As Reported by the Senate Health, Human Services and Aging Committee

127th General Assembly
Regular Session
2007-2008
Sub. S. B. No. 148


Senator Faber 

Cosponsor: Senator Mumper 

A BILL
To amend sections 3309.33, 3309.34, 3309.36, 3309.38, 1
and 3309.381 of the Revised Code to revise 2
retirement eligibility requirements for members of 3
the School Employees Retirement System.4


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

       Section 1. That sections 3309.33, 3309.34, 3309.36, 3309.38, 5
and 3309.381 of the Revised Code be amended to read as follows:6

       Sec. 3309.33. (A) An employer may establish a retirement7
incentive plan for its employees who are members of the school8
employees retirement system. The plan shall provide for purchase9
by the employer of service credit for eligible employees who10
choose to participate in the plan and for payment by the employer11
of the entire cost of such service credit. A plan established12
under this section shall remain in effect until terminated by the13
employer, except that, once established, the plan must remain in14
effect for at least one year.15

       An employee who is a member of the school employees16
retirement system shall(B) To be eligible to participate in a17
retirement incentive plan if he, an employee must meet the 18
following requirements:19

       (1) Either of the following:20

       (a) If the employee became a member of the retirement system 21
before the effective date of this amendment, the member has 22
attained age fifty and heyears of age;23

        (b) If the employee became a member of the retirement system 24
on or after the effective date of this amendment, the employee has 25
attained fifty-five years of age;26

        (2) The employee agrees to retire and retires under section 27
3309.36 of the Revised Code effective within ninety days after 28
receiving notice from the school employees retirement system that 29
service credit has been purchased for himthe employee under this 30
section.31

       (C) Participation in the plan shall be available to all32
eligible employees except that the employer may limit the number33
of persons for whom it purchases credit in any calendar year to a34
specified percentage of its employees who are members of the35
school employees retirement system on the first day of January of36
that year. The percentage shall not be less than five per cent of 37
such employees. If participation is limited, employees with a38
greater length of service with the employer have the right to39
elect to have credit purchased before employees with a lesser40
length of service with the employer.41

       (D) The amount of service credit purchased for any 42
participant shall be uniformly determined but shall not exceed the 43
lesser of the following:44

       (A)(1) Five years of service credit;45

       (B)(2) An amount of service credit equal to one-fifth of the46
total service credited to the participant under Chapter 3309. of47
the Revised Code.48

       For each year of service credit purchased under this section, 49
the employer shall pay an amount specified by the school employees 50
retirement board equal to the additional liability resulting from 51
the purchase of that year of service credit as determined by an 52
actuary employed by the board. Payments shall be made in 53
accordance with rules adopted by the board, and the board shall 54
notify each member when hethe member is credited with service55
purchased under this section.56

       No payment made to the school employees retirement system57
under this section shall affect any payment required by section58
3309.49 of the Revised Code.59

       Sec. 3309.34. (A)(1) A member of the school employees 60
retirement system whose membership began before the effective date 61
of this amendment is eligible for service retirement if hethe 62
member has at least five years of total service credit and has63
attained sixty years of age, or if hethe member has at least64
thirty years of total service credit at any age. A member whose 65
membership began before the effective date of this amendment is 66
eligible for commuted service retirement if hethe member has at 67
least twenty-five years of total service credit and has attained 68
fifty-five years of age.69

       (2) A member whose membership began on or after the effective 70
date of this amendment is eligible for service retirement if the 71
member meets one of the following requirements:72

       (a) Has earned at least ten years of total service credit and 73
has attained sixty-two years of age;74

       (b) Has earned at least twenty-five years of total service 75
credit and has attained sixty years of age;76

        (c) Has earned at least thirty years of total service credit 77
and has attained fifty-five years of age.78

       (B) A member may retire by filing an application for 79
retirement with the school employees retirement board on a form 80
provided by the board. The board shall not retire the member 81
sooner than the first day of the month next following the later 82
of:83

       (A)(1) The last day of employment for which compensation was84
paid;85

       (B)(2) The attainment of minimum age and service credit 86
eligibility for service or commuted service retirement.87

       (C) At least once every ten years, the board shall direct its 88
actuary to evaluate the retirement eligibility requirements of 89
this section.90

       Sec. 3309.36.  (A)(1) A member retiringof the school 91
employees retirement system whose membership began before the 92
effective date of this amendment who retires on service retirement93
shall be granted a retirement allowance consisting of the lesser94
of the sum of the following amounts or the limit established by95
section 415 of the "Internal Revenue Code of 1986," 100 Stat.96
2085, 26 U.S.C.A. 415, as amended:97

       (1)(a) An annuity having a reserve equal to the amount of the98
employee's accumulated contributions at that time;99

       (2)(b) A pension of equivalent amount;100

       (3)(c) An additional pension of forty dollars multiplied by101
the number of years of such prior service credit;102

       (4)(d) For members who have ten or more years of service103
credit accumulated prior to October 1, 1956, a basic annual104
pension equal to one hundred eighty dollars, except that such105
basic annual pension shall not exceed the sum of the total annual106
benefits provided by divisions (A)(1), (2), and (3) of this 107
section.108

       (2) A member whose membership began on or after the effective 109
date of this amendment who retires on service retirement shall be 110
granted a retirement allowance consisting of the lesser of the sum 111
of the following amounts or the limit established by section 415 112
of the "Internal Revenue Code of 1986":113

        (a) An annuity having a reserve equal to the amount of the 114
employee's accumulated contributions at that time;115

        (b) A pension of equivalent amount.116

       (B)(1) When a member retires on service retirement, the117
member's allowance when computed as an annual single lifetime118
allowance as provided in divisions (A)(1), (2), (3), and (4)(2) of119
this section and section 3309.38 of the Revised Code, based upon120
attained age sixty-five or thirty years of total service credit,121
shall be not less than the greater of the amounts determined by122
multiplying the member's total service credit by the following:123

       (a) Eighty-six dollars;124

       (b) Two and two-tenths per cent of the member's final average 125
salary for each of the first thirty years of service credit or 126
fraction thereof plus two and one-half per cent of the member's 127
final average salary for each subsequent year of service credit or 128
fraction thereof.129

       (2) TheFor a member whose membership began before the 130
effective date of this amendment, the annual single lifetime 131
allowance determined under division (B)(1) of this section shall 132
be adjusted by the greater percentage shown in the following 133
schedule opposite the member's attained age or years of Ohio 134
service credit:135

Years of Per Cent 136
Attained or Ohio Service of 137
Age Credit Base Amount 138
58 25 75% 139
59 26 80 140
60 27 85 141
61 88 142
28 90 143
62 91 144
63 94 145
29 95 146
64 97 147
65 30 or more 100 148

Members shall vest the For a member whose membership began before 149
the effective date of this amendment, the right to a benefit shall 150
vest in accordance with the following schedule, based on the 151
member's attained age by September 1, 1976:152

Per Cent 153
Attained of 154
Age Base Amount 155
66 102 156
67 104 157
68 106 158
69 108 159
70 or more 110 160

       (3) For a member whose membership began on or after the 161
effective date of this amendment, the annual single lifetime 162
allowance determined under division (B)(1) of this section shall 163
be adjusted to be the actuarial equivalent of the member's 164
retirement allowance, as determined by the retirement board's 165
actuary, had the member retired at age sixty-five or with thirty 166
years of service credit, except that the retirement allowance 167
shall not be less than the following:168

Per Cent 169
Years of Service of 170
Credit Base Amount 171
25 75% 172
26 80 173
27 85 174
28 90 175
29 95 176

       (4) The annual single lifetime allowance which a retirant177
shall receive under this division shall not exceed the lesser of178
one hundred per cent of the member's final average salary or the179
limit established by section 415 of the "Internal Revenue Code of180
1986," 100 Stat. 2085, 26 U.S.C.A. 415, as amended.181

       (C) Retirement allowances determined under this section shall 182
be paid as provided in section 3309.46 of the Revised Code.183

       (D) At least once every ten years, the school employees 184
retirement board shall direct its actuary to evaluate the 185
actuarial equivalents in division (B)(3) of this section to 186
determine their appropriateness. The board may adjust the 187
actuarial equivalents in accordance with the actuary's 188
recommendations.189

       Sec. 3309.38.  (A) A member retiring on commuted service190
retirement on or after September 30, 1963, shall be granted a191
retirement allowance consisting of:192

       (1) An annuity having a reserve equal to the amount of the193
employee's accumulated contributions at the time;194

       (2) A pension of equivalent amount;195

       (3) An additional pension, if such employee has prior service 196
credit, the reserve for which, based upon regular interest and the 197
service tables approved by the board, shall be the present worth 198
of the reserve required for the payment of the prior service 199
pension provided by section 3309.36 of the Revised Code, after 200
either age sixty or thirty-two years of service credit, whichever 201
can be first attained. The annual prior service pension shall be 202
determined by the amount of such commuted reserve divided by the 203
service annuity rate for the attained annuity age of retirement.204

       (4) For members who have ten or more years of service credit 205
accumulated prior to October 1, 1956, a basic annual pension equal 206
to one hundred eighty dollars, which shall be commuted in the same 207
manner as provided for the prior service pension in division 208
(A)(3) of this section, provided such commuted basic annual 209
pension shall not exceed the sum of the total annual benefits 210
provided by divisions (A)(1), (2), and (3) of this section.211

       (B) When a member retires on commuted service retirement, the 212
member's annual single lifetime allowance including the allowances213
provided in divisions (A)(1), (2), (3), and (4) of this section214
shall not be less than the allowances provided under the215
provisions of division (B) of section 3309.36 of the Revised Code216
and shall not exceed the limit established by division (B)(3)(4)217
of that section.218

       (C) Retirement allowances determined under this section shall 219
be paid as provided in section 3309.46 of the Revised Code.220

       Sec. 3309.381.  (A) A recipient of a disability allowance221
under section 3309.401 of the Revised Code who is subject to222
division (C)(3) of that section may make application for service223
retirement under this section. Retirement shall be effective on224
the first day of the first month following the last day for which225
the disability allowance is paid.226

       (B) The annual allowance payable under this section shall227
consist of the sum of the amounts determined under divisions228
(B)(1) and (2) of this section:229

       (1) The greater of the following:230

       (a) An allowance calculated as provided in section 3309.36 of 231
the Revised Code, excluding any period during which the applicant 232
received a disability benefit under section 3309.401 of the 233
Revised Code;234

       (b) An allowance calculated by multiplying the applicant's235
total service credit, including service credit for the last236
continuous period during which the applicant received a disability 237
benefit under section 3309.401 of the Revised Code, by two and 238
two-tenths per cent of the applicant's final average salary, 239
except that the allowance shall not exceed forty-five per cent of 240
the applicant's final average salary.241

       (2) An amount equal to the additional allowance the recipient 242
would receive under section 3309.374 of the Revised Code, plus any 243
other additional amount the recipient would receive under this 244
chapter, had the recipient retired under section 3309.36 of the 245
Revised Code effective on the effective date of the recipient's 246
most recent continuous period of receipt of a disability benefit 247
under section 3309.401 of the Revised Code.248

       (C) The allowance calculated under division (B) of this249
section, exclusive of any amount added under division (B)(2) of250
this section based on section 3309.374 of the Revised Code, shall251
be the base for all future additional allowances under section252
3309.374 of the Revised Code.253

       The anniversary date for future additional allowances under254
section 3309.374 of the Revised Code shall be the effective date255
of the recipient's most recent continuous period of receipt of a256
disability benefit under section 3309.401 of the Revised Code.257

       (D) The retirement allowance determined under this section258
shall be paid as provided in section 3309.46 of the Revised Code.259

       Section 2. That existing sections 3309.33, 3309.34, 3309.36, 260
3309.38, and 3309.381 of the Revised Code are hereby repealed.261