“We are just being proactive and trying to be good fiduciaries of the system,” said OPERS spokesman Mike Pramik. Ohio law requires public pension funds to have enough assets on hand to meet their liabilities within a 30 year window. If OPERS doesn’t take action, the system would be out of compliance with that 30 year requirement.
The OPERS cost of living allowance depends on when the worker retired. For those who retired before January 2013, it’s 3 percent each year. For those who retired after that, the COLA is tied to inflation and is expected to be 1.4 percent for 2020.
OPERS trustees are also considering whether to require public workers hired after 2022 to contribute 11 percent of their wages toward retirement, up from the current 10 percent, Pramik said.
OPERS is the largest of Ohio’s five public employee retirement systems. It has $91.2 billion in assets and serves 1.14 million, including 213,000 retirees, 628,000 inactive members and 304,000 active workers.
The assumed rate of return on the OPERS portfolio is 7.2 percent per year. Returns in recent years have bouned up and down: -3.38% in 2018, 16.62% in 2017, 8.23% in 2016, -.03% in 2015 and 6.7% in 2014.
The second largest pension system in Ohio, State Teachers Retirement System, eliminated its COLA in 2017.
Related: Retired Ohio teachers to lose cost of living increase