REPRESENTATIVES Willamowski, Hughes, Gibbs, Allen, Otterman, J. Stewart, Schneider, Schmidt, Reidelbach, Buehrer, Cates, Clancy, Core, Distel, Domenick, Fessler, Flowers, Hagan, Harwood, Hollister, Key, Latta, McGregor, Niehaus, Price, Seitz

To amend sections 145.323, 145.46, 145.92, 3105.80,

1

3105.82, 3307.60, 3307.67, 3307.87, 3309.374,

2

3309.46, and 3309.92 of the Revised Code to make

3

changes to the optional benefit plans for

4

retirants and the cost-of-living increase in the

5

Public Employee Retirement System, State Teachers

6

Retirement System, and School Employees Retirement

7

System.

8

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

Section 1. That sections 145.323, 145.46, 145.92, 3105.80,	9
3105.82, 3307.60, 3307.67, 3307.87, 3309.374, 3309.46, and 3309.92	10
of the Revised Code be amended to read as follows:	11

Sec. 145.323.  (A) The public employees retirement board	12
shall annually increase each allowance, pension, or benefit	13
payable under this chapter by three per cent, except that no	14
allowance, pension, or benefit shall exceed the limit established	15
by section 415 of the "Internal Revenue Code of 1986," 100 Stat.	16
2085, 26 U.S.C.A. 415, as amended.	17

The first increase is payable to all persons becoming	18
eligible after June 30, 1971, upon such persons receiving an	19
allowance for twelve months. The increased amount is payable for	20
the ensuing twelve-month period or until the next increase is	21
granted under this section, whichever is later. Subsequent	22
increases shall be determined from the date of the first increase	23
paid to the former member in the case of an allowance being paid a	24
beneficiary under an option, or from the date of the first	25
increase to the survivor first receiving an allowance or benefit	26
in the case of an allowance or benefit being paid to the	27
subsequent survivors of the former member.	28

The date of the first increase under this section becomes the	29
anniversary date for any future increases.	30

The allowance or benefit used in the first calculation of an	31
increase under this section shall remain as the base for all	32
future increases, unless a new base is established.	33

(B) If payment of a portion of a benefit is made to an	34
alternate payee under section 145.571 of the Revised Code,	35
increases under this section granted while the order is in effect	36
shall be apportioned between the alternate payee and the benefit	37
recipient in the same proportion that the amount being paid to the	38
alternate payee bears to the amount paid to the benefit recipient.	39

(C) The board shall make all rules necessary to carry out	40
this section.	41

Sec. 145.46.  (A) A retirement allowance calculated under	42
section 145.33, 145.331, or 145.34 of the Revised Code shall be	43
paid as provided in this section. If the member is eligible to	44
elect a plan of payment under this section, the election shall be	45
made on a form provided by the public employees retirement board.	46
A plan of payment elected under this section shall be effective	47
only if approved by the board, which shall approve it only if it	48
is certified by an actuary engaged by the board to be the	49
actuarial equivalent of the retirement allowance calculated under	50
section 145.33, 145.331, or 145.34 of the Revised Code.	51

(B)(1) Unless the member is eligible to elect another plan of	52
payment(a) Except as provided in division (B)(1)(b) of this	53
section, a member who retires under section 145.32, 145.331, or	54
145.34 of the Revised Code shall receive a retirement allowance	55
under "plan A," which shall consist of the actuarial equivalent of	56
the member's retirement allowance determined under section 145.33,	57
145.331, or 145.34 of the Revised Code in a lesser amount payable	58
for life and one-half of such allowance continuing after death to	59
the member's surviving spouse for the life of the spouse.	60

(b) A member may elect to receive the member'sa retirement	61
allowance under a plan of payment other than "plan A" if either of	62
the following is the case:	63

(i) The member is not married or either the member's spouse	64
consents in writing to the member's election of a plan of payment	65
other than "plan A" or the board waives the requirement that the	66
spouse consent. An;	67

(ii) A plan of payment providing for payment in a specified	68
amount continuing after the member's death to a former spouse is	69
required by a court order issued prior to the effective date of	70
the member's retirement under section 3105.171 or 3105.65 of the	71
Revised Code or the laws of another state regarding division of	72
marital property.	73

(2) An application for retirement shall include an	74
explanation of all of the following:	75

(a) That, if the member is married, unless the spouse	76
consents to another plan of payment or there is a court order	77
dividing marital property that provides for payment in a specified	78
amount, the member's retirement allowance will be paid under "plan	79
A," which consists of the actuarial equivalent of the member's	80
retirement allowance in a lesser amount payable for life and	81
one-half of the allowance continuing after death to the surviving	82
spouse for the life of the spouse;	83

(b) A description of the alternative plans of payment,	84
including all plans described in divisions (B)(2) and (3) of this	85
section, available with the consent of the spouse;	86

(c) That the spouse may consent to another plan of payment	87
and the procedure for giving consent;	88

(d) That consent is irrevocable once notice of consent is	89
filed with the board.	90

Consent shall be valid only if it is signed, in writing, and	91
witnessed by a notary public. The board may waive the requirement	92
of consent if the spouse is incapacitated or cannot be located or	93
for any other reason specified by the board. Consent or waiver is	94
effective only with regard to the spouse who is the subject of the	95
consent or waiver.	96

(2)(3) A member eligible to elect to receive the member's	97
retirement allowance under a plan of payment other than "plan A"	98
shall receive the member's retirement allowance under the plan	99
described in division (B)(3)(4) of this section or one of the	100
following plans:	101

(a) "Plan B," which shall consist of an allowance determined	102
under section 145.33, 145.331, or 145.34 of the Revised Code;	103

(b) "Plan C," which shall consist of the actuarial equivalent	104
of the member's retirement allowance determined under section	105
145.33, 145.331, or 145.34 of the Revised Code in a lesser amount	106
payable for life and one-half or some other portion of the	107
allowance continuing after death to the member's sole surviving	108
beneficiary designated at the time of the member's retirement,	109
provided that the amount payable to the beneficiary does not	110
exceed the amount payable to the member;	111

(c) "Plan D," which shall consist of the actuarial equivalent	112
of the member's retirement allowance determined under section	113
145.33, 145.331, or 145.34 of the Revised Code in a lesser amount	114
payable for life and continuing after death to a surviving	115
beneficiary designated at the time of the member's retirement;	116

(d) "Plan E," which shall consist of the actuarial equivalent	117
of the member's retirement allowance determined under section	118
145.33, 145.331, or 145.34 of the Revised Code in a lesser amount	119
payable for a certain period from the member's retirement date as	120
elected by the member and approved by the retirement board, and on	121
the member's death before the expiration of that certain period	122
the member's lesser retirement allowance payable for the remainder	123
of that period to the member's surviving designated beneficiary	124
nominated by written designation filed with the retirement board.	125

Should the nominated beneficiary designated in writing die	126
prior to the expiration of the guarantee period, then for the	127
purpose of completing payment for the remainder of the guarantee	128
period, the present value of such payments shall be paid to the	129
estate of the beneficiary last receiving.	130

(e) "Plan F," which shall consist of the actuarial equivalent	131
of the member's retirement allowance determined under section	132
145.33, 145.331, or 145.34 of the Revised Code in a lesser amount	133
payable for life and continuing after death to each of two or more	134
surviving beneficiaries designated at the time of the member's	135
retirement, in such portion as specified at retirement.	136

(3)(4)(a) Beginning on a date selected by the retirement	137
board, which shall be not later than July 1, 2004, a member may	138
elect to receive a retirement allowance under a plan of payment	139
consisting of both a lump sum in an amount the member designates	140
that constitutes a portion of the member's retirement allowance	141
under a plan described in division (B) of this section and the	142
remainder as a monthly allowance under that plan.	143

The total amount paid as a lump sum and a monthly benefit	144
shall be the actuarial equivalent of the amount that would have	145
been paid had the lump sum not been selected.	146

(b) The lump sum designated by a member shall be not less	147
than six times and not more than thirty-six times the monthly	148
amount that would be payable to the member under the plan of	149
payment elected under division (B)(3)(4)(a) of this section had	150
the lump sum not been elected and shall not result in a monthly	151
allowance that is less than fifty per cent of that monthly amount.	152

(4)(5) An election under division (B)(2)(3) or (3)(4) of this	153
section shall be made at the time the member makes application for	154
retirement.	155

(5)(6) A member eligible to elect to receive the member's	156
retirement allowance under a plan of payment other than "plan A"	157
because the member is unmarried who fails to make an election on	158
retirement shall receive the member's retirement allowance under	159
"plan B."	160

(C) If the retirement allowances, as a single life annuity or	161
payment plan as provided in this section, due and paid are in a	162
total amount less than (1) the accumulated contributions, and (2)	163
other deposits made by the member as provided by this chapter,	164
standing to the credit of the member at the time of retirement,	165
then the difference between the total amount of the allowances	166
paid and the accumulated contributions and other deposits shall be	167
paid to the beneficiary provided under division (D) of section	168
145.43 of the Revised Code.	169

(D)(1) The death of a spouse or any designated beneficiary	170
following retirement shall cancel any plan of payment to provide	171
continuing lifetime benefits to the spouse or beneficiary and	172
return the retirant to the retirant's single lifetime benefit	173
equivalent, as determined by the board, to be effective the month	174
following receipt by the board of notice of the death.	175

(2) On divorce, annulment, or marriage dissolution, a	176
retirant receiving a retirement allowance under a plan that	177
provides for continuation of all or part of the allowance after	178
death for the lifetime of the retirant's surviving spouse may,	179
with the written consent of the spouse or pursuant to an order of	180
the court with jurisdiction over the termination of the marriage,	181
elect to cancel the plan and receive the member's single lifetime	182
benefit equivalent as determined by the retirement board. The	183
election shall be made on a form provided by the board and shall	184
be effective the month following its receipt by the board.	185

(E) Following a marriage or remarriage, a retirant who is	186
receiving the retirant's retirement allowance under "plan B" may	187
elect a new plan of payment under division (B)(1), (2)(3)(b), or	188
(2)(3)(c) of this section based on the actuarial equivalent of the	189
retirant's single lifetime benefit as determined by the board. The	190
plan shall become effective the first day of the month following	191
receipt by the board of an application on a form approved by the	192
board.	193

(F) Any person who, prior to July 24, 1990, selected an	194
optional plan of payment at retirement that provided for a return	195
to the single life benefit after the designated beneficiary's	196
death shall have the retirant's benefit adjusted to the optional	197
plan equivalent without such provision.	198

(G) A retirant's receipt of the first month's retirement	199
allowance constitutes the retirant's final acceptance of the plan	200
of payment and may be changed only as provided in this chapter.	201

Sec. 145.92.  If a member participating in a PERS defined	202
contribution plan is married at the time benefits under the plan	203
are to commence, unless the spouse consents to another plan of	204
payment or the spouse's consent is waived, the member's retirement	205
allowance under the plan shall be paid in a lesser amount payable	206
for life and one-half of the allowance continuing after death to	207
the surviving spouse for the life of the spouse.	208

Consent is valid only if it is evidenced by a written	209
document signed by the member and the signature is witnessed by a	210
notary public. A plan may waive the requirement of consent if the	211
spouse is incapacitated or cannot be located or for any other	212
reason specified by the plan or in rules adopted by the public	213
employees retirement board. A plan shall waive the requirement of	214
consent if a plan of payment that provides for payment in a	215
specified amount continuing after the member's death to a former	216
spouse is required by a court order issued prior to the effective	217
date of the member's retirement under section 3105.171 or 3105.65	218
of the Revised Code or laws of another state regarding division of	219
marital property.	220

Consent or waiver is effective only with regard to the spouse	221
who is the subject of the consent or waiver.	222

Sec. 3105.80.  As used in this section and sections 3105.81	223
to 3105.90 of the Revised Code:	224

(A) "Alternate payee" means a party in an action for divorce,	225
legal separation, annulment, or dissolution of marriage who is to	226
receive one or more payments from a benefit or lump sum payment	227
under an order issued under section 3105.171 or 3105.65 of the	228
Revised Code that is in compliance with sections 3105.81 to	229
3105.90 of the Revised Code.	230

(B) "Benefit" means a periodic payment under a pension,	231
annuity, allowance, or other type of benefit, other than a	232
survivor benefit, that has been or may be granted to a participant	233
under sections 742.01 to 742.61 or Chapter 145., 3307., 3309., or	234
5505. of the Revised Code or any payment that is to be made under	235
a contract a participant has entered into for the purposes of an	236
alternative retirement plan. "Benefit" also includes all amounts	237
received or to be received under a plan of payment elected under	238
division (B)(3)(4) of section 145.46, division (B) of section	239
3307.60, or division (B)(3)(4) of section 3309.46 of the Revised	240
Code.	241

(C) "Lump sum payment" means a payment of accumulated	242
contributions standing to a participant's credit under sections	243
742.01 to 742.61 or Chapter 145., 3307., 3309., or 5505. of the	244
Revised Code or pursuant to a contract a participant has entered	245
into for the purposes of an alternative retirement plan and any	246
other payment made or that may be made to a participant under	247
those sections or chapters on withdrawal of a participant's	248
contributions. "Lump sum payment" includes a lump sum payment	249
under section 145.384, 742.26, 3307.352, or 3309.344 of the	250
Revised Code.	251

(D) "Participant" means a member, contributor, retirant, or	252
disability benefit recipient who is or will be entitled to a	253
benefit or lump sum payment under sections 742.01 to 742.61 or	254
Chapter 145., 3307., 3309., or 5505. of the Revised Code or an	255
academic or administrative employee who elects to participate in	256
an alternative retirement plan under Chapter 3305. of the Revised	257
Code.	258

(E) "Personal history record" has the same meaning as in	259
section 145.27, 742.41, 3305.20, 3307.20, 3309.22, and 5505.04 of	260
the Revised Code.	261

(F) "Public retirement program" means the public employees	262
retirement system, Ohio police and fire pension fund, school	263
employees retirement system, state teachers retirement system,	264
state highway patrol retirement system, or an entity providing an	265
alternative retirement plan under Chapter 3305. of the Revised	266
Code.	267

Sec. 3105.82.  An order described in section 3105.81 of the	268
Revised Code shall meet all of the following requirements:	269

(A) Be on the form created under section 3105.90 of the	270
Revised Code;	271

(B) Set forth the name and address of the public retirement	272
program subject to the order or, if the court determines that the	273
participant has contributions on deposit with more than one public	274
retirement program, the name and address of each public retirement	275
program that is potentially subject to the order;	276

(C) Set forth the names, social security numbers, and current	277
addresses of the participant and alternate payee;	278

(D) Specify the amount to be paid to the alternate payee as	279
one of the following:	280

(1) As both a monthly dollar amount should the participant	281
elect a benefit and as a one-time payment should the participant	282
elect a lump sum payment;	283

(2) As a percentage of a fraction determined as follows of a	284
monthly benefit or lump sum payment:	285

(a) The numerator of the fraction shall be the number of	286
years during which the participant was both a member of a public	287
retirement program and married to the alternate payee.	288

(b) The denominator, which shall be determined by the public	289
retirement program at the time the participant elects to take the	290
benefit or payment, shall be the participant's total years of	291
service credit or, in the case of a participant in a retirement	292
plan established under section 145.81, 3307.81, or 3309.81 or	293
Chapter 3305. of the Revised Code, years of participation in the	294
plan.	295

(E) If the participant is eligible for more than one benefit	296
or lump sum payment, specify in accordance with division (D) of	297
this section the amount, if any, to be paid to the alternate payee	298
from each benefit or lump sum payment.	299

(F) Require an individual who is a participant or alternate	300
payee to notify the public retirement program in writing of a	301
change in the individual's mailing address;	302

(G) Notify the alternate payee of the following:

303

(1) The payee's right to payment under the order is	304
conditional on the participant's right to a benefit payment or	305
lump sum payment;	306

(2) The possible reduction under section 145.571, 742.462,	307
3307.371, 3309.671, or 5505.261 of the Revised Code of the amount	308
paid to the alternate payee;	309

(3) The possible termination of the payee's rights as	310
described in section 3105.86 of the Revised Code.	311

(H) Apply to payments made by the public retirement program	312
after retention of an order under section 145.571, 742.462,	313
3305.21, 3307.371, 3309.671, or 5505.261 of the Revised Code.	314

Sec. 3307.60.  (A) Upon application for retirement as	315
provided in section 3307.58 or 3307.59 of the Revised Code, the	316
retirant may elect a plan of payment under this division or, on	317
and after the date specified in division (B) of this section, a	318
plan of payment under that division. Under this division, the	319
retirant may elect to receive a single lifetime benefit, or may	320
elect to receive the actuarial equivalent of the retirant's	321
benefit in a lesser amount, payable for life, and continuing after	322
death to a beneficiary under one of the following optional plans:	323

(1) Option 1. The retirant's lesser benefit shall be paid for	324
life to the sole beneficiary named at retirement.	325

(2) Option 2. Some other portion of the retirant's benefit	326
shall be paid for life to the sole beneficiary named at	327
retirement. The beneficiary's monthly amount shall not exceed the	328
monthly amount payable to the retirant during the retirant's	329
lifetime.	330

(3) Option 3. The retirant's lesser benefit established as	331
provided under option 1 or option 2 shall be paid for life to the	332
sole beneficiary named at retirement, except that in the event of	333
the death of the sole beneficiary or termination of a marital	334
relationship between the retirant and the sole beneficiary the	335
retirant may elect to return to a single lifetime benefit	336
equivalent as determined by the state teachers retirement board,	337
if, in the case of termination of a marital relationship, the	338
election is made with the written consent of the beneficiary or	339
pursuant to an order of the court with jurisdiction over	340
termination of the marital relationship.	341

(4) Option 4. A portion of the retirant's lesser benefit	342
shall be paid for life to each of two or more beneficiaries named	343
at retirement, in such portion as specified at retirement.	344

(5) Option 5. Upon the retirant's death before the expiration	345
of a certain period from the retirement date and elected by the	346
retirant, and approved by the board, the retirant's benefit shall	347
be continued for the remainder of such period to the beneficiary.	348
Monthly benefits shall not be paid to joint beneficiaries, but	349
they may receive the present value of any remaining payments in a	350
lump sum settlement. If all beneficiaries die before the	351
expiration of the certain period, the present value of all	352
payments yet remaining in such period shall be paid to the estate	353
of the beneficiary last receiving.	354

(5)(6) Option 56. A plan of payment established by the state	355
teachers retirement board combining any of the features of options	356
1, 2, and 45.	357

(B) Beginning on a date selected by the state teachers	358
retirement board, which shall be not later than July 1, 2004, a	359
retirant may elect, in lieu of a plan of payment under division	360
(A) of this section, a plan consisting of both of the following:	361

(1) A lump sum in an amount the member designates that	362
constitutes a portion of the member's single lifetime benefit;	363

(2) Either of the following:

364

(a) The remainder of the retirant's single lifetime benefit;

365

(b) The actuarial equivalent of the remainder of the	366
retirant's benefit in a lesser amount, payable for life, and	367
continuing after death to a beneficiary under one of the options	368
described in divisions (A)(1) to (5)(6) of this section.	369

In the event of the death of the sole beneficiary or	370
termination of a marital relationship between the retirant and the	371
sole beneficiary, the retirant may elect to receive the actuarial	372
equivalent of the remainder of the retirant's single lifetime	373
benefit except that, in the case of termination of a marital	374
relationship, the election may be made only with the written	375
consent of the beneficiary or pursuant to an order of the court	376
with jurisdiction over termination of the marital relationship.	377

The amount designated by the member under division (B)(1) of	378
this section shall be not less than six times and not more than	379
thirty-six times the monthly amount that would be payable to the	380
member as a single lifetime benefit and shall not result in a	381
monthly allowance that is less than fifty per cent of that amount.	382

(C) Until the first payment is made to a former member under	383
section 3307.58 or 3307.59 of the Revised Code, the former member	384
may change the selection of a plan of payment.	385

(D)(1) If a deceased member was eligible for but had not yet	386
been awarded a service retirement benefit under section 3307.58 or	387
3307.59 of the Revised Code at the time of death, option 1 as	388
provided for in division (A)(1) of this section shall be paid to	389
the spouse or other sole dependent beneficiary.	390

(2) Beginning on a date selected by the board, which shall be	391
not later than July 1, 2004, the spouse or sole beneficiary may	392
elect, in lieu of option 1, a plan of payment consisting of both	393
of the following:	394

(a) A lump sum in an amount the spouse or other sole	395
dependent beneficiary designates that constitutes a portion of the	396
retirant's single life annuity;	397

(b) The actuarial equivalent of the remainder of the	398
retirant's single life annuity paid in a lesser amount for life to	399
the spouse or other sole dependent beneficiary.	400

The amount designated by the spouse or other sole dependent	401
beneficiary under division (D)(2)(a) of this section shall be not	402
less than six times and not more than thirty-six times the monthly	403
amount that would be payable as the retirant's single life annuity	404
and shall not result in a monthly allowance that is less than	405
fifty per cent of that monthly amount.	406

(E) If the total benefit paid under this section is less than	407
the balance in the teachers' savings fund, the difference shall be	408
paid to the beneficiary provided under division (D) of section	409
3307.562 of the Revised Code.	410

(F) In the case of a retirant who elected an optional plan	411
prior to September 15, 1989:	412

(1) The death of the spouse or other designated beneficiary	413
following retirement shall, at the election of the retirant,	414
cancel any optional plan selected at retirement to provide	415
continuing lifetime benefits to the spouse or other beneficiary	416
and return the retirant to a single lifetime benefit equivalent as	417
determined by the board.	418

(2) A divorce, annulment, or marriage dissolution shall, at	419
the election of the retirant, cancel any optional plan selected at	420
retirement to provide continuing lifetime benefits to the spouse	421
as designated beneficiary and return the retirant to a single	422
lifetime benefit equivalent as determined by the board if the	423
election is made with the written consent of the beneficiary or	424
pursuant to an order of a court of common pleas or the court of	425
another state with jurisdiction over the termination of the	426
marriage.	427

(G) Following marriage or remarriage, a retirant may elect a	428
new optional plan of payment based on the actuarial equivalent of	429
the retirant's single lifetime benefit, as determined by the	430
board, except that if the retirant is receiving a retirement	431
allowance under an optional plan that provides for continuation of	432
benefits after death to a former spouse, the retirant may elect a	433
new optional plan of payment only with the written consent of the	434
former spouse or pursuant to an order of the court with	435
jurisdiction over the termination of the marriage. Such plan shall	436
become effective the first of the month following an application	437
on a form approved by the board.	438

(H)(1) Unless one of the following occursExcept as otherwise	439
provided in this division, an application for service retirement	440
made pursuant to section 3307.58 or 3307.59 of the Revised Code by	441
a married person shall be considered an election of a benefit	442
under option 2 as provided for in division (A)(2) of this section	443
under which one-half of the lesser benefit payable during the life	444
of the retirant will be paid after death to the retirant's spouse	445
for life as sole beneficiary. The exceptions are as follows:	446

(a) The retirant selects an optional plan under division (A)	447
of this section providing for payment after death to the	448
retirant's spouse for life as sole beneficiary of more than	449
one-half of the lesser benefit payable during the life of the	450
retirant.	451

(b) A plan of payment providing for payment in a specified	452
amount continuing after the retirant's death to a former spouse is	453
required by a court order issued prior to the effective date of	454
retirement under section 3105.171 or 3105.65 of the Revised Code	455
or the laws of another state regarding division of marital	456
property.	457

(c) The retirant submits to the retirement board a written	458
statement signed by the spouse attesting that the spouse consents	459
to the retirant's election to receive a single lifetime annuity or	460
a payment under an optional benefit plan under which after the	461
death of the retirant the surviving spouse will receive less than	462
one-half of the lesser benefit payable during the life of the	463
retirant.	464

(2) An application for retirement shall include an	465
explanation of all of the following:	466

(a) That, if the member is married, unless the spouse	467
consents to another plan of payment or there is a court order	468
dividing marital property that provides for payment in a specified	469
amount, the member's retirement allowance will be paid under	470
"option 2" as provided for in division (A)(2) of this section and	471
consist of the actuarial equivalent of the member's retirement	472
allowance in a lesser amount payable for life and one-half of the	473
lesser allowance continuing after death to the surviving spouse	474
for the life of the spouse;	475

(b) A description of the alternative plans of payment	476
available with the consent of the spouse;	477

(c) That the spouse may consent to another plan of payment	478
and the procedure for giving consent;	479

(d) That consent is irrevocable once notice of consent is	480
filed with the board.	481

Consent shall be valid only if it is signed, in writing, and	482
witnessed by a notary public.	483

(3) If the retirant does not select an optional plan of	484
payment as described in division (H)(1)(a) of this section, no	485
court has ordered a plan of payment described in division	486
(H)(1)(b) of this section, and the board does not receive the	487
written statement provided for in division (H)(1)(b)(c) of this	488
section, itthe board shall determine and pay the retirement	489
allowance in accordance with this division, except that the board	490
may provide by rule for waiver by the board of the statement and	491
payment of the benefits other than in accordance with this	492
division or payment under section 3307.56 of the Revised Code if	493
the retirant is unable to obtain the statement due to absence or	494
incapacity of the spouse or other cause specified by the board.	495

(I) For the purpose of determining actuarial equivalence	496
under this section, on the advice of an actuary employed by the	497
board, the board shall adopt mortality tables that may take into	498
consideration the membership experience of the state teachers	499
retirement system and may also include the membership experience	500
of the public employees retirement system and the school employees	501
retirement system.	502

Sec. 3307.67.  (A) The state teachers retirement board shall	503
annually increase each allowance or benefit payable under sections	504
3307.50 to 3307.79 of the Revised Code by three per cent, except	505
that no allowance or benefit shall exceed the limit established by	506
section 415 of the "Internal Revenue Code of 1986," 100 Stat.	507
2085, 26 U.S.C.A. 415, as amended.	508

The first increase is payable to all persons becoming	509
eligible after June 30, 1971, upon such persons receiving an	510
allowance or benefit for twelve months. The increased amount is	511
payable for the ensuing twelve-month period or until the next	512
increase is granted under this section, whichever is later.	513
Subsequent increases shall be determined from the date of the	514
first increase paid to the former member in the case of an	515
allowance being paid a beneficiary under an option, or from the	516
date of the first increase to the survivor first receiving an	517
allowance or benefit in the case of an allowance or benefit being	518
paid to the subsequent survivors of the former member.	519

The date of the first increase under this section becomes the	520
anniversary date for any future increases.	521

The allowance or benefit used in the first calculation of an	522
increase under this section shall remain as the base for all	523
future increases, unless a new base is established.	524

(B) If payment of a portion of a benefit is made to an	525
alternate payee under section 3307.371 of the Revised Code,	526
increases under this section granted while the order is in effect	527
shall be apportioned between the alternate payee and the benefit	528
recipient in the same proportion that the amount being paid to the	529
alternate payee bears to the amount paid to the benefit recipient.	530

(C) The board shall make all rules necessary to carry out	531
this section.	532

Sec. 3307.87.  (A)(1) If a member participating in a plan	533
established under section 3307.81 of the Revised Code is married	534
at the time any benefits under the plan commence, benefits shall	535
be paid in accordance with division (A)(2) of this section, unless	536
the spouse has consented under division (C) of this section to a	537
different form of payment or the spouse's consent is waived under	538
that division.	539

(2) The benefits described in division (A)(1) of this section	540
shall be paid in the form of an annuity, which shall consist of	541
the actuarial equivalent of the member's benefits, in an amount	542
that is payable for the life of the member and one-half of the	543
amount continuing after the member's death to the spouse for the	544
life of the spouse.	545

(B) If a member participating in a plan established under	546
section 3307.81 of the Revised Code is married at the time of the	547
member's death, any benefits that are payable to the member shall	548
be paid to the member's spouse, unless the spouse has consented	549
under division (C) of this section to the designation of a	550
different beneficiary or the spouse's consent is waived under that	551
division.	552

(C) Consent is valid only if it is evidenced by a signed	553
statement that is witnessed by a notary public. Each plan may	554
waive the requirement of consent if the spouse is incapacitated or	555
cannot be located or for any other reason specified by the plan or	556
in rules adopted by the state teachers retirement board. A plan	557
shall waive the requirement of consent if a plan of payment that	558
provides for payment in a specified amount continuing after the	559
member's death to a former spouse is required by a court order	560
issued prior to the effective date of the member's retirement	561
under section 3105.171 or 3105.65 of the Revised Code or laws of	562
another state regarding division of marital property.	563

Consent or waiver is effective only with regard to the spouse	564
who is the subject of the consent or waiver.	565

Sec. 3309.374.  (A) The school employees retirement board	566
shall annually increase each allowance, pension, or benefit	567
payable under this chapter by three per cent, except that no	568
allowance, pension, or benefit shall exceed the limit established	569
by section 415 of the "Internal Revenue Code of 1986," 100 Stat.	570
2085, 26 U.S.C.A. 415, as amended.	571

The first increase is payable to all persons becoming	572
eligible after June 30, 1971, upon such persons receiving an	573
allowance, pension, or benefit for twelve months.	574

The increased amount is payable for the ensuing twelve-month	575
period or until the next increase is granted under this section,	576
whichever is later. Subsequent increases shall be determined from	577
the date of the first increase paid to the former member in the	578
case of an allowance being paid a beneficiary under an option, or	579
from the date of the first increase to the survivor first	580
receiving an allowance or benefit in the case of an allowance or	581
benefit being paid to the subsequent survivors of the former	582
member.	583

The date of the first increase under this section becomes the	584
anniversary date for any future increases.	585

The allowance or benefit used in the first calculation of an	586
increase under this section shall remain as the base for all	587
future increases, unless a new base is established. Any increase	588
resulting from payment of a recalculated benefit under Section 3	589
of Substitute Senate Bill No. 270 of the 123rd general assembly	590
shall be included in the calculation of future increases under	591
this section.	592

(B) If payment of a portion of a benefit is made to an	593
alternate payee under section 3309.671 of the Revised Code,	594
increases under this section granted while the order is in effect	595
shall be apportioned between the alternate payee and the retirant	596
or disability benefit recipient in the same proportion that the	597
amount being paid to the alternate payee bears to the amount paid	598
to the retirant or disability benefit recipient.	599

(C) The board shall make all rules necessary to carry out	600
this section.	601

Sec. 3309.46.  (A) The retirement allowance calculated under	602
section 3309.36, 3309.38, or 3309.381 of the Revised Code shall be	603
paid as provided in this section. If the member is eligible to	604
elect a plan of payment under this section, the election shall be	605
made on the application for retirement. A plan of payment elected	606
under this section shall be effective only if it is certified by	607
the actuary engaged by the school employees retirement board to be	608
the actuarial equivalent of the member's retirement allowance and	609
is approved by the retirement board.	610

(B)(1) Unless the member is eligible to elect another plan of	611
payment(a) Except as provided in division (B)(1)(b) of this	612
section, a member who retires under section 3309.36, 3309.38, or	613
3309.381 of the Revised Code shall receive a retirement allowance	614
under "plan A," which shall consist of the actuarial equivalent of	615
the member's retirement allowance determined under section	616
3309.36, 3309.38, or 3309.381 of the Revised Code in a lesser	617
amount payable for life and one-half of such allowance continuing	618
after death to the member's surviving spouse for the life of the	619
spouse.	620

(b) A member may elect to receive a retirement allowance	621
under a plan of payment other than "plan A" if theeither of the	622
following is the case:	623

(i) The member is not married or either the member's spouse	624
consents in writing to the member's election to a plan of payment	625
other than "plan A" or the board waives the requirement that the	626
spouse consent;	627

(ii) A plan of payment providing for payment in a specified	628
amount continuing after the member's death to a former spouse is	629
required by a court order issued prior to the effective date of	630
the member's retirement under section 3105.171 or 3105.65 of the	631
Revised Code or the laws of another state regarding division of	632
marital property.	633

(2) An application for retirement shall include an	634
explanation of all of the following:	635

(a) That, if the member is married, unless the spouse	636
consents to another plan of payment or there is a court order	637
dividing marital property that provides for payment in a specified	638
amount, the member's retirement allowance will be paid under "plan	639
A," which consists of the actuarial equivalent of the member's	640
retirement allowance in a lesser amount payable for life and	641
one-half of the allowance continuing after death to the surviving	642
spouse for the life of the spouse;	643

(b) A description of the alternative plans of payment,	644
including all plans described in divisions (B)(2)(3) and (3)(4) of	645
this section, available with the consent of the spouse;	646

(c) That the spouse may consent to another plan of payment	647
and the procedure for giving consent;	648

(d) That consent is irrevocable once notice of consent is	649
filed with the board.	650

Consent shall be valid only if it is in writing, signed by	651
the spouse, and witnessed by an employee of the school employees	652
retirement system or a notary public. The board may waive the	653
requirement of consent if the spouse is incapacitated or cannot be	654
located or for any other reason specified by the board. Consent or	655
waiver is effective only with regard to the spouse who is the	656
subject of the consent or waiver.	657

(2)(3) A member eligible to elect to receive a retirement	658
allowance under a plan of payment other than "plan A" shall	659
receive the retirement allowance under the plan described in	660
division (B)(3)(4) of this section or one of the following plans:	661

(a) "Plan B," which shall consist of an allowance determined	662
under section 3309.36, 3309.38, or 3309.381 of the Revised Code;	663

(b) "Plan C," which shall consist of the actuarial equivalent	664
of the member's retirement allowance determined under section	665
3309.36, 3309.38, or 3309.381 of the Revised Code in a lesser	666
amount payable for life and one-half or some other portion of the	667
allowance continuing after death to the member's sole surviving	668
beneficiary designated at the time of the member's retirement,	669
provided that the amount payable to the beneficiary does not	670
exceed the amount payable to the member;	671

(c) "Plan D," which shall consist of the actuarial equivalent	672
of the member's retirement allowance determined under section	673
3309.36, 3309.38, or 3309.381 of the Revised Code in a lesser	674
amount payable for life and continuing after death to a surviving	675
designated beneficiary designated at the time of the member's	676
retirement;	677

(d) "Plan E," which shall consist of the actuarial equivalent	678
of the member's retirement allowance determined under section	679
3309.36, 3309.38, or 3309.381 of the Revised Code in a lesser	680
amount payable for a certain period from the member's retirement	681
date as elected by the member and approved by the retirement	682
board, and on the member's death before the expiration of that	683
certain period, the member's lesser retirement allowance continued	684
for the remainder of that period to, and in such order, the	685
beneficiaries as the member has nominated by written designation	686
and filed with the retirement board.	687

Monthly benefits shall not be paid to joint beneficiaries,	688
but they may receive the present value of any remaining payments	689
in a lump sum settlement. If all beneficiaries die before the	690
expiration of the certain period, the present value of all such	691
payments yet remaining in such period shall be paid to the estate	692
of the beneficiary last receiving.	693

(e) "Plan F," which shall consist of the actuarial equivalent	694
of the member's retirement allowance determined under section	695
3309.36, 3309.38, or 3309.381 of the Revised Code in a lesser	696
amount payable for life and continuing after death to each of two	697
or more surviving beneficiaries designated at the time of the	698
member's retirement, in such portion as specified at retirement.	699

(3)(4)(a) Beginning on a date selected by the board, which	700
shall be not later than July 1, 2004, a member may elect, in lieu	701
of a plan of payment under division (B)(1) or (2)(3) of this	702
section, a plan consisting of both a lump sum in an amount the	703
member designates that constitutes a portion of the retirement	704
allowance payable under a plan described in division (B)(1) or	705
(2)(3) of this section and the remainder of the allowance payable	706
under that plan in monthly payments.	707

The total amount paid as a lump sum and a monthly benefit	708
shall be the actuarial equivalent of the amount that would have	709
been paid had the lump sum not been selected.	710

(b) The lump sum amount designated by the member shall be not	711
less than six times and not more than thirty-six times the monthly	712
amount that would be payable to the member under the plan of	713
payment elected under this section had the lump sum not been	714
elected and shall not result in a monthly benefit that is less	715
than fifty per cent of that amount.	716

(4)(5) An election under division (B)(2)(3) or (3)(4) of this	717
section shall be made at the time the member makes application for	718
retirement.	719

(5)(6) A member eligible to elect to receive a retirement	720
allowance under a plan of payment other than "plan A" because the	721
member is unmarried who fails to make an election on retirement	722
shall receive a retirement allowance under "plan B."	723

(C) Until the first payment of any retirement allowance is	724
made, as provided in sections 3309.36, 3309.38, or 3309.381 of the	725
Revised Code, a member may change the member's election of a	726
payment plan if the election is made in accordance with and is	727
consistent with division (B) of this section.	728

(D) If the retirement allowances due and paid under the above	729
provisions of this section are in a total amount less than (1) the	730
accumulated contributions, (2) the deposits for additional credit	731
as provided by section 3309.31 of the Revised Code, (3) the	732
deposits for additional annuities as provided by section 3309.47	733
of the Revised Code, (4) the deposits for repurchase of service	734
credit as provided by section 3309.26 of the Revised Code, (5) the	735
accumulated contributions provided by section 3309.65 of the	736
Revised Code, (6) the deposits for purchase of military service	737
credit provided by section 3309.021 or 3309.022 of the Revised	738
Code, and (7) the deposits for the purchase of service credit	739
provided by section 3309.73 of the Revised Code, standing to the	740
credit of the member at the time of retirement, then the	741
difference between the total amount of the allowances paid and the	742
accumulated contributions and other deposits shall be paid to the	743
beneficiary provided under division (D) of section 3309.44 of the	744
Revised Code.	745

(E)(1) The death of a spouse or any other designated	746
beneficiary following the member's retirement shall cancel anythe	747
portion of the plan of payment to provideproviding continuing	748
lifetime benefits to the deceased spouse or deceased designated	749
beneficiary and the retirant shall receive the actuarial	750
equivalent of the retirant's single lifetime retirement allowance	751
equivalent as determined by the board.	752

(2) On divorce, annulment, or marriage dissolution, a	753
retirant receiving a retirement allowance under a plan of payment	754
that provides for continuation of all or part of the allowance	755
after death for the lifetime of the member's surviving spouse may	756
elect to cancel the portion of the plan providing continuing	757
lifetime benefits to that spouse and receive the member's	758
actuarial equivalent of the retirant's single lifetime retirement	759
allowance equivalent as determined by the retirement board, except	760
that in the case of a member who retires on or after July 24,	761
1990, the election may be made only with the written consent of	762
the spouse or pursuant to an order of the court with jurisdiction	763
over the termination of the marriage. The election shall be made	764
on a form provided by the board and shall be effective the month	765
following its receipt by the board.	766

(3) Following marriage or remarriage, aboth of the following	767
apply:	768

(a) A retirant who is receiving a benefit pursuant to "plan	769
B" may elect a new plan of payment under division (B)(1),	770
(2)(3)(b), or (2)(3)(c) of this section based on the actuarial	771
equivalent of the member'sretirant's single lifetime retirement	772
allowance as determined by the board. The	773

(b) A retirant who is receiving a benefit pursuant to a plan	774
of payment providing for payment to a former spouse pursuant to a	775
court order described in division (B)(1)(b)(ii) of this section	776
may elect a new plan of payment under division (B)(3)(e) of this	777
section based on the actuarial equivalent of the retirant's single	778
lifetime retirement allowance as determined by the board if the	779
new plan of payment elected does not reduce the payment to the	780
former spouse.	781

The plan shall become effective the first day of the month	782
following receipt by the board of an application on a form	783
approved by the board.	784

Sec. 3309.92.  If a member participating in a plan	785
established under section 3309.81 of the Revised Code is married	786
at the time benefits under the plan are to commence, before making	787
any payment the school employees retirement system, or the entity	788
administering the plan pursuant to a contract with the school	789
employees retirement board, shall obtain the consent of the	790
member's spouse to the form of payment selected by the member,	791
unless the spouse's consent is waived under this section.	792

A plan established under section 3309.81 of the Revised Code	793
shall include requirements for consent under this section that are	794
the same as the requirements specified in section 417(a)(2) of the	795
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A.	796
417(a)(2), as amended. A plan may waive consent if the spouse	797
cannot be located or for any other reason specified in the	798
regulations adopted under that section. A plan shall waive consent	799
if a plan of payment that provides for payment in a specified	800
amount continuing after the member's death to a former spouse is	801
required by a court order issued prior to the effective date of	802
the member's retirement under section 3105.171 or 3105.65 of the	803
Revised Code or laws of another state regarding division of	804
marital property.	805

Consent or waiver is effective only with regard to the spouse	806
who is the subject of the consent or waiver.	807

Section 2. That existing sections 145.323, 145.46, 145.92,	808
3105.80, 3105.82, 3307.60, 3307.67, 3307.87, 3309.374, 3309.46,	809
and 3309.92 of the Revised Code are hereby repealed.	810

Section 3. Sections 1 and 2 of this act take effect July 1,	811
2004.	812