PERI Continues to Discuss COLA Issue With OPERS

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September 15, 2017
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September 29, 2017

PERI Continues to Discuss COLA Issue With OPERS

After two meetings with OPERS Executive Director Karen Carraher, it appears OPERS is resolute in its desire to improve its funding status with modifications to the COLA.

The OPERS Board was presented with several options to consider at its meeting last week.  They include several combinations of possible caps and/or freezes to future COLA payments.  Some of these options were developed as a result of feedback OPERS received from 70,000 retiree surveys.

More details are available on the OPERS website- www.opers.org. Additionally, the PERI website posts OPERS news feeds on our news page.

The PERI board of trustees will meet on October 24th to discuss OPERS plans and take a formal position on their recommendations.  We will report our official position and on any action the board  suggests PERI members may want to take on October 25th.

27 Comments

  1. Jerry M. says:

    If Opers is resolute to adjust retirees c.o.l.a., I hope that p.e.r.i. will consider legal action if justified, to try to stop this. It is the responsibility of opers to make better decisions as far as investments etc. to keep the pension system solvent. I hope this is taken into consideration when the p.e.r.i. board meets on Oct. 24. Opers always wants the retirees to make sacrifices to address funding issues. I never hear opers say that their employees should also make sacrifices to address any funding issues. It is always the retirees that must sacrifice. Just food for thought. I do hope what ever plan opers submits to the general assembly will be scrutinized to the most extreme level.

  2. Maria says:

    Will the two retiree OPERS board members Steve Toth and John Maurer be at the OPERI annual meeting in October? I would like to hear their comments to fellow retirees concerning the COLA changes.

  3. Donna says:

    I hope PERI does everything possible to fight the cuts to COLA. It is very easy for those 6 figure employees to make that decision. Let them try living on some of the pensions we retirees are living on. My health care premiums have skyrocketed. Now they want to come after me for more. We were promised the simple 3% COLA. It is law. I believe we pay the executive director $400,000 annually. Let her figure out another way to strengthen the system. She should be a better steward of our hard earned money. Leave our COLA alone.

  4. Donna says:

    If OPERS is resolute in its decision to reduce COLA, then we retirees must be resolute in our actions to fight it. They already got their pound of flesh from us by drastically reducing our health care benefits. We can’t give in.

  5. Ginny says:

    Will the PERI Board meeting be after OPERS has already made its decision on the COLA for retirees? Sounds as if PERI, like retirees, has been blindsided by this resolute position of OPERS. Once an organization becomes as you say, resolute, significant changes continue to be the norm and no reasoning or bargaining will be considered. PERI and retirees must take a bold stand on the COLA issue with expediency NOW!

  6. Susan Giga says:

    Hi. Can anyone tell me if there has been a time , in the past, when either the OPERS board and/or the Ohio legislators have approved a change that negatively impacted people who had already retired? If so, when was that and what was the change? Thanks.

  7. William Hamilton says:

    OPERS is setting a bad precedent in its resolve to adjust the COLA promised to retirees . Changing the anticipated benefits breaks a trust between Ohio Public Employees and the retirement system in general. Many years ago, I , like many others , weighed the uncertainly in the private sector with what appeared to be greater guaranteed income during our retirement years in the public sector. Now I know this to be wrong .Creating uncertainty for future income while in retirement years definitely adds stress during these “Golden Years”. The leadership in OPERS continues to diminish its support to it’s retiree’s in favor of believing their short termed solutions will fix long term projections. Other options should be evaluated and what was promised to retirees left in place so as to protect what was intended for it’s current retirees.

  8. Donna says:

    I agree with Ginny. It has only been five years since the huge sweeping changes were made that cut into our take home pension amount. Now they are coming back for more. We need to stop this now or it will never end.

  9. Mark says:

    I’ve seen more than half of the posts on OPERS Facebook page removed that were critical of this. Postings on their website board were never published. We have had massive increases in health care deductibles. The providers we do have such as Dental routinely deny coverage 3 or 4 times in a row before they will approve the same service–hoping our doctor will give up submitting it again. Yet the OPERS board retired on 6 figured salaries has no issue with making it worse for us. PERI seems to a shrinking violet to all of it, unable or unwilling to just say no.

  10. Dale Harmon says:

    ORC 145.561 is the vesting section of Ohio law. It states that the the retirement allowance, annuity, pension, or other benefit is fixed at the time of granting such retirement allowance. Effective 1/7/2013 a subsection “B” was added. That subsection specifically removed the COLA from the vested right. By inference, since subsection “B” specifically removed the COLA for those who retired after 1/7/2017, it was part of the vested right for those who retired prior to 1/7/2013. Further, the COLA for those retirees has to remain fixed at 3% simple because that was the rate fixed at the time of the granting of retirement. The Ohio Constitution prohibits retroactive laws. The US Constitution prohibits after the fact laws and state laws which interfere with contracts.

    Any change in the COLA for those retirees who retired before 1/7/2017 would probably be illegal. The enactment of the change in ORC 145.561, effective 1/7/2013, to allow changes in the COLA is both an acknowledgement that the COLA is a vested right for those who retired prior to 1/7/2013 and that it would be illegal to change that COLA retroactively.

  11. Jim says:

    If you look at the latest OPERS release, “OPERS Releases COLA Essentials”, they start off with a deceptive graph. They show average inflation as a level line, which is correct. Then they show our simple COLA as a level 3 percent line. When, for accuracy, the line should go from 3 percent to 1.6 percent over the 30 years shown. This depiction would then accurately show we are losing purchasing power.

  12. Jim says:

    I posted this comment on the OPERS’ website also, but they tend to make me await moderation right before they delete my comment entirely. Therefore I’m posting it here too:

    I used the underlying CPI-W (Social Security COLA) in your graph to do the actual computations for 2 retirees retiring in 1986. One under OPERS and one under Social Security. Each receiving $1,000 each month. The compounding Social Security recipient’s benefit exceeds the OPERS’ simple COLA formula throughout this timeline. At the end of your graph (2016), the OPERS retiree would receive $1,900 each month while the Social Security recipient’s monthly benefit would be $2,160 each month. This clearly shows our loss of purchasing power.

    • Donna says:

      Thank you Jim. OPERS continues to deceive.

      • Ginny says:

        Jim,

        Like you, there are many intelligent retirees who can reason and explain this issue with clarity. I only hope PERI can make the retiree’s thoughts known to OPERS and the legislature before it is too late.

    • Retiree says:

      Jim, your comments are so spot on. I really hope that someone from PERI is taking note of this. OPERS is definitely trying to deceive us by manipulating the numbers and hoping the majority don’t figure it out. This is not a small thing they’re trying to do to us by changing our COLA. It will end up being a significant change in our benefits over the long term. I really do hope that PERI will fight for us. OPERS will undoubtably have quite a presentation ready for the general assembly when they decide (which I’m sure they already have) what exact change they plan on making. We can’t just sit back and do nothing. I do not want my COLA changed in any way and I need to know what PERI is going to do about it.

  13. Dean says:

    When one considers OPERS”s COLA analysis, One has to wonder if the OPERS Board believes the retirees are mathematically incompetent and unable to do the math.

    • Ginny says:

      Yes, Dean, you are right, they underestimate us. Also, because retirees are aging. OPERS assumes they can push their agenda through with ease because retirees don’t have enough clout and leverage to fight their efforts. Will PERI fight for us on this issue, or is it a done deal?

  14. Hilou says:

    PERI doubled their annual dues in 2017.
    OPERS wants to deny retirees their 3% COLA.
    It is time for PERI to stand up and back the retirees, and earn the dues they demand.

  15. Donna says:

    My heath insurance premium just doubled. In the past five years they have increased exponentially. PERI has got to help us fight to keep our COLA, which was passed into law, intact. My pension check shrinks every year.

  16. Hilou says:

    What did PERI do with the access to ” OPERS Proposed Changes To The COLA August 8, 2017″?
    There were 192 posted comments on that blog, which has now disappeared as of 10/4/17.
    There were a lot of important comments there, and people who now enter this blog should have access to that information.

  17. Hilou says:

    To readers of these comments who were not previously following this discussion prior to 10/1/17.
    There is a previous PERI comment discussion that you might find informative.

    Here is the link:

    operi.org/opers-proposed-changes-cola-august-8-2017/

  18. Rick says:

    I also want to hear from PERI as to exactly what are they doing and plan to fight this. Do we have attorneys or should we hire our own? Are any counter proposals being offered to minimize the impact on us. OPERS is moving right to the most draconian cuts possible. Personally I don’t want OPERS to have the discretion to pass out five dollar raises. I need some predictability.

  19. Hilou says:

    Hilou says:
    October 6, 2017 at 1:18 pm
    With Ohio having 99 Representatives and 33 Senators, I had asked bothe OPERS and Peri who retirees should be writing to with our objections to the proposed COLA changes by OPERS. Neither OPERS or PERI responded to my question.
    So I did some research on my own and found out the following information, and I am posting it here in case some other retirees might find it useful.
    The Ohio General Assembly oversees all the Ohio Retirement Systems, which includes OPERS, through the “Ohio Retirement Study Council”.
    This is the “committee” that would initially receive any proposed legislative changes that OPERS would want acted upon.
    The Ohio Retirement Study Council has nine voting members of council.
    The “voting members” are who retirees should be writing to, calling, or E-mailing, voicing our concerns.
    These voting members are as follows:
    State Representatives:
    – Kirk Schuring, Chairman – 614-752-2438 – E-mail = rep48@ohiohouse.gov
    – Rick Carfagna – 614-466-1431- E-mail = rep68@ohiohouse.gov
    – Dan Ramos – 614-466-5141 – E-mail= rep56@ohiohouse.gov
    Senators:
    – Steve Wilson, Vice Chairman – 614-466-9737 – E-mail = wilson@ohiosenate.gov
    – Edna Brown – 614-466-5204 – E-mail = brown@ohiosenate.gov
    – Jay Hottinger- 614-466-5838 – e-mail = sd31@ohiosenate.gov
    Governor Appointees:
    – Lora Miller – could not locate her E-mail yet
    – Dr. Thomas Pascarella – could not locate his E-mail yet
    – Third Appointee position currently vacant
    There are four non-voting members also. They are the heads of each of the retirement systems. Karen Carraher is one of them.

    The mailing address for the nine voting members of the Ohio Retirement Study Council is as follows:
    30 East Broad St.- 2nd Floor – Columbus, Oh 43215
    Phone = 614-228-1346
    Fax = 614-228-0118

    These are the nine voting members who will be involved with any legislative changes that OPERS wants to make, and these are the people I am writing to. At this point I see no value in writing to any of the other 30 Senators or 93 Representatives.

    Reply

  20. James Hixson says:

    It would be nice if OPERS or Social Security would eliminate the Windfall Provision Law. I feel that since state employees who paid into both funds as private citizens and state employees, we should get the full benefits we would get if the provision was voted out. This would be a solution to the COLA issue. As an example, I worked for the State of Ohio 16 years, and worked in the private sector since I was 16 about 20 years. I only get about 50% of my possible retirement amount from OPERS, plus less than half of my amount from Social Security. What happens to all the money I paid into Social Security? If I were to receive all of the Social Security benefits, along with what I now receive from OPERS, I wouldn’t have to worry so much about COLA raises and higher cost of living.

  21. J Neal Perrine says:

    My wife and I are travelling to the annual state PERI meeting tomorrow. How will OPERS answer the apples and oranges COL comparison–OPERS retirees and the general public? I have taken a $1200/year reduction in my retirement income(part B help eliminated). My spouse is no longer eligible for a health care premium assist(costing me ? future thousands of dollars)
    OPERS has beaten us over the head with the mantra “health benefits are not guaranteed” Well, I have a guarantee for them. It’s a guarantee that most of us will be dead and buried before OPERS says in 25-27 years from now ” We really didn’t need to squeeze those old timers so much way back then. Let’s give them a little boost”. We’ve been told “It’s up to the state legislature to decide on this issue”. Is there any legislation that can rule for sensibility and compassion and against stupidity?

  22. Dean says:

    After attending the PERI meeting, it is apparent OPERS knows their COLA chart is bogus. They are just trying to convince those who don’t understand inflation so they can reduce objections being sent to the General Assembly.

  23. RP MacKenzie says:

    Ohio’s legislative committee on retirement is meeting soon concerning OPERS COLA issue.
    I just sent 6 senators and representatives this letter.

    Dear Ohio State Senators and Representatives:
    Recently I read and article about Michael Sabia, head of Quebec’s largest pension fund. This guy is a great public servant who truly looks out for his wards, namely other public servants in regard to their jobs and their positive retirement outcomes.
    “When work begins on a new, 42-mile commuter rail system here this year, it will also be a groundbreaking moment for Michael Sabia, head of Quebec’s largest pension fund.

    Not only is his fund, Caisse de dépôt & placement du Québec, financing 51% of the 6 billion Canadian dollar (US$4.8 billion) project, but Mr. Sabia has structured the deal so it will manage the building and operation too.
    The project has also grabbed the attention of U.S. officials from cash-strapped states who have noted that the Quebec government had to put up only C$1.3 billion—just about 20% of the project. Mr. Sabia has met with half a dozen U.S. governors in the past year to explain the train deal and promote Caisse’s model for U.S. public works.
    (Since Mr. Sabia was hired)…
    the fund’s assets have more than doubled since it reported net assets of C$131.6 billion in 2009. It has delivered an annualized return of 10.6% in the past five years.”
    Excerpts from the Wall Street Journal Tuesday, October 10, 2017.
    It’s quite a dichotomy isn’t it? One system is fortunate enough to get a leader with vision who is not only helping his constituents but his entire province and country. Meanwhile OPERS, the 12th largest pension system in the United States, gets saddled with “executives” whose only objective is to follow in the footsteps of our lesser Ohio pension systems. STERS and SERS administrators got away with COLA cuts. Why not stick it to OPERS members too.
    The information that OPERS is feeding its members and you is biased and false. Take the claim that we have been outpacing inflation for years. Since 1914 until present there has only been 11 years reported with a negative inflation number. Historically for most years over time there is inflation. In fact in the last 50 years the mean average for inflation was 3.22%. The 3% COLA promised to retirees is based on their original retirement benefit and does not compound. Therefore, it diminishes each year for the retiree. For retirees that retired before 2013 this would equate to a 2.4 % allowance after 10 years , and 1.9% after 20 years.
    The survey put before our noses smelled of bias and a predetermined outcome. Questions 10, 11 and 12 stink mightily of this. All three deserve a “none of the above” for an answer. It’s unfortunate that so many out of 70,000 people felt compelled to dignify the choices given to this disgusting set of queries. The COLA survey is nothing more than a device to be used to renege promises concerning COLAs made by OPERS and posted in OPERS Quarterly Newsletters during the OPERS Healthcare System change starting in 2012.

    Don’t let these administrators ram their predetermined conclusions from an unsound survey down the throats of present and future retirees. Ask them for data, real data. Make them get you demographics, future Ohio public employment trends, the funding base for future payments and what they are doing in regard to investment decisions that make Ohio and OPERS stronger. Get data from OPERS members and retirees. This deserves more than one hearing. Get well rounded information and force the OPERS administrators to drop this exercise or present a truthful and palatable plan that is fair and equitable to all OPERS members. In doing so, perhaps some leadership will emerge from OPERS that is more more like Mr. Sabia’s of Canada.

    Patrick MacKenzie

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