OPERS TOWN HALL MEETING PowerPoint Presentation

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Why Are We Considering Benefit Changes Now?. OPERS has a long history of proactively tending to issues as right on time as could be expected under the circumstances (illustrations incorporate the Choices Health Care Plan, the Healthcare Preservation Plan, isolating benefits trust from human services trust).OPERS has a long history of mindful financing and moderate monetary practices (samples incorporate intergenerational value quality, subsidizing wellbeing

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OPERS Update - Recommended Benefit Changes OPERS TOWN HALL MEETING PowerPoint Presentation

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Why Are We Considering Benefit Changes Now? OPERS has a long history of proactively tending to issues as right on time as could reasonably be expected (illustrations incorporate the Choices Health Care Plan, the Healthcare Preservation Plan, isolating benefits trust from medicinal services trust). OPERS has a long history of dependable subsidizing and traditionalist financial practices (illustrations incorporate intergenerational value esteem, subsidizing human services benefits at beginning in 1974, accepted procedures in actuarial suspicions). OPERS is focused on part association and correspondence. 2

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Goal: Finding the Right Balance More Than Needed Less Than Needed May bring about undue hardship on individuals May make requirement for more intense changes later Key to Achieving Balance Incremental Changes Over Time 3

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What is Driving the Consideration of Benefit Changes Now? Retirees living longer in retirement and we have to change our advantages to perceive that Eliminate out of line endowment of advantages of subsets of individuals Encourage part engagement in their retirement arranging Economic condition 4

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Retirees Living Longer in Retirement 5

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Growth in Retirees 6

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How Does This Impact OPERS Funding? 7

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Key Funding Measures Funded Ratio – the proportion of advantages collected to pay annuity advantages to comparing liabilities Amortization years – reflects to what extent it will take to finance our unfunded liabilities in light of expected inflows and outpourings 8

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Key Measures of OPERS Funding ($ in Millions) 9

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2007 Pension Plan In-Flows and Out-Flows (Percentages)

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Historical Fluctuation of Market Returns Data with respect to OPERS speculation returns is accessible back to 1979. A survey of this recorded information demonstrates that OPERS has just had 4 years with negative venture returns since 1979. 12

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Recent Changes in Key Funding Measures * keeping in mind the end goal to remain inside 30 years of financing, OPERS received a timetable of diminishing medicinal services subsidizing down to 0% by 2014, which implies the advantages in the social insurance store would run out inside 10 years 13

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2009 Contribution Rate Allocation Changes To Retain 30-Year Funding

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Keys to Changing Funding 15

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What Do We Want To Do? Statistician characterized objectives for funds from plan configuration changes. Objectives: 16

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Recommended Benefit Changes Assumptions Components 17

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Current

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Proposed

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Age & Service Eligibility 20

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Benefit Formula 21

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COLA 22

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FAS 24

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Assumptions 25

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Recommended Benefit Changes Assumptions Components 26

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Transition Plan ( Age & Service Eligibility, Benefit Formula, COLA & FAS) How we move to this new arrangement will be essential. The Board prescribed the accompanying three-assemble stage in once enactment is passed. This will guarantee sufficient notice of the move to our individuals. Aggregate A – Must be qualified to resign inside five years after the viable date of the legislation.* Grandfathered under current arrangement configuration with the exception of COLA arrangement. Gather B – Must be qualified to resign inside 10 years after the compelling date of the enactment or have achieved 20 years of administration credit before the powerful date.* Grandfathered under current arrangement configuration with the exception of COLA arrangement and for those looking for an early retirement their benefits will be lessened to reflect longer futures. Bunch C – All others and new contracts after the compelling date of the enactment. All components of the new arrangement configuration apply. *To be tallied toward deciding gathering qualification, all administration buys must be finished amid the pertinent move time frame. 27

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Transition Plan (All other arrangement configuration changes) Age diminishment variables actuarially nonpartisan – Will apply to Groups B and C Elimination of least advantage computation – Will apply to every one of the three Groups Intersystem exchanges actuarially unbiased – Will apply to each of the three Groups Limit retroactive advantages to inside 90 days of use receipt – Will apply to every one of the three Groups 28

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Other Board Changes Purchase Service credit – wipe out endowment Increase least earnable compensation to $1,000/month Establish a statute of restrictions on participation judgments Grant Board expert to build up relieving rate Disability program changes Corrective changes 29

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Other Board Changes Disability program changes: Implement industry-acknowledged norms for qualification conclusions and bar inabilities coming about because of lawful offense or elective restorative surgery Utilize "any occupation" standard following three years (up to five) of accepting advantages and point of confinement business duty regarding reestablishment to three years (up to five) Adopt case administration show for advantage beneficiaries Require counterbalance for SSDI benefits (if pertinent) On come back as far as possible free administration credit allow (least 2 years/most extreme 5 years) 30

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Transition Plan (Other Board changes) Purchase Service credit actuarially impartial – Six-month window after bill's successful date to buy credit at current cost Increase least earnable pay to $1,000/month – If charge gets to be distinctly viable in 2011, will apply to benefit earned after January 1, 2012 Establish a statute of constraints on enrollment judgments – One-year window to look for an assurance for administration before bill's powerful date; five-year statute of impediments will apply to all administration after bill's viable date Grant Board specialist to set up moderating rate – Will apply after bill's viable date Disability program changes – Will apply to individuals with a viable date of advantages that is after the bill's viable date Corrective changes – Will apply after bill's compelling date 31

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2009-10 Funding Plan Estimated 12.26 years Estimated Total Impact *Does not require statutory specialist for change 32

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Next Steps Continue correspondence to individuals, retirees and partners Work with individuals from the Ohio General Assembly 33

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Questions 5/3/10

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