Merry Christmas or Happy Holidays...whatever it is you may celebrate.
Relatively slow month being the last meeting of 2012. Things will rev up in the new year beginning with work on disability grants and the coordinated benefits associated with such grants. We have special meetings planned for February and April to address these issues. We anticipate that the OR5C will address this issue next year so we would like to be proactive in our work and see if we can establish some type of reform. We think that the ORSC will look at all the systems as a whole but ours always stands out when it comes to disability grants. We currently have one of the highest disability grants in the country amongst police and fire pension funds. We believe they will look at the process and coordination of benefits as their priority.
Wachtmann will head up the OR5C for 2013 ...great, he is a knucklehead so who knows what he will be planning. Good news is that he is done after two years as he will be termed out. Keith Faber is out of the OR5C, he will be taking a new role somewhere so he will not be on this committee. There was no OR5C meeting in December as they were in lame duck session. Meetings will start up again in January.
Buck and Associates, our actuary presented us with a "preliminary study" which implemented the changes that will occur from 5B340. The good news that comes from this is that with the changes and the investment returns we have gathered since the downturn we are making significant headway in the right direction. Although we may be a little short of our 30 year funding, we will be very close. We still have to let the changes go into effect and we will revisit this study in 2017 to see where we are at before addressing any further changes. We anticipate our investment returns for 2012 to be in the vicinity of 12+% but of course I will not
know the exact number until January 1st.
Although not in Ohio yet, obviously we are all aware of the right to work initiative that has been passed in Michigan. Kasich was quoted as saying that it was not on his agenda or the legislatures agenda in Ohio for the immediate future. Kasich believes that the 5tate is moving in the right direction and that this does not need to be addressed to move us ahead. With that being said, there is a private group gathering signatures to place this issue on the ballot and it appears that they may have enough to get it there. I know it has nothing to do with the pension system but we have to be aware of this because we may be dealing with it again. AQuinnipiac pole has shown that Kasich's approval rating is at a whopping 42% and with his re-election campaign starting in 2013 it will be important to keep an eye on how he moves along.
We did pass as a board new language for the "anti-spiking salary language" that appears in the changes to 5B340. Moving forward, the process of promotions will not be subject to the anti-spiking elements written in the bill. Natural promotions will have its own language and not subject to any spiking clause. The overtime accrued with promotions will be subject to the cap but if your salary alone puts you over the cap, you would not be subject to the cap. Again, this is only for promotions of rank within or outside of your respective departments. The vote passed closely 5-3 and ,was a very difficult and debated topic amongst the trustees. We will be working on the health care subsidy linked to years of service in 2013 and the parameters surrounding that. I will let you know what we decide for spousal benefits and other items that create issues with this change. We will be addressing this at our special meeting in February. As it still stands, health care will be paid at a rate of 3% per year (member) and 1%per year (spouse) with a total of 75% and 25% respectfully for 25 years of service. This is the cap, so if you work 26 +years it will not be more. This was the last meeting for Bill Estabrook and Kay Penn. They were very good for our fund and will be missed. If you had the pleasure of meeting any of the two or needed them you will know what they did for this fund. John Gallagher and Jennifer Harville will be taking their positions respectively. John will be an excellent fit and Jennifer has been with the fund for 15 years. Both will do an excellent job.
Thanks for your support during the year, 2012 was challenging with the implementation of 5B340 and the changes we had to endure. Although it was not easy at times to swallow and even more challenging being a board member explaining various things, I appreciate the patience and hopefully this will be a good start to a great 2013 for everyone.
Last Updated (Saturday, 15 December 2012 15:12)