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OPERS…how viable is it?

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The Auburntownship.org article on double dipping by public employees prompted us to do a little research on OPERS. [Ohio Public Employee Retirement System]  We thought our readers might be interested in the numbers.

If you are interested in reading about the Public Employee Pension Plan details here is a link:  https://www.opers.org/pubs-archive/leaflets/ISL-B.pdf

Needless to say, it is a sweet deal. Far, far better than the average citizen gets in the private sector, who by the way pays for the public sector.

“In 2017, women age 65 and older received an average annual Social Security income of $14,353, compared to $18,041 for men. That is  about $1,196 per month for women and about $1,503 per month for men.”

We could not find an average for public employees, but we did find the formula to calculate their retirement benefits:

https://www.opers.org/members/traditional/features.shtml#calculation-formulas

“For members in Groups A and B, the retirement benefit calculated under the Traditional Pension Plan consists of an annual lifetime allowance equal to 2.2 percent of final average salary, multiplied by the first 30 years of service plus 2.5 percent of final average salary for each year, or partial year for service credit over 30.

2.2% of FAS Years of Service for the first 30 years
2.5% of FAS for each year over 30“
For calculation purposes, let’s assume we have a 60 year old public employee that earned an average of  $100,000 per year for the last five years of service and has 30 years services.
The annual pension would be $100,000 x 2.2% x 30 years = $66,000. [$5,500 per month}
And guess what?  The public employee gets to retire, and then be rehired in the same job.
Hence, the term “double dipping”!  Is this a great country or what?
The problem is that the OPERS is severely underfunded. Want some proof?  Take a look at this link:
https://www.mercatus.org/system/files/mercatus-elder-ohio-public-pension-sum-v2.pdf
Excerpts from the article:

“KEY FINDINGS”

“Because Ohio’s four largest pension plans have low funding ratios and because investment returns are volatile, these plans only have sufficient assets to pay benefits with complete certainty for the next five years.  After that point, the likelihood that the plans will fulfill their promised obligations begins to fall very rapidly.

The four largest Ohio pension plans are the Ohio Public Employees Retirement System (OPERS), the Ohio School Employees Retirement System (SERS), the Ohio State Teachers Retirement System (STRS), and the Ohio Police and Fire Pension Fund (OP&F). They have funding ratios ranging between 86 percent and 72 percent.

please read

• There is only a 50 percent chance that OPERS—Ohio’s largest pension plan—will be able to fulfill its obligations by 2037. There is only a 25 percent chance that OP&F will be able to do so.

• Though funding ratios are often used as indicators of a pension plan’s health, they do not fully represent a plan’s ability to fund its promised benefit payments without additional resources.”

AND GUESS WHO GETS TO BAIL THEM OUT? 

taxpayer screwed 2
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2 replies

  1. concordbob
    April 18, 2020 • 11:31 am

    I say, let it sink.

    Sent from my iPad

    >

    Reply ↓
    • Andy Rose
      April 22, 2020 • 8:58 am

      Let it sink? Don’t be silly! Your comment is one of the most uninformed comments I’ve seen in a long time. How about comprehensive reform in how we handle public employee compensation? If you let it sink, no one would dare enter the public sector for employment. At that point, who runs the various levels of government? You can be cavalier about it but government NEEDS employees in order to provide services to the citizens.

      Reply ↓

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