SERS Is Not Seeking Federal COVID Relief Funds
Any time the federal government earmarks funding for state and local governments, some legislators express concerns that once the money is delivered to the states it will be used to “bail out” public pension funds instead of its intended purpose.
While the relief bill does have language regarding funding for private multi-employer pension plans, these are not public pension plans. For more on how these plans are different, read our story at www.ohsers.org/public-pensions-are-not-the-same-as-multiemployer-pensions/.
SERS neither needs nor wants any federal funding to pay down its liabilities.
SERS is within the state-mandated 30-year funding window and based on anticipated future funding will be able to pay off all unfunded liabilities in 24 years. Our contribution funding is reliable, and our employers pay their statutorily required contributions in full every month. This is a key component in maintaining a well-funded pension plan.
Oversight of Ohio’s pension funds is provided by the legislature’s Ohio Retirement Security Council. To maintain transparency and accountability, SERS engages in the following operational investigations:
- an annual financial audit by an independent, outside auditor
- an annual actuarial valuation
- an actuarial experience study every 5 years
- a fiduciary audit every 10 years
- an actuarial audit every 10 years
SERS also voluntarily participates in Ohio’s Open Checkbook program that provides information about expenses.
Ohio’s public pension funding model is clearly defined in state law. Employer and employee contributions are capped by state law and the public pension systems manage their liabilities according to income received through contributions and investment income. Ohio’s public pension funding model is designed to protect taxpayers from huge contribution increases especially in bad economic periods, and requires the pension systems to manage liabilities through benefit changes when necessary.
SERS has maintained its solvency through the pandemic, and is supportive of state efforts to direct the federal funding to individuals and businesses that have been affected by the pandemic and to make vaccines available to all Ohioans as soon as possible.