As Passed by the House 1 122nd General Assembly 4 Regular Session Am. H. B. No. 339 5 1997-1998 6 REPRESENTATIVES VESPER-TIBERI-PADGETT-CORBIN-MOTTLEY-LUCAS- 8 COLONNA-TERWILLEGER-HAINES-BRITTON-BRADING-MAIER-TAYLOR- 9 WESTON-PATTON-SCHURING-VAN VYVEN-TAVARES-COUGHLIN-GARDNER- 10 OGG-METZGER-HARRIS-SULZER-SAWYER-REID-VERICH-GERBERRY- 11 BEATTY-WILSON-STAPLETON-THOMAS-PERZ-FOX-ROBERTS-CORE- 12 HOUSEHOLDER-GARCIA-CAREY-BRADY-JONES-HEALY-KRUPINSKI- 13 SUTTON-BUCHY-PRINGLE-OLMAN-MASON-ROMAN-METELSKY- 14 JOHNSON-MYERS-SALERNO 15 17 A B I L L To amend sections 3307.38 and 3307.384 and to enact 19 section 3307.4013 of the Revised Code to increase 20 benefits under the State Teachers Retirement 22 System. 23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 25 Section 1. That sections 3307.38 and 3307.384 be amended 26 and section 3307.4013 of the Revised Code be enacted to read as 27 follows: Sec. 3307.38. Any member who has five years of service 29 credit and has attained age sixty, or who has twenty-five years 30 of service credit and has attained age fifty-five, or who has 31 thirty years of service credit shall be granted service 32 retirement after filing with the state teachers retirement board 33 a completed application on a form approved by the board. 34 (A) Service retirement shall be effective on the first day 36 of the month next following the later of: 37 (1) The last day for which compensation was paid; or 39 (2) The attainment of minimum age or service credit 41 eligibility for benefits provided under this section. 42 2 Except as otherwise provided in division (D) of this 44 section, the service retirement benefit shall be the greater of 45 the benefits provided in divisions (B) and (C) of this section. 46 (B)(1) Subject to any adjustment made under division 48 (B)(2) of this section, the annual single lifetime benefit of a 50 member shall be the greater of the amounts determined byhisTHE MEMBER'S Ohio service credit multiplied by one of the following: 52 (a) Eighty-six dollars; 54 (b) Two and one-tenth per cent ofhisTHE MEMBER'S final 56 average salary, except that if the member has more than thirty 57 years service credit earned under section 3307.31 or purchased 58 under section 3307.512 of the Revised Code,two and five-tenths59 THE per centof hisSHALL BE THE PER CENT SHOWN IN THE FOLLOWING 60 SCHEDULE TIMES THE MEMBER'S final average salary for each 61 CORRESPONDING year or fraction of a year of service credit earned 62 or purchased under those sections that is in excess of thirty 63 years: YEAR PER YEAR PER 66 OF CENT OF CENT 67 SERVICE FOR THAT SERVICE FOR THAT 69 CREDIT YEAR CREDIT YEAR 70 30.01-31.00 2.5% 37.01-38.00 3.2% 71 31.01-32.00 2.6 38.01-39.00 3.3 72 32.01-33.00 2.7 39.01-40.00 3.4 73 33.01-34.00 2.8 40.01-41.00 3.5 74 34.01-35.00 2.9 41.01-42.00 3.6 75 35.01-36.00 3.0 42.01-43.00 3.7 76 36.01-37.00 3.1 77 FOR PURPOSES OF THIS SCHEDULE, YEARS OF SERVICE CREDIT SHALL BE 81 ROUNDED TO THE NEAREST ONE-HUNDREDTH OF A YEAR. (2) The annual single lifetime benefit of a member 83 determined under division (B)(1) of this section shall be 84 adjusted by the greater per cent shown in the following schedule 85 oppositehisTHE MEMBER'S attained age or Ohio service credit. 86 3 Years of Per Cent 88 Attained or Ohio Service of Base 89 Age Credit Amount 90 58 25 75% 91 59 26 80 92 60 27 85 93 61 88 94 28 90 95 62 91 96 63 94 97 29 95 98 64 97 99 65 30 or more 100 100 Members shall vest the right to a benefit in accordance 103 with the following schedule, based on the member's attained age 104 by September 1, 1976: 105 Per Cent 107 Attained of Base 108 Age Amount 109 66 102% 111 67 104 112 68 106 113 69 108 114 70 or more 110 115 (3) The annual single lifetime benefit determined under 118 this division shall not exceed the lesser of one hundred per cent 119 of the final average salary or the limit established by section 120 415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 121 U.S.C.A. 415, as amended. 122 (C) The annual single lifetime benefit of a member shall 124 not exceed the lesser of the sum of the following amounts or the 125 limit established by section 415 of the "Internal Revenue Code of 126 1986," 100 Stat. 2085, 26 U.S.C.A. 415, as amended: 127 (1) An annuity with a reserve equal to the member's 129 4 accumulated contributions; 130 (2) A pension equal to the amount in division (C)(1) of 132 this section; 133 (3) An additional pension of forty dollars annually 135 multiplied by the number of years of prior and military service 136 credit, except years of credit purchased under section 3307.021 137 of the Revised Code; 138 (4) An additional basic annual pension of one hundred 140 eighty dollars, provided the member had ten or more years of Ohio 141 service credit as of October 1, 1956, except thatsuchTHE 142 additional basic annual pension shall not exceed the sum of the 143 annual benefits provided by divisions (C)(1), (2), and (3) of 144 this section. 145 (D) Benefits determined under this section shall be paid 147 as provided in section 3307.50 of the Revised Code. 148 Sec. 3307.384. A retirant who on the effective date of 150 thissectionAMENDMENT is eligible to receive an annual single 152 lifetime benefit under section 3307.38, 3307.41, or 3307.50 of 153 the Revised Code of less thansixNINE thousand SIX HUNDRED 154 dollars or its actuarial equivalent shall havesuchTHAT benefit 155 increased tosixNINE thousand SIX HUNDRED dollars or its 156 actuarial equivalent if the benefit is based on an award arising 157 from thirty or more years of Ohio service credit. The benefit 158 increase provided by thissectionAMENDMENT shall take effect on 159 the first day of the first month following the effective date of 160 thissectionAMENDMENT and shall not be subject to any final 161 average salary limitation. Sec. 3307.4013. (A) AS USED IN THIS SECTION: 163 (1) "BENEFIT" MEANS A BENEFIT, PENSION, OR ALLOWANCE UNDER 165 SECTION 3307.38, 3307.41, 3307.43, 3307.431, 3307.49, OR 3307.50 166 OF THE REVISED CODE. (2) "CUMULATIVE PERCENTAGE CHANGE IN THE CPI" MEANS THE 168 TOTAL PERCENTAGE CHANGE IN THE CONSUMER PRICE INDEX PREPARED BY 169 THE UNITED STATES BUREAU OF LABOR STATISTICS FOR URBAN WAGE 171 5 EARNERS AND CLERICAL WORKERS (CPI-W: U.S. CITY AVERAGE, ALL 172 ITEMS) FROM THE THIRTY-FIRST DAY OF DECEMBER IMMEDIATELY 173 PRECEDING THE YEAR IN WHICH THE ORIGINAL BENEFIT STARTED THROUGH 174 THE THIRTY-FIRST DAY OF DECEMBER IMMEDIATELY PRECEDING THE 175 EFFECTIVE DATE OF THIS SECTION. 176 (3) "ELIGIBLE RECIPIENT" MEANS ANY PERSON RECEIVING A 178 BENEFIT ON THE EFFECTIVE DATE OF THIS SECTION THAT HAS BEEN 179 PAYABLE TO THAT PERSON OR TO ANY OTHER PERSON FOR AT LEAST TWELVE 180 MONTHS. (4) "ORIGINAL BENEFIT AMOUNT" MEANS THE INITIAL AMOUNT OF 182 A BENEFIT GRANTED TO THE INITIAL RECIPIENT OF THE BENEFIT. 183 (B) AS OF THE EFFECTIVE DATE OF THIS SECTION, THE STATE 185 TEACHERS RETIREMENT BOARD SHALL DETERMINE AN AMOUNT FOR EACH 186 ELIGIBLE RECIPIENT EQUAL TO THE SUM OF THE FOLLOWING AMOUNTS: 187 (1) AN AMOUNT EQUAL TO SEVENTY PER CENT OF THE ORIGINAL 189 BENEFIT AMOUNT FOR THE RECIPIENT; 190 (2) AN AMOUNT EQUAL TO THE PRODUCT OBTAINED WHEN SEVENTY 192 PER CENT OF THE ORIGINAL BENEFIT AMOUNT IS MULTIPLIED BY THE 193 CUMULATIVE PERCENTAGE CHANGE IN THE CPI FOR THE RECIPIENT. 194 (C)(1) EXCEPT AS PROVIDED IN DIVISION (C)(2) OF THIS 196 SECTION, IF THE AMOUNT OF THE ANNUAL BENEFIT PAYABLE TO AN 197 ELIGIBLE RECIPIENT ON THE EFFECTIVE DATE OF THIS SECTION IS LESS 198 THAN THE AMOUNT DETERMINED FOR THE RECIPIENT UNDER DIVISION (B) 199 OF THIS SECTION, THE BOARD SHALL RECALCULATE THAT ANNUAL BENEFIT 200 SO THAT IT EQUALS THE AMOUNT DETERMINED UNDER DIVISION (B) OF 201 THIS SECTION. (2) IF THE RECALCULATED BENEFIT DETERMINED UNDER DIVISION 203 (C)(1) OF THIS SECTION FOR AN ELIGIBLE RECIPIENT WHOSE RETIREMENT 204 WAS EFFECTIVE BEFORE JULY 1, 1979, IS LESS THAN ONE HUNDRED THREE 205 PER CENT OF THE ANNUAL BENEFIT PAYABLE TO THE RECIPIENT ON THE 206 EFFECTIVE DATE OF THIS SECTION, THE BOARD SHALL RECALCULATE THE 207 ANNUAL BENEFIT SO THAT IT EQUALS ONE HUNDRED THREE PER CENT OF 208 THE ANNUAL BENEFIT PAYABLE TO THE RECIPIENT ON THE EFFECTIVE DATE 209 OF THIS SECTION. 6 AN INCREASE GRANTED BY DIVISION (C)(1) OR (2) OF THIS 211 SECTION TO A BENEFIT AMOUNT SHALL APPLY ON AND AFTER THE FIRST 212 DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION. 213 (D) THE BOARD SHALL INCLUDE THE INCREASE IN AMOUNT PAID 215 UNDER THIS SECTION IN A PERSON'S BASE FOR PURPOSES OF FUTURE 216 INCREASES IN ANY BENEFIT UNDER SECTION 3307.403 OF THE REVISED 217 CODE. Section 2. That existing sections 3307.38 and 3307.384 of 219 the Revised Code are hereby repealed. 220 Section 3. Any retirant granted service retirement, as 222 provided in section 3307.38 of the Revised Code, that is based on 223 thirty-one or more years service credit earned under section 224 3307.31 or purchased under section 3307.512 of the Revised Code 225 and is effective on or after July 1, 1997, but before the effective date of this act may, no later than December 31, 1997, 226 make application to the State Teachers Retirement Board to have 227 the retirant's benefit recalculated under section 3307.38 of the 228 Revised Code, as amended by this act, and section 3307.50 of the 229 Revised Code. On receipt of the application, the Board shall 230 inform the applicant of the benefit and options to which the 231 applicant is entitled under this act and the applicant may elect to receive a recalculated benefit. If the applicant makes that 232 election, the Board shall pay the recalculated benefit. 233 If the recalculated benefit is greater than the applicant's 235 benefit prior to the recalculation, the Board shall make one 236 additional payment to the applicant equal to the difference 237 between the benefits the applicant received between July 1, 1997, 238 and the date of the payment and the increased benefit the 239 applicant would have received had the act gone into effect on July 1, 1997. 240 The Board shall give written notice to each retirant 242 subject to this section that the retirant may, no later than 243 December 31, 1997, make application to the Board to have the 244 retirant's benefit recalculated under section 3307.38 of the 245 7 Revised Code, as amended by this act, and section 3307.50 of the Revised Code. The Board shall deliver the notice to each 246 retirant by certified mail, return receipt requested. 247