COLUMBUS, Ohio — An obscure but lucrative perk in some public-sector contracts — governments paying part of an employee’s pension contribution — is up for debate at the Ohio Statehouse.
House Bill 473, which has its first hearing on Wednesday, would ban public employers from covering any portion of their workers’ pension contributions in future contracts.
It’s a practice sometimes used to sweeten deals for administrators and other top hires, where a school district or local government pays not only the employer share of a pension but part or all of the employee share as well.
Rep. Dave Thomas, an Ashtabula County Republican, said the idea might sound generous but ends up being “flawed on a number of fronts.”
He argued it lacks transparency for taxpayers, fuels bidding wars between local governments, and can lower an employee’s eventual pension benefit.
“When taxpayers look at the compensation of an employee, they see the hourly pay rate,” Thomas said. “The practice of picking up the employee’s pension boosts their compensation without full transparency.”
Unions see it differently.
They argue the decision should stay with local school boards and city councils, who know best what it takes to attract and keep top talent.
“It’s this ruse of trying to protect taxpayer dollars instead of addressing the real problem that you’re giving tax breaks to people who don’t need it,” said Ohio Federation of Teachers President Melissa Cropper.
This fight isn’t new.
In 2011, Senate Bill 5 — a sweeping attempt to limit collective bargaining rights voters later struck down — also included a ban on pension pickups.
At the time, school administrators said they were excluded from collective bargaining and didn’t get automatic raises for seniority or advanced degrees. Combine that with more mandatory workdays, and many made less per day than the teachers they supervised.
Pension pickups, they argued, were one way districts could balance that gap.
More than a decade later, Buckeye Association of School Administrators lobbyist Paul Imhoff said the market for administrators hasn’t improved.
“To be honest with you, our market for leaders, whether it’s principals, superintendents, or treasurers, has been steadily shrinking,” he said.
He pushed back on Thomas’s transparency concerns, saying contracts are public records and must be approved in public meetings.
“There is nothing to hide here,” Ihofff said. “If the concern is transparency, I don’t think the answer is to violate local control.”
Unions say HB 473 is also part of a bigger pattern.
Earlier this year, lawmakers passed Senate Bill 1, which restricted faculty bargaining rights at public universities. They warned that Republicans might be trying to pass SB 5 by spreading it across multiple bills.
“It’s these little pieces that keep popping up,” Cropper said. “What do they have against public employees?”
Thomas said the bill is about fairness.
“If this policy was in the best interest of everyone involved, why not have all public employees not contribute to their pensions?” he asked.
Republicans attempted to rein in pension pickups in the state budget, but that measure only applied to school administrators. Gov. Mike DeWine vetoed it, saying it unfairly singled them out.
HB 473 would apply to all public employees, starting with any new contracts signed after the law takes effect.
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