A robust stock market delivered strong investment returns in 2024 for Ohio’s five public pension systems, boosting the collective portfolio to $265.6 billion.
The five systems, which serve 1.16 million Ohio workers and retirees, are funded through a combination of employer and employee contributions and returns on investments.
Stay informed:Sign up for our weekly Ohio politics newsletter
Here is a breakdown of the pension systems’ investment performance in 2024:
Ohio Public Employees Retirement System: 8.62% on its pension fund and 10% on its health care fund. Total portfolio is $130 billion.
State Teachers Retirement System: 9.98%. Total portfolio is now $96.3 billion.
Ohio Police & Fire Pension Fund: 10.66%. Total portfolio is $18.7 billion.
School Employees Retirement System: 9.54%. Total portfolio is $19.5 billion.
Ohio State Highway Patrol Retirement System: 9.6%. The portfolio is worth $1.1 billion.
This marks back-to-back strong returns for the pension funds, which also made investment gains in 2023. The positive years come after big losses in 2022.
The funds each have their specific mix of investment assets: stocks, bonds, real estate and alternative investments.
Their strategies take a long-view because pension funds need to be able to pay out benefits for decades into the future.
They make assumptions about how much they’ll earn on investments, on average, year to year. Public Employees Retirement System has the most conservative assumed rate of return at 6.9% while the police and fire fund has the highest at 7.5%.
What do the pension funds want from lawmakers?
Pension benefits are set in state law, not union contracts. That means the retirement systems need to get lawmakers on board for most reforms.
Despite the strong investment returns for the past two years, two of the systems −STRS and OP&F − will ask state lawmakers to increase how much school districts and police departments contribute as a percentage of payroll into the pension funds.
The teachers fund said it’ll lobby lawmakers for rate hike for how much school districts pay into the system. The employer contribution rate − 14% − hasn’t increased since 1984. STRS will be pitching lawmakers on the rate hike at the same time that its board has been in turmoil and top executives are leaving.
Lawmakers have balked at giving OP&F a contribution rate hike, despite heavy lobbying efforts since 2021. In the new two-year legislative session, the fund will again work with state Rep. Cindy Abrams, R-Cincinnati, a former police officer, to gain a rate boost.
The police and fire fund reduced its assumed annual rate of return from 8% to 7.5%. That move caused its unfunded liabilities to increase on paper.
State law requires the five public pension systems to be able to pay off their liabilities within 30 years. Without either funding increases or benefit cuts, Ohio Police & Fire Pension Fund will likely be out of compliance with the 30-year requirement in the coming years.
Laura Bischoff is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.
