OEA Retirement systems update

OEA Retirement Systems Update

Report to the OEA Board of Directors: October 2014

Please distribute to other OEA members

OPERS, SERS and STRS Reach Agreement on Joint Retirement

For the better part of a year, staff members from OPERS, SERS and STRS have been working on the issue of joint retirement. Under Ohio law, service in any of these systems is transferable and members retire under the system in which they’ve accumulated the most service credit. However, a couple of changes to the law had caused some concerns.

Senate Bill 343, passed in 2012, removed a provision in the law that requires that OPERS accept certified credit from the other systems when determining pension benefits. OPERS indicated its intention to reduce credit earned by members while working under STRS- or SERS-covered positions in some circumstances. OEA and other unions strongly objected to this and urged the systems to work toward a resolution.

Pension reform legislation also altered the formula for transferring funds between systems when there is a joint retirement. Previously, an amount equal to two times the member contributions was transferred. The new formula was the employee and employer contributions plus interest. The result of this change was a dramatic increase in the amount of money being transferred.

Recently an agreement was reached between the systems about how to handle joint retirements. The agreement has been approved by the OPERS, SERS and STRS Boards and includes the following provisions:

· Modify the transfer of money between systems to include retention of 5% of the employer contribution by the paying system. The rest of the contributions and interest will still be transferred.