Proposed Legislation Changing Public Pension Benefits Not Yet Introduced
Legislation to address long-term stability of the public pension systems is still in draft form at this point. Even if the legislation is introduced in the near future, we expect the legislative process to be slow and deliberative in this crucial political year. It is likely any votes on such a proposal will come post-election this fall.

Still, the long-term challenges facing the public pension systems continue to be front-page news in Ohio. The historic downturn in the stock market has had a significant impact on all five public pension funds, including the Ohio Public Employees Retirement System (OPERS). The drop has caused the amortization for the OPERS pension fund (the number of years to pay off obligations) to increase from 14 years in 2007 to beyond 30 years today. The fund is required by law to have a plan to keep that number below 30.

The proposal that has been presented by OPERS to the Ohio legislature modifies several major elements of the pension plan to restore balance (outlined below).

 

Current Pension Benefits	Proposed Reform Plan
Unreduced retirement at 65 (with at least 5 years service) or any age with 30 years.	Raises unreduced retirement age to 67 (with at least 5 years service). Raises retirement at any age to 32 years of service.
Reduced retirement at 60 (with at least 5 years service) or 55 with 25 years service.	Raises reduced retirement at 62 (with at least 5 years service) or 57 (with 25 years service).
Benefit formula: 2.2% for first 30 years of service, 2.5% thereafter.	Benefit formula: 2.2% for first 35 years of service, 2.5% thereafter.
Annual Cost of Living Adjustment (COLA) set at 3%.	COLA tied to Consumer Price Index (inflation) not to exceed 3%.
Final Average Salary determined by 3 highest years.	Final Average Salary determined by 5 highest years.

 

In addition to other smaller changes, the proposal recommends a transition to the new structure. Those within 5 years of retirement eligibility would be grandfathered under the current structure, except for the COLA change. Those within 10 years of retirement eligibility would be grandfathered in most elements, except COLA and the reduced retirement benefit calculation for those who would retire early. The new structure would apply to all OPERS members more than 10 years from retirement.

It is important to remember that the legislature will likely make changes to the proposal as it moves through the legislative process, so nothing is set in stone. It will be important for SEIU members to advocate for common-sense reform at the appropriate time to stave off any efforts by those who would rather dismantle our public pensions. Stay tuned.

State Revenue Update: CAT and Personal Income Tax Revenue Weaker than Expected
Although total revenues coming into the state's General Revenue Fund are at one percent below expectations for the first seven months of the fiscal year, January's income tax receipts were a different story. Income taxes for January were 15.6% below expectations (or $139.5 million.) If shortfalls of this magnitude continue in the second half of the fiscal year, additional budget cuts may be necessary.

In addition, the Commercial Activities Tax (or CAT), which was phased-in beginning in 2005 as other business taxes were being phased-out, is coming up short of projections. Even before the recession, the CAT was not expected to generate enough revenue to replace the other eliminated business taxes. Those taxes were helping fund school districts and local government. Without adequate CAT revenue, additional general revenue funds will need to be diverted to fill the hole, adding to the projected $8 billion shortfall we could be facing in the next state budget. All of this points to the need to focus on having a serious debate about how we raise revenues to adequately fund the services provided through the state budget.

Decision Time for National Health Care Reform, Let's Get It Done!
President Obama has called on the Congress to take action on comprehensive health care reform. He also recently released his vision for health reform legislation. The President's plan starts with the Senate-approved bill as a foundation and includes several key changes. Major provisions include:

• It makes insurance more affordable by providing the largest middle-class tax cut for health care in history, reducing premium costs for tens of millions of families and small business owners.

• It sets up a new competitive health insurance market giving tens of millions of Americans the exact same insurance choices that members of Congress will have.

• It brings greater accountability to health care by laying out common-sense rules of the road.

• It will end discrimination against Americans with pre-existing conditions.

• It reduces the deficit by $100 billion over the next ten years by cutting government overspending and reining in waste, fraud and abuse.

• It eliminates "special deals" such as the arrangement made for Nebraska.

• It includes a new provision to prevent insurance companies from making arbitrary rate hikes.

President Obama hosted a televised bi-partisan summit in an effort to get both parties to come together on issues of common interest. Unfortunately, very little common ground was found. The current thinking is that in order to enact comprehensive health care reform, the House would pass the Senate bill, and the Senate would make improvements to the bill through a simple majority up-or-down vote. Votes are expected by the end of the month. We encourage all members to contact their members of Congress to ask them to support President Obama's comprehensive health care plan.

Prepared by SEIU District 1199 Public Affairs Division Staff
REMEMBER: POLITICAL ACTION TAKEN ON THESE ISSUES MADE POSSIBLE BY MEMBER CONTRIBUTIONS TO COPE/PAC

Yesterday, SEIU District 1199 President Becky Williams and other Union officers visited members at State of Ohio agencies in Columbus.

Our Union's "Tour de District" program of site visits is designed to encourage greater communication and rank-and-file input within SEIU 1199.

An evening reception at the SEIU 1199 Columbus office featured State Representatives Ted Celeste, Dan Stewart, John Patrick Carney and Tracy Maxwell Heard, as well as experts on the Ohio Public Employees Retirement System. The reception also offered attending members the chance to discuss various issues with Union officers, including how 1199's political relationships impact our plans to protect and improve members' gains.

Click here for more photos of the event. Previous cities visited have included Cleveland; Lorain; Toledo; Youngstown; Cincinnati; Canton; Huntington, W.V. and Prestonsburg, Ky.

SEIU District 1199 does not currently have a position on the proposed change. This document is strictly for informational purposes only.

 

Proposed legislative changes to the Ohio Public Employees Retirement System

The recent stock market downturn and other demographic changes driven by the economy have had a dramatic impact on the pension fund (below).

• Funded Ratio has decreased from 96% in 2007 to 75% in 2008.

• Amortization for the pension fund (the number of years to pay off obligations) have increased from 14 in 2007 to 30 in 2008, and continue to head in the wrong direction.

• The current solvency of the health care benefit provided by the fund has decreased from 31 years (2007), to 10 years (2008).

 

Healthcare fund could run out by 2020

Without being able to make changes in the pension benefits, the OPERS board has had to adopt a schedule of decreasing healthcare funding down to 0% by 2015, which would mean the healthcare fund could run out within 10 years.

The fund is recommending making legislative changes that will achieve the following goals:

• Ensures that the benefit plan (after changes) is more economically sustainable and reflects the longer lives of members.

• Provides time for members to plan for retirement.

• Provides economic stability for the state of Ohio, public employers, retirees and members.

• Restore healthcare funding to a level of 4% / year and allows OPERS to continue to provide healthcare coverage beyond 2015.

• Ensure amortization period remains under 30 years through 2012 in order to give the investment market time to recover.

• Corrects some of the current inequities where a group of members receive benefits that are funded by all other members.

 

Current Pension System Benefits

• Unreduced retirement at 65 (with at least 5 years service) or any age with 30 years

• Reduced retirement at 60 (with at least 5 years service) or 55 (with 25 years' service)

• Benefit formula 2.2% for first 30 years of service, 2.5% thereafter.

• Annual Cost Of Living Adjustment (COLA) is set at 3%.

• Final Average Salary determined by three highest years.

 

Proposed Reform Plan Major Elements

• Raises Unreduced retirement age to 67 (with at least 5 years service) Raises retirement at any age to 32 years of service

• Raises Reduced retirement at 62 (with at least 5 years service) or raises to 57 (with 25 years' service)

• Minimum age to retire is 55

• Benefit formula 2.2% for first 35 years of service, 2.5% thereafter

• COLA tied to Consumer Price Index (inflation) not to exceed 3%.

• Final Average Salary determined by five highest years.

 

Other proposed legislative changes:

• Eliminate subsidization of Purchase Service credit

• Increase minimum earnable salary to $1,000/month

• Establish a statute of limitations on membership determinations

• Grant Board authority to establish mitigating rate for Alternative Retirement Plans

The Board has also made changes to the disability program to limit eligibility and add exclusions.

The transition to this new plan will be important. The Board recommended the following three-group phase-in once legislation is passed. This will ensure adequate notice of the transition to members.

Group A - Must be eligible to retire within five years after the effective date of the legislation. Grandfathered under current plan design except for COLA provision.
Group B - Must be eligible to retire within 10 years after the effective date of the legislation. Grandfathered under current plan design except for COLA provision. Those seeking an early retirement will have their pension reduced to reflect longer life expectancies.
Group C - All others. All elements of the new plan design apply.

Important Note: Legislation on this issue has still not been introduced. It is likely that the time line for action will be drawn out given the dynamics of a political year. Still we want to keep our public employee members regularly informed about the latest proposals because there will come a time when legislative action will be necessary. So stay tuned for additional communication from the union as this issue develops.

 

President Franklin Roosevelt once said, "I ask you to judge me by the enemies I have made." The same goes for those leading the fight for healthcare for all, attacked on-air yesterday by Rush Limbaugh.

In yet another of his trademark personal smear attempts, the divisive talk show host mischaracterized remarks at Saturday's "Healthcare for America Now" rally at SEIU District 1199 in Columbus: "Obama's number-one supporters showed up," said Limbaugh, "these union thugs, and they said, 'We want to fight! We don't want any more rallies, we don't want any more speeches, we want to fight.'"

Limbaugh then misquoted remarks made by SEIU District 1199 President Becky Williams: "Becky Williams, president of SEIU 1199, was interrupted by loud cheers as she led off the rally, telling the crowd, 'We have three things to tell the administration and the majority in Congress: One, we worked for and voted for change last year. That means actually changing what was there when you got there. Two, we need for you to lead with courage, not be intimidated by Fox News and Teabaggers. Three, don't be fooled by lies!' she said. 'If you do these things we'll be with you, and the 66% of Americans who, according to polls are demanding that healthcare reform be passed.'"

Not referenced by Limbaugh, unsurprisingly, were remarks made by Williams underscoring the urgency of health insurance reform: "This is serious," she said. "This isn't just a number: Every week that goes by, 421 people are estimated to die as a result of not having healthcare."

Leave it to those who don't want to fix our healthcare system to spin a conscientious campaign to save tens of thousands of American lives into bogus threats of violence.

The White House released its reform plan today in preparation for the bipartisan healthcare summit later this week.

The plan increases affordability, expands choices, prohibits discriminatry insurance company abuses, and reduces federal budget deficits by $1.1 trillion over the next 20 years. Click here to read the proposal (pdf file).

SEIU signed a joint letter to the U.S. Senate and House of Representatives urging those bodies to continue their healthcare reform efforts without further delay: SEIUletterSenate&House.pdf.

"The President recognized with his proposal today that people ... should not have to lose their life because of an insurance company refuses treatment," said SEIU President Andy Stern. "That insurance companies cannot be allowed to gouge Americans with rate increases that force them to pay up to 39% more for the exact same coverage. And that working families deserve health insurance that covers more and costs less."

SEIU District 1199 President Becky Williams was joined in a Saturday rally at the Union's Columbus headquarters by activists and a powerhouse lineup of Ohio officeholders urging Congress to "finish healthcare reform right."

"It is time for health care reform," Williams said. "If congressional opponents of reform won't cooperate, we must then use whatever legislative means are necessary to get the Senate bill passed by the House, signed by the President, and written into the laws of our country."

Echoing this call were Ohio Secretary for State Jennifer Brunner, Ohio Lieutenant Governor Lee Fisher, and Ohio Representatives Marian Harris and Ted Celeste. The dominant theme was that health insurance reform efforts cannot wait and should build upon what Congress has already passed instead of starting over again from scratch.

The 2 pm "Health Care for America Now" rally was sponsored by Progress Ohio and hosted by SEIU 1199. Due to the persistence of many Americans and SEIU members, our historic campaign to end abusive health insurance practices, expand coverage, and rein in runaway costs for all Americans is regaining momentum in Washington. Video of Williams below:

Willa Crew has worked as an STNA at Oak Pavilion Nursing Center in Cincinnati for almost 25 years. From that vantage point, she has seen coworkers and colleagues across the healthcare field increasingly struggle to afford health insurance for themselves and their families. Healthcare costs continue to explode while healthcare workers' wages and benefits remain stagnant.

"It has been time for a change for a long time now," Willa said. "It's normal for healthcare workers I know to put off seeing a doctor when they know they really need to, and many of them just can't afford the meds that they're been prescribed to get better."

While Willa believes that everyone deserves access to quality healthcare, she views the increasing difficulties faced by underinsured healthcare workers as an illustration of just how absurd our healthcare delivery system has become. She added that this absurdity is only underscored by the well-known fact that healthcare workers suffer from a much higher incidence of various ailments, such as arthritis, tendinitis, chronic aches from work-related falls, back problems from performing unassisted lifts, the deterioration of ones bones, knees, and hip joints -- as well as a much higher exposure to staph infections and other diseases. In general, some of these injuries are caused or exacerbated by staffing shortages that are widespread across the healthcare industry.

The only thing that's certain, Willa said, is that without reforms, all of these problems will keep getting worse, just as they have been.

"It's ridiculous that we even have to argue that healthcare workers should be able to afford their own healthcare," she said. "How could anyone be against that?"

The financial difficulties that have plagued Ohio's Forum Health hospital system have mirrored much of the economic devastation that has afflicted the Mahoning Valley region which Forum Health serves.

The health insurance crisis has combined with wholesale job losses and the Great Recession to create a perfect storm of adverse conditions for the Rust Belt region.

In her own words, Forum Health unit secretary Mary Ann Lloyd describes how everyone is worse off for having millions of Americans without health insurance:

"If everyone who came through the door where I work had health insurance, it would change everything at my hospital.

Our beds would be full, and some people who are on lay-off would be called back in. I wouldn't have to worry so much about my own job security.

It would be wonderful if everyone who wanted to retire -- but isn't yet 65 and on Medicare -- could still do so, because they could afford health insurance."

LPN Dayna Stewart sees her own family not receiving the full healthcare treatments that they need.

Because many of their prescription drug prices are too expensive, some of Dayna's family members will resort to taking only half of a pill and furthermore going every other day without the medication. These life-saving prescriptions are necessary for ailments such as thyroid disease, high blood pressure, and cardiac conditions.

"Healthcare has gone above and beyond the limit," says Dayna, pictured with SEIU President Andy Stern, "and America is suffering for it."