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Was OSERS alone in getting heavily into alternative investments? How much does OPS pay annually for pensions?

Was OSERS alone in getting heavily into alternative investments? How much does OPS pay annually for pensions?

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Henry Cordes and Erin Duffy recently completed a six-part series diving into OPS's $771 million pension shortfall. The investigation has generated a number of questions. You can read some of those answers below.

For the full series, click here.

Q: Was OSERS alone in getting heavily into alternative investments?

A: No, a handful of other public pension funds did, too, most getting similar results. Public safety workers in Arizona, school employees in Pennsylvania, state employees in South Carolina, Texas county employees and Dallas police and fire all put more than half their portfolios into alternatives, while Indiana teachers and state workers had just under 50 percent.

Dallas in 2016 had the lowest 10-year investment returns at only 1.3 percent annually. In 2017, the Indiana funds ranked last at 3 percent, with OSERS ninth worst at 4 percent, Pennsylvania schools 7th worst and the Arizona funds 10th worst.

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Q: How do OSERS benefits compare to the state school retirement plan?

Historically, OSERS benefits have been somewhat higher. In August, the average OSERS monthly pension was $2,108, translating into $25,000 annually. The average monthly payment in the state school plan was lower by $90 a month, or $1,100 a year.

The Legislature in 2016 changed benefits for new OPS hires to match the state’s. Teachers already in the system continued to receive the higher benefits. Teachers in both systems pay into and receive Social Security.

Q: How much does OPS pay for pensions every year?

The district essentially matches the contributions taken out of school workers’ paychecks. That was about $37 million in 2017-18.

In addition, the district is now required to make added payments toward making its system solvent again. It paid $19 million for that last year, and the payment is expected to rise to $26 million this year. In all, about 10 percent of the OPS budget now goes to pensions.

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Reporter - Metro News

Henry is a general assignment reporter, but his specialty is deep dives into state issues and public policy. He's also into the numbers behind a story, yet to meet a spreadsheet he didn't like. Follow him on Twitter @HenryCordes. Phone: 402-444-1130.

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There are plenty of other states and school districts trying to stabilize pension systems so that budgets can be balanced and employees can be guaranteed the benefits they were promised. Solutions have included increased contributions from current workers, cuts to current benefits through reduced cost-of-living adjustments and increased contributions from taxpayers.

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