COLUMBUS, Ohio — Thousands of retired state workers will pay more for health-care coverage under changes approved Wednesday by trustees of Ohio’s largest public-pension system.
Ohio Public Employees Retirement System Executive Director Karen Carraher told trustees during a Wednesday board meeting in Columbus that without the changes, OPERS’ $11 billion health care fund would run out of money in 11 years.
With the changes, which take effect in 2022, the fund will be solvent for 18 years.
“Our members’ risk score is increasing and costs are increasing too,” Carraher said. “It’s just spiraling out of control.”
The changes will shrink OPERS’ unfunded health-care liabilities from $6.2 billion to $27 million, a spokesman said.
The amount the changes will cost individual retirees will vary, depending on when they retired and how old they were when they did, and how many years they worked for the state. Pension fund officials detailed various scenarios in which the premium subsidies retirees receive from OPERS might shrink by around $60 to $400 a month.
But beyond the subsidy cuts, the changes would cause another major difference for future retirees younger than 65, the Medicare eligibility age. Instead of getting health-care coverage from OPERS, these retirees would have to buy coverage on the open market, with an OPERS subsidy to help them pay for it.
The new amount these under-65 retirees would pay in premiums would vary, based on factors including where they live, whether they smoke and how much money they make.
Geoff Hetrick, the president and CEO of Public Employee Retirees Inc., which represents OPERS retirees, was not available for comment on Wednesday. But the organization supports the changes, describing them in an August blog post as unfortunate, but necessary.
OPERS represents about 516,000 active and retired state employees and former state workers, and manages assets totaling $87.8 billion, making it one of the largest pension funds in the country.
Beyond health care, OPERS also is dealing with general funding issues, and is short $24 billion of what it needs to cover its future obligations.
OPERS trustees in September voted to freeze cost-of-living increases for retirees for 2022 and 2023, changes that will require legislative approval.
OPERS also is considering raising the retirement age for future state workers from 55 to 62, and requiring them to set aside 11% of their salary to cover their retirement, compared to the current 10%.