As Passed by the Senate 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 SENATORS DRAKE-McLIN-DiDONATO-HERINGTON-BLESSING- 16 B. JOHNSON-NEIN-OELSLAGER-WHITE-SHOEMAKER-LATTA- 17 KEARNS-HOWARD-RAY-SCHAFRATH-SUHADOLNIK 18 20 A B I L L To amend sections 3307.38 and 3307.384 and to enact 22 section 3307.4013 of the Revised Code to increase 23 benefits under the State Teachers Retirement 25 System, and to declare an emergency. 26 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 28 Section 1. That sections 3307.38 and 3307.384 be amended 29 and section 3307.4013 of the Revised Code be enacted to read as 30 follows: Sec. 3307.38. Any member who has five years of service 32 credit and has attained age sixty, or who has twenty-five years 33 of service credit and has attained age fifty-five, or who has 34 thirty years of service credit shall be granted service 35 retirement after filing with the state teachers retirement board 36 a completed application on a form approved by the board. 37 (A) Service retirement shall be effective on the first day 39 of the month next following the later of: 40 2 (1) The last day for which compensation was paid; or 42 (2) The attainment of minimum age or service credit 44 eligibility for benefits provided under this section. 45 Except as otherwise provided in division (D) of this 47 section, the service retirement benefit shall be the greater of 48 the benefits provided in divisions (B) and (C) of this section. 49 (B)(1) Subject to any adjustment made under division 51 (B)(2) of this section, the annual single lifetime benefit of a 53 member shall be the greater of the amounts determined by
hisTHE MEMBER'S Ohio service credit multiplied by one of the following: 55 (a) Eighty-six dollars; 57 (b) Two and one-tenth per cent of hisTHE MEMBER'S final 59 average salary, except that if the member has more than thirty 60 years service credit earned under section 3307.31 or purchased 61 under section 3307.512 of the Revised Code, two and five-tenths62 THE per cent of hisSHALL BE THE PER CENT SHOWN IN THE FOLLOWING 63 SCHEDULE TIMES THE MEMBER'S final average salary for each 64 CORRESPONDING year or fraction of a year of service credit earned 65 or purchased under those sections that is in excess of thirty 66 years: YEAR PER YEAR PER 69 OF CENT OF CENT 70 SERVICE FOR THAT SERVICE FOR THAT 72 CREDIT YEAR CREDIT YEAR 73 30.01-31.00 2.5% 37.01-38.00 3.2% 74 31.01-32.00 2.6 38.01-39.00 3.3 75 32.01-33.00 2.7 39.01-40.00 3.4 76 33.01-34.00 2.8 40.01-41.00 3.5 77 34.01-35.00 2.9 41.01-42.00 3.6 78 35.01-36.00 3.0 42.01-43.00 3.7 79 36.01-37.00 3.1 80 FOR PURPOSES OF THIS SCHEDULE, YEARS OF SERVICE CREDIT SHALL BE 84 ROUNDED TO THE NEAREST ONE-HUNDREDTH OF A YEAR. (2) The annual single lifetime benefit of a member 86 3 determined under division (B)(1) of this section shall be 87 adjusted by the greater per cent shown in the following schedule 88 opposite hisTHE MEMBER'S attained age or Ohio service credit. 89 Years of Per Cent 91 Attained or Ohio Service of Base 92 Age Credit Amount 93 58 25 75% 94 59 26 80 95 60 27 85 96 61 88 97 28 90 98 62 91 99 63 94 100 29 95 101 64 97 102 65 30 or more 100 103 Members shall vest the right to a benefit in accordance 106 with the following schedule, based on the member's attained age 107 by September 1, 1976: 108 Per Cent 110 Attained of Base 111 Age Amount 112 66 102% 114 67 104 115 68 106 116 69 108 117 70 or more 110 118 (3) The annual single lifetime benefit determined under 121 this division shall not exceed the lesser of one hundred per cent 122 of the final average salary or the limit established by section 123 415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 124 U.S.C.A. 415, as amended. 125 (C) The annual single lifetime benefit of a member shall 127 not exceed the lesser of the sum of the following amounts or the 128 4 limit established by section 415 of the "Internal Revenue Code of 129 1986," 100 Stat. 2085, 26 U.S.C.A. 415, as amended: 130 (1) An annuity with a reserve equal to the member's 132 accumulated contributions; 133 (2) A pension equal to the amount in division (C)(1) of 135 this section; 136 (3) An additional pension of forty dollars annually 138 multiplied by the number of years of prior and military service 139 credit, except years of credit purchased under section 3307.021 140 of the Revised Code; 141 (4) An additional basic annual pension of one hundred 143 eighty dollars, provided the member had ten or more years of Ohio 144 service credit as of October 1, 1956, except that suchTHE 145 additional basic annual pension shall not exceed the sum of the 146 annual benefits provided by divisions (C)(1), (2), and (3) of 147 this section. 148 (D) Benefits determined under this section shall be paid 150 as provided in section 3307.50 of the Revised Code. 151 Sec. 3307.384. A retirant who on the effective date of 153 this sectionAMENDMENT is eligible to receive an annual single 155 lifetime benefit under section 3307.38, 3307.41, or 3307.50 of 156 the Revised Code of less than sixNINE thousand SIX HUNDRED 157 dollars or its actuarial equivalent shall have suchTHAT benefit 158 increased to sixNINE thousand SIX HUNDRED dollars or its 159 actuarial equivalent if the benefit is based on an award arising 160 from thirty or more years of Ohio service credit. The benefit 161 increase provided by this sectionAMENDMENT shall take effect on 162 the first day of the first month following the effective date of 163 this sectionAMENDMENT and shall not be subject to any final 164 average salary limitation. Sec. 3307.4013. (A) AS USED IN THIS SECTION: 166 (1) "BENEFIT" MEANS A BENEFIT, PENSION, OR ALLOWANCE UNDER 168 SECTION 3307.38, 3307.41, 3307.43, 3307.431, 3307.49, OR 3307.50 169 OF THE REVISED CODE. 5 (2) "CUMULATIVE PERCENTAGE CHANGE IN THE CPI" MEANS THE 171 TOTAL PERCENTAGE CHANGE IN THE CONSUMER PRICE INDEX PREPARED BY 172 THE UNITED STATES BUREAU OF LABOR STATISTICS FOR URBAN WAGE 174 EARNERS AND CLERICAL WORKERS (CPI-W: U.S. CITY AVERAGE, ALL 175 ITEMS) FROM THE THIRTY-FIRST DAY OF DECEMBER IMMEDIATELY 176 PRECEDING THE YEAR IN WHICH THE ORIGINAL BENEFIT STARTED THROUGH 177 THE THIRTY-FIRST DAY OF DECEMBER IMMEDIATELY PRECEDING THE 178 EFFECTIVE DATE OF THIS SECTION. 179 (3) "ELIGIBLE RECIPIENT" MEANS ANY PERSON RECEIVING A 181 BENEFIT ON THE EFFECTIVE DATE OF THIS SECTION THAT HAS BEEN 182 PAYABLE TO THAT PERSON OR TO ANY OTHER PERSON FOR AT LEAST TWELVE 183 MONTHS. (4) "ORIGINAL BENEFIT AMOUNT" MEANS THE INITIAL AMOUNT OF 185 A BENEFIT GRANTED TO THE INITIAL RECIPIENT OF THE BENEFIT. 186 (B) AS OF THE EFFECTIVE DATE OF THIS SECTION, THE STATE 188 TEACHERS RETIREMENT BOARD SHALL DETERMINE AN AMOUNT FOR EACH 189 ELIGIBLE RECIPIENT EQUAL TO THE SUM OF THE FOLLOWING AMOUNTS: 190 (1) AN AMOUNT EQUAL TO SEVENTY PER CENT OF THE ORIGINAL 192 BENEFIT AMOUNT FOR THE RECIPIENT; 193 (2) AN AMOUNT EQUAL TO THE PRODUCT OBTAINED WHEN SEVENTY 195 PER CENT OF THE ORIGINAL BENEFIT AMOUNT IS MULTIPLIED BY THE 196 CUMULATIVE PERCENTAGE CHANGE IN THE CPI FOR THE RECIPIENT. 197 (C)(1) EXCEPT AS PROVIDED IN DIVISION (C)(2) OF THIS 199 SECTION, IF THE AMOUNT OF THE ANNUAL BENEFIT PAYABLE TO AN 200 ELIGIBLE RECIPIENT ON THE EFFECTIVE DATE OF THIS SECTION IS LESS 201 THAN THE AMOUNT DETERMINED FOR THE RECIPIENT UNDER DIVISION (B) 202 OF THIS SECTION, THE BOARD SHALL RECALCULATE THAT ANNUAL BENEFIT 203 SO THAT IT EQUALS THE AMOUNT DETERMINED UNDER DIVISION (B) OF 204 THIS SECTION. (2) IF THE RECALCULATED BENEFIT DETERMINED UNDER DIVISION 206 (C)(1) OF THIS SECTION FOR AN ELIGIBLE RECIPIENT WHOSE RETIREMENT 207 WAS EFFECTIVE BEFORE JULY 1, 1979, IS LESS THAN ONE HUNDRED THREE 208 PER CENT OF THE ANNUAL BENEFIT PAYABLE TO THE RECIPIENT ON THE 209 EFFECTIVE DATE OF THIS SECTION, THE BOARD SHALL RECALCULATE THE 210 6 ANNUAL BENEFIT SO THAT IT EQUALS ONE HUNDRED THREE PER CENT OF 211 THE ANNUAL BENEFIT PAYABLE TO THE RECIPIENT ON THE EFFECTIVE DATE 212 OF THIS SECTION. AN INCREASE GRANTED BY DIVISION (C)(1) OR (2) OF THIS 214 SECTION TO A BENEFIT AMOUNT SHALL APPLY ON AND AFTER THE FIRST 215 DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION. 216 (D) THE BOARD SHALL INCLUDE THE INCREASE IN AMOUNT PAID 218 UNDER THIS SECTION IN A PERSON'S BASE FOR PURPOSES OF FUTURE 219 INCREASES IN ANY BENEFIT UNDER SECTION 3307.403 OF THE REVISED 220 CODE. Section 2. That existing sections 3307.38 and 3307.384 of 222 the Revised Code are hereby repealed. 223 Section 3. Any retirant granted service retirement, as 225 provided in section 3307.38 of the Revised Code, that is based on 226 thirty-one or more years service credit earned under section 227 3307.31 or purchased under section 3307.512 of the Revised Code 228 and is effective on or after July 1, 1997, but before the effective date of this act may, no later than December 31, 1997, 229 make application to the State Teachers Retirement Board to have 230 the retirant's benefit recalculated under section 3307.38 of the 231 Revised Code, as amended by this act, and section 3307.50 of the 232 Revised Code. On receipt of the application, the Board shall 233 inform the applicant of the benefit and options to which the 234 applicant is entitled under this act and the applicant may elect to receive a recalculated benefit. If the applicant makes that 235 election, the Board shall pay the recalculated benefit. 236 If the recalculated benefit is greater than the applicant's 238 benefit prior to the recalculation, the Board shall make one 239 additional payment to the applicant equal to the difference 240 between the benefits the applicant received between July 1, 1997, 241 and the date of the payment and the increased benefit the 242 applicant would have received had the act gone into effect on July 1, 1997. 243 The Board shall give written notice to each retirant 245 7 subject to this section that the retirant may, no later than 246 December 31, 1997, make application to the Board to have the 247 retirant's benefit recalculated under section 3307.38 of the 248 Revised Code, as amended by this act, and section 3307.50 of the Revised Code. The Board shall deliver the notice to each 249 retirant by certified mail, return receipt requested. 250 Section 4. This act is hereby declared to be an emergency 252 measure necessary for the immediate preservation of the public 253 peace, health, and safety. The reason for such necessity is that 254 the benefits of teachers who retired in the 1960s and 1970s have 255 lost a significant amount of purchasing power due to inflation, 256 and an immediate increase in benefits is needed to regain some of this purchasing power. Therefore, this act shall go into 257 immediate effect.