(December 18, 2017) The federal tax reform package to be voted on later this week will not have a provision that would have cost OPERS and other public retirement systems millions of dollars in new taxes. The Unrelated Business Income Tax (UBIT) proposal originally in the U.S. House passed version of the tax reform package would have, for the first time, applied this tax to public sector retirement systems across the country such as OPERS. Investment transactions executed by the retirement systems have been tax-exempt but the new rules would have allowed for the tax to be charged and collected by the federal government.
PERI along with OPERS and other public retirement systems here in Ohio and in other states lobbied the House and Senate Conference Committee reviewing the tax bill to strip the provision from the final bill reported out on Friday. The compromise bill will be voted on by Congress and sent to the president yet this week. The provision, had it been included in the final report, would have subjected OPERS to as much as $40 million or more in new taxes every year and placed an additional burden on public sector retirement systems that in our opinion was completely unnecessary.