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To amend sections 5505.01, 5505.03, 5505.15, | 1 |
5505.174, 5505.28, and 5505.54 of the Revised Code | 2 |
to revise the law governing the State Highway | 3 |
Patrol Retirement System. | 4 |
Section 1. That sections 5505.01, 5505.03, 5505.15, 5505.174, | 5 |
5505.28, and 5505.54 of the Revised Code be amended to read as | 6 |
follows: | 7 |
Sec. 5505.01. As used in this chapter: | 8 |
(A) "Employee" means any qualified employee in the uniform | 9 |
division of the state highway patrol, any qualified employee in | 10 |
the radio division hired prior to November 2, 1989, and any state | 11 |
highway patrol cadet attending training school pursuant to section | 12 |
5503.05 of the Revised Code whose attendance at the school begins | 13 |
on or after June 30, 1991. "Employee" includes the superintendent | 14 |
of the state highway patrol. In all cases of doubt, the state | 15 |
highway patrol retirement board shall determine whether any person | 16 |
is an employee as defined in this division, and the decision of | 17 |
the board is final. | 18 |
(B) "Prior service" means all service rendered as an employee | 19 |
of the state highway patrol prior to September 5, 1941, to the | 20 |
extent credited by the board, provided that in no case shall prior | 21 |
service include service rendered prior to November 15, 1933. | 22 |
(C) "Total service" means all service rendered by an employee | 23 |
to the extent credited by the board. Total service includes all of | 24 |
the following: | 25 |
(1) Contributing service rendered by the employee since last | 26 |
becoming a member of the state highway patrol retirement system; | 27 |
(2) All prior service credit; | 28 |
(3) Restored service credit as provided in this chapter; | 29 |
(4) Military service credit purchased under division (D) of | 30 |
section 5505.16 or section 5505.25 of the Revised Code; | 31 |
(5) Credit granted under division (C) of section 5505.17 or | 32 |
section 5505.201, 5505.40, or 5505.402 of the Revised Code; | 33 |
(6) Credit for any period, not to exceed three years, during | 34 |
which the member was out of service and receiving benefits under | 35 |
Chapters 4121. and 4123. of the Revised Code. | 36 |
(D) "Beneficiary" means any person, except a retirant, who is | 37 |
in receipt of a pension or other benefit payable from funds of the | 38 |
retirement system. | 39 |
(E) "Regular interest" means interest compounded at rates | 40 |
designated from time to time by the retirement board. | 41 |
(F) "Plan" means the provisions of this chapter. | 42 |
(G) "Retirement system" or "system" means the state highway | 43 |
patrol retirement system created and established in the plan. | 44 |
(H) "Contributing service" means all service rendered by a | 45 |
member since September 4, 1941, for which deductions were made | 46 |
from the member's salary under the plan. | 47 |
(I) "Retirement board" or "board" means the state highway | 48 |
patrol retirement board provided for in the plan. | 49 |
(J) Except as provided in section 5505.18 of the Revised | 50 |
Code, "member" means any employee included in the membership of | 51 |
the retirement system, whether or not rendering contributing | 52 |
service. | 53 |
(K) "Retirant" means any member who retires with a pension | 54 |
payable from the retirement system. | 55 |
(L) "Accumulated contributions" means the sum of the | 56 |
following credited to a member's individual account in the | 57 |
employees' savings fund: | 58 |
(1) All amounts deducted from the salary of the member; | 59 |
(2) All amounts paid by the member to purchase state highway | 60 |
patrol retirement system service credit pursuant to this chapter | 61 |
or other state law. | 62 |
(M)(1) Except as provided in division (M)(2) of this section, | 63 |
"final average salary" means the average of the highest salary | 64 |
paid a member during any | 65 |
years. | 66 |
If a member has less than | 67 |
service, the member's final average salary shall be the average of | 68 |
the annual rates of salary paid to the member during the member's | 69 |
total years of contributing service. | 70 |
(2) If a member is credited with service under division | 71 |
(C)(6) of this section or division (D) of section 5505.16 of the | 72 |
Revised Code, the member's final average salary shall be the | 73 |
average of the highest salary that was paid to the member or would | 74 |
have been paid to the member, had the member been rendering | 75 |
contributing service, during any | 76 |
nonconsecutive years. If that member has less than | 77 |
years of total service, the member's final average salary shall be | 78 |
the average of the annual rates of salary that were paid to the | 79 |
member or would have been paid to the member during the member's | 80 |
years of total service. | 81 |
(N) "Pension" means an annual amount payable by the | 82 |
retirement system throughout the life of a person or as otherwise | 83 |
provided in the plan. | 84 |
(O) "Pension reserve" means the present value of any pension, | 85 |
or benefit in lieu of any pension, computed upon the basis of | 86 |
mortality and other tables of experience and interest the board | 87 |
shall from time to time adopt. | 88 |
(P) "Deferred pension" means a pension for which an eligible | 89 |
member of the system has made application and which is payable as | 90 |
provided in division (A) or (B) of section 5505.16 of the Revised | 91 |
Code. | 92 |
(Q) "Retirement" means termination as an employee of the | 93 |
state highway patrol, with application having been made to the | 94 |
system for a pension or a deferred pension. | 95 |
(R) "Fiduciary" means any of the following: | 96 |
(1) A person who exercises any discretionary authority or | 97 |
control with respect to the management of the system, or with | 98 |
respect to the management or disposition of its assets; | 99 |
(2) A person who renders investment advice for a fee, direct | 100 |
or indirect, with respect to money or property of the system; | 101 |
(3) A person who has any discretionary authority or | 102 |
responsibility in the administration of the system. | 103 |
(S)(1) Except as otherwise provided in this division, | 104 |
"salary" means all compensation, wages, and other earnings paid to | 105 |
a member by reason of employment but without regard to whether any | 106 |
of the compensation, wages, or other earnings are treated as | 107 |
deferred income for federal income tax purposes. Salary includes | 108 |
all of the following: | 109 |
(a) Payments for shift differential, hazard duty, | 110 |
professional achievement, and longevity; | 111 |
(b) Payments for occupational injury leave, personal leave, | 112 |
sick leave, bereavement leave, administrative leave, and vacation | 113 |
leave used by the member; | 114 |
(c) Payments made under a disability leave program sponsored | 115 |
by the state for which the state is required by section 5505.151 | 116 |
of the Revised Code to make periodic employer and employee | 117 |
contributions to the retirement system. | 118 |
(2) "Salary" does not include any of the following: | 119 |
(a) Payments resulting from the conversion of accrued but | 120 |
unused sick leave, personal leave, compensatory time, and vacation | 121 |
leave; | 122 |
(b) Payments made by the state to provide life insurance, | 123 |
sickness, accident, endowment, health, medical, hospital, dental, | 124 |
or surgical coverage, or other insurance for the member or the | 125 |
member's family, or amounts paid by the state to the member in | 126 |
lieu of providing that insurance; | 127 |
(c) Payments for overtime work; | 128 |
(d) Incidental benefits, including lodging, food, laundry, | 129 |
parking, or services furnished by the state, use of property or | 130 |
equipment of the state, and reimbursement for job-related expenses | 131 |
authorized by the state including moving and travel expenses and | 132 |
expenses related to professional development; | 133 |
(e) Payments made to or on behalf of a member that are in | 134 |
excess of the annual compensation that may be taken into account | 135 |
by the retirement system under division (a)(17) of section 401 of | 136 |
the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. | 137 |
401 (a)(17), as amended; | 138 |
(f) Payments made under division (B), (C), or (E) of section | 139 |
5923.05 of the Revised Code, Section 4 of Substitute Senate Bill | 140 |
No. 3 of the 119th general assembly, Section 3 of Amended | 141 |
Substitute Senate Bill No. 164 of the 124th general assembly, or | 142 |
Amended Substitute House Bill No. 405 of the 124th general | 143 |
assembly. | 144 |
(3) The retirement board shall determine by rule whether any | 145 |
compensation, wages, or earnings not enumerated in this division | 146 |
are salary, and its decision shall be final. | 147 |
(T) "Actuary" means an individual who satisfies all of the | 148 |
following requirements: | 149 |
(1) Is a member of the American academy of actuaries; | 150 |
(2) Is an associate or fellow of the society of actuaries; | 151 |
(3) Has a minimum of five years' experience in providing | 152 |
actuarial services to public retirement plans. | 153 |
Sec. 5505.03. (A) The funds created by this section are the | 154 |
"employees' savings fund," "employer's accumulation fund," | 155 |
"pension reserve fund," "survivors' benefit fund," "income fund," | 156 |
and "expense fund." When reference is made to any of such funds, | 157 |
such reference is made to each as a separate legal entity; | 158 |
provided that the moneys in the funds may be intermingled for | 159 |
deposit and investment purposes. | 160 |
(B) The employees' savings fund is the fund in which shall be | 161 |
accumulated the contributions deducted from the salaries of | 162 |
members, except as provided in division (B)(1)(b) of section | 163 |
5505.54 of the Revised Code. Any refunds of accumulated | 164 |
contributions, as provided in the plan, shall be paid from such | 165 |
fund. Upon a member's retirement, | 166 |
contributions standing to
| 167 |
shall be transferred to the pension reserve fund if | 168 |
member's retirement occurs on or after January 1, 1966, or to the | 169 |
employer's accumulation fund if | 170 |
occurred prior to January 1, 1966. If a pension is payable on | 171 |
account of the death of a member, | 172 |
contributions standing to
| 173 |
employees' savings fund shall be transferred to the survivors' | 174 |
benefit fund if | 175 |
1966, or to the employer's accumulation fund if | 176 |
death occurs prior to January 1, 1966. | 177 |
(C)(1) The employer's accumulation fund is the fund in which | 178 |
shall be accumulated the state's contribution to the state highway | 179 |
patrol retirement system and the amounts contributed under | 180 |
division (B)(1)(b) of section 5505.54 of the Revised Code. Upon a | 181 |
member's retirement after January 1, 1966, the difference between | 182 |
183 | |
contributions shall be transferred to the pension reserve fund. If | 184 |
a pension is payable on account of a member's death occurring | 185 |
after January 1, 1966, the difference between the pension reserve | 186 |
for that pension and | 187 |
shall be transferred to the survivors' benefit fund. | 188 |
(2) All pensions allowed and payable prior to January 1, | 189 |
1966, shall be continued according to the provisions of the plan | 190 |
in force the day preceding January 1, 1966, unless otherwise | 191 |
provided for in this chapter and shall be paid from the employer's | 192 |
accumulation fund. | 193 |
(D) The pension reserve fund is the fund from which shall be | 194 |
paid all pensions on account of members who retire on or after | 195 |
January 1, 1966. If a disability retirant returns to the employ of | 196 |
the state highway patrol, | 197 |
reserve at that time shall be transferred to the employees' | 198 |
savings fund and the employer's accumulation fund in the same | 199 |
proportion as the pension reserve was originally transferred to | 200 |
the pension reserve fund. | 201 |
(E) The survivors' benefit fund is the fund from which shall | 202 |
be paid all pensions, payable under section 5505.17 of the Revised | 203 |
Code, on account of members who die on or after January 1, 1966. | 204 |
(F)(1) The income fund is the fund to which shall be credited | 205 |
all interest, dividends, distributions, and other income derived | 206 |
from deposits and investments of moneys of the retirement system, | 207 |
all gifts and bequests to the system, all transfers from the | 208 |
employees' savings fund because of lack of claimant, and any other | 209 |
moneys the disposition of which is not otherwise provided for in | 210 |
the plan. | 211 |
(2) If the balance in the income fund exceeds the | 212 |
requirements of the fund, the state highway patrol retirement | 213 |
board may transfer amounts from the income fund to meet special | 214 |
requirements of the various other funds of the retirement system. | 215 |
(G) The expense fund is the fund from which the expense of | 216 |
the administration of this chapter shall be paid, exclusive of | 217 |
amounts payable as retirement allowances and as other benefits. | 218 |
The state highway patrol retirement board shall estimate annually | 219 |
the amount to be provided in the expense fund and such amount | 220 |
shall be transferred from the income fund. If such amount is | 221 |
insufficient during any year, the board is authorized to transfer | 222 |
the amount of such insufficiency from the income fund. | 223 |
Sec. 5505.15. (A)(1) A member of the state highway patrol | 224 |
retirement system shall contribute
| 225 |
percentage of the member's annual salary to the state highway | 226 |
patrol retirement fund. The percentage shall be not less than ten | 227 |
per cent of the member's annual salary but not more than fourteen | 228 |
per cent. The state highway patrol retirement board shall | 229 |
establish and may adjust the rate as it considers necessary to | 230 |
meet the amortization period requirement of section 5505.121 of | 231 |
the Revised Code. The board shall base its determination of the | 232 |
necessary rate on the annual actuarial valuation required by | 233 |
section 5505.12 of the Revised Code. The amount shall be deducted | 234 |
by the employer from the employee's salary for each payroll | 235 |
period. | 236 |
(2) The total contributions arising from deductions made | 237 |
prior to January 1, 1966, from the salaries of members in the | 238 |
employ of the state highway patrol and standing to the credit of | 239 |
their individual accounts in the retirement fund shall be | 240 |
transferred and credited to their respective individual accounts | 241 |
in the employees' savings fund. | 242 |
(B) The state shall annually pay into the employer | 243 |
accumulation fund, in monthly or less frequent installments as the | 244 |
state highway patrol retirement board requires, the employer | 245 |
contribution. The employer contribution shall be an amount equal | 246 |
to twenty-six and one-half per cent of the total salaries paid | 247 |
contributing members. If a member severs connection with the | 248 |
patrol or is dismissed, the employer contribution shall remain in | 249 |
the retirement system. | 250 |
The rate percentage of the employer contribution shall be | 251 |
certified by the board to the director of budget and management | 252 |
and shall not be lower than nine per cent of the total salaries | 253 |
paid contributing members and shall not exceed three times the | 254 |
rate percentage being deducted from the annual salaries of | 255 |
contributing members. The board shall prepare and submit to the | 256 |
director, on or before the first day of November of each | 257 |
even-numbered year, an estimate of the amounts necessary to pay | 258 |
the state's obligations accruing during the biennium beginning the | 259 |
first day of July of the following year. Such amounts shall be | 260 |
included in the budget and allocated as certified by the board. | 261 |
Sec. 5505.174. (A) | 262 |
263 |
| 264 |
shall be determined as follows: | 265 |
(1) For a person whose pension effective date is prior to the | 266 |
effective date of this amendment, an "eligible person" is one of | 267 |
the following: | 268 |
(a) A person fifty-three years old or older who | 269 |
receiving | 270 |
5505.16, division (A)(1) of section 5505.17, or division (B) of | 271 |
section 5505.18 of the Revised Code for not less than twelve | 272 |
months; | 273 |
| 274 |
275 | |
the Revised Code for not less than sixty months regardless of age; | 276 |
| 277 |
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(A)(3), (4), (5), (6), or (7) of section 5505.17 of the Revised | 279 |
Code for not less than twelve months regardless of age. | 280 |
(2) For a person whose pension effective date is on or after | 281 |
the effective date of this amendment, an "eligible person" is a | 282 |
person who is sixty years old or older who has been receiving a | 283 |
pension pursuant to division (B) of section 5505.16, section | 284 |
5505.162, division (A)(1), (3), (4), (5), (6), or (7) of section | 285 |
5505.17, or division (B) of section 5505.18 of the Revised Code | 286 |
for not less than twelve months. | 287 |
(B) | 288 |
state highway patrol retirement board shall annually increase | 289 |
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291 | |
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| 294 |
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the following: | 298 |
(a) For each person sixty-five years of age or older who is | 299 |
receiving a pension not greater than one hundred eighty-five per | 300 |
cent of the federal poverty level for a family of two persons, as | 301 |
revised annually by the United States department of health and | 302 |
human services in accordance with section 673(2) of the "Omnibus | 303 |
Reconciliation Act of 1981," 95 Stat. 511, 42 U.S.C. 9902, as | 304 |
amended, the board shall increase the pension by three per cent. | 305 |
(b) For persons other than those described in division | 306 |
(B)(1)(a) of this section, the board may increase the pension. Any | 307 |
increase shall be determined by the board based on compliance with | 308 |
the amortization period requirement of section 5505.121 of the | 309 |
Revised Code. The board's determination shall be based on the | 310 |
annual actuarial valuation required by section 5505.12 of the | 311 |
Revised Code. If the board determines that an increase may be | 312 |
made, the increase shall not exceed three per cent of the eligible | 313 |
person's pension. | 314 |
(2) No increase under this section shall exceed the limit | 315 |
established by section 415 of the "Internal Revenue Code of 1986," | 316 |
100 Stat. 2085, 26 U.S.C. 415, as amended. | 317 |
(3) The date of the first increase paid under this section | 318 |
shall be the anniversary date for future increases. The pension | 319 |
used in the first calculation of an increase under this section | 320 |
shall remain as the base for all future increases paid under this | 321 |
section, unless a new base is established. | 322 |
| 323 |
324 | |
325 | |
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(C) If payment of a portion of a benefit is made to an | 327 |
alternate payee under section 5505.261 of the Revised Code, | 328 |
increases under this section granted while the order is in effect | 329 |
shall be apportioned between the alternate payee and the eligible | 330 |
person in the same proportion that the amount being paid to the | 331 |
alternate payee bears to the amount paid to the eligible person. | 332 |
If payment of a portion of a benefit is made to one or more | 333 |
beneficiaries under "option 4" under division (A)(4) of section | 334 |
5505.162 of the Revised Code, each increase under this section | 335 |
granted while the plan of payment is in effect shall be divided | 336 |
among the designated beneficiaries in accordance with the portion | 337 |
each beneficiary has been allocated. | 338 |
(D) The board shall adopt, and may amend or rescind, any rule | 339 |
necessary to carry out this section. | 340 |
Sec. 5505.28. (A) The state highway patrol retirement board | 341 |
may enter into an agreement with insurance companies, health | 342 |
insuring corporations, or government agencies authorized to do | 343 |
business in the state for issuance of a policy or contract of | 344 |
health, medical, hospital, or surgical benefits, or any | 345 |
combination thereof, for those persons receiving pensions and | 346 |
subscribing to the plan. Notwithstanding any other provision of | 347 |
this chapter, the policy or contract may also include coverage for | 348 |
any eligible individual's spouse and dependent children and for | 349 |
any of the individual's sponsored dependents as the board | 350 |
considers appropriate. | 351 |
If all or any portion of the policy or contract premium is to | 352 |
be paid by any individual receiving a service, disability, or | 353 |
survivor pension or benefit, the individual shall, by written | 354 |
authorization, instruct the board to deduct from the individual's | 355 |
pension or benefit the premium agreed to be paid by the individual | 356 |
to the company, corporation, or agency. | 357 |
The board may contract for coverage on the basis of part or | 358 |
all of the cost of the coverage to be paid from appropriate funds | 359 |
of the state highway patrol retirement system. The cost paid from | 360 |
the funds of the system shall be included in the employer's | 361 |
contribution rate as provided by section 5505.15 of the Revised | 362 |
Code. | 363 |
(B) The board shall, beginning the month following receipt of | 364 |
satisfactory evidence of the payment for coverage, pay monthly to | 365 |
each recipient of a pension under the state highway patrol | 366 |
retirement system who is eligible for | 367 |
under part B of the medicare program established under Title XVIII | 368 |
of "The Social Security Amendments of 1965," 79 Stat. 301 (1965), | 369 |
42 U.S.C.A. 1395j, as amended, an amount established by board rule | 370 |
not exceeding the basic premium for such coverage. | 371 |
(C) The board shall establish by rule requirements for the | 372 |
coordination of any coverage, payment, or benefit provided under | 373 |
this section with any similar coverage, payment, or benefit made | 374 |
available to the same individual by the public employees | 375 |
retirement system, Ohio police and fire pension fund, state | 376 |
teachers retirement system, or school employees retirement system. | 377 |
(D) The board shall make all other necessary rules pursuant | 378 |
to the purpose and intent of this section. | 379 |
Sec. 5505.54. (A) During the period beginning on the | 380 |
effective date of an election to participate in the deferred | 381 |
retirement option plan and ending on the date participation | 382 |
ceases, a member's monthly pension amount determined under section | 383 |
5505.53 of the Revised Code shall accrue to the member's benefit. | 384 |
To this amount shall be added any benefit increases the member | 385 |
would be eligible for under section 5505.174 of the Revised Code | 386 |
had the member, on the effective date of the member's election, | 387 |
retired under section 5505.16 of the Revised Code. | 388 |
(B)(1) The amounts contributed under division (A) of section | 389 |
5505.15 of the Revised Code by a member participating in the | 390 |
deferred retirement option plan shall | 391 |
392 |
(a) Ten per cent of the member's annual salary shall accrue | 393 |
to the member's benefit. | 394 |
(b) Any amount of the member's annual salary that is in | 395 |
excess of ten per cent shall be credited to the employer's | 396 |
accumulation fund. | 397 |
(2) The state highway patrol retirement system shall credit | 398 |
to the employer's accumulation fund the amounts contributed by the | 399 |
state under section 5505.15 of the Revised Code on behalf of a | 400 |
member participating in the deferred retirement option plan. | 401 |
(C) During the period beginning on the election's effective | 402 |
date and ending on the date the member ceases participation in the | 403 |
plan, the amounts described in divisions (A) and (B)(1)(a) of this | 404 |
section shall earn interest at an annual rate established by the | 405 |
state highway patrol retirement board and compounded annually | 406 |
using a method established by rule adopted under section 5505.50 | 407 |
of the Revised Code. | 408 |
Section 2. That existing sections 5505.01, 5505.03, 5505.15, | 409 |
5505.174, 5505.28, and 5505.54 of the Revised Code are hereby | 410 |
repealed. | 411 |
Section 3. Sections 1 and 2 of this act take effect January | 412 |
7, 2013, except that section 5505.15 of the Revised Code, as | 413 |
amended by this act, takes effect one hundred and eighty days | 414 |
after the effective date of this section and section 5505.01, as | 415 |
amended by this act, takes effect January 1, 2015. | 416 |
Section 4. (A) The Ohio Retirement Study Council shall study | 417 |
and make recommendations regarding the authority of the State | 418 |
Highway Patrol Retirement Board to adjust employee contributions | 419 |
rates as provided in section 5505.15 of the Revised Code, as | 420 |
amended by this act. | 421 |
(B) Not later than ninety days after the effective date of | 422 |
this section, the council shall prepare and submit to the | 423 |
President of the Senate and Speaker of the House of | 424 |
Representatives a report of its findings and recommendations. | 425 |