Submitted by Peggy Bott, WSURA’s OPERS representative to the Ohio Council of Higher Education Retirees (OCHER)
Public Employee Retirees, Inc. (PERI), is an advocacy organization for public employees. Membership is open to any active or retired member of the Ohio Public Employees Retirement System (OPERS). Annual dues are $20. PERI is the organization that spearheaded lobbying efforts to save the annual cost-of-living adjustment (COLA) for OPERS members.
In the second quarter 2018 issue of PERI Perspectives, the group’s newsletter, the president and other top officials explain why they don't think it is necessary for OPERS to reduce the COLA from a fixed 3 percent annually to actual inflation up to a maximum of 2.5 percent per year. In 2017, the OPERS Board of Trustees voted to reduce the anticipated annual rate of return on its investments from 8 percent to 7.5 percent. This action created an unfunded liability of $2.8 billion that OPERS is required to recognize on its books. The OPERS board maintains that this action was based on advice from their actuaries and investments team.
PERI officials believe it was not necessary to reduce the expected rate of return since OPERS has successfully exceeded the 8 percent investment target when averaged over the past 30 years. Also the rate of return for 2017 was more than 15 percent. The Ohio Legislature would need to approve the new COLA, but hasn't taken up the issue at this time.
There is additional information in the PERI newsletter on the laws and court cases that are relevant to the COLA being changed. The newsletter is available online at the link below.