(January 25, 2019) Karen Carraher, OPERS Executive Director, met with PERI’s Board of Trustees this week to discuss major challenges facing OPERS’ health care fund. The fund has been shrinking as a result of a combination of costs associated with coverage for pre-Medicare retirees and the lack of investment directed from a portion of active member’s employer contributions.
OPERS has been and continues to be committed to providing a meaningful health care benefit to retirees although it is not statutorily mandated like the pension fund. OPERS made a commitment to continue to fund health care and provide for its long term solvency back in 2012. Their plan included a contribution of four percent of the fourteen percent employer contribution annually and to count on an annual expected return of at least four percent on the health care plan’s investments.
Unfortunately, OPERS has been limited in the amount of the employer contribution they have directed to the health care fund. Since their adoption of the 2012 health care preservation plan, only a maximum of two percent has ever been allocated to the fund in a given year. In fact, during the most recent two years, none of the employer contribution has been directed to the healthcare fund. The full four percent has been used to support the pension fund.
OPERS made a presentation of the fund’s financial challenges to their Health Care Committee and was directed to look at a variety of scenarios to determine next steps. This will occur over the course of 2019.
PERI agrees that this important benefit deserves to be preserved and that all options should be explored to ensure the best possible outcome. The first step in this process is for all retirees to be aware of the current situation. To this end, PERI believes it is important to be properly educated on the issue and has invited OPERS to present on this topic at upcoming PERI District Annual Meetings in the coming months. We urge every PERI member to attend these meetings and to stay informed on the issue through PERI updates here on the website and through the PERI Perspectives newsletter.
PERI will continue conversations with OPERS to ensure the best possible outcome is achieved for our members.