OPERS Considers Changes to Cost-of-Living Adjustment

At its Sept. 20 meeting, the OPERS Board of Trustees considered a number of options for changing how COLAs are granted. The changes are being considered as part of an effort to further strengthen the System. While most of these options primarily impact current retirees, there are some components that may impact current active members when they retire.

Under current law, for those who retire after January 2013, the COLA is scheduled to match the Consumer Price Index, with a cap of 3 percent, starting in 2019. The OPERS Board is now considering options that include:

  • A reduction of the cap (2 percent or 2.5 percent)
  • Extending the waiting period for the first COLA for new retirees (from 12 months to 24 months)
  • Flat dollar amount COLA

These changes would strengthen the system in two ways:

  • Reduce OPERS’ current unfunded liabilities. Unfunded liabilities represent the amount OPERS has to fund on future benefits payments already earned beyond what we currently have in assets.
  • Align the COLA with inflation. Because of low inflationary times, the COLA has outpaced inflation 60 percent of the time in the last 30 years. That is why OPERS is considering changes to the current formula.

No decisions have been made to-date. Ultimately, to effect any changes approved by the OPERS Board, the Ohio Legislature must enact legislation.

For more information, FAQs and future updates on this issue, visit www.opers.org/cola.

New Accounting Rules to Impact Public Employers in 2018

The Governmental Accounting Standards Board (GASB) requirements implemented by employers in 2015 changed how pension liabilities are accounted for, requiring employers who file GAAP, or accrual-basis financial statements, to include a portion of the unfunded pension liability on the face of their financial statements. This is a reporting requirement – not a funding requirement.

The net pension liabilities now being placed on an employer’s balance sheet do not represent the contribution obligations employers owe. Public employers are not required to fund the system beyond the statutorily required contribution rates, currently 14 percent for most employers.

Beginning with fiscal years ending in 2018, those same employers are now required to report a proportionate share of OPERS’ unfunded Other Post Employment Benefit (OPEB), or health care, liabilities.

It is important to note that not all OPERS public employers are required to report the unfunded liabilities for pension and OPEB – only those who file financial statements utilizing GAAP.

GASB implemented the health care standards for the same reason as the pension standards. GASB believes pension and health care is a component of the employee compensation package and the employer should report a share of the liability for the unfunded future employee benefits.

As we did with the pension standards, OPERS fought for our employers and strongly opposed the health care standards, including testifying against these standards in-person at a GASB board meeting. We told GASB how Ohio is unique and that Ohio statutes, system materials and education are clear that health care coverage is discretionary and different from pension benefits. Health care is not a promised benefit to employees.

Additionally, we told GASB the model for the management of our health care program is that we adapt the plan design and benefit structure to live within the projections of the funding available through the trust, modifying plan design if funding is projected to be insufficient. We demonstrated this practice in our operations over the past several years as we have gone through plan design changes.

We know these new standards will be material to the applicable employers. We will continue updating GASB materials posted online at opers.org to assist you in your understanding and implementation. Methodology and information provided by OPERS to employers in 2018 will be similar to the pension standards and will be available through ECS.

More information on GASB, including frequently asked questions and how these standards apply to you, can be found in the Employer section of the OPERS website.

If you have additional questions, please contact us at gasboutreach@opers.org.

Employer Requirement for Retiree Health Care

OPERS needs your help to ensure we have the correct forms on file for any re-employed retiree receiving OPERS retiree health care coverage (pre and post-Medicare). Be sure to complete the proper forms so re-employed retirees are enrolled in the correct health care plan and any adverse impact on their benefits is minimized.

The Notice of Re-employment or Contract Services of an OPERS or Other System Benefit Recipient (SR-6) and the Notice of Re-employment or Contract Services of an OPERS or Other System Benefit Recipient (SR-6) forms are required when hiring an OPERS or another Ohio retirement system benefit recipient as an employee, or retaining an OPERS benefit recipient as an Independent Contractor.

When hiring an OPERS benefit recipient, OPERS needs to know if the employer’s health care coverage is available to the re-employed retiree, the coverage effective date and if the coverage is a High Deductible Health Plan (HDHP). 

Tip
If you are unsure of whether someone is an OPERS benefit recipient, you can use the SSN Lookup feature in ECS. You will be informed as to what forms need to be completed in ECS.
Tip
The start dates on the SR-6/6E and first contribution begin date should match.

The Notice of Change in Employer Health Care Coverage: OPERS Benefit Recipient (HCCHGEMNR) form was created for employers to communicate changes such as new availability of employer health care coverage or loss of eligibility for employer health care coverage. Required information includes whether health care is available, the effective date of the change, and whether the plan is an HDHP.

The Employer Certification of Termination of an OPERS Benefit Recipient (TERM-MP) form allows employers to inform the System about a termination of employment prior to submitting the final contribution report on which the employee appears, or to inform OPERS about the end of employment when no contributions are being remitted, or to end an independent contractor relationship. 

Tip
For contributing re-employed retirees, the date on the TERM-MP and the final contribution end date should match.

Where to find these forms

Employers can find the HCCHGEMNR form on the Employer Forms page of opers.org.

The SR6, SR-6E and TERM–MP forms can be accessed and submitted through ECS. If you are an employer not yet registered for ECS, please call Employer Services at 1-888-400-0965 to order forms.

Financial Reports Released

OPERS is dedicated to providing secure retirement benefits for our members, and that dedication is the theme of this year’s annual financial reports.

We published the 2016 Comprehensive Annual Financial Report and the abbreviated Popular Annual Financial Report, and both are available on opers.org under the Financial section. They contain important financial, investment, actuarial and statistical information about your retirement system as of the end of last year. The PAFR is also available as an interactive Web page.

The “Dedication” theme captures the efforts of our Board of Trustees and our staff to continue building financial stability, maximizing operational efficiency, maintaining a responsible investment policy, providing transparent communication and strong educational opportunities for members and stakeholders and continuing to anticipate and prepare for the future.

Board Election Results to be Certified in October

Elections for two seats on the OPERS and Ohio Deferred Compensation Boards of Trustees are currently being held. The two seats up for election are for the County Employee representative and a Retiree representative. A third seat, representing miscellaneous employees, does not require an election because only one candidate completed the nomination requirements, and is therefore taking office as if elected. Those elected will serve four-year terms beginning Jan. 1, 2018.

Voting ballots were mailed to qualified voters in late August and voting concludes Sept. 29, 2017. The election certification is scheduled for Monday, Oct. 2, 2017 when the final results will be certified by the office of the Ohio Secretary of State. More information can be found on the Board Election page of opers.org.

GASB 68 Report on ECS

The most recent GASB 68 information is available on ECS. If you are an employer registered for ECS and given the GASB role by the delegated administrator at your place of employment, you can access the most recent information on the net pension liability and related activity.

If you have trouble accessing the information, contact Employer Services for assistance at 1-888-400-0965 or employeroutreach@opers.org.

If you have questions regarding the information, please submit your inquiry through gasboutreach@opers.org.

Six New Counties Earn All-ECS Designation

We have added six new counties to the all-ECS counties map: Carroll, Fayette, Medina, Meigs, Mercer and Wood counties.

  • Allen County
  • Butler County
  • Carroll County
  • Clark County
  • Clermont County
  • Columbiana County
  • Cuyahoga County
  • Defiance County
  • Delaware County
  • Fayette County
  • Franklin County
  • Fulton County
  • Geauga County
  • Hamilton County
  • Henry County
  • Lake County
  • Lawrence County
  • Logan County
  • Lorain County
  • Madison County
  • Mahoning County
  • Medina County
  • Meigs County
  • Mercer County
  • Montgomery County
  • Ottawa County
  • Paulding County
  • Perry County
  • Stark County
  • Summit County
  • Trumbull County
  • Union County
  • Warren County
  • Wayne County
  • Williams County
  • Wood County

Did you know?

To date, only 134 of all OPERS employers are reporting on paper – about 4 percent – and nearly 72 percent of employers are using ECS to submit electronic payments. To learn more about ECS or to register, contact Employer Services at 1-888-400-0965 or employeroutreach@opers.org.

Map of All-ECS counties

Spotlight on: Missy Castaneda, Kaylib Johnson, Lisa Rundag and Eric Wilson

Compliance Specialists Missy Castaneda and Eric Wilson, and Employer Account Representatives Kaylib Johnson and Lisa Rundag have more than 40 years of combined experience at OPERS. These individuals work primarily with cities, villages and libraries.

Missy Castaneda, Lisa Rundag, Eric Wilson, and Kaylib Johnson
Left to right: Lisa Rundag, Missy Castaneda, Eric Wilson, Kaylib Johnson

When calling Employer Services, be sure to enter your employer code when prompted. That way you will be connected to one of your dedicated Compliance Specialists or Employer Account Representatives. 

Reminders: Reporting Seasonal Employees and Reporting Salary

Consider these tips when reporting seasonal or intermittent employees:

  • Employers are required to ensure OPERS enrollment for all qualified employees—even if the employees are seasonal—that means withholding and remitting retirement contributions.
  • Consider seasonal employees just like any new employee—this means you’ll need to:
    • Complete and submit the Personal History Record (Form A) within 30 days of the employee’s first day worked for which retirement contributions are withheld. If the seasonal employee is a re-employed retiree, you will need to complete the Notice of Re-employment or Contract Services of an OPERS or Other System Benefit Recipient (SR-6) form.
  • If a seasonal employee is returning, a new Form A does not need to be completed if the employee is returning within a year.
  • Report both new and returning employees with a Pay Period Begin (PPB) code of S for seasonal/intermittent for the Contributions Report on which the employee is listed.

When the employee terminates for the season:

  • Report final contributions with a Pay Period End (PPE) code of Q (quit).
  • If the employee will be returning next year, or intermittently, and you consider them still to be working for you, report the final contribution code the same as the PPB code—S.
  • It is especially important to remit the proper PPE code for re-employed retirees, as there may be a direct impact on the retiree’s ability to receive an HRA allowance.

Reminders about reporting salary when earned, not when paid:

  • OPERS has always required salary to be reported as it is earned, not as it is paid.
  • Ensures individuals get proper service credit, both for pension and health care
  • Keeps you in compliance

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It is your responsibility to be certain that OPERS has your current physical and e-mail address on file. If OPERS is not made aware of address changes, we cannot guarantee that you will receive important information pertaining to your OPERS account. This publication is written in plain language for use by public employers who are subject to coverage under the Ohio Public Employees Retirement System. It is not intended as a substitute for the federal or state law, namely the Ohio Revised Code, the Ohio Administrative Code, or the Internal Revenue Code, nor will its interpretation prevail should a conflict arise between it and the Ohio Revised Code, Ohio Administrative Code, or Internal Revenue Code. Rules governing the retirement system are subject to change periodically either by statute of the Ohio General Assembly, regulation of the Ohio Public Employees Retirement Board, or regulation of the Internal Revenue Code. If you have questions about this material, please contact our office or seek legal advice from your attorney. OPERS is not required to provide health care coverage to retirees or their dependents and will only do so at the discretion of the Board of Trustees.