CLEVELAND, Ohio (WOIO) - 19 News has detailed the frustration of police and fire retirees trying to deal with insurance changes to the Ohio Police and Fire Pension Fund.
Many claim the plans were far from what they were promised.
Other funds could be in the same situation soon.
John Damschroder analyzed contracts in the Voinovich administration, and is currently a researcher and newspaper columnist.
He believes other Ohio funds can’t help but trim benefits, saying, “This is a gigantic problem caused by malfeasance in terms of management of the funds.”
He dug deep into the way public pension funds invest, using the Ohio Public Employee Retirement Systems’ own fiduciary performance audit and found the results are more than disappointing.
Something that can’t be lost on the investment side of the equation is the fact that the stock market is at a record high.
The question is simple, with that being the case: How are OPERS investments flat?
Damschroder says, “It’s not that they didn’t make money in 2019. We all know what they did, but we do know that they have underperformed what they would have done minus their entry into high fee alternative investments.”
In Ohio, only pensions are guaranteed. Health care is an add on.
By law, pensions must be fully-funded.
What has happened is that funding pensions has shortchanged health care.
Damschroder says the funds are going to have to come to cities and ask for higher contributions.
That cost certainly will be passed on to taxpayers when local governments come up short.
“We’re paying 76 bonus points more than the industry average on private equity. There’s about $10 billion dollars in that. There’s no category that we’re not paying higher fees than all the other pension funds. You have to scratch your head. Why is that?,” says Damschroder.
It is a question 19 News will continue to pursue.