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School employees' pensions are safe for now, but schools lose possible future gains.
The budget was approved by the Ohio House of Representatives earlier this month, but the changes made won't alleviate funding woes for school districts.
Several schools are likely to lose funding from decreases in tangible tax payments within the proposed Ohio's budget bill.
The bill that was introduced in March required a two percent decrease in employer contribution rates into the School Employee Retirement System that may have helped to offset some of those losses.
The house, however, eliminated that plan in May, which not only affects school retirement payouts, but also was proposed for government employees, police and firefighters.
The change called for school employees to pay more toward their pension.
Under the current general policy, the employer pays 14 percent and employees pay 10 percent toward pensions, depending on union contracts.
The Office of Budget and Management projected a total cost savings of more than $299 million annually for Ohio districts, joint vocational schools, and educational service centers from the program.
To see the revised budget bill visit http://www.lsc.state.oh.us/analyses129/h0153-ph-129.pdf
In April, The Ohio Public Employees Retirement System pleaded with the Ohio House committee to withdraw the proposal to alter contribution rate structures, according to the OPERS website.
Karen Carraher, interim executive director of OPERS said in her testimony to the committee, "The proposal to boost public employee pension contributions and reduce employer contributions by two percentage points each would increase unfunded liabilities beyond limits required by state law."
Although, the OPERS wanted the proposal removed from Ohio's budget bill, Carraher said instead, insert the language into the pending pension reform legislation so the agency can evaluate the plan further.
Carraher added that a recent study, which the current employer contribution rate of 14 percent is comparable with the retirement contributions provided by Ohio’s large private-sector employers through Social Security,
employer-sponsored retirement plans, and employer-sponsored matched savings plans.
"Restoring the Board of Trustee's discretion to set the rate will provide flexibility in the future to lower rates if the financial conditions exist that make it prudent to do so," she said.
Most school officials, however, didn't plan for the two percent savings as the proposed budget was a total shock and it was felt by many, the extra dollars weren't going to be enough.
"It (the budget) was just another blow to us," Euclid Schools Treasurer Stephen Vasek said.
He said everything is up in the air as millions of dollars isn't easy to make up even with the incentive.
Cardinal Schools Treasurer Merry Lou Knuckles said it could have yielded a little bit of savings for the district, but it wouldn't have helped their situation.
__________________________________________________________________
What would have your district saved?
Estimated School Employer Savings from 2 percent Retirement Contribution Shift
(School Districts, Joint Vocational School Districts, and Educational Service Centers)
Sources: STRS and SERS 2009-10 school year contribution data and The Office of Budget and Management
Lake County
School District Total Retirement Shift Savings
Auburn JVSD $121,298
Fairport $56,715
Kirtland $164,525
Madison Local $374,444
Mentor $1,172,881
Painesville $432,914
Perry $265,710
Wickliffe $206,074
Willoughby-Eastlake $1,095,417
Geauga County
--Angela Gartner
AGartner@News-Herald.com
Several schools are likely to lose funding from decreases in tangible tax payments within the proposed Ohio's budget bill.
The bill that was introduced in March required a two percent decrease in employer contribution rates into the School Employee Retirement System that may have helped to offset some of those losses.
The house, however, eliminated that plan in May, which not only affects school retirement payouts, but also was proposed for government employees, police and firefighters.
The change called for school employees to pay more toward their pension.
Under the current general policy, the employer pays 14 percent and employees pay 10 percent toward pensions, depending on union contracts.
The Office of Budget and Management projected a total cost savings of more than $299 million annually for Ohio districts, joint vocational schools, and educational service centers from the program.
To see the revised budget bill visit http://www.lsc.state.oh.us/analyses129/h0153-ph-129.pdf
In April, The Ohio Public Employees Retirement System pleaded with the Ohio House committee to withdraw the proposal to alter contribution rate structures, according to the OPERS website.
Karen Carraher, interim executive director of OPERS said in her testimony to the committee, "The proposal to boost public employee pension contributions and reduce employer contributions by two percentage points each would increase unfunded liabilities beyond limits required by state law."
Although, the OPERS wanted the proposal removed from Ohio's budget bill, Carraher said instead, insert the language into the pending pension reform legislation so the agency can evaluate the plan further.
Carraher added that a recent study, which the current employer contribution rate of 14 percent is comparable with the retirement contributions provided by Ohio’s large private-sector employers through Social Security,
employer-sponsored retirement plans, and employer-sponsored matched savings plans.
"Restoring the Board of Trustee's discretion to set the rate will provide flexibility in the future to lower rates if the financial conditions exist that make it prudent to do so," she said.
Most school officials, however, didn't plan for the two percent savings as the proposed budget was a total shock and it was felt by many, the extra dollars weren't going to be enough.
"It (the budget) was just another blow to us," Euclid Schools Treasurer Stephen Vasek said.
He said everything is up in the air as millions of dollars isn't easy to make up even with the incentive.
Cardinal Schools Treasurer Merry Lou Knuckles said it could have yielded a little bit of savings for the district, but it wouldn't have helped their situation.
__________________________________________________________________
What would have your district saved?
Estimated School Employer Savings from 2 percent Retirement Contribution Shift
(School Districts, Joint Vocational School Districts, and Educational Service Centers)
Sources: STRS and SERS 2009-10 school year contribution data and The Office of Budget and Management
Lake County
School District Total Retirement Shift Savings
Auburn JVSD $121,298
Fairport $56,715
Kirtland $164,525
Madison Local $374,444
Mentor $1,172,881
Painesville $432,914
Perry $265,710
Wickliffe $206,074
Willoughby-Eastlake $1,095,417
Geauga County
School District Total Retirement Shift Savings
Berkshire $252,532
Chardon $364,635
Kenston $431,301
Ledgemont $56,141
Newbury $87,674
West Geauga $292,536
Cuyahoga County
Berkshire $252,532
Chardon $364,635
Kenston $431,301
Ledgemont $56,141
Newbury $87,674
West Geauga $292,536
Cuyahoga County
School District Total Retirement Shift Savings
Euclid $993,132
Mayfield $822,328
South Euclid-Lyndhurst $697,089
Euclid $993,132
Mayfield $822,328
South Euclid-Lyndhurst $697,089
--Angela Gartner
AGartner@News-Herald.com
posted by News-Herald Blogs at
12:26 PM
1 Comments:
The Employer should only match 3%. Get in line with the rest of the community. Than the teachers could contribute up to 16 % of their own money. The way the propety owners have too. Get with it already I am so tired of my hard earned money being bled form me.
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