Columbus, Ohio – During a recent Ohio Retirement Study Council (ORSC) meeting, State Representative Phil Plummer presented an ambitious proposal aimed at tackling the continuous governance and financial management problems inside Ohio’s state pension systems. Plummer’s proposal seeks Ohio’s five main state pension systems to be consolidated into a single entity, a move that has sparked a debate among stakeholders and experts.
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The idea emerged amid mounting debate inside Ohio’s State Teachers Retirement System (STRS), where board differences have deepened. Within STRS, some reformers have been arguing for higher cost-of-living adjustments for retirees and pushing for the acceptance of passive index funds for asset management. This group also questions significant bonuses awarded to investment workers, which the STRS board most famously rejected for fiscal year 2025.
Maintaining five separate pension systems—STRS, the Ohio Public Employees Retirement System, the School Employees Retirement System of Ohio, the Ohio Highway Patrol Retirement System, and the Ohio Police & Fire Pension Fund—Plummer underlined inefficiencies and financial strains resulting from this approach during his speech at the ORSC conference. Together, these systems oversee around $225 billion in assets and service over a million both active and inactive members as well as almost half a million beneficiaries.
“There are five different processes. Certain boards can do this, certain boards can do that, certain systems are getting [cost of living adjustments], certain systems aren’t: Maybe we ought to look at combining some of these systems,” said Plummer at last Monday’s ORSC meeting.
The director and general counsel of the Ohio Retirement Study Council, Bethany Rhodes, provided her opinion on the technical difficulties of combining them. She suggested a staged integration strategy by explaining that it would first look like a receivership arrangement whereby one board would supervise the operations of the others.
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Several of Ohio’s pension funds have expressed doubt despite the plan’s possible simplicity and maybe improvement in financial management of the pension assets. Declaring that their system’s financial situation is strong and does not call for such significant restructuring, a spokesman from the School Employees Retirement System of Ohio questioned the need of the plan.
Complicating matters further, recent events inside STRS—including the restoration of board member Wade Steen following a contentious departure—have clouded the board’s stability. The turbulence has only been exacerbated by the resignation of STRS’s investment consultant Aon and board member Steve Forman, therefore illustrating the challenges of enacting broad changes.
No formal legislation to consolidate the pension systems has been introduced yet amid ongoing discussions. Understanding that any major modification to the pension systems will need careful review of the legal, financial, and operational consequences for Ohio’s retirees and taxpayers, stakeholders are closely monitoring the developments.
