Home Legal News Scott Huff

Scott Huff

Taking Full Advantage of Your Available Pension Benefits

As many of you are aware, while you work as a police officer in your city, at the end of your career you are entitled to benefits through the Ohio Police & Fire Pension Fund.  Most officers and fireman are aware of the basic benefits but many don’t know how to take advantage of the great pension system we have.

Minimum benefits start at 25 years of service.  Whether you fall under the old benefit structure of your three years highest average (benchmarked) or your highest five years average it is important to know the difference in working beyond 25 years.  After 25 years of working, should you decide to work beyond that date you will receive a multiplier of 1.5% per year of your average annual salary to a maximum amount of 72% after 33 years of service.

After 25 years of service, you also have the option of entering the deferred retirement option program (you must meet age requirements of 48 under the old system or 52 under the new system).  The deferred retirement option program allows you to freeze your benefits and have those benefits deposited into a tax deferred account upon entering into a service retirement (maximum eight years).

To maximize the benefit, if you were to work until you received the maximum of 72% and enter the deferred retirement option program completing it until the maximum of eight years you would be entitled to a very optimal retirement program.  Purchasing of prior service also counts toward the years of service you work.  You are also entitled to receive benefits that are any combination of 25 plus years of service and the minimum required time in the deferred retirement option program (minimum 5 years to collect interest).

These are only a portion of the benefits available that most members are aware of.  You are also entitled to participate in a deferred compensation program.  The most popular program is the Ohio Deferred Compensation Program.  You can contribute a maximum of $17,500 for 2014.  If you were able to contribute just a small amount per day throughout your career and balanced a portfolio along the way, you would have a nice little savings account upon your retirement.  Should a deferred compensation program not be of your liking you can contribute to an Individual Retirement Account (Roth or Traditional) which contribution limits of $6,500 for 2014.

Currently the Ohio Police & Fire Pension Fund also offers health care benefits at competitive rates for the member (spouse and children make the cost a lot higher).  OP&F covers 75% of the benefit cost for the participant.  The fund also offers prescription, dental and vision coverage.

I encourage everyone to revisit the benefits you have available to you and to take advantage of the full complement of options.  Please visit www.op-f.org to review the retirement benefits you have available to you.  You can download or request the service retirement brochure which explains your benefits in greater detail.

Scott Huff, Trustee

Ohio Police & Fire Pension Fund

 

The Ever Challenging Task of Maintaining Affordable Health Care

Let’s face it, having health care insurance is almost as important as having a monthly paycheck when you retire.  The older we get the more susceptible we are to needing health care.  While we are younger we may not realize the need and importance but as we approach retirement we appreciate more and more the option of having it.

Earlierl, I mentioned what I call in health care as “arbitrary billing.”  A scary thought but this is reality as I recently had another child via C section.  No staff came in told me how much it would cost, no one told us how much each shot or anesthesia would cost or even the stay each night in the hospital.  Even if they would have I couldn’t tell them “well, let me shop that around.”  I was stuck and whatever procedure they did I had to live with.

A month later I receive summary of charges in the mail (what the insurance was billed).  They billed $11,000.00 for the procedure.  Ironically, my two year old came the same way and the insurance was billed only $4500.00 for the same C section.  The increase in a two year period was ridiculous but again arbitrary and there was nothing I or you will be able to do about it.  For us the cost was $500.00 for the first child and $1700.00 for the second

Insurance costs keep rising beyond the cost of inflation.  The pension board based on recommendations by actuaries had to raise health care rates this year alone by 13.2%.  When you add the fact that we can only subsidize a spouse and children by 25% it makes the cost to the retirees rough.  We continually fight this as it challenges the financial being of the fund and the health care stabilization fund.  Recently, Ohio Public Employee’s Pension Plan (OPERS) phased out spousal subsidies and is moving toward a stipend system where employees must purchase their own health care.

Move now to the “Affordable Health Care Act” and now no one knows what is going on.   Basically everyone is in some type of limbo until this act goes into effect in 2014.  If a plan wants grandfathering status which appears to be advantageous then the plan cannot make any changes.  OP&F has to wait to see if grandfathering is more advantageous or making changes and losing that status is more beneficial.

The solution is always challenging and the good news is the health care stabilization fund is doing well and growing.  The pension board is continually looking at ways to keep health care for the retirees for a long period of time.  There has never been talk on removal of health care, only ways to make it more affordable.  It is a challenge we are up to and we will continue to work to provide health care options for the members and their families.

 

Ohio Police and Fire Pension Fund

As 2013 brings us the changes we needed to preserve The Ohio Police & Fire Pension Fund, the work will still continue to make the fund stronger and stronger. The theme this year will be disability pensions. As we stand, we are one of the few in the country pension funds that offer partial off-duty disability awards. We are also one of the highest awarder of disability pensions in the country with approximately 34% of our retirees being disability grants. The Board of Trustees and the Ohio Retirement Study Council clearly understands that the benefits awarded need to be looked at.

Our process is one of the best in the country. What really becomes the issue is what benefits we pay and what injuries are included in the calculation. Additional factors which increase the benefit also need to be looked at. The Board has added special meetings so that we can timeline these issues and work diligently to make these changes before they are imposed upon us by the legislature. We assure the membership that the Trustees will continue to work toward improving this grant.

On the other end, it may be a little slow on the legislative side so we shouldn't have too much to worry about. We will continue to show the ORSC that we are attempting to make improvements where need be. Our health care stabilization fund is our focus to continue to offer reasonable cost health care for our members and their families. Currently, our health care stabilization fund is healthy and we are looking to keep it that way.

We have recently had a few changes to our administration, John Gallagher is our new Executive Director and Jennifer Harville is our Director of Member Services. John comes to us as the Executive Director of the Chicago Police Pension Fund and has a lot of experience which will help lead our fund moving forward. Jennifer has been with OP&F for some time and is experience in serving our members. Both are great additions to our executive/director staff.

Thank you for your support and please feel free to contact myself should the need arise.

Scott Huff

Cleveland Police

Trustee - Ohio Police & Fire Pension Fund

Last Updated (Monday, 11 March 2013 18:05)

 

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.
Take care,
Scott Huff

Last Updated (Saturday, 15 December 2012 15:12)

 

Changes in Pension

By now you have hopefully been familiarized with the changes that will occur to your pension in the coming years.  If you haven’t you can familiarize yourself by logging onto www.op-f.org and reviewing the recently approved legislation and changes.  While over the last few weeks and frankly last few years the board and myself have been getting a little grief over these changes.  It is important to keep in mind the reasoning.  First, while change is unpopular it is needed to sustain the overall health of the fund.  Simply stating, we were paying out more than we were taking in, cost and life expectancies were continuing to rise and we could not simply sustain this trend.  While I cannot speak on the proposed changes first being presented to the ORSC and legislature I can speak on the fact that something needed to be done.  

I can also assure you at the time, the board that was in place was working with the best interest of the members in mind and that the changes that they chose would impact majority of the members least.  Those board members wanted to make changes that would have little or no impact on current retirees, minor impact on those about to retire with the ability for those to make certain adjustments and the most impact to those entering the profession or having ample time to make major adjustments.  The bottom line is whether supported or not change definitely had to occur to sustain the overall health of the Ohio Police & Fire Pension Fund.  Only time will tell whether these changes will work for a long and healthy retirement fund.

On another note, we have finally hired a replacement for our retiring Executive Director, William Estabrook.  John Gallagher was hired and comes to us as the Executive Director of the Chicago Police Pension Fund.  He has been with the Chicago Police Pension Fund since 1980 and has been the Executive Director since 2006.  He comes to us with a wealth of knowledge and the board is confident he will be an excellent predecessor to Mr. Estabrook.

Moving forward, the next task and issue that should be coming our way is disability pension reform.  We believe that the ORSC will make this a pressing issue in the years to come and ultimately look at addressing this growing debate.  To date we have one of the highest disability rates in the country with some 30% plus members retiring on disability retirements.  While our process is not in question and actually is one of the best in the country, the fact that our members become disabled according to our administrative policy at a high rate needs to be addressed.  I am not sure what the solution may be but I believe the board and staff will work with the ORSC to help refine this issue.  The reform itself may help the funding of the Ohio Police & Fire Pension Fund for future years.

Thanks for your support and should you have any concerns, comments or needs feel free to email me anytime.
Scott Huff
Trustee/Ohio Police & Fire Pension Fund
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 
More Articles...