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Ohio's Pension Systems Are Underfunded, According to a New Report

photo of David Draine

State pension systems are underfunded by more than a trillion dollars nationwide, according to a new report. And taxpayers would have to make up that shortfall. But Statehouse correspondent Karen Kasler reports the study has some good news for Ohio.

Ohio’s pension system is 76 percent funded, which is an improvement over the last time the Pew Charitable Trusts looked at public sector retirement systems. Senior researcher David Draine says Ohio is at 21st in the nation, and he notes the state has made some changes to try to shore up its pension funds, such as capping cost-of-living adjustments.

“If all those things hold true, that obviously puts them on a path towards closing their pension debt over time.”

But the report said the three Ohio pension funds studied assumed rates of return of more than 7.75 percent, which is twice as high as their actual rates of return. And the Pew study said pension funds nationwide paid more than $4 billion in hidden fees, mostly to private equity managers.

Karen is a lifelong Ohioan who has served as news director at WCBE-FM, assignment editor/overnight anchor at WBNS-TV, and afternoon drive anchor/assignment editor in WTAM-AM in Cleveland. In addition to her daily reporting for Ohio’s public radio stations, she’s reported for NPR, the BBC, ABC Radio News and other news outlets. She hosts and produces the Statehouse News Bureau’s weekly TV show “The State of Ohio”, which airs on PBS stations statewide. She’s also a frequent guest on WOSU TV’s “Columbus on the Record”, a regular panelist on “The Sound of Ideas” on ideastream in Cleveland, appeared on the inaugural edition of “Face the State” on WBNS-TV and occasionally reports for “PBS Newshour”. She’s often called to moderate debates, including the Columbus Metropolitan Club’s Issue 3/legal marijuana debate and its pre-primary mayoral debate, and the City Club of Cleveland’s US Senate debate in 2012.