In an earlier post we discussed the failure of organizations to properly fund their traditional pension plans. We said that actuaries pressure Plan Administration to 100% fund every dollar of plan benefits–even those not payable for up to 30 years in the future. The consequence of that actuarial demand is now being felt by thousands of public retirees in Ohio. The Ohio Public Employees Retirement System (OPERS) as it strives for 100% funding is now eliminating retiree medical plan coverage from its plan. Several thousand elderly retirees and spouses are losing their coverage when they need it the most. To compound this calamity, 97% of all Ohio retirees are NOT eligible for Medicare. So all of these individuals are being thrown into the retail insurance market with a small stipend to sort out coverages, eligibility, exclusions, conditions, co-payments and co-insurance along with the real possibility that they might need to change doctors. This entire mess is caused by the lack of intelligence of the Plan Managers who bow to the whims of actuaries without using common sense. By comparison, the vast majority (85%) of for-profit companies DO NOT FUND TO THE 100% level. They understand that to do so is a total waste of company resources. And if the OPERS decision isn’t distasteful enough for the retirees, imagine the current employee who was planning to retire. Many of these individuals were school bus drivers, custodians, cafeteria workers and the like. They will be afraid to retire because of the lack of a retiree medical plan. This same fate is falling to teacher plans state-wide. The system MUST BE CHANGED before stupidity destroys the lives of many through medical bankruptcy. FYI, THIS MESS EXISTS IN EVERY STATE AND THE CONSEQUENCES WILL BE FAR-REACHING AND DISASTROUS.
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