On August 16, 2018, as part of the Annual OSHPRS Retreat, Senior Actuarial Consultant Mita Drazilov of Gabriel, Roeder, Smith and Company (GRS) presented an overview of the 2017 Actuarial Report for the OSHPRS. The final version of this report will be presented to the Ohio Retirement Study Council later this month. This report serves as the foundation for determining pension system solvency and the legislative mandate of maintaining a 30 year (or less) amortization period to pay off its unfunded liabilities.
Considering “Capital Market Expectations” for the coming year, Drazilov advised the 2017 report will allow for a 7.75% projected rate of return on investments, which will allow the OSHPRS to stay within the 30-year amortization period set forth by statute, while continuing the current 12.5% active member contribution rate and the 1.25% retiree COLA for 2019. Drazilov further advised that the 2018 report, based on current capital market expectations, will require that the investment rate of return be reduced. It is unknown at this time what reduction will be required, but any reduction negatively affects the funding status of the system. This may require a change to employee contribution, COLA, or both to stay compliant with the 30-year amortization period. We will post more information as it becomes available.