REPRESENTATIVES Schuring, Hollister, Ogg, Barrett, D. Miller, Schneider, Boccieri, Key, DeWine, Lendrum

To amend sections 145.323, 742.37, 742.3711, 742.3716,

1

742.3717, 742.3718, 742.3720, 3307.67, 3309.374,

2

and 5505.174 of the Revised Code to provide that

3

the annual cost of living increase paid to retired

4

members and beneficiaries of Ohio's state

5

retirement systems will be three per cent.

6

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 145.323, 742.37, 742.3711,	7
742.3716, 742.3717, 742.3718, 742.3720, 3307.67, 3309.374, and	8
5505.174 of the Revised Code be amended to read as follows:	9

Sec. 145.323.  (A) Beginning April 1, 1971, and each year	10
thereafter, the board of theThe public employees retirement	11
system shall determine the average percentage change in the	12
consumer price index prepared by the United States bureau of labor	13
statistics (U.S. City Average for Urban Wage Earners and Clerical	14
Workers: "All Items 1982-84=100") for the twelve-calendar-month	15
period prior to the first day of January over the next preceding	16
twelve-calendar-month period, as reported by the bureau.	17

Upon a determination by the board in any year that the change	18
in the consumer price index is an increase or that the change plus	19
the accumulation described in division (B) of this section is an	20
increase, the board shall annually increase each allowance,	21
pension, or benefit payable under this chapter by a percentage	22
equal to the percentage increase in the consumer price index or to	23
that increase plus the accumulation, except that the increase	24
shall not exceed three per cent and,except that no allowance,	25
pension, or benefit shall exceed the limit established by section	26
415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26	27
U.S.C.A. 415, as amended.	28

The first increase is payable to all persons becoming	29
eligible after June 30, 1971, upon such persons receiving an	30
allowance for twelve months. The increased amount is payable for	31
the ensuing twelve-month period or until the next increase is	32
granted under this section, whichever is later. Subsequent	33
increases shall be determined from the date of the first increase	34
paid to the former member in the case of an allowance being paid a	35
beneficiary under an option, or from the date of the first	36
increase to the survivor first receiving an allowance or benefit	37
in the case of an allowance or benefit being paid to the	38
subsequent survivors of the former member.	39

The date of the first increase under this section becomes the	40
anniversary date for any future increases.	41

The allowance or benefit used in the first calculation of an	42
increase under this section shall remain as the base for all	43
future increases, unless a new base is established.	44

(B) Any percentage of change in the consumer price index in	45
any year that is in excess of three per cent shall be accumulated	46
and used to determine increases under this section in subsequent	47
years. Any percentage of change in the consumer price index	48
accumulated by an eligible person prior to the effective date of	49
this amendment shall be used in determining any future increases	50
under this section.	51

(C) The board shall make all rules necessary to carry out	52
this section.	53

Sec. 742.37.  The board of trustees of the Ohio police and	54
fire pension fund shall adopt rules for the management of the fund	55
and for the disbursement of benefits and pensions as set forth in	56
this section and section 742.39 of the Revised Code. Any payment	57
of a benefit or pension under this section is subject to the	58
provisions of section 742.461 of the Revised Code. Notwithstanding	59
any other provision of this section, no pension or benefit paid or	60
determined under division (B) or (C) of this section or section	61
742.39 of the Revised Code shall exceed the limit established by	62
section 415 of the "Internal Revenue Code of 1986," 100 Stat.	63
2085, 26 U.S.C.A. 415, as amended.	64

(A) Persons who were receiving benefit or pension payments	65
from a police relief and pension fund established under former	66
section 741.32 of the Revised Code, or from a firemen's relief and	67
pension fund established under former section 521.02 or 741.02 of	68
the Revised Code, at the time the assets of the fund were	69
transferred to the Ohio police and fire pension fund, known at	70
that time as the police and firemen's disability and pension fund,	71
shall receive benefit and pension payments from the Ohio police	72
and fire pension fund in the same amount and subject to the same	73
conditions as such payments were being made from the former fund	74
on the date of the transfer.	75

(B) A member of the fund who, pursuant to law, elected to	76
receive benefits and pensions from a police relief and pension	77
fund established under former section 741.32 of the Revised Code,	78
or from a firemen's relief and pension fund established under	79
former section 741.02 of the Revised Code, in accordance with the	80
rules of the fund governing the granting of benefits or pensions	81
therefrom in force on April 1, 1947, shall receive benefits and	82
pensions from the Ohio police and fire pension fund in accordance	83
with such rules; provided, that any member of the fund who is not	84
receiving a benefit or pension from the fund on August 12, 1975,	85
may, upon application for a benefit or pension to be received on	86
or after August 12, 1975, elect to receive a benefit or pension in	87
accordance with division (C) of this section.	88

(C) Members of the fund who have not elected to receive	89
benefits and pensions from a police relief and pension fund or a	90
firemen's relief and pension fund in accordance with the rules of	91
the fund in force on April 1, 1947, shall receive pensions and	92
benefits in accordance with the following provisions:	93

(1) A member of the fund who has completed twenty-five years	94
of active service in a police or fire department and has attained	95
forty-eight years of age may, at the member's election, retire	96
from the police or fire department, and upon notifying the board	97
in writing of the election, shall receive an annual pension,	98
payable in twelve monthly installments, in an amount equal to a	99
percentage of the member's average annual salary. The percentage	100
shall be the sum of two and one-half per cent for each of the	101
first twenty years the member was in the active service of the	102
department, plus two per cent for each of the twenty-first to	103
twenty-fifth years the member was in the active service of the	104
department, plus one and one-half per cent for each year in excess	105
of twenty-five years the member was in the active service of the	106
department. The annual pension shall not exceed seventy-two per	107
cent of the member's average annual salary.	108

A member who completed twenty-five years of active service,	109
has resigned or been discharged, and has left the sum deducted	110
from the member's salary on deposit in the pension fund shall,	111
upon attaining forty-eight years of age, be entitled to receive a	112
normal service pension benefit computed and paid under division	113
(C)(1) of this section.	114

(2) A member of the fund who has served fifteen or more	115
years as an active member of a police or fire department and who	116
voluntarily resigns or is discharged from the department for any	117
reason other than dishonesty, cowardice, intemperate habits, or	118
conviction of a felony, shall receive an annual pension, payable	119
in twelve monthly installments, in an amount equal to one and	120
one-half per cent of the member's average annual salary multiplied	121
by the number of full years the member was in the active service	122
of the department. The pension payments shall not commence until	123
the member has attained the age of forty-eight years and until	124
twenty-five years have elapsed from the date on which the member	125
became a full-time regular police officer or firefighter in the	126
department.	127

(3) A member of the fund who has completed fifteen or more	128
years of active service in a police or fire department and who has	129
attained sixty-two years of age, may retire from the department	130
and, upon notifying the board in writing of the election to	131
retire, shall receive an annual pension, payable in twelve monthly	132
installments, in an amount equal to a percentage of the member's	133
average annual salary. The percentage shall be the sum of two and	134
one-half per cent for each of the first twenty years the member	135
was in the active service of the department, plus two per cent for	136
each of the twenty-first to twenty-fifth years the member was in	137
the active service of the department, plus one and one-half per	138
cent for each year in excess of twenty-five years the member was	139
in the active service of the department. The annual pension shall	140
not exceed seventy-two per cent of the member's average annual	141
salary.	142

(4) With the exception of those persons who may make	143
application for benefits as provided in section 742.26 of the	144
Revised Code, no person receiving a pension or other benefit under	145
division (C) of this section on or after July 24, 1986, shall be	146
entitled to apply for any new, changed, or different benefit.	147

If a member covered by division (C) of this section or	148
section 742.38 of the Revised Code dies prior to the time the	149
member has received a payment and leaves a surviving spouse or	150
dependent child, the surviving spouse or dependent child shall	151
receive a pension under division (D) or (E) of this section.	152

(D)(1) Except as provided in division (D)(2) of this	153
section, a surviving spouse of a deceased member of the fund shall	154
receive a monthly pension as follows:	155

(a) For the period beginning July 1, 1999, and ending June	156
30, 2000, five hundred fifty dollars;	157

(b) For the period beginning July 1, 2000, and the first day	158
of July of each year thereafter and continuing for the following	159
twelve months, an amount equal to the monthly amount paid during	160
the prior twelve-month period plus an amount determined by	161
multiplying five hundred fiftysixteen dollars by the average	162
percentage change in the consumer price index, not exceeding three	163
per cent, as determined each year by the board under section	164
742.3716 of the Revised Codeand fifty cents.	165

(2) A surviving spouse of a deceased member of the fund	166
shall receive a monthly pension of four hundred ten dollars if the	167
surviving spouse is eligible for a benefit under division (B) or	168
(D) of section 742.63 of the Revised Code. If the surviving	169
spouse ceases to be eligible for a benefit under division (B) or	170
(D) of section 742.63 of the Revised Code, the pension shall be	171
increased, effective the first day of the first month following	172
the day on which the surviving spouse ceases to be eligible for	173
the benefit, to the amount it would be under division (D)(1) of	174
this section had the spouse never been eligible for a benefit	175
under division (B) or (D) of section 742.63 of the Revised Code.	176

(3) A pension paid under this division shall continue during	177
the natural life of the surviving spouse. Benefits to a deceased	178
member's surviving spouse that were terminated under a former	179
version of this section that required termination due to	180
remarriage and were not resumed prior to September 16, 1998, shall	181
resume on the first day of the month immediately following receipt	182
by the board of an application on a form provided by the board.	183

(E) Each surviving child of a deceased member of the fund	184
shall receive a monthly pension of one hundred fifty dollars until	185
the child attains the age of eighteen years, or marries, whichever	186
event occurs first. A pension under this division, however, shall	187
continue to be payable to a child under age twenty-two who is a	188
student in and attending an institution of learning or training	189
pursuant to a program designed to complete in each school year the	190
equivalent of at least two-thirds of the full-time curriculum	191
requirements of the institution, as determined by the board. If	192
any surviving child, regardless of age at the time of the member's	193
death, because of physical or mental disability, is totally	194
dependent upon the deceased member for support at the time of	195
death, the child shall receive a monthly pension under this	196
division during the child's natural life or until the child has	197
recovered from the disability.	198

(F) If a deceased member of the fund leaves no surviving	199
spouse or surviving children, but leaves two parents dependent	200
upon the deceased member for support, each parent shall be paid a	201
monthly pension of one hundred dollars. If there is only one	202
parent dependent upon the member for support, the parent shall be	203
paid a monthly pension of two hundred dollars. The pensions	204
provided for in this division shall be paid during the natural	205
life of the surviving parents, or until dependency ceases, or	206
until remarriage, whichever event occurs first.	207

(G) Subject to the provisions of section 742.461 of the	208
Revised Code, a member of the fund who voluntarily resigns or is	209
removed from active service in a police or fire department is	210
entitled to receive an amount equal to the sums deducted from the	211
member's salary and credited to the member's account in the fund,	212
except that a member receiving a disability benefit or service	213
pension is not entitled to receive any return of contributions to	214
the fund.	215

(H) On and after January 1, 1970, all pensions shall be	216
increased in accordance with the following provisions:	217

(1) A member of the fund who retired prior to January 1,	218
1967, has attained age sixty-five on January 1, 1970, and was	219
receiving a pension on December 31, 1969, pursuant to division (B)	220
or (C)(1) of this section or former division (C)(2), (3), (4), or	221
(5) of this section, shall have the pension increased by ten per	222
cent.	223

(2) The monthly pension payable to eligible surviving	224
spouses under division (D) of this section shall be increased by	225
forty dollars for each surviving spouse receiving a pension on	226
December 31, 1969.	227

(3) The monthly pension payable to each eligible child under	228
division (E) of this section shall be increased by ten dollars for	229
each child receiving a pension on December 31, 1969.	230

(4) The monthly pension payable to each eligible dependent	231
parent under division (F) of this section shall be increased by	232
thirty dollars for each parent receiving a pension on December 31,	233
1969.	234

(5) A member of the fund, including a survivor of a member,	235
who is receiving a pension in accordance with the rules governing	236
the granting of pensions and benefits in force on April 1, 1947,	237
that provide an increase in the original pension from time to time	238
pursuant to changes in the salaries of active members, shall not	239
be eligible for the benefits provided in this division.	240

(I) On and after January 1, 1977, a member of the fund who	241
was receiving a pension or benefit on December 31, 1973, under	242
division (A), (B), (C)(1), or former division (C)(2) or (7) of	243
this section shall have the pension or benefit increased as	244
follows:	245

(1) If the member's annual pension or benefit is less than	246
two thousand seven hundred dollars, it shall be increased to three	247
thousand dollars.	248

(2) If the member's annual pension or benefit is two	249
thousand seven hundred dollars or more, it shall be increased by	250
three hundred dollars.	251

The following shall not be eligible to receive increased	252
pensions or benefits as provided in this division:	253

(a) A member of the fund who is receiving a pension or	254
benefit in accordance with the rules in force on April 1, 1947,	255
governing the granting of pensions and benefits, which provide an	256
increase in the original pension or benefit from time to time	257
pursuant to changes in the salaries of active members;	258

(b) A member of the fund who is receiving a pension or	259
benefit under division (A) or (B) of this section, based on funded	260
volunteer or funded part-time service, or off-duty disability, or	261
partial on-duty disability, or early vested service;	262

(c) A member of the fund who is receiving a pension under	263
division (C)(1) of this section, based on funded volunteer or	264
funded part-time service.	265

(J) On and after July 1, 1977, a member of the fund who was	266
receiving an annual pension or benefit on December 31, 1973,	267
pursuant to division (B) of this section, based upon partial	268
disability, off-duty disability, or early vested service, or	269
pursuant to former division (C)(3), (5), or (6) of this section,	270
shall have such annual pension or benefit increased by three	271
hundred dollars.	272

The following are not eligible to receive the increase	273
provided by this division:	274

(1) A member of the fund who is receiving a pension or	275
benefit in accordance with the rules in force on April 1, 1947,	276
governing the granting of pensions and benefits, which provide an	277
increase in the original pension or benefit from time to time	278
pursuant to changes in the salaries of active members;	279

(2) A member of the fund who is receiving a pension or	280
benefit under division (B) or (C)(2) of this section or former	281
division (C)(3), (5), or (6) of this section based on volunteer or	282
part-time service.	283

(K)(1) Except as otherwise provided in this division, every	284
person who on July 24, 1986, is receiving an age and service or	285
disability pension, allowance, or benefit pursuant to this chapter	286
in an amount less than thirteen thousand dollars a year that is	287
based upon an award made effective prior to February 28, 1984,	288
shall receive an increase of six hundred dollars a year or the	289
amount necessary to increase the pension or benefit to four	290
thousand two hundred dollars after all adjustments required by	291
this section, whichever is greater.	292

(2) Division (K)(1) of this section does not apply to the	293
following:	294

(a) A member of the fund who is receiving a pension or	295
benefit in accordance with rules in force on April 1, 1947, that	296
govern the granting of pensions and benefits and that provide an	297
increase in the original pension or benefit from time to time	298
pursuant to changes in the salaries of active members;	299

(b) A member of the fund who is receiving a pension or	300
benefit based on funded volunteer or funded part-time service.	301

(L) On and after July 24, 1986:

302

(1) The pension of each person receiving a pension under	303
division (D) of this section on July 24, 1986, shall be increased	304
to three hundred ten dollars per month.	305

(2) The pension of each person receiving a pension under	306
division (E) of this section on July 24, 1986, shall be increased	307
to ninety-three dollars per month.	308

Sec. 742.3711.  (A) On application for retirement as	309
provided in section 742.37 of the Revised Code, a member of the	310
fund may elect to receive a retirement allowance payable	311
throughout the member's life, or may elect, on the application for	312
retirement, to receive the actuarial equivalent of the member's	313
retirement allowance in a lesser amount payable for life and	314
continuing after death to a surviving designated beneficiary under	315
one of the following optional plans, provided the amount payable	316
to the beneficiary shall not exceed the amount payable to the	317
retiring member of the fund, and is certified by the actuary	318
engaged by the board of trustees of the Ohio police and fire	319
pension fund to be the actuarial equivalent of the member's	320
retirement allowance and is approved by the board.	321

(1) Option 1. The member's lesser retirement allowance	322
shall be paid for life to the sole beneficiary designated at the	323
time of the member's retirement.	324

(2) Option 2. One-half or some other portion of the	325
member's lesser retirement allowance shall be paid for life to the	326
sole beneficiary designated at the time of the member's	327
retirement.	328

(3) Option 3. Upon the member's death before the expiration	329
of a certain period from the retirement date and elected by the	330
member and approved by the retirement board, the member's lesser	331
retirement allowance shall be continued for the remainder of that	332
period to the beneficiary the member has nominated by written	333
designation and filed with the retirement board.	334

Should the nominated beneficiary designated in writing become	335
deceased prior to the expiration of the guarantee period, then for	336
the purpose of completing payment for the remainder of the	337
guarantee period, the present value of such payments shall be paid	338
to the estate of the beneficiary last receiving.	339

(B)(1) On or after February 28, 1980, the death of a spouse	340
nominated as beneficiary or the death of any other nominated	341
beneficiary following retirement shall cancel any optional plan of	342
payment to provide continuing lifetime benefits to such nominated	343
beneficiary and return the member of the fund to the member's	344
single lifetime benefit equivalent, as determined by the board, to	345
be effective the month following receipt by the board of notice of	346
the death.	347

(2) On divorce, annulment, or marriage dissolution, a member	348
receiving a retirement allowance under a plan that provides for	349
continuation of all or part of the allowance after death for the	350
lifetime of the member's surviving spouse may, with the written	351
consent of the spouse or pursuant to an order of the court with	352
jurisdiction over the termination of the marriage, elect to cancel	353
the plan and receive the member's single lifetime benefit	354
equivalent as determined by the board. The election shall be made	355
on a form provided by the board and shall be effective the month	356
following its receipt by the board.	357

(C) Following marriage or remarriage, a member of the fund	358
may elect not later than one year after the date of marriage or	359
remarriage a new optional plan of payment based on the actuarial	360
equivalent of the member's single lifetime benefit as determined	361
by the board. The plan and the member's lesser retirement	362
allowance shall become effective on the date the election is made	363
on a form approved by the board.	364

(D)(1) Unless one of the following occurs, an application	365
for retirement by a married person shall be considered an election	366
of a benefit under option 2 as provided for in division (A)(2) of	367
this section under which one-half of the lesser retirement	368
allowance payable during the life of the retirant will be paid	369
after death to the retirant's spouse for life as sole beneficiary:	370

(a) The retirant selects an optional plan under division (A)	371
of this section providing for payment after death to the	372
retirant's spouse for life as sole beneficiary of more than	373
one-half of the lesser retirement allowance payable during the	374
life of the retirant;	375

(b) The retirant submits to the retirement board a written	376
statement signed by the spouse attesting that the spouse consents	377
to the retirant's election to receive a single lifetime retirement	378
allowance or a payment under an optional benefit plan under which	379
after the death of the retirant the surviving spouse will receive	380
less than one-half of the lesser retirement allowance payable	381
during the life of the retirant.	382

(2) An application for retirement shall include an	383
explanation of all of the following:	384

(a) That, if the member is married, unless the spouse	385
consents to another plan of payment, the member's retirement	386
allowance will be paid under "option 2" and consist of the	387
actuarial equivalent of the member's retirement allowance in a	388
lesser amount payable for life and one-half of the lesser	389
allowance continuing after death to the surviving spouse for the	390
life of the spouse;	391

(b) A description of the alternative plans of payment	392
available with the consent of the spouse;	393

(c) That the spouse may consent to another plan of payment	394
and the procedure for giving consent;	395

(d) That consent is irrevocable once notice of consent is	396
filed with the board.	397

Consent shall be valid only if it is signed, in writing, and	398
witnessed by an employee of the board or a notary public.	399

(3) If the retirant does not select an optional plan as	400
described in division (D)(1)(a) of this section and the board does	401
not receive the written statement provided for in division	402
(D)(1)(b) of this section, it shall determine and pay the	403
retirement allowance in accordance with division (A)(2) of this	404
section, except that the board may provide by rule for waiver by	405
the board of the statement and payment of the allowance other than	406
in accordance with division (A)(2) of this section if the retirant	407
is unable to obtain the statement due to absence or incapacity of	408
the spouse or other cause specified by the board.	409

(E) A member of the fund who has elected an optional plan	410
under this section or section 742.3715 of the Revised Code may,	411
with the consent of the designated beneficiary, cancel the	412
optional plan and receive the retirement allowance payable	413
throughout life the member would have received had the member not	414
elected the optional plan, if the member makes a request to cancel	415
the optional plan not later than one year after the later of	416
September 9, 1988, or the date on which the member first receives	417
a payment under this section or section 742.3715 of the Revised	418
Code. Cancellation of the optional plan shall be effective the	419
month after acceptance of the request by the trustees of the fund.	420
No payment or adjustment shall be made in the retirement allowance	421
payable throughout the member's life to compensate for the lesser	422
allowance the member received under the optional plan.	423

The request to cancel the optional plan shall be made on a	424
form provided by the fund and shall be valid only if the completed	425
form includes a signed statement of the designated beneficiary's	426
understanding of and consent to the cancellation. The signature	427
shall be verified by the trustees of the fund prior to their	428
acceptance of the cancellation.	429

(F) Any option elected and payments made under this section	430
shall be in addition to any benefit payable under divisions (D),	431
(E), and (F) of section 742.37 of the Revised Code.	432

(G) A person is eligible to receive a benefit increase under	433
this division if the person is receiving a retirement allowance or	434
benefit under an optional plan elected under this section or	435
section 742.3715 of the Revised Code based on an award made prior	436
to July 24, 1986. A person is not eligible to receive an increase	437
under this division if the person is receiving a pension or	438
benefit in accordance with rules in force on April 1, 1947, that	439
govern the granting of pensions and benefits and that provide an	440
increase in the original pension or benefit from time to time	441
pursuant to changes in the salaries of active members.	442

On or before the fifteenth day of April of each year, theThe	443
board shall determine the average percentage change in the	444
consumer price index prepared by the United States bureau of labor	445
statistics (U.S. city average for urban wage earners and clerical	446
workers: "all items 1982-84=100") for the twelve-month period	447
prior to the first day of January over the next preceding	448
twelve-calendar-month period, as reported by the bureau. On a	449
determination by the board that this change is an increase or that	450
the change plus the accumulation described in this division is an	451
increase, the board shallannually increase all benefits payable	452
under this section or section 742.3715 of the Revised Code to	453
eligible persons by the actuarial equivalent of an amount	454
determined by multiplying twelve thousandthree hundred sixty	455
dollars by the percentage of the increase in the consumer price	456
index, or that percentage plus the accumulation, except that the	457
percentage shall not exceed three per cent and no benefit shall	458
exceed the limit established by section 415 of the "Internal	459
Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 415, as	460
amended.	461

Any percentage of change in the consumer price index in any	462
year that is in excess of three per cent shall be accumulated and	463
used to determine increases under this section in succeeding	464
years. Any percentage of change in the consumer price index	465
accumulated by an eligible person prior to September 27, 1996,	466
shall be used in determining any future increases under this	467
section. The first increase is payable to all eligible persons on	468
July 1, 1988. The increase is payable for the ensuing	469
twelve-month period or until the next increase is granted under	470
this section, whichever is later.	471

The date of the first increase payable under this section	472
shall be the anniversary date for future increases.	473

Sec. 742.3716.  (A) As used in this section:

474

(1) "Eligible person" means a person who meets all of the	475
following conditions:	476

(a) Has been receiving a pension or benefit under this	477
chapter for one year or more based on an award made on or after	478
July 24, 1986;	479

(b) Has not made the election provided for in division (B)	480
of this section;	481

(c) Is not the spouse or survivor of a person who has made	482
the election provided for in division (B) of this section;	483

(d) Is receiving a benefit in accordance with division (A),	484
(B), or (C) of section 742.37, division (C)(2), (3), (4), or (5)	485
of former section 742.37, section 742.3711, or section 742.39 of	486
the Revised Code.	487

(2) "Recalculated average annual salary" means the highest	488
average annual compensation of a member of the Ohio police and	489
fire pension fund during any three years of contributions,	490
including amounts included in terminal pay attributable to such	491
three years, determined by dividing the member's total earnings as	492
an employee during such years by three.	493

(B)(1) Notwithstanding section 742.37 or 742.39 of the	494
Revised Code, a member of the fund who is not receiving a pension	495
or benefit under this chapter and who on January 1, 1989, has	496
completed fifteen or more years of active service in a police or	497
fire department may elect to have any future benefit or pension	498
paid to the member or the member's spouse or survivors under this	499
chapter calculated on the basis of the member's recalculated	500
average annual salary rather than the member's average annual	501
salary. The election shall be made by the member prior to or at	502
the time of making an election under section 742.3711 of the	503
Revised Code.	504

(2) If the member eligible to make the election under	505
division (B)(1) of this section dies prior to making the election	506
and at the time of death is eligible to retire and receive a	507
pension or benefit under division (C)(1) or (3) of section 742.37	508
of the Revised Code, the person entitled to receive a benefit	509
under section 742.3714 of the Revised Code may make the election	510
provided for in division (B)(1) of this section.	511

(3) The election under division (B)(1) or (2) of this	512
section shall be made on forms provided by the trustees of the	513
fund. Once received by the fund, the election shall be	514
irrevocable and shall bind the member and any other person who	515
receives a pension or benefit based on the member's service. No	516
person who receives a pension or benefit calculated in accordance	517
with division (B) of this section is eligible to receive a	518
cost-of-living allowance under this section. If the person making	519
the election receives a benefit under section 742.3714 of the	520
Revised Code, that person is not eligible to receive a	521
cost-of-living allowance under section 742.3711 of the Revised	522
Code.	523

(C)(1) On or before the fifteenth day of April of each year,	524
theThe board of trustees of the Ohio police and fire pension fund	525
shall determine the average percentage change in the consumer	526
price index prepared by the United States bureau of labor	527
statistics (U.S. City Average for Urban Wage Earners and Clerical	528
Workers: "All Items 1982-84=100") for the twelve-month period	529
prior to the first day of January over the next preceding	530
twelve-calendar-month period, as reported by the bureau. Upon a	531
determination by the board that such change is an increase or that	532
the change plus the accumulation described in division (C)(2) of	533
this section is an increase, the board shallannually increase all	534
benefits payable to eligible persons by a percentage equal to the	535
percentage increase in the consumer price index or to that	536
increase plus the accumulation, except that the increase shall not	537
exceed three per cent and,except that no benefit shall exceed the	538
limit established by section 415 of the "Internal Revenue Code of	539
1986," 100 Stat. 2085, 26 U.S.C.A. 415, as amended.	540

(2) Any percentage of change in the consumer price index in	541
any year that is in excess of three per cent shall be accumulated	542
and used to determine increases under this section in succeeding	543
years. Any percentage of change in the consumer price index	544
accumulated by an eligible person prior to September 27, 1996,	545
shall be used in determining any future increases under this	546
section. The first additional benefitincrease is payable to all	547
eligible persons who on July 1, 1988, have been receiving a	548
pension or benefit for twelve months or longer. The additional	549
benefitincrease is payable for the ensuing twelve-month period or	550
until the next increase is granted under this section, whichever	551
is later.	552

The date of the first additional benefitincrease paid under	553
this section shall be the anniversary date for future additional	554
benefitsincreases. The pension or benefit used in the first	555
calculation of an additional benefitincrease under this section	556
shall remain as the base for all future additional benefits	557
increases paid under this section, unless a new base is	558
established by law.	559

(3) Additional benefits(2)Increases paid in years	560
subsequent to the year of the first additional benefitincrease	561
paid under this section shall be paid to all eligible persons who,	562
on the date that the additional benefitincrease is authorized by	563
the board, have been receiving a pension or benefit for twelve	564
months.	565

Sec. 742.3717.  (A)(1) Except as provided in division (A)(2)	566
of this section, as used in this section, "eligible person" means	567
a person who meets both of the following conditions:	568

(a) The person is receiving an annual pension or benefit	569
under division (A), (B), or (C) of section 742.37 or division	570
(C)(2), (3), (4), or (5) of former section 742.37 of the Revised	571
Code based on an award made prior to July 24, 1986.	572

(b) The person has not elected under section 742.3711 of the	573
Revised Code to receive a retirement allowance under an optional	574
benefit plan.	575

(2) A person is not an eligible person if the person is	576
receiving a pension or benefit in accordance with rules in force	577
on April 1, 1947, that govern the granting of pensions and	578
benefits and that provide an increase in the original pension or	579
benefit from time to time pursuant to changes in the salaries of	580
active members.	581

(B)(1) On or before the fifteenth day of April of each year,	582
theThe board of trustees of the Ohio police and fire pension fund	583
shall determine the average percentage change in the consumer	584
price index prepared by the United States bureau of labor	585
statistics (U.S. city average for urban wage earners and clerical	586
workers: "all items 1982-84=100") for the twelve-month period	587
prior to the first day of January over the next preceding	588
twelve-calendar-month period, as reported by the bureau. Upon a	589
determination by the board that this change is an increase or that	590
the change plus the accumulation described in division (B)(2) of	591
this section is an increase, the board shallannually increase all	592
benefits payable to eligible persons by an amount determined by	593
multiplying twelve thousandthree hundred sixty dollars by the	594
percentage of the increase in the consumer price index, or that	595
percentage plus the accumulation, except that the percentage shall	596
not exceed three per cent and no benefit shall exceed the limit	597
established by section 415 of the "Internal Revenue Code of 1986,"	598
100 Stat. 2085, 26 U.S.C.A. 415, as amended.	599

(2) Any percentage of change in the consumer price index in	600
any year that is in excess of three per cent shall be accumulated	601
and used to determine increases under this section in succeeding	602
years. Any percentage of change in the consumer price index	603
accumulated by an eligible person prior to September 27, 1996,	604
shall be used in determining any future increases under this	605
section. The first increase is payable to all eligible persons on	606
July 1, 1988. The increase is payable for the ensuing	607
twelve-month period or until the next increase is granted under	608
this section, whichever is later.	609

The date of the first increase payable under this section	610
shall be the anniversary date for future increases.	611

Sec. 742.3718.  (A) Except as otherwise provided in this	612
division, each person who on September 9, 1988, is receiving a	613
pension or benefit of less than five thousand dollars annually	614
under division (A) or (B) of section 742.37 of the Revised Code on	615
the basis of disability or service of twenty-five years or more,	616
under division (C)(1) of that section, or under division (C)(2) or	617
(5) of former section 742.37 of the Revised Code shall have the	618
pension or benefit increased to five thousand dollars a year,	619
effective July 1, 1988. This division does not apply to any	620
person receiving a pension or benefit based on funded volunteer or	621
funded part-time service.	622

(B) On and after July 1, 1988:

623

(1) The pension of each person receiving a pension or	624
benefit under division (D) of section 742.37 of the Revised Code	625
shall be increased to four hundred ten dollars a month.	626

(2) The pension of each person receiving a pension or	627
benefit under division (E) of section 742.37 of the Revised Code	628
shall be increased to one hundred eighteen dollars a month.	629

(C) Notwithstanding any average annual salary limitation in	630
section 742.37 of the Revised Code, each person who on July 1,	631
1999, is receiving an annual pension or benefit described in	632
division (A), (B), or (C)(1) or (3) of that section of less than	633
six thousand six hundred dollars shall have the pension increased	634
to that amount, effective July 1, 1999. The increase granted	635
under this division shall be included in a person's base for the	636
purpose of determining future increases under section 742.3716 of	637
the Revised Code.	638

(D)(1) Except as provided in division (D)(2) of this	639
section, the monthly pension of each person who is the surviving	640
spouse of a deceased member of the fund and on the effective date	641
of this amendmentMarch17, 2000, is receiving a pension of less	642
than the amount described in division (D)(1) of section 742.37 of	643
the Revised Code shall be increased as follows:	644

(a) For the period beginning on the first day of the first	645
month following the effective date of this amendmentMarch17,	646
2000, and ending June 30, 2000, to five hundred fifty dollars;	647

(b) For the period beginning July 1, 2000, and the first day	648
of July of each year thereafter and continuing for the following	649
twelve months, to an amount equal to the greater of five hundred	650
fifty dollars or the monthly amount paid during the prior	651
twelve-month period plus an amount determined by multiplying five	652
hundred fiftysixteen dollars by the average percentage change in	653
the consumer price index, not exceeding three per cent, as	654
determined each year by the board of trustees of the Ohio police	655
and fire pension fund under section 742.3716 of the Revised Code	656
and fifty cents.	657

(2) An increase under division (D)(1) of this section shall	658
not be paid to a person who is receiving a pension under division	659
(D)(2) of section 742.37 of the Revised Code and a benefit under	660
division (B) or (D) of section 742.63 of the Revised Code until	661
the person ceases to be eligible for a benefit under division (B)	662
or (D) of section 742.63 of the Revised Code. The person's	663
monthly pension shall be increased, effective the first day of the	664
first month following the date on which the person ceases to be	665
eligible for the benefit, to the amount it would be under division	666
(D)(1) of this section had the person never been eligible for a	667
benefit under division (B) or (D) of section 742.63 of the Revised	668
Code.	669

(E) The monthly pension of each person receiving a pension	670
under division (E) of section 742.37 of the Revised Code shall be	671
increased to one hundred fifty dollars effective July 1, 1999.	672

(F) Effective July 1, 1999, the monthly pension of each	673
person receiving a pension under division (F) of section 742.37 of	674
the Revised Code shall be increased as follows:	675

(1) If there are two dependent parents, to one hundred	676
dollars;	677

(2) If there is one dependent parent, to two hundred	678
dollars.	679

Sec. 742.3720.  As used in this section, "eligible person"	680
means a person who has been receiving a pension under division (E)	681
or (F) of section 742.37 of the Revised Code for twelve months or	682
longer.	683

On or before the fifteenth day of April of each year, theThe	684
board of trustees of the Ohio police and firemen's disability and	685
fire pension fund shall determine the average percentage change in	686
the consumer price index prepared by the United States bureau of	687
labor statistics (U.S. City Average for Urban Wage Earners and	688
Clerical Workers: "All Items 1982-84 = 100") for the	689
twelve-calendar-month period prior to the first day of January	690
over the next preceding twelve-calendar-month period, as reported	691
by the bureau. On a determination by the board that this change	692
is an increase, or that the change plus the accumulation described	693
in this section is an increase, the board shallannually increase	694
pensions payable to eligible persons by a percentage equal to the	695
percentage increase in the consumer price index or to that	696
increase plus the accumulation, except that the increase shall not	697
exceed three per cent and,except that no pension shall exceed the	698
limit established by section 415 of the "Internal Revenue Code of	699
1986," 100 Stat. 2085, 26 U.S.C. 415, as amended.	700

Any percentage increase in the consumer price index in any	701
year that is in excess of three per cent shall be accumulated and	702
used to determine increases in succeeding years.	703

The first increase under this section is payable to eligible	704
persons beginning July 1, 2000. The increased amount is payable	705
for the ensuing twelve-month period or until the next increase is	706
granted under this section, whichever is later.	707

The date of the first increase under this section is the	708
anniversary date for any future increases. The pension used in	709
the first calculation of an increase under this section shall	710
remain as the base for all future increases paid under this	711
section, unless a new base is established by law.	712

The board shall adopt any rules necessary to implement this	713
section.	714

Sec. 3307.67.  (A) Beginning April 1, 1971, and each year	715
thereafter, theThe state teachers retirement board shall	716
determine the average percentage change in the consumer price	717
index prepared by the United States bureau of labor statistics	718
(U.S. City Average for Urban Wage Earners and Clerical Workers:	719
"All Items 1982-84=100") for the twelve-calendar-month period	720
prior to the first day of January over the next preceding	721
twelve-calendar-month period, as reported by the bureau.	722

Upon a determination by the board in any year that the change	723
in the consumer price index is an increase or that the change plus	724
the accumulation described in division (B) of this section is an	725
increase, the board shall annually increase each allowance or	726
benefit payable under sections 3307.50 to 3307.79 of the Revised	727
Code by a percentage equal to the percentage increase in the	728
consumer price index or to that increase plus the accumulation,	729
except that the increase shall not exceed three per cent and,	730
except that no allowance or benefit shall exceed the limit	731
established by section 415 of the "Internal Revenue Code of 1986,"	732
100 Stat. 2085, 26 U.S.C.A. 415, as amended.	733

The first increase is payable to all persons becoming	734
eligible after June 30, 1971, upon such persons receiving an	735
allowance or benefit for twelve months. The increased amount is	736
payable for the ensuing twelve-month period or until the next	737
increase is granted under this section, whichever is later.	738
Subsequent increases shall be determined from the date of the	739
first increase paid to the former member in the case of an	740
allowance being paid a beneficiary under an option, or from the	741
date of the first increase to the survivor first receiving an	742
allowance or benefit in the case of an allowance or benefit being	743
paid to the subsequent survivors of the former member.	744

The date of the first increase under this section becomes the	745
anniversary date for any future increases.	746

The allowance or benefit used in the first calculation of an	747
increase under this section shall remain as the base for all	748
future increases, unless a new base is established.	749

(B) Any percentage of change in the consumer price index in	750
any year that is in excess of three per cent shall be accumulated	751
and used to determine increases under this section in subsequent	752
years. Any percentage of change in the consumer price index	753
accumulated by an eligible person prior to September 27, 1996,	754
shall be used in determining any future increases under this	755
section.	756

(C) The board shall make all rules necessary to carry out	757
this section.	758

Sec. 3309.374.  (A) Beginning April 1, 1971, and each year	759
thereafter, the board of theThe school employees retirement	760
system shall determine the average percentage change in the	761
consumer price index prepared by the United States bureau of labor	762
statistics (U.S. City Average for Urban Wage Earners and Clerical	763
Workers: "All Items 1982-84=100") for the twelve-calendar-month	764
period prior to the first day of January over the next preceding	765
twelve-calendar-month period, as reported by the bureau.	766

Upon a determination by the board in any year that the change	767
in the consumer price index is an increase or that the change plus	768
the accumulation described in division (B) of this section is an	769
increase, the board shall annually increase each allowance,	770
pension, or benefit payable under this chapter by a percentage	771
equal to the percentage increase in the consumer price index or to	772
that increase plus the accumulation, except that the increase	773
shall not exceed three per cent and, except that no allowance,	774
pension, or benefit shall exceed the limit established by section	775
415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26	776
U.S.C.A. 415, as amended.	777

The first increase is payable to all persons becoming	778
eligible after June 30, 1971, upon such persons receiving an	779
allowance, pension, or benefit for twelve months.	780

The increased amount is payable for the ensuing twelve-month	781
period or until the next increase is granted under this section,	782
whichever is later. Subsequent increases shall be determined from	783
the date of the first increase paid to the former member in the	784
case of an allowance being paid a beneficiary under an option, or	785
from the date of the first increase to the survivor first	786
receiving an allowance or benefit in the case of an allowance or	787
benefit being paid to the subsequent survivors of the former	788
member.	789

The date of the first increase under this section becomes the	790
anniversary date for any future increases.	791

The allowance or benefit used in the first calculation of an	792
increase under this section shall remain as the base for all	793
future increases, unless a new base is established. Any increase	794
resulting from payment of a recalculated benefit under Section 3	795
of Substitute Senate Bill No. 270 of the 123rd general assembly	796
shall be included in the calculation of future increases under	797
this section.	798

(B) Any percentage of change in the consumer price index in	799
any year that is in excess of three per cent shall be accumulated	800
and used to determine increases under this section in subsequent	801
years. Any percentage of change in the consumer price index	802
accumulated by an eligible person prior to September 27, 1996,	803
shall be used in determining any future increases under this	804
section.	805

(C) The board shall make all rules necessary to carry out	806
this section.	807

Sec. 5505.174.  (A) The following persons are eligible to	808
receive an additional benefitincrease under this section:	809

(1) Persons fifty-three years old or older who have been	810
receiving pensions pursuant to division (B) of section 5505.16,	811
division (A)(1) of section 5505.17, or division (B) of section	812
5505.18 of the Revised Code for not less than twelve months;	813

(2) Persons who have been receiving pensions pursuant to	814
division (B) of section 5505.18 of the Revised Code for not less	815
than sixty months regardless of age;	816

(3) Persons who have been receiving pensions pursuant to	817
section 5505.162 or division (A)(3), (4), (5), (6), or (7) of	818
section 5505.17 of the Revised Code for not less than twelve	819
months regardless of age.	820

(B) On the fifteenth day of September of each year, theThe	821
state highway patrol retirement board shall determine the average	822
percentage change in the consumer price index prepared by the	823
United States bureau of labor statistics (U.S. City Average for	824
Urban Wage Earners and Clerical Workers: "All Items 1982-84=100")	825
for the twelve-month period prior to the first day of January over	826
the next preceding twelve-calendar-month period, as reported by	827
the bureau. Upon a determination by the board that the change is	828
an increase or that the change plus the accumulation described in	829
division (C) of this section is an increase, the board shall	830
annually increase each benefit payable under this chapter by a	831
percentage equal to the percentage increase in the consumer price	832
index or to that increase plus the accumulation, except that the	833
increase shall not exceed three per cent and,except that no	834
benefit shall exceed the limit established by section 415 of the	835
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 415,	836
as amended.	837

For each person eligible to receive the additional benefit	838
under this section, the accumulation shall commence on the later	839
of May 6, 1988, or the effective date of the pension the person	840
receives.	841

The first additional benefitincrease is payable to all	842
persons becoming eligible on or after November 18, 1981. The	843
additional benefitincrease is payable for each ensuing	844
twelve-month period or until the next increase is granted under	845
this section, whichever is later.	846

The date of the first additional benefitincrease paid under	847
this section shall be the anniversary date for future additional	848
benefitsincreases. The pension used in the first calculation of	849
an additional benefitincrease under this section shall remain as	850
the base for all future additional benefitsincreases paid under	851
this section, unless a new base is established.	852

Additional benefitsIncreases paid in years subsequent to the	853
year of the first additional benefitincrease paid under this	854
section shall be paid to all persons who, on the date that the	855
additional benefitincrease is authorized by the board, are	856
eligible for the benefit as provided in this section.	857

(C) Any percentage of change in the consumer price index in	858
any year that is in excess of three per cent shall be accumulated	859
and used to determine increases under this section in subsequent	860
years. Any percentage of change in the consumer price index	861
accumulated by an eligible person prior to the effective date of	862
this amendment shall be used in determining any future increases	863
under this section.	864

(D) The board shall adopt, and may amend or rescind, any	865
rule necessary to carry out this section.	866

The board shall adopt, and may amend or rescind, any rule	867
necessary to carry out this section.	868

Section 2.  That existing sections 145.323, 742.37, 742.3711,	869
742.3716, 742.3717, 742.3718, 742.3720, 3307.67, 3309.374, and	870
5505.174 of the Revised Code are hereby repealed.	871