially since this is the last year OPERS is providing any health care dollars for spouses. Being seniors our cost of living is going up much faster than anticipated when we originally retired due in large part to changes in our health care coverage. Let’s not forget that 3% is based on our retiring salary, certainly not the same as today’s salaries. So those of us who can least afford this financial hit will be expected to take it. Had we known these road blocks would be thrown in the way would we have retired when we did? Should we be expected to go back into the workforce to make up the difference?
    BTW here is some of the bloomberg article mentioned above, note that businesses are decreasing their retirement liabilities due to shorter life spans.
    “In 2015, the American death rate—the age-adjusted share of Americans dying—rose slightly for the first time since 1999. And over the last two years, at least 12 large companies, from Verizon to General Motors, have said recent slips in mortality improvement have led them to reduce their estimates for how much they could owe retirees by upward of a combined $9.7 billion, according to a Bloomberg analysis of company filings. “Revised assumptions indicating a shortened longevity,” for instance, led Lockheed Martin to adjust its estimated retirement obligations downward by a total of about $1.6 billion for 2015 and 2016, it said in its most recent annual report.”

  8. Frank Zangara says:

    I urge all of my fellow OPERS to fight these “proposed COLA cuts”. OPERS is in great financial shape there is no need. The OPERS Director seems to think we retirees
    need to take a hit but as you all recall if you retired prior to 2013 you were to continue to receive 3.0% COLA each year. She also notes the low inflation environment of the last few decades.
    That indicates that low inflation is behind us and higher inflation is in our future, I imagine the more assets in OPERS the better it look for the OPERS Director but her job performance
    and legacy is not our concern. When ask how the COLA revision would be accomplished she notes there are several possible scenarios and or combinations of scenarios but interesting enough she also states the savings would be $2 billion dollars…now tell me if you do not have a plan already determined how can estimate the savings? I think they know exactly what they
    plan on doing. Also please complete and return surveys…they will be mailed the week of August14th. OPERS director also mentioned generational equality but how can retirees take the hit we were told we were grandfathered in the last changes in health care as nice as that sounds we are paying more for less. The working members need to take the hit they can always choose to work longer. Also they can limit the start of COLA until 3-5 yrs after retirement or discontinue Defined benefits completely and offer new employees 401k’s if they don’t like it they can find work elsewhere. Further the CPI is not a good gauge of the cost of living. The federal government has an incentive to low ball the figure every check to every social security. military and I could go on.. they want to keep their expenses lower. Also if we agree to a COLA freeze we may never get another increase in our benefits. Over 30yrs this change can mean hundreds of thousands of dollars lost to each and everyone of us. Go to http://www.hughcalc/cola.org and use the calculator to determine just how much money you stand to lose. Do not allow it to happen,call OPERS fill out your survey and return it, call your legislators and consider legal action. Get vocal on social media and write editorials to the newspapers. This is the fight of your life so fight as if your life depends on it because your financial future well being does. Do not let OPERS back out of their obligation to us. Remember that is our money.. they work for us and not the other way around. Get mad as hell and do not take it anymore. They refer to themselves as a trusted partner. What a joke they have did nothing in recent years to earn or deserve our trust.

  9. William H Hamilton says:

    Having been a member of PERI since my retirement in 2000 and after 34 years of public service I ,like all retirees am concerned and disappointed in the recent OPERS Directors letter. Over the years OPERS has published Benefit documentation which has always stated to our membership ,” A retiree who has received benefits for 12 months WILL receive an annual cost-of-living adjustment.” Even the posturing the a COLA would be eliminated contradicts long standing policy. The letter suggests further that different age groups ( retirement groups) would be subjected to different COLA benefit rules depending on retirement dates. This is not a well informed policy decision if this is allowed to become reality. All retirees,in my opinion should be guided by the same policy guidelines . OPERS now appears to want to make a case that our oldest retirees somehow did not deserve what was provided based on their conclusions about historical Consumer Price Index. These inflation rates are available for all retirees and PERI Reps to closely review. It is rather difficult to make any argument that the CPI index is flawed (and it is) , but this has always been the benchmark data to report inflation for most economic planning. However when you take the CPI data and look at it closely some things are evident.

    1. Since 1914 until present there has only been 11 years reported with a negative inflation number. Point is historically most years over time there is inflation. In fact in the last 50 years the mean average for inflation was 3.22% . So it appears the historical wisdom of OPERs recognized this some years ago. It is true as pointed out in the OPERS Directors letter that reported inflation numbers are down . Over the past 25 years the mean average is 2.3 % and past 10 years 1.76%.

    2 , On average there continues to be inflation reported and slightly reducing over time.

    3 , When looking at inflationary changes over the years there are significant swings which are driven by historical events but also documented changes in the formulas used in different times to report a national Consumer Price Index. There is significant speculation represented about impact and the forecasting with inflation. Any serious investor knows this all too well.

    In conclusion, I would encourage PERI to secure the continuance of a COLA benefit for all retirees as well as future retirees who have given their public service. While achieving this ,care must be taken to not compartmentalize retirement groups based solely in our economic swings over the past 10 years if one also concludes like I have that the historical data proves otherwise.

  10. jeff owens says:

    The problem is and always has been giving free insurance to spouses who never paid into the system, they should have pay their way like it or not

  11. jeff says:

    The problem is and always has been giving free insurance to spouses who never paid into the system, they should have pay their way like it or not

    • William H Hamilton says:

      Jeff that problem has now been remedied. Spouses are no longer covered nor is OPERS brokering much in the way of health insurance thus the HRA accounts which are funded at the present.

  12. Ginny says:

    Retiree increase in healthcare costs, elimination of reimbursement for Medicare B, now reducing or eventually eliminating COLA. What next… decreasing monthly benefit payments? How does one fight these never ending changes by OPERS that impact retirees lives? We must all fight this, including a strong voice from PERI.

  13. Dianne Rabe says:

    My husband worked for the county for 19 years and purchased time with certain promises as to his pension. Along with accepting OPERS, he gave up half of his Social Security and any claim to mine. Kerry did his part; it is time for OPERS and the state of Ohio to do theirs.

    There were comments during his work-life that there were no promises as to healthcare. There were no such comments regarding the COLA. I, frankly, do not care if OPERS has financial problems. Don’t turn your problems into mine.

    Our pension is not charity. We and our employer put money in with state guarantees of a certain outcome. If there is money to expand Medicaid to healthy adults who do not work, there is money to back up any shortfalls to the pension system.

    When my husband first retired in 2010, OPERS was one of the strongest pensions in the country. To remain strong, cuts were made in 2012. Already in 2017, you’re considering additional cuts? I know that other, weaker plans have not made cuts, the Cincinnati Retirement System, Connecticut’s state fund, and California’s fund. It is unfair for Ohio’s pensioners to take multiple hits when a bailout of other systems is obvious in the making.

    As you can tell, I am not happy about this.

  14. Carolyn
    Cuting our cost of living is not good. As it is when I receive my percent I have notify Social security and then the deduct two third of that amount from my social security pension.

  15. John Pallay says:

    Draft of letter I plan to send to OPERS Executive Director Karen Carraher . . .

    I am writing to raise several questions about the proposed ending of the 3% COLA. I can see how, particularly in retrospect, you see the 3% COLA as overly generous.

    It might help in your deliberations to consider issues raised by my situation:
    I retired at the end of 2012, with the 3% COLA being a primary factor in the timing of my retirement. I, like many other state employees, did a lot of personal number crunching in late 2012. My numbers showed that I would be ahead to retire sooner than I had planned, although this meant a loss of wages that I would have earned if I had continued to work, and a loss of a higher pension had I continued to work. It also meant that I was taking a risk that inflation would not continue to be under 3%. I also lost money from Social Security since I was drawing Social Security while working, but my check was reduced by the pension offset once I retired.

    Now you are considering taking back this 3% COLA, which is in effect a retroactive change in the terms of my pension. However, I cannot go back and retroactively retire at a later date to compensate for this. Pension planning has to consider financial projections for however long the retiree may still live.

    So my questions are: Can you ethically take back a 3% benefit, which a retiree had relied on you for in long-term planning? How would a 3% take-back hurt the OPERS reliability image among younger state workers and prospective state workers? If it is right to take back the 3% COLA, why didn’t OPERS do this in 2013? If you don’t take back the 3% COLA now, is it going to continue to be a threat hanging over the heads of current retirees for the rest of their lives?

    If you look at retirement rates, I think you will find a bump-up in numbers at the end of 2012. This bump-up is a group that was looking at the 3% versus non-3% question, and this is a class of people who would be particularly disadvantaged by a take-back of the 3% COLA.

    Thank you for your consideration.


    John Pallay

  16. Jim says:

    John’s letter is a good example. His situation is like all of ours. When we retire, after one year, we receive a 3 percent increase. Each year thereafter we receive that exact same dollar amount. So after 5 years, that dollar amount is a 2.6 increase. And if you are fortunate enough to live 20 years, this dollar amount only provides a 1.9 percent increase. Social security does their COLA on your current retirement, not what you started off with 20 years earlier. With our healthcare costs soaring, we will all be in a fix

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