How is the CostofLiving Adjustment COLA Changing On June 30 2017 HB 49 was passed by the Ohio legislature This bill 1 Changed SERS 3 x00660069xed COLA to a COLA based on the Bure ID: 832386
Download Pdf The PPT/PDF document "COLA Changes – What You Need to Kno..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
®COLA Changes – What You Need to
®COLA Changes – What You Need to KnowHow is the Cost-of-Living Adjustment (COLA) Changing?On June 30, 2017, HB 49 was passed by the Ohio legislature. This bill:1.Changed SERS’ 3% �xed COLA to a COLA based on the Bureau of Labor Statistics’ June-to-June CPI-W; however, any adjustment above or below CPI-W could only be enacted if the system’s actuary October 9, 20171.Implement a three-year COLA suspension for all SERS retirees and bene�t recipients beginning On November 29, 2017, the Ohio legislature passed SB 8, which gave SERS’ Board the authority to determine the COLA onset for future retirees. For bene�ts e�ective April 1, 2018 and after, bene�t recipients Why are these COLA Changes Necessary?Why were these changes necessary?While SERS is not in �nancial crisis, the COLA changes are necessary to address immediate �nancial Immediate Financial ChallengesFollowing the Great Recession, SERS’ funding decreased from 82% in 2008 to 63% in 2012. SERS’ funding policy states that employer contributions cannot be used to support health care unt
il SERS • 300 E. BROAD ST., SUITE
il SERS • 300 E. BROAD ST., SUITE 100 • COLUMBUS, OHIO 43215-3746 • 614-222-5853 • Toll-Free 800-878-5853 • www.ohsers.orgMBS-7023 Rev. 5/2019Long-Term Funding GoalsUltimately, SERS’ funding policy states that the long-term goal is to get to 90% funded.To speed up the funding progress, the Board changed the funding policy so that all 14% of employer fund reached 70% funded. An increased amount of employer contributions can be devoted to health (OVER)SERS | MBS-7023 Rev. 5/2019 | Page 2What caused SERS’ �nancial challenges?1.Rising life expectancy rates have increased SERS’ unfunded liabilities to the point that investment returns retirees. 3.liabilities are attributable to retirees. The only way to address the liabilities associated with retirees is to 4.Decreasing these unfunded liabilities will increase SERS’ funded status.A lower investment return environment is projected for the foreseeable future.How will this COLA Change Affect You?A three-year COLA suspension is in e�ect for retirees for the years 2018, 2019, and 2020. Upon resumption of In addition, e�ec
tive April 1, 2018, new bene�
tive April 1, 2018, new bene�t recipients must wait until the fourth anniversary of their bene�t for COLA eligibility. passes away two years after the retirement date. The spouse’s waiting period shortens to two years.based on your spouse’s Social Security earnings. SERS’ COLA and Ad Hoc HistoryApril 1, 1971 1976 Waiting period reduced from 3 years to 2 years 1979 Waiting period reduced from 2 years to 1 year 1981 1984 1988 1996 COLA tied to CPI-W Instituted COLA bank if CPI-W COLA was below 3% 2002 Fixed COLA at 3% Eliminated COLA bank 2006 Allowed alternate payees receiving a bene�t as party of a division of property 2018 Changed 3% �xed COLA to COLA based on CPI-W with a cap of 2.5% and Three-year COLA suspension for SERS retirees and bene�t recipients E�ective April 1, 2018, new bene�t recipients must wait until the fourth anniversary of their bene�t for COLA eligibility®