As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 574

Representative Combs 

Cosponsors: Representatives McGregor, J., Fessler 

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A BILL

To amend sections 145.297, 145.298, and 145.38 of the

1

Revised Code to require an analysis of each

2

proposed retirement incentive plan for state

3

retirement system members and to prohibit a person

4

who participates in such a retirement incentive

5

plan from being re-employed by the same employer.

6

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

Section 1. That sections 145.297, 145.298, and 145.38 of the	7
Revised Code be amended to read as follows:	8

Sec. 145.297.  (A) As used in this section, "employing unit"	9
means:	10

(1) A municipal corporation, agency of a municipal	11
corporation designated by the legislative authority, park	12
district, conservancy district, sanitary district, health	13
district, township, department of a township designated by the	14
board of township trustees, metropolitan housing authority, public	15
library, county law library, union cemetery, joint hospital, or	16
other political subdivision or unit of local government.	17

(2) With respect to state employees, any entity of the state	18
including any department, agency, institution of higher education,	19
board, bureau, commission, council, office, or administrative body	20
or any part of such entity that is designated by the entity as an	21
employing unit.	22

(3)(a) With respect to employees of a board of alcohol, drug	23
addiction, and mental health services, that board.	24

(b) With respect to employees of a county board of mental	25
retardation and developmental disabilities, that board.	26

(c) With respect to other county employees, the county or any	27
county agency designated by the board of county commissioners.	28

(4) In the case of an employee whose employing unit is in	29
question, the employing unit is the unit through whose payroll the	30
employee is paid.	31

(B) AnSubject to division (C) of this section, an employing	32
unit may establish a retirement incentive plan for its eligible	33
employees. In the case of a county or county agency, decisions on	34
whether to establish a retirement incentive plan for any employees	35
other than employees of a board of alcohol, drug addiction, and	36
mental health services or county board of mental retardation and	37
developmental disabilities and on the terms of the plan shall be	38
made by the board of county commissioners. In the case of a	39
municipal corporation or an agency of a municipal corporation,	40
decisions on whether to establish a retirement incentive plan and	41
on the terms of the plan shall be made by the legislative	42
authority.	43

All terms of a retirement incentive plan shall be in writing.

44

A retirement incentive plan shall provide for purchase by the	45
employing unit of service credit for eligible employees who elect	46
to participate in the plan and for payment by the employing unit	47
of the entire cost of the service credit purchased.	48

Every retirement incentive plan shall remain in effect for at	49
least one year. The employing unit shall give employees at least	50
thirty days' notice before terminating the plan.	51

Every retirement incentive plan shall include provisions for	52
the timely and impartial resolution of grievances and disputes	53
arising under the plan.	54

No employing unit shall have more than one retirement	55
incentive plan in effect at any time.	56

(C)(1) Prior to implementing a retirement incentive plan	57
under this section, the employing unit that proposes to establish	58
the plan shall have the proposed plan analyzed in accordance with	59
division (C)(2) of this section by a state university.	60

The university conducting the analysis shall be determined as	61
follows:	62

(a) If the employing unit is a state agency or, if not a	63
state agency, the employing unit's chief administrative office is	64
located in any of the following counties, a department of the Ohio	65
state university selected by the university president: Delaware,	66
Fairfield, Fayette, Franklin, Hocking, Knox, Licking, Madison,	67
Marion, Morrow, Muskingum, Perry, Pickaway, or Union;	68

(b) If the employing unit is not a state agency and the	69
employing unit's chief administrative office is located in any of	70
the following counties, a department of the university of Toledo	71
selected by the university president: Allen, Crawford, Defiance,	72
Fulton, Hancock, Hardin, Henry, Lucas, Ottawa, Paulding, Putnam,	73
Sandusky, Seneca, Van Wert, Williams, Wood, or Wyandot;	74

(c) If the employing unit is not a state agency and the	75
employing unit's chief administrative office is located in any of	76
the following counties, a department of Cleveland state university	77
selected by the university president: Ashland, Ashtabula, Carroll,	78
Columbiana, Coshocton, Cuyahoga, Erie, Geauga, Harrison, Holmes,	79
Huron, Jefferson, Lake, Lorain, Mahoning, Medina, Portage,	80
Richland, Stark, Summit, Trumbull, Tuscarawas, or Wayne;	81

(d) If the employing unit is not a state agency and the	82
employing unit's chief administrative office is located in any of	83
the following counties, a department of Ohio university selected	84
by the university president: Athens, Belmont, Gallia, Guernsey,	85
Jackson, Lawrence, Meigs, Monroe, Morgan, Noble, Scioto, Vinton,	86
or Washington;	87

(e) If the employing unit is not a state agency and the	88
employing unit's chief administrative office is located in any of	89
the following counties, a department of the university of	90
Cincinnati selected by the university president: Adams, Auglaize,	91
Brown, Butler, Champaign, Clark, Clermont, Clinton, Darke, Greene,	92
Hamilton, Highland, Logan, Mercer, Miami, Montgomery, Pike,	93
Preble, Ross, Shelby, or Warren.	94

(2) The analysis shall be completed not later than ninety	95
days after submission to the university determined under division	96
(C)(1) of this section and shall include both of the following:	97

(a) A cost-benefit analysis of the proposed retirement	98
incentive plan that compares the projected long-term savings of	99
the plan with the projected cost to the employing unit of	100
purchasing the credit for participants;	101

(b) A recommendation, consistent with the findings under	102
division (C)(2)(a) of this section, to the employing unit on the	103
advisability of establishing the retirement incentive plan.	104

(3) The employing unit shall cooperate with the university	105
conducting the analysis to the extent necessary for the university	106
to complete the analysis.	107

(4) The employing unit is not required to follow the	108
recommendation made under division (C)(2) of this section.	109

(5) Any analysis conducted under this division is a public	110
record.	111

(D) Any classified or unclassified employee of the employing	112
unit who is a member of the public employees retirement system	113
shall be eligible to participate in the retirement incentive plan	114
established by the employee's employing unit if the employee meets	115
the following criteria:	116

(1) The employee is not any of the following:

117

(a) An elected official;

118

(b) A member of a board or commission;

119

(c) A person elected to serve a term of fixed length;

120

(d) A person appointed to serve a term of fixed length, other	121
than a person appointed and employed by the person's employing	122
unit.	123

(2) The employee is or will be eligible to retire under	124
section 145.32, 145.34, 145.37, or division (A) of section 145.33	125
of the Revised Code on or before the date of termination of the	126
retirement incentive plan. Service credit to be purchased for the	127
employee under the retirement incentive plan shall be included in	128
making such determination.	129

(3) The employee agrees to retire under section 145.32,	130
145.34, 145.37, or division (A) of section 145.33 of the Revised	131
Code within ninety days after receiving notice from the public	132
employees retirement system that service credit has been purchased	133
for the employee under this section.	134

(4) The employee agrees not to be re-employed by the	135
employing unit for which the retirement incentive plan was	136
established.	137

Participation in the plan shall be available to all eligible	138
employees except that the employing unit may limit the number of	139
participants in the plan to a specified percentage of its	140
employees who are members of the public employees retirement	141
system on the date the plan goes into effect. The percentage shall	142
not be less than five per cent of such employees. If participation	143
is limited, employees with more total service credit have the	144
right to elect to participate before employees with less total	145
service credit. In the case of employees with the same total	146
service credit, employees with a greater length of service with	147
the employing unit have the right to elect to participate before	148
employees with less service with the employing unit. Employees	149
with less than eighteen months of service with the employing unit	150
have the right to elect to participate only after all other	151
eligible employees have been given the opportunity to elect to	152
participate. For the purpose of determining which employees may	153
participate in a plan, total service credit includes service	154
credit purchased by the employee under this chapter after the date	155
on which the plan is established.	156

A retirement incentive plan that limits participation may	157
provide that an employee who does not notify the employing unit of	158
the employee's decision to participate in the plan within a	159
specified period of time will lose priority to participate in the	160
plan ahead of other employees with less seniority. The time given	161
to an employee to elect to participate ahead of other employees	162
shall not be less than thirty days after the employee receives	163
written notice that the employee may participate in the plan.	164

(D)(E) A retirement incentive plan shall provide for purchase	165
of the same amount of service credit for each participating	166
employee, except that the employer may not purchase more service	167
credit for any employee than the lesser of the following:	168

(1) Five years of service credit;

169

(2) An amount of service credit equal to one-fifth of the	170
total service credited to the participant under this chapter,	171
exclusive of service credit purchased under this section.	172

For each year of service credit purchased under this section,	173
the employing unit shall pay an amount equal to the additional	174
liability resulting from the purchase of that year of service	175
credit, as determined by an actuary employed by the public	176
employees retirement board.	177

(E)(F) Upon the election by an eligible employee to	178
participate in the retirement incentive plan, the employee and the	179
employing unit shall agree upon a date for payment or contracting	180
for payment in installments to the public employees retirement	181
system of the cost of the service credit to be purchased. The	182
employing unit shall submit to the public employees retirement	183
system a written request for a determination of the cost of the	184
service credit, and within forty-five days after receiving the	185
request, the board shall give the employing unit written notice of	186
the cost.	187

The employing unit shall pay or contract to pay in	188
installments the cost of the service credit to be purchased to the	189
public employees retirement system on the date agreed to by the	190
employee and the employing unit. The payment shall be made in	191
accordance with rules adopted by the public employees retirement	192
board. The rules may provide for payment in installments and for	193
crediting the purchased credit to the employee's account upon the	194
employer's contracting to pay the cost in installments. The board	195
shall notify the member when the member is credited with service	196
purchased under this section. If the employee does not retire	197
within ninety days after receiving notice that the employee has	198
been credited with the purchased service credit, the system shall	199
refund to the employing unit the amount paid for the service	200
credit.	201

No payment made to the public employees retirement system	202
under this section shall affect any payment required by section	203
145.48 of the Revised Code.	204

(G) An employee who participates in a retirement incentive	205
plan may not be employed after retirement by the employing unit	206
for which the plan was established.	207

Sec. 145.298.  (A) As used in this section:

208

(1) "State employing unit" means an employing unit described	209
in division (A)(2) of section 145.297 of the Revised Code.	210

(2) "State institution" means a state correctional facility,	211
a state institution for the mentally ill, or a state institution	212
for the care, treatment, and training of the mentally retarded.	213

(B) In the event of a proposal to close a state institution	214
or lay off, within a six-month period, a number of persons	215
employed at an institution that equals or exceeds the lesser of	216
fifty or ten per cent of the persons employed at the institution,	217
the employing unit responsible for the institution's operation	218
shall establish a retirement incentive plan for persons employed	219
at the institution.	220

(C) In the event of a proposal, other than a proposal	221
described in division (B) of this section, to lay off, within a	222
six-month period, a number of employees of a state employing unit	223
that equals or exceeds the lesser of fifty or ten per cent of the	224
employing unit's employees, the employing unit shall establish a	225
retirement incentive plan for employees of the employing unit.	226

(D)(1) A retirement incentive plan established under this	227
section shall be consistent with the requirements of section	228
145.297 of the Revised Code, except as provided in division (D)(2)	229
of this section and except that the plan shall go into effect at	230
the time the layoffs or proposed closings are announced and shall	231
remain in effect until the date of the layoffs or closings.	232

(2) A retirement incentive plan established under this	233
section due to the proposed closing of a state institution by the	234
department of mental health prior to July 1, 1997, shall be	235
consistent with the requirements of section 145.297 of the Revised	236
Code, except as follows:	237

(a) The employing unit shall purchase at least three years of	238
service credit for each participating employee, except that it	239
shall not purchase more service credit than the amount allowed by	240
division (D)(E) of section 145.297 of the Revised Code;	241

(b) The plan shall go into effect at the time the proposed	242
closing is announced and shall remain in effect at least until the	243
date of the closing.	244

(3) If the employing unit already has a retirement incentive	245
plan in effect, the plan shall remain in effect at least until the	246
date of the layoffs or closings. The employing unit may revise the	247
existing plan to provide greater benefits, but if it revises the	248
plan, it shall give written notice of the changes to all employees	249
who have elected to participate in the original plan, and it shall	250
provide the greater benefits to all employees who participate in	251
the plan, whether their elections to participate were made before	252
or after the date of the revision.	253

Sec. 145.38.  (A) As used in this section and sections	254
145.381 and 145.384 of the Revised Code:	255

(1) "PERS retirant" means a former member of the public	256
employees retirement system who is receiving one of the following:	257

(a) Age and service retirement benefits under section 145.32,	258
145.33, 145.331, 145.34, or 145.46 of the Revised Code;	259

(b) Age and service retirement benefits paid by the public	260
employees retirement system under section 145.37 of the Revised	261
Code;	262

(c) Any benefit paid under a PERS defined contribution plan.

263

(2) "Other system retirant" means both of the following:

264

(a) A member or former member of the Ohio police and fire	265
pension fund, state teachers retirement system, school employees	266
retirement system, state highway patrol retirement system, or	267
Cincinnati retirement system who is receiving age and service or	268
commuted age and service retirement benefits or a disability	269
benefit from a system of which the person is a member or former	270
member;	271

(b) A member or former member of the public employees	272
retirement system who is receiving age and service retirement	273
benefits or a disability benefit under section 145.37 of the	274
Revised Code paid by the school employees retirement system or the	275
state teachers retirement system.	276

(B)(1) Subject to this section and, section 145.381 of the	277
Revised Code, and division (G) of section 145.297 of the Revised	278
Code, a PERS retirant or other system retirant may be employed by	279
a public employer. If so employed, the PERS retirant or other	280
system retirant shall contribute to the public employees	281
retirement system in accordance with section 145.47 of the Revised	282
Code, and the employer shall make contributions in accordance with	283
section 145.48 of the Revised Code.	284

(2) A public employer that employs a PERS retirant or other	285
system retirant, or enters into a contract for services as an	286
independent contractor with a PERS retirant, shall notify the	287
retirement board of the employment or contract not later than the	288
end of the month in which the employment or contract commences.	289
Any overpayment of benefits to a PERS retirant by the retirement	290
system resulting from delay or failure of the employer to give the	291
notice shall be repaid to the retirement system by the employer.	292

(3) On receipt of notice from a public employer that a person	293
who is an other system retirant has been employed, the retirement	294
system shall notify the retirement system of which the other	295
system retirant was a member of such employment.	296

(4)(a) A PERS retirant who has received a retirement	297
allowance for less than two months when employment subject to this	298
section commences shall forfeit the retirement allowance for any	299
month the PERS retirant is employed prior to the expiration of the	300
two-month period. Service and contributions for that period shall	301
not be included in calculation of any benefits payable to the PERS	302
retirant, and those contributions shall be refunded on the	303
retirant's death or termination of the employment.	304

(b) An other system retirant who has received a retirement	305
allowance or disability benefit for less than two months when	306
employment subject to this section commences shall forfeit the	307
retirement allowance or disability benefit for any month the other	308
system retirant is employed prior to the expiration of the	309
two-month period. Service and contributions for that period shall	310
not be included in the calculation of any benefits payable to the	311
other system retirant, and those contributions shall be refunded	312
on the retirant's death or termination of the employment.	313

(c) Contributions made on compensation earned after the	314
expiration of the two-month period shall be used in the	315
calculation of the benefit or payment due under section 145.384 of	316
the Revised Code.	317

(5) On receipt of notice from the Ohio police and fire	318
pension fund, school employees retirement system, or state	319
teachers retirement system of the re-employment of a PERS	320
retirant, the public employees retirement system shall not pay, or	321
if paid, shall recover, the amount to be forfeited by the PERS	322
retirant in accordance with section 742.26, 3307.35, or 3309.341	323
of the Revised Code.	324

(6) A PERS retirant who enters into a contract to provide	325
services as an independent contractor to the employer by which the	326
retirant was employed at the time of retirement or, less than two	327
months after the retirement allowance commences, begins providing	328
services as an independent contractor pursuant to a contract with	329
another public employer, shall forfeit the pension portion of the	330
retirement benefit for the period beginning the first day of the	331
month following the month in which the services begin and ending	332
on the first day of the month following the month in which the	333
services end. The annuity portion of the retirement allowance	334
shall be suspended on the day services under the contract begin	335
and shall accumulate to the credit of the retirant to be paid in a	336
single payment after services provided under the contract	337
terminate. A PERS retirant subject to division (B)(6) of this	338
section shall not contribute to the retirement system and shall	339
not become a member of the system.	340

(7) As used in this division, "employment" includes service	341
for which a PERS retirant or other system retirant, the retirant's	342
employer, or both, have waived any earnable salary for the	343
service.	344

(C)(1) Except as provided in division (C)(3) of this section,	345
this division applies to both of the following:	346

(a) A PERS retirant who, prior to September 14, 2000, was	347
subject to division (C)(1)(b) of this section as that division	348
existed immediately prior to September 14, 2000, and has not	349
elected pursuant to Am. Sub. S.B. 144 of the 123rd general	350
assembly to cease to be subject to that division;	351

(b) A PERS retirant to whom both of the following apply:

352

(i) The retirant held elective office in this state, or in	353
any municipal corporation, county, or other political subdivision	354
of this state at the time of retirement under this chapter.	355

(ii) The retirant was elected or appointed to the same office	356
for the remainder of the term or the term immediately following	357
the term during which the retirement occurred.	358

(2) A PERS retirant who is subject to this division is a	359
member of the public employees retirement system with all the	360
rights, privileges, and obligations of membership, except that the	361
membership does not include survivor benefits provided pursuant to	362
section 145.45 of the Revised Code or, beginning on the ninetieth	363
day after September 14, 2000, any amount calculated under section	364
145.401 of the Revised Code. The pension portion of the PERS	365
retirant's retirement allowance shall be forfeited until the first	366
day of the first month following termination of the employment.	367
The annuity portion of the retirement allowance shall accumulate	368
to the credit of the PERS retirant to be paid in a single payment	369
after termination of the employment. The retirement allowance	370
shall resume on the first day of the first month following	371
termination of the employment. On termination of the employment,	372
the PERS retirant shall elect to receive either a refund of the	373
retirant's contributions to the retirement system during the	374
period of employment subject to this section or a supplemental	375
retirement allowance based on the retirant's contributions and	376
service credit for that period of employment.	377

(3) This division does not apply to any of the following:

378

(a) A PERS retirant elected to office who, at the time of the	379
election for the retirant's current term, was not retired but, not	380
less than ninety days prior to the primary election for the term	381
or the date on which a primary for the term would have been held,	382
filed a written declaration of intent to retire before the end of	383
the term with the director of the board of elections of the county	384
in which petitions for nomination or election to the office are	385
filed;	386

(b) A PERS retirant elected to office who, at the time of the	387
election for the retirant's current term, was a retirant and had	388
been retired for not less than ninety days;	389

(c) A PERS retirant appointed to office who, at the time of	390
appointment to the retirant's current term, notified the person or	391
entity making the appointment that the retirant was already	392
retired or intended to retire before the end of the term.	393

(D)(1) Except as provided in division (C) of this section, a	394
PERS retirant or other system retirant subject to this section is	395
not a member of the public employees retirement system, and,	396
except as specified in this section does not have any of the	397
rights, privileges, or obligations of membership. Except as	398
specified in division (D)(2) of this section, the retirant is not	399
eligible to receive health, medical, hospital, or surgical	400
benefits under section 145.58 of the Revised Code for employment	401
subject to this section.	402

(2) A PERS retirant subject to this section shall receive	403
primary health, medical, hospital, or surgical insurance coverage	404
from the retirant's employer, if the employer provides coverage to	405
other employees performing comparable work. Neither the employer	406
nor the PERS retirant may waive the employer's coverage, except	407
that the PERS retirant may waive the employer's coverage if the	408
retirant has coverage comparable to that provided by the employer	409
from a source other than the employer or the public employees	410
retirement system. If a claim is made, the employer's coverage	411
shall be the primary coverage and shall pay first. The benefits	412
provided under section 145.58 of the Revised Code shall pay only	413
those medical expenses not paid through the employer's coverage or	414
coverage the PERS retirant receives through a source other than	415
the retirement system.	416

(E) If the disability benefit of an other system retirant	417
employed under this section is terminated, the retirant shall	418
become a member of the public employees retirement system,	419
effective on the first day of the month next following the	420
termination with all the rights, privileges, and obligations of	421
membership. If such person, after the termination of the	422
disability benefit, earns two years of service credit under this	423
system or under the Ohio police and fire pension fund, state	424
teachers retirement system, school employees retirement system, or	425
state highway patrol retirement system, the person's prior	426
contributions as an other system retirant under this section shall	427
be included in the person's total service credit as a public	428
employees retirement system member, and the person shall forfeit	429
all rights and benefits of this section. Not more than one year of	430
credit may be given for any period of twelve months.	431

(F) This section does not affect the receipt of benefits by	432
or eligibility for benefits of any person who on August 20, 1976,	433
was receiving a disability benefit or service retirement pension	434
or allowance from a state or municipal retirement system in Ohio	435
and was a member of any other state or municipal retirement system	436
of this state.	437

(G) The public employees retirement board may adopt rules to	438
carry out this section.	439

Section 2. That existing sections 145.297, 145.298, and	440
145.38 of the Revised Code are hereby repealed.	441