OFT President Melissa Cropper: Pension Reform is Bitter but Necessary

Ida Lieszkovszky / StateImpact: Ohio

Pam Hummer, a former Cleveland school teacher, retired this past year.

There’s a set of bills headed to Gov. John Kasich that will make significant changes to Ohio’s five public pension plans. That means school employees, teachers and other state and local government workers can expect to see significant changes to their retirement plans.

For teachers, that means an increase in the amount they have to contribute toward their pensions, up from 10 percent of their paycheck to 14 percent. That will tie it with the highest rate of contributions among state employees.

StateImpact Ohio sat down with Melissa Cropper, president of the Ohio Federation of Teachers, to see how they feel about the imminent changes.

Q: How are teachers taking the changes to their pension system?

A: There’s obviously a lot of pain in the pension reform but it’s reform that had to happen, so we gave our support, we have endorsed the plan and obviously there are going to be some teachers who aren’t really happy about the changes and I’m not real happy about all the changes in it as far as it’s going to impact me also. But I want to be able to have a pension one day and this is a way that we’re going to be able to save our pension funds. I believe that there’s been a lot of collaboration between the union groups and the systems and that we’ve come up with solutions that are going to work out best for us all in the long run — be able to save the systems with the least amount of pain possible.

Q: What happens if these reforms aren’t passed?

A: The alternative would be to lose our pension funds eventually. I mean that’s what we were looking at is that there simply wasn’t going to be enough to pay out at some point in time. Now having said that, I wish there had been a little bit more flexibility on what they call this 30-year funding period that we have to stay within. But the Legislature is saying we want you to keep within that 30-year funding period, though I do believe they allowed STRS (State Teachers Retirement System) to go above that somewhat. But like I said, even though it is going to impact us, it is a change that needed to happen. Not only is it saving our pension fund but it’s also allowing for the systems to continue to offer health care, which legally they’re not bound to do. … By making some of these changes they’ll still be able to provide healthcare for retirees, which is a huge benefit to our retirees also.

Q: Teachers will see one of the biggest jumps in contributions to their pension system among public employees. How are teachers responding to that requirement?

A: That’s a gradual change, we’re not going to jump to 14 percent over night but over the next few years we’ll see that jump to 14 percent. And again from a teacher’s perspective we would have liked to see that split between employees and employers, but given the current economic status and the trouble all the school districts are having anyway, that just wasn’t going to happen. … Originally, it was going to be 13 percent and I’d still like to see it capped at 13 percent but the most important thing is to make sure we still have a retirement system and we can still provide healthcare to our members.

Q: How much of a difference will that increase in pension contributions actually make to teachers?

A: That’s dependent on where you are on the pay scale because that’s the percentage of your paycheck. So it really makes a huge impact when you couple that with the fact that teachers aren’t seeing raises now or are taking pay freezes. Some of our districts are actually taking pay cuts. So in addition to what you’re not getting on the pay scale, now you’re losing that additional percentage our of your paycheck for retirement. Plus whatever increases you see in health care as most employees pay a certain percentage of their health care also and healthcare (costs) are going up constantly also.