Keeping Pension Program Solvent
A few years ago, Ohio officials began facing up to the reality of severely underfunded public em-ployee pension programs. State law now requires all of the programs be able to pay off all their obligations within 30 years.
Invariably, some people don’t read the memo. Ohio’s Police and Fire Pension Fund is so far behind that, according to a study last spring, it will be 70 years before it has enough money to cover all its obligations.
Since then, some changes have been made. Law enforcement officers and firefighters signing up for the program will not be able to collect full pensions as early as in the past. Amounts withheld from their payments to help fund pensions have gone up and will increase more during the next two years.
That will not be enough to get the program within the 30-year rule, however. One analysis is that, even with the changes, 44 years is a more likely scenario.
Yet officials of the Police and Fire Pension Fund don’t want to do any more to make the program sound in the long run. They have told members of the Ohio Retirement Study Council, which supervises public employee pension programs, that the fund should be left as it is until at least 2017.
That would allow more than three years for the fund to build up new liabilities.
Some members of the oversight council have suggested drastic steps need to be taken regarding the police and firefighters program. Eliminating its separate board and combining it with another public employee pension program has been suggested.
That could cause a whole new set of problems. Still, unless the fund’s officials face up to reality and do more to ensure long-term solvency, the council may have to take action.