How do the OPERS Changes Impact Me?
Recently OPERS made a number of changes to active and retired members with the majority of the changes impacting those still working. The perception among members is that they will work longer and get less.
- Membership divided into three groups
- Group A – eligible to retire before January 7, 2018.
- Group B – must have 20-years of service on January 7, 2013, or eligible to retire under the current eligibility requirements after Jan. 7, 2018, but on or before Jan.7, 2023.
- Group C – eligible to retire under current eligibility after January 7, 2023 or became a member on or after Jan. 7, 2013.
- Cost of Living Adjustment(COLA) Reduction – All new retirees will receive a COLA based on the Consumer Price Index (CPI). Instead of the standard 3% the COLA will be based on the CPI which has average about 2.5% over the last decade.
- Final Average Salary (FAS): no longer three highest years but 5 highest years for Group B/C. If your FAS was $75,000 at retirement than it will now be approximately $72,750. A 3% drop.
- Service Credit purchases are becoming more expensive: Members will be permitted to make service purchases at the current rates if they initiate the purchases by July 7, 2013. Members will have until July 7, 2018 to complete the purchase before the cost will be recalculated.
- Early retirement reduction factors now larger for Group B/C.
While these changes may seem manageable it is important to consider their impact over a retirement period that could last thirty years or more. Call us today to learn how these changes will impact you.