The need for changes in the Ohio Police & Fire Pension Fund (OP&F) employer contribution formula remains vital for the long-term health of the retirement system, though the most recent actuarial study shows the system in compliance with Ohio’s funding requirements.
“We are very proud of the excellent stewardship the Board and staff of OP&F have provided to sustain this fund despite inequities in funding that have persisted for nearly 40 years. It is time for Ohio’s employers to do their part to protect the pensions of our protectors” said Mary Beth Foley, OP&F Executive Director.
House Bill 512 currently under consideration by Ohio legislators would make long overdue changes to the employer contribution rates, which have not been changed since 1986. A poll released in September indicated 63 percent of Ohioans support this bill, and 78 percent said they are more likely to vote for a legislator who supports House Bill 512.
Also, results of a recent poll conducted by the Ohio Chamber of Commerce show that the business community is in universal agreement that discussion about defunding police should be put to a stop and businesses would like to see more police on patrol. A strong and healthy pension fund is a major tool to entice recruits to public safety jobs.
The most recent actuarial valuation of OP&F shows it remains compliant with Ohio’s funding requirements, despite a change in a key factor last February—the assumed rate of investment return.
“The amazing returns achieved by OP&F in 2021 primarily contributed to OP&F being at 28.07 years, despite the Board’s move to lower the assumed rate of return. However, U.S. market performance in 2022, as we predicted, is negative and cannot be included in the current valuation,” said Foley.
According to the independent actuarial study, OP&F’s funding period is under the state’s 30-year requirement and therefore in compliance for the three-year reporting period.
“Now is the time to act,” said Gary Wolske, President of the Ohio Fraternal Order of Police. “We and our sponsors warned the legislature and took bold action introducing this bill. It should have passed already. It is imperative the legislature act before the end of this year.”
“Our fund and our sponsors pursued good government,” added Jon Harvey, Ohio Association of Professional Fire Fighters President. “Further delay is inexcusable. The cities are well funded, and have received billions and billions under COVID and other federal relief bills. The time is now.”
House Bill 512 was conceived to equalize employer contributions and increase the amount that has been stagnant for nearly 40 years, and bring OP&F in line with the Ohio Highway Patrol’s rate. The changes in the bill are designed to secure future pensions for Ohio’s first responders.
While OP&F conducts an independent actuarial study annually, a quinquennial study is done every five years and looks at a broad range of assumptions. OP&F’s independent actuary studies and adjusts these assumptions as appropriate. The OP&F Board of Trustees will receive both the actuarial and quinquennial reports on Oct. 26. A vote to adopt the report is expected at that time.