Ohio Public Employees Retirement System (OPERS) Contributions to Increase

Earlier this fall, the Ohio Public Employees Retirement System (OPERS) informed its members of a funding change in contributions effective in 2006. The following is intended to supplement information that you should have already received from OPERS.

OPERS is implementing a Health Care Preservation Plan (HCPP). The plan, which was announced by OPERS in 2004, is intended to provide long-term solvency to the OPERS health fund and preserve access to quality health coverage for retired OPERS members and their dependents.

The funding changes that take effect Jan.1, 2006, are part of the overall HCPP implementation plan. This includes increases in the contributions required from both OPERS members and employers. Currently, OPERS members contribute 8.5 percent each year; that amount will increase to 10 percent, with the increases phased in over a three-year period. This funding change marks the first increase in OPERS member contributions since 1977.

Larry Salasek, manager of University Benefits, points out that employees are not the only ones being asked to contribute more to OPERS. Under the funding plan, Kent State will also be sharing in the changes, as the university’s contribution to the retirement system increases over a three-year period. The increases will begin with the first paychecks issued in 2006. The contributions that employees and the university make are based on the following schedule:


Employee Contribution Rate

Kent State Contribution Rate













When the phase-in is complete in 2008 the contribution rates will be at the maximum amount currently permitted under Ohio law. Employees who participate in an Alternative Retirement Plan (ARP) instead of OPERS should note that these contribution changes also affect their programs and the contributions to their ARP accounts.

To estimate what the increased contribution will mean to your paycheck, see the chart below.

 Member Contribution Rate Examples (for 12-month payroll)

Member Annual Earnings 20,000 40,000 70,000 90,000
Per pay at 8.5% (2005) 141.67 283.33 495.83 637.50
Per pay at 9.0% (2006) 150.00 300.00 525.00 675.00
Per pay at 9.5% (2007) 158.33 316.67 554.17 712.50
Per pay at 10% (2008) 166.67 333.33 583.33 750.00

“Quality, cost effective health care coverage is important to everyone, not only current employees but also to retirees,” Salasek says. “No one likes to see more money come out of their paycheck, but the long-term impact is that the contributions — from employees and employers — will provide financial stability for the OPERS health fund. And that is something that will be important to everyone when they retire.”

For more information on these changes or the Health Care Preservation Plan, employees should contact 1-800-222-7377 or visit the OPERS Web site.

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