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Union: Pension proposal ‘slippery slope’

Governor suggests reducing employer contribution from 14% to 8%.

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By Laura A. Bischoff, Staff Writer Updated 10:09 AM Tuesday, June 23, 2009

COLUMBUS — Ohio wants to write an IOU to its 60,150 state workers for contributions to their pension accounts for the next two years by delaying more than $350 million in contributions to the Public Employee Retirement System.

Gov. Ted Strickland is proposing reducing the employer contribution to Ohio PERS from 14 percent of pay to 8 percent during the next two years, then paying back that money during 10 years, beginning in 2012.

“We are crunching the numbers. We’re trying to determine the impact of this,” said Ohio PERS spokeswoman Julie Graham Price.

No actuarial analysis has been done, so the impact on the pension fund is unknown.

Public pension contribution rates are set in state law, not through collective bargaining agreements in Ohio. Currently, the state puts in 14 cents for every $1 of pay. That rate would drop to 8 cents under Strickland’s proposal.

Sally Meckling, spokeswoman for the Ohio Civil Service Employees union which represents 35,000 state workers, said, “This is a dangerous road to start down. It’s a slippery slope to start down. Other states have started down this road and have been unable to return, to pay the money back.”

To help in the budget crisis, state workers have already agreed to wage freezes and 10 days off without pay in each of the next two years.

Ohio’s five public pension systems, including OPERS, have been methodically studying what changes they need to make to keep the retirement funds solvent. “This just kind of pulls the rug out from all those deliberations,” said Aristotle Hutras, director of the Ohio Retirement Study Council.

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