To amend sections 145.01, 145.23, 145.31, 145.37, 145.38, 145.40, 145.43, 3307.41, and 3309.35 and to enact sections 145.401, 145.471, 145.472, and 145.473 of the Revised Code to require the Public Employees Retirement System to credit interest on a member's contributions and, under certain conditions, to pay an amount of employer contributions on the death of a member or withdrawal of a member's contributions.

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

Sec. 145.01. As used in this chapter:

(A) "Public employee" means:

(1) Any person holding an office, not elective, under the state or any county, township, municipal corporation, park district, conservancy district, sanitary district, health district, metropolitan housing authority, state retirement board, Ohio historical society, public library, county law library, union cemetery, joint hospital, institutional commissary, state university, or board, bureau, commission, council, committee, authority, or administrative body as the same are, or have been, created by action of the general assembly or by the legislative authority of any of the units of local government named in division (A)(1) of this section, or employed and paid in whole or in part by the state or any of the authorities named in division (A)(1) of this section in any capacity not covered by section 742.01, 3307.01, 3309.01, or 5505.01 of the Revised Code.

(2) A person who is a member of the public employees retirement system and who continues to perform the same or similar duties under the direction of a contractor who has contracted to take over what before the date of the contract was a publicly operated function. The governmental unit with which the contract has been made shall be deemed the employer for the purposes of administering this chapter.

(3) Any person who is an employee of a public employer, notwithstanding that the person's compensation for that employment is derived from funds of a person or entity other than the employer. Credit for such service shall be included as total service credit, provided that the employee makes the payments required by this chapter, and the employer makes the payments required by sections 145.48 and 145.51 of the Revised Code.

In all cases of doubt, the public employees retirement board shall determine whether any person is a public employee, and its decision is final.

(B) "Member" means any public employee, other than a public employee excluded or exempted from membership in the retirement system by section 145.03, 145.031, 145.032, 145.033, 145.034, 145.035, or 145.38 of the Revised Code. "Member" includes a PERS retirant who becomes a member under division (C)(2) of section 145.38 of the Revised Code. "Member" also includes a disability benefit recipient.

(C) "Head of the department" means the elective or appointive head of the several executive, judicial, and administrative departments, institutions, boards, and commissions of the state and local government as the same are created and defined by the laws of this state or, in case of a charter government, by that charter.

(D) "Employer" or "public employer" means the state or any county, township, municipal corporation, park district, conservancy district, sanitary district, health district, metropolitan housing authority, state retirement board, Ohio historical society, public library, county law library, union cemetery, joint hospital, institutional commissary, state medical college, state university, or board, bureau, commission, council, committee, authority, or administrative body as the same are, or have been, created by action of the general assembly or by the legislative authority of any of the units of local government named in this division not covered by section 3307.01 or 3309.01 of the Revised Code. In addition, "employer" means the employer of any public employee.

(E) "Prior service" means all service as a public employee rendered before January 1, 1935, and all service as an employee of any employer who comes within the state teachers retirement system or of the school employees retirement system or of any other retirement system established under the laws of this state rendered prior to January 1, 1935, provided that if the employee claiming the service was employed in any capacity covered by that other system after that other system was established, credit for the service may be allowed by the public employees retirement system only when the employee has made payment, to be computed on the salary earned from the date of appointment to the date membership was established in the public employees retirement system, at the rate in effect at the time of payment, and the employer has made payment of the corresponding full liability as provided by section 145.44 of the Revised Code. "Prior service" also means all service credited for active duty with the armed forces of the United States as provided in section 145.30 of the Revised Code.

If an employee who has been granted prior service credit by the public employees retirement system for service rendered prior to January 1, 1935, as an employee of a board of education establishes, before retirement, one year or more of contributing service in the state teachers retirement system or school employees retirement system, then the prior service ceases to be the liability of this system.

If the board determines that a position of any member in any calendar year prior to January 1, 1935, was a part-time position, the board shall determine what fractional part of a year's credit shall be allowed by the following formula:

(1) When the member has been either elected or appointed to an office the term of which was two or more years and for which an annual salary is established, the fractional part of the year's credit shall be computed as follows:

First, when the member's annual salary is one thousand dollars or less, the service credit for each such calendar year shall be forty per cent of a year.

Second, for each full one hundred dollars of annual salary above one thousand dollars, the member's service credit for each such calendar year shall be increased by two and one-half per cent.

(2) When the member is paid on a per diem basis, the service credit for any single year of the service shall be determined by using the number of days of service for which the compensation was received in any such year as a numerator and using two hundred fifty days as a denominator.

(3) When the member is paid on an hourly basis, the service credit for any single year of the service shall be determined by using the number of hours of service for which the compensation was received in any such year as a numerator and using two thousand hours as a denominator.

(F) "Contributor" means any person who has an account in the employees' savings fund created by section 145.23 of the Revised Code.

(G) "Beneficiary" or "beneficiaries" means the estate or a person or persons who, as the result of the death of a member, contributor, or retirant, qualify for or are receiving some right or benefit under this chapter.

(H)(1) "Total service credit," except as provided in section 145.37 of the Revised Code, means all service credited to a member of the retirement system since last becoming a member, including restored service credit as provided by section 145.31 of the Revised Code; credit purchased under sections 145.293 and 145.299 of the Revised Code; all the member's prior service credit; all the member's military service credit computed as provided in this chapter; all service credit established pursuant to section 145.297 of the Revised Code; and any other service credited under this chapter. In addition, "total service credit" includes any period, not in excess of three years, during which a member was out of service and receiving benefits under Chapters 4121. and 4123. of the Revised Code. For the exclusive purpose of satisfying the service credit requirement and of determining eligibility for benefits under sections 145.32, 145.33, 145.331, 145.35, 145.36, and 145.361 of the Revised Code, "five or more years of total service credit" means sixty or more calendar months of contributing service in this system.

(2) "One and one-half years of contributing service credit," as used in division (B) of section 145.45 of the Revised Code, also means eighteen or more calendar months of employment by a municipal corporation that formerly operated its own retirement plan for its employees or a part of its employees, provided that all employees of that municipal retirement plan who have eighteen or more months of such employment, upon establishing membership in the public employees retirement system, shall make a payment of the contributions they would have paid had they been members of this system for the eighteen months of employment preceding the date membership was established. When that payment has been made by all such employee members, a corresponding payment shall be paid into the employers' accumulation fund by that municipal corporation as the employer of the employees.

(3) Where a member also is a member of the state teachers retirement system or the school employees retirement system, or both, except in cases of retirement on a combined basis pursuant to section 145.37 of the Revised Code, service credit for any period shall be credited on the basis of the ratio that contributions to the public employees retirement system bear to total contributions in all state retirement systems.

(4) Not more than one year of credit may be given for any period of twelve months.

(5) "Ohio service credit" means credit for service that was rendered to the state or any of its political subdivisions or any employer.

(I) "Regular or current interest" means interest at any rates for the respective funds and accounts as the public employees retirement board may determine from time to time, except as follows:

(1) Subsequent to December 31, 1958, the retirement board shall discontinue the annual crediting of current interest to the individual accounts of contributors. The noncrediting of current interest shall not affect the rate of interest at retirement guaranteed under division (I) of this section.

(2) The rate of interest credited on a contributor's contributions at retirement shall be four per cent per annum, compounded annually, to and including December 31, 1955; three per cent per annum, compounded annually, from January 1, 1956, to and including December 31, 1963; three and one-quarter per cent per annum, compounded annually, from January 1, 1964, to and including December 31, 1969; and thereafter four per cent per annum, compounded annually.

In determining the reserve value for the purpose of computing the amount of the contributor's annuity, the rate of interest used in the annuity values shall be four per cent per annum, compounded annually, for contributors retiring before October 1, 1956, and after December 31, 1969; three per cent per annum, compounded annually, for contributors retiring between October 1, 1956, and December 31, 1963; and three and one-quarter per cent per annum, compounded annually, for contributors retiring from January 1, 1964, to December 31, 1969. Interest on contributions from contributors within any one calendar year shall begin on the first day of the calendar year next following and shall be computed at the end of each calendar year, except in the case of a contributor who retires before the end of the year.

(J) "Accumulated contributions" means the sum of all amounts credited to a contributor's individual account in the employees' savings fund together with any current interest thereon, but does not include the interest adjustment at retirement CREDITED TO THE CONTRIBUTOR'S ACCOUNT UNDER SECTION 145.471 OR 145.472 of the Revised Code.

(K)(1) "Final average salary" means the quotient obtained by dividing by three the sum of the three full calendar years of contributing service in which the member's earnable salary was highest, except that if the member has a partial year of contributing service in the year the member's employment terminates and the member's earnable salary for the partial year is higher than for any comparable period in the three years, the member's earnable salary for the partial year shall be substituted for the member's earnable salary for the comparable period during the three years in which the member's earnable salary was lowest.

(2) If a member has less than three years of contributing service, the member's final average salary shall be the member's total earnable salary divided by the total number of years, including any fraction of a year, of the member's contributing service.

(3) For the purpose of calculating benefits payable to a member qualifying for service credit under division (Z) of this section, "final average salary" means the total earnable salary on which contributions were made divided by the total number of years during which contributions were made, including any fraction of a year. If contributions were made for less than twelve months, "final average salary" means the member's total earnable salary.

(L) "Annuity" means payments for life derived from contributions made by a contributor and paid from the annuity and pension reserve fund as provided in this chapter. All annuities shall be paid in twelve equal monthly installments.

(M) "Annuity reserve" means the present value, computed upon the basis of the mortality and other tables adopted by the board, of all payments to be made on account of any annuity, or benefit in lieu of any annuity, granted to a retirant as provided in this chapter.

(N)(1) "Disability retirement" means retirement as provided in section 145.36 of the Revised Code.

(2) "Disability allowance" means an allowance paid on account of disability under section 145.361 of the Revised Code.

(3) "Disability benefit" means a benefit paid as disability retirement under section 145.36 of the Revised Code, as a disability allowance under section 145.361 of the Revised Code, or as a disability benefit under section 145.37 of the Revised Code.

(4) "Disability benefit recipient" means a member who is receiving a disability benefit.

(O) "Age and service retirement" means retirement as provided in sections 145.32, 145.33, 145.331, 145.34, 145.37, and 145.46 of the Revised Code.

(P) "Pensions" means annual payments for life derived from contributions made by the employer that at the time of retirement are credited into the annuity and pension reserve fund from the employers' accumulation fund and paid from the annuity and pension reserve fund as provided in this chapter. All pensions shall be paid in twelve equal monthly installments.

(Q) "Retirement allowance" means the pension plus that portion of the benefit derived from contributions made by the member.

(R)(1) Except as otherwise provided in division (R) of this section, "earnable salary" means all salary, wages, and other earnings paid to a contributor by reason of employment in a position covered by the retirement system. The salary, wages, and other earnings shall be determined prior to determination of the amount required to be contributed to the employees' savings fund under section 145.47 of the Revised Code and without regard to whether any of the salary, wages, or other earnings are treated as deferred income for federal income tax purposes. "Earnable salary" includes the following:

(a) Payments made by the employer in lieu of salary, wages, or other earnings for sick leave, personal leave, or vacation used by the contributor;

(b) Payments made by the employer for the conversion of sick leave, personal leave, and vacation leave accrued, but not used if the payment is made during the year in which the leave is accrued, except that payments made pursuant to section 124.383 or 124.386 of the Revised Code are not earnable salary;

(c) Allowances paid by the employer for full maintenance, consisting of housing, laundry, and meals, as certified to the retirement board by the employer or the head of the department that employs the contributor;

(d) Fees and commissions paid under section 507.09 of the Revised Code;

(e) Payments that are made under a disability leave program sponsored by the employer and for which the employer is required by section 145.296 of the Revised Code to make periodic employer and employee contributions;

(f) Amounts included pursuant to divisions (K)(3) and (Y) of this section.

(2) "Earnable salary" does not include any of the following:

(a) Fees and commissions, other than those paid under section 507.09 of the Revised Code, paid as sole compensation for personal services and fees and commissions for special services over and above services for which the contributor receives a salary;

(b) Amounts paid by the employer to provide life insurance, sickness, accident, endowment, health, medical, hospital, dental, or surgical coverage, or other insurance for the contributor or the contributor's family, or amounts paid by the employer to the contributor in lieu of providing the insurance;

(c) Incidental benefits, including lodging, food, laundry, parking, or services furnished by the employer, or use of the employer's property or equipment, or amounts paid by the employer to the contributor in lieu of providing the incidental benefits;

(d) Reimbursement for job-related expenses authorized by the employer, including moving and travel expenses and expenses related to professional development;

(e) Payments for accrued, but unused sick leave, personal leave, or vacation that are made at any time other than in the year in which the sick leave, personal leave, or vacation was accrued;

(f) Payments made to or on behalf of a contributor that are in excess of the annual compensation that may be taken into account by the retirement system under division (a)(17) of section 401 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 401(a)(17), as amended;

(g) Payments made under division (B) or (D) of section 5923.05 of the Revised Code or Section 4 of Substitute Senate Bill No. 3 of the 119th general assembly;

(h) Anything of value received by the contributor that is based on or attributable to retirement or an agreement to retire, except that payments made on or before January 1, 1989, that are based on or attributable to an agreement to retire shall be included in earnable salary if both of the following apply:

(i) The payments are made in accordance with contract provisions that were in effect prior to January 1, 1986;

(ii) The employer pays the retirement system an amount specified by the retirement board equal to the additional liability resulting from the payments.

(3) The retirement board shall determine by rule whether any compensation not enumerated in division (R) of this section is earnable salary, and its decision shall be final.

(S) "Pension reserve" means the present value, computed upon the basis of the mortality and other tables adopted by the board, of all payments to be made on account of any retirement allowance or benefit in lieu of any retirement allowance, granted to a member or beneficiary under this chapter.

(T)(1) "Contributing service" means all service credited to a member of the system since January 1, 1935, for which contributions are made as required by sections 145.47, 145.48, and 145.483 of the Revised Code. In any year subsequent to 1934, credit for any service shall be allowed by the following formula:

(a) For each month for which the member's earnable salary is two hundred fifty dollars or more, allow one month's credit.

(b) For each month for which the member's earnable salary is less than two hundred fifty dollars, allow a fraction of a month's credit. The numerator of this fraction shall be the earnable salary during the month, and the denominator shall be two hundred fifty dollars, except that if the member's annual earnable salary is less than six hundred dollars, the member's credit shall not be reduced below twenty per cent of a year for a calendar year of employment during which the member worked each month. Division (T)(1)(b) of this section shall not reduce any credit earned before January 1, 1985.

(2) Notwithstanding division (T)(1) of this section, an elected official who prior to January 1, 1980, was granted a full year of credit for each year of service as an elected official shall be considered to have earned a full year of credit for each year of service regardless of whether the service was full-time or part-time. The public employees retirement board has no authority to reduce the credit.

(U) "State retirement board" means the public employees retirement board, the school employees retirement board, or the state teachers retirement board.

(V) "Retirant" means any former member who retires and is receiving a monthly allowance as provided in sections 145.32, 145.33, 145.331, 145.34, and 145.46 of the Revised Code.

(W) "Employer contribution" means the amount paid by an employer as determined by the employer rate including the normal and deficiency contribution rates.

(X) "Public service terminates" means the last day for which a public employee is compensated for services performed for an employer or the date of the employee's death, whichever occurs first.

(Y) When a member has been elected or appointed to an office, the term of which is two or more years, for which an annual salary is established, and in the event that the salary of the office is increased and the member is denied the additional salary by reason of any constitutional provision prohibiting an increase in salary during a term of office, the member may elect to have the amount of the member's contributions calculated upon the basis of the increased salary for the office. At the member's request, the board shall compute the total additional amount the member would have contributed, or the amount by which each of the member's contributions would have increased, had the member received the increased salary for the office the member holds. If the member elects to have the amount by which the member's contribution would have increased withheld from the member's salary, the member shall notify the employer, and the employer shall make the withholding and transmit it to the retirement system. A member who has not elected to have that amount withheld may elect at any time to make a payment to the retirement system equal to the additional amount the member's contribution would have increased, plus interest on that contribution, compounded annually at a rate established by the board and computed from the date on which the last contribution would have been withheld from the member's salary to the date of payment. A member may make a payment for part of the period for which the increased contribution was not withheld, in which case the interest shall be computed from the date the last contribution would have been withheld for the period for which the payment is made. Upon the payment of the increased contributions as provided in this division, the increased annual salary as provided by law for the office for the period for which the member paid increased contributions thereon shall be used in determining the member's earnable salary for the purpose of computing the member's final average salary.

(Z) "Five years of service credit," for the exclusive purpose of satisfying the service credit requirements and of determining eligibility for benefits under section 145.33 of the Revised Code, means employment covered under this chapter or under a former retirement plan operated, recognized, or endorsed by the employer prior to coverage under this chapter or under a combination of the coverage.

(AA) "Deputy sheriff" means any person who is commissioned and employed as a full-time peace officer by the sheriff of any county, and has been so employed since on or before December 31, 1965, and whose primary duties are to preserve the peace, to protect life and property, and to enforce the laws of this state; any person who is or has been commissioned and employed as a peace officer by the sheriff of any county since January 1, 1966, and who has received a certificate attesting to the person's satisfactory completion of the peace officer training school as required by section 109.77 of the Revised Code and whose primary duties are to preserve the peace, protect life and property, and enforce the laws of this state; or any person deputized by the sheriff of any county and employed pursuant to section 2301.12 of the Revised Code as a criminal bailiff or court constable who has received a certificate attesting to the person's satisfactory completion of the peace officer training school as required by section 109.77 of the Revised Code and whose primary duties are to preserve the peace, protect life and property, and enforce the laws of this state.

(BB) "Township constable or police officer in a township police department or district" means any person who is commissioned and employed as a full-time peace officer pursuant to Chapter 505. or 509. of the Revised Code, who has received a certificate attesting to the person's satisfactory completion of the peace officer training school as required by section 109.77 of the Revised Code, and whose primary duties are to preserve the peace, protect life and property, and enforce the laws of this state.

(CC) "Drug agent" means any person who is either of the following:

(1) Employed full-time as a narcotics agent by a county narcotics agency created pursuant to section 307.15 of the Revised Code and has received a certificate attesting to the satisfactory completion of the peace officer training school as required by section 109.77 of the Revised Code;

(2) Employed full-time as an undercover drug agent as defined in section 109.79 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(DD) "Department of public safety enforcement agent" means a full-time employee of the department of public safety who is designated under section 5502.14 of the Revised Code as an enforcement agent and who is in compliance with section 109.77 of the Revised Code.

(EE) "Natural resources law enforcement staff officer" means a full-time employee of the department of natural resources who is designated a natural resources law enforcement staff officer under section 1501.013 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(FF) "Park officer" means a full-time employee of the department of natural resources who is designated a park officer under section 1541.10 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(GG) "Forest officer" means a full-time employee of the department of natural resources who is designated a forest officer under section 1503.29 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(HH) "Preserve officer" means a full-time employee of the department of natural resources who is designated a preserve officer under section 1517.10 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(II) "Wildlife officer" means a full-time employee of the department of natural resources who is designated a wildlife officer under section 1531.13 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(JJ) "State watercraft officer" means a full-time employee of the department of natural resources who is designated a state watercraft officer under section 1547.521 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(KK) "Park district police officer" means a full-time employee of a park district who is designated pursuant to section 511.232 or 1545.13 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(LL) "Conservancy district officer" means a full-time employee of a conservancy district who is designated pursuant to section 6101.75 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(MM) "Municipal police officer" means a member of the organized police department of a municipal corporation who is employed full-time, is in compliance with section 109.77 of the Revised Code, and is not a member of the police and firemen's disability and pension fund.

(NN) "Ohio veterans' home police officer" means any person who is employed at the Ohio veterans' home as a police officer pursuant to section 5907.02 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(OO) "Special police officer for a mental health institution" means any person who is designated as such pursuant to section 5119.14 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(PP) "Special police officer for an institution for the mentally retarded and developmentally disabled" means any person who is designated as such pursuant to section 5123.13 of the Revised Code and is in compliance with section 109.77 of the Revised Code.

(QQ) "State university law enforcement officer" means any person who is employed full-time as a state university law enforcement officer pursuant to section 3345.04 of the Revised Code and who is in compliance with section 109.77 of the Revised Code.

(RR) "Hamilton county municipal court bailiff" means a person appointed by the clerk of courts of the Hamilton county municipal court under division (A)(3) of section 1901.32 of the Revised Code who is employed full-time as a bailiff or deputy bailiff, who has received a certificate attesting to the person's satisfactory completion of the peace officer training school as required by division (C) of section 109.77 of the Revised Code, and whose primary duties are to preserve the peace, to protect life and property, and to enforce the laws of this state.

(SS) Notwithstanding section 2901.01 of the Revised Code, "law enforcement officer" means a sheriff, deputy sheriff, township constable or police officer in a township police department or district, drug agent, department of public safety enforcement agent, natural resources law enforcement staff officer, park officer, forest officer, preserve officer, wildlife officer, state watercraft officer, park district police officer, conservancy district officer, Ohio veterans' home police officer, special police officer for a mental health institution, special police officer for an institution for the mentally retarded and developmentally disabled, state university law enforcement officer, Hamilton county municipal court bailiff, or municipal police officer.

(TT) "Fiduciary" means a person who does any of the following:

(1) Exercises any discretionary authority or control with respect to the management of the system or with respect to the management or disposition of its assets;

(2) Renders investment advice for a fee, direct or indirect, with respect to money or property of the system;

(3) Has any discretionary authority or responsibility in the administration of the system.

(UU) "Actuary" means an individual who satisfies all of the following requirements:

(1) Is a member of the American academy of actuaries;

(2) Is an associate or fellow of the society of actuaries;

(3) Has a minimum of five years' experience in providing actuarial services to public retirement plans.

Sec. 145.23. The funds hereby created are the employees' savings fund, the employers' accumulation fund, the annuity and pension reserve fund, the income fund, the survivors' benefit fund, and the expense fund.

(A) The employees' savings fund is the fund in which shall be accumulated contributions from the earnable salaries of contributors for the purchase of annuities or retirement allowances.

The accumulated contributions of a contributor returned to him THE CONTRIBUTOR upon his withdrawal, or paid to his THE CONTRIBUTOR'S estate or designated beneficiary in the event of his death, shall be paid from the employees' savings fund. Any accumulated contributions forfeited by failure of a member, or his A MEMBER'S estate, to claim the same, shall be transferred from the employees' savings fund to the income fund. The accumulated contributions of a contributor shall be transferred from the employees' savings fund to the annuity and pension reserve fund in the event of his THE CONTRIBUTOR'S retirement.

(B) The employers' accumulation fund is the fund in which shall be accumulated the reserves for the payment of all pensions and disability benefits payable as provided in this chapter. The amounts paid by the state of Ohio and by any employer defined in division (A) of section 145.01 of the Revised Code because of the normal contributions and deficiency contributions shall be credited to the employers' accumulation fund.

Any payments made into the employers' accumulation fund by a member as provided in section 145.31 of the Revised Code shall be refunded to such member under the conditions specified in section 145.40 of the Revised Code.

Upon the retirement of a contributor, the full amount of his THE CONTRIBUTOR'S pension reserve shall be transferred from the employers' accumulation fund to the annuity and pension reserve fund.

(C) The annuity and pension reserve fund is the fund from which shall be paid all pensions, disability benefits, annuities, and benefits in lieu thereof, because of which reserves have been transferred from the employees' savings fund and the employers' accumulation fund.

Any contributor may deposit in the employees' savings fund, subject to rules established from time to time by the public employees retirement board, such amounts as he THE CONTRIBUTOR desires, and, at the time of age and service retirement, shall receive in return therefor, at his THE CONTRIBUTOR'S option, either an annuity having a reserve equal to the amount deposited or a cash refund of such amounts together with such interest as may have been allowed by the public employees retirement board at the end of each calendar year. Such deposits for additional annuity together with such interest as may have been allowed by the public employees retirement board at the end of each calendar year shall be refunded in the event of death prior to retirement or withdrawal of accumulated contributions as provided in sections 145.40 and 145.43 of the Revised Code or upon application of the contributor prior to age and service retirement.

FOR DEPOSITS RECEIVED IN A CALENDAR YEAR, INTEREST SHALL BE EARNED BEGINNING ON THE FIRST DAY OF THE CALENDAR YEAR NEXT FOLLOWING AND ENDING ON THE LAST DAY OF THAT YEAR, EXCEPT THAT IN THE CASE OF A PAYMENT UNDER THIS DIVISION MADE PRIOR TO THE LAST DAY OF A YEAR, INTEREST SHALL BE EARNED ENDING ON THE LAST DAY OF THE MONTH PRIOR TO THE DATE OF PAYMENT. THE BOARD SHALL CREDIT INTEREST AT THE END OF THE CALENDAR YEAR IN WHICH IT IS EARNED.

(D) The income fund is the fund from which interest is transferred and credited on the amounts in the funds described in divisions (B), (C), and (F) of this section, and is a contingent fund from which the special requirements of the funds may be paid by transfer from this fund. All income derived from the investment of funds by the public employees retirement board as trustee under section 145.11 of the Revised Code, together with all gifts and bequests, or the income therefrom, shall be paid into this fund.

Any deficit occurring in any other fund that will not be covered by payments to that fund, as otherwise provided in Chapter 145. of the Revised Code, shall be paid by transfers of amounts from the income fund to such fund or funds. If the amount in the income fund is insufficient at any time to meet the amounts payable therefrom, the amount of the deficiency, with regular interest, shall be paid by an additional employer rate of contributions as determined by the actuary, not to exceed fourteen per cent, and the amount of the additional employer contribution shall be credited to the income fund.

The public employees retirement board may accept gifts and bequests. Any funds that may come into possession of the public employees retirement board in this manner, or which may be transferred from the employees' savings fund by reason of lack of a claimant, or any surplus in any fund created by this section, or any other funds whose disposition is not otherwise provided for, shall be credited to the income fund.

(E) The expense fund is the fund from which shall be paid the expenses of the administration of this chapter, exclusive of amounts payable as retirement allowances and as other benefits.

(F) The survivors' benefit fund is the fund from which shall be paid dependent survivor benefits provided by section 145.45 of the Revised Code.

Sec. 145.31. Except as provided in this section, a member or former member of the public employees retirement system with at least eighteen months of contributing service credit in this system, the state teachers retirement system, the school employees retirement system, the police and firemen's disability and pension fund, or the state highway patrol retirement system, after the withdrawal of ACCUMULATED contributions and cancellation of service credit in this system, may restore such service credit by redepositing in the employees' savings fund the amount withdrawn, with interest on such amount compounded annually at a rate to be determined by the public employees retirement board from the first day of the month of withdrawal to and including the month of redeposit. The AMOUNT REDEPOSITED SHALL BE CREDITED AS FOLLOWS:

(A) THE AMOUNT THAT EQUALS THE AMOUNT, IF ANY, INCLUDED UNDER SECTION 145.401 OF THE REVISED CODE IN THE WITHDRAWAL OF ACCUMULATED CONTRIBUTIONS UNDER SECTION 145.40 of the Revised Code SHALL BE CREDITED TO THE EMPLOYER'S ACCUMULATION FUND.

(B) THE REMAINING AMOUNT SHALL BE CREDITED TO THE MEMBER'S ACCOUNT IN THE EMPLOYEE'S SAVINGS FUND.

THE member may choose to purchase only part of such credit in any one payment, subject to board rules. The EXCEPT FOR ANY AMOUNT INCLUDED UNDER SECTION 145.401 of the Revised Code IN THE WITHDRAWAL OF ACCUMULATED CONTRIBUTIONS UNDER SECTION 145.40 of the Revised Code, THE total payment to restore canceled service credit, plus any interest credited thereto, shall be considered as accumulated contributions of the member. If a former member is eligible to buy the service credit as a member of the police and firemen's disability and pension fund or state highway patrol retirement system, the former member is ineligible to restore that service credit under this section.

Any employee who has been refunded the employee's accumulated contributions to the public employees retirement system solely by reason of membership in a former firemen's relief and pension fund or a former police relief and pension fund may restore membership in the public employees retirement system by redepositing with the system the amount refunded, with interest on such amount compounded annually at a rate to be determined by the board from the month of refund to and including the month of redeposit. The member may choose to purchase only part of such credit in any one payment, subject to board rules.

Sec. 145.37. (A) As used in this section:

(1) "State retirement system" means the public employees retirement system, school employees retirement system, or state teachers retirement system.

(2) "Total service credit" means all service credit earned in the state retirement systems, except credit for service subject to section 145.38 of the Revised Code. Total service credit shall not exceed one year of credit for any twelve-month period.

(3) In addition to the meaning given in division (N) of section 145.01 of the Revised Code, "disability benefit" means "disability benefit" as defined in sections 3307.01 and 3309.01 of the Revised Code.

(B) To coordinate and integrate membership in the state retirement systems, the following provisions apply:

(1) At the option of a member, total contributions and service credit in all state retirement systems shall be used in determining the eligibility and total retirement or disability benefit payable. When total contributions and service credit are so combined, the following provisions apply:

(a) Age and service retirement or disability benefits are effective on the first day of the month immediately following the later of:

(i) The last day for which compensation was paid;

(ii) The attainment of minimum age or service credit eligibility for benefits provided under this section.

(b) In determining eligibility for a disability benefit, the medical examiner's report to the retirement board of any state retirement system, showing that the member's disability incapacitates him THE MEMBER for the performance of duty, may be accepted by the state retirement boards as sufficient for granting a disability benefit.

(c) The state retirement system in which the member had the greatest service credit, without adjustment, shall determine and pay the total retirement or disability benefit. Where his THE MEMBER'S credit is equal in two or more state retirement systems, the system having the largest total contributions of the member shall determine and pay the total benefit.

(d) In determining the total credit to be used in calculating a retirement or disability benefit, credit shall not be reduced below that certified by the system or systems transferring credit, except that such total combined service credit shall not exceed one year of credit for any one "year" as defined in the law of the system making the calculation.

(e) The state retirement system determining and paying a retirement or disability benefit shall receive from the other system or systems the member's refundable account at retirement or the effective date of a disability benefit plus an equal amount from the employer's accumulation fund EQUAL TO THE MEMBER'S REFUNDABLE ACCOUNT LESS INTEREST CREDITED UNDER SECTION 145.471, 145.472, OR 3307.80 of the Revised Code.

(i) The annuity rates and mortality tables of the state retirement system making the calculation and paying the benefit shall be exclusively applicable.

(ii) Deposits made for the purpose of an additional annuity, and including guaranteed interest, upon the request of the member, shall be transferred to the state retirement system paying the benefit. The return upon such deposits shall be that offered by the state retirement system making the calculation and paying the benefit.

(2) A former member receiving a retirement or disability benefit under this section, who accepts employment amenable to coverage in any state retirement system that participated in his THE FORMER MEMBER'S combined benefit, shall be subject to the applicable provisions of law governing such re-employment. If the former member is subject to section 3307.381 of the Revised Code and exceeds the limits on re-employment established by that section, the state retirement system paying a combined benefit shall terminate the entire pension portion of the benefit for the period of re-employment that exceeds the limit in that section. If a former member should be paid any amount in a retirement benefit, to which he THE FORMER MEMBER is not entitled under the applicable provisions of law governing such re-employment, such amount shall be recovered by the state retirement system paying such benefit by utilizing any recovery procedure available under the code provisions of the state retirement system covering such re-employment.

(C) A PERS retirant or other system retirant, as defined in section 145.38 of the Revised Code, is not eligible to receive any benefit under this section for service subject to section 145.38 of the Revised Code.

Sec. 145.38. (A) As used in this section:

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

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

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

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

(a) A member or former member of the police and firemen's disability and pension fund, state teachers retirement system, school employees retirement system, state highway patrol retirement system, or Cincinnati retirement system who is receiving age and service or commuted age and service retirement benefits or a disability benefit from a system of which the person is a member or former member;

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

(B)(1) Subject to this section, a PERS retirant or other system retirant may be employed by a public employer. If so employed, the PERS retirant or other system retirant shall contribute to the public employees retirement system in accordance with section 145.47 of the Revised Code, and the employer shall make contributions in accordance with section 145.48 of the Revised Code.

(2) A public employer that employs a PERS retirant or other system retirant, or enters into a contract for services as an independent contractor with a PERS retirant who was employed by the public employer at the time of the retirant's retirement shall notify the retirement board of the employment or contract not later than the end of the month in which the employment or contract commences. Any overpayment of benefits to a PERS retirant by the retirement system resulting from delay or failure of the employer to give the notice shall be repaid to the retirement system by the employer.

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

(4)(a) A PERS retirant who has received a retirement allowance for less than six months when employment subject to this section commences shall forfeit the retirement allowance for the period that begins on the date the employment commences and ends on the date that is six months after the date on which the retirement allowance commenced. Service and contributions for that period shall not be included in calculation of any benefits payable to the PERS retirant and those contributions shall be refunded on the retirant's death or termination of the employment. For purposes of this division, "employment" shall include service for which the retirant or the retirant's employer, or both, have waived any earnable salary for such service.

(b) An other system retirant who has received a retirement allowance or disability benefit for less than two months when employment subject to this section commences shall forfeit the retirement allowance or disability benefit for the period that begins on the date the employment commences and ends on the date that is two months after the date on which the retirement allowance or disability benefit commenced. Service and contributions for that period shall not be included in the calculation of any benefits payable to the other system retirant and those contributions shall be refunded on the retirant's death or termination of the employment.

(5) On receipt of notice from the police and firemen's disability and pension fund, school employees retirement system, or state teachers retirement system of the re-employment of a PERS retirant, the public employees retirement system shall not pay, or if paid, shall recover, the amount to be forfeited by the PERS retirant in accordance with section 742.26, 3307.381, or 3309.341 of the Revised Code.

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

(C)(1) Except as provided in division (C)(4) of this section, a PERS retirant employed pursuant to this section shall elect one of the following:

(a) To receive both compensation for the employment and a retirement allowance;

(b) To receive compensation for the employment and forfeit the pension portion of the retirement allowance.

(2) A PERS retirant who is described in division (C)(4) of this section or elects to forfeit the pension portion of the retirement allowance under division (C)(1)(b) of this section shall become a new member of the public employees retirement system with all the rights, privileges, and obligations of membership, except that the new membership does not include survivor benefits provided pursuant to section 145.45 of the Revised Code OR ANY AMOUNT CALCULATED UNDER SECTION 145.401 of the Revised Code. The pension portion of the PERS retirant's retirement allowance shall cease on the first day of the first month following commencement of the employment and shall thereafter be forfeited until the first day of the first month following termination of the employment. The annuity portion of the retirement allowance shall be suspended on the first day of the first month following commencement of the employment and shall thereafter accumulate to the credit of the PERS retirant to be paid in a single payment after termination of the employment. The retirement allowance shall resume on the first day of the first month following termination of the employment. On termination of the employment, the PERS retirant shall elect to receive either a refund of the retirant's contributions to the retirement system during the period of employment subject to this section or a supplemental retirement allowance based on the retirant's contributions and service credit for that period of employment.

(3) Except as provided in division (B)(4) of this section, there shall be no suspension or forfeiture of any portion of the retirement allowance payable to other system retirants or to PERS retirants who make an election under division (C)(1)(a) of this section.

(4) A PERS retirant shall elect division (C)(1)(b) of this section if both of the following apply:

(a) The retirant held elective office in this state, or in any municipal corporation, county, or other subdivision of this state at the time of retirement under Chapter 145. of the Revised Code;

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

(D)(1) On termination of employment under this section, the PERS retirant who makes an election under division (C)(1)(a) of this section or other system retirant may file an application with the public employees retirement system for a benefit under this division, which shall consist of a single life annuity having a reserve equal to the amount of the retirant's accumulated contributions for the period of employment and an equal amount of the employer's contributions. The PERS retirant or other system retirant shall elect either to receive the benefit as a monthly annuity for life or a lump sum payment discounted to the present value using the current actuarial assumption rate of interest, except that if the monthly annuity would be less than twenty-five dollars per month, the retirant shall receive a lump sum payment.

(2) A benefit payable under this division shall commence on the latest of the following:

(a) The last day for which compensation for employment subject to this section was paid;

(b) Attainment by the PERS retirant or other system retirant of age sixty-five;

(c) If the PERS retirant or other system retirant was previously employed under this section and is receiving or previously received a benefit under this division, completion of a period of twelve months since the effective date of the last benefit under this division.

(3)(a) If a PERS retirant or other system retirant dies while employed in employment subject to this section, a lump sum payment calculated in accordance with division (D)(1) of this section shall be paid to the retirant's beneficiary under division (G) of this section.

(b) If at the time of death a PERS retirant or other system retirant receiving a monthly annuity has received less than the retirant would have received as a lump sum payment, the difference between the amount received and the amount that would have been received as a lump sum payment shall be paid to the retirant's beneficiary under division (G) of this section.

(4)(a) A PERS retirant or other system retirant subject to this division is not a member of the public employees retirement system, does not have any of the rights, privileges, or obligations of membership, except as specified in this section, and, except as specified in division (D)(4)(b) of this section, is not eligible to receive health, medical, hospital, or surgical benefits under section 145.58 of the Revised Code for employment subject to this section. No amount received under this division shall be included in determining an additional benefit under section 145.323 of the Revised Code or any other post-retirement benefit increase.

(b) A PERS retirant who makes an election under division (C)(1)(a) of this section shall receive primary health, medical, hospital, or surgical insurance coverage from the retirant's employer, if the employer provides coverage to other employees performing comparable work. Neither the employer nor the PERS retirant may waive the employer's coverage, except that the PERS retirant may waive the employer's coverage if the retirant has coverage comparable to that provided by the employer from a source other than the employer or the public employees retirement system. If a claim is made, the employer's coverage shall be the primary coverage and shall pay first. The benefits provided under section 145.58 of the Revised Code shall pay only those medical expenses not paid through the employer's coverage or coverage the PERS retirant receives through a source other than the retirement system.

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

(F) A PERS retirant who performs services for a public employer as an independent contractor pursuant to a contract with the employer shall not make contributions to the public employees retirement system or become a member of the system. Except as provided in division (B)(6) of this section, there shall be no suspension or forfeiture of the retirant's retirement allowance.

(G) A PERS retirant or other system retirant employed under this section may designate one or more persons as beneficiary to receive any benefits payable under this section due to death. The designation shall be in writing duly executed on a form provided by the public employees retirement board, signed by the PERS retirant or other system retirant, and filed with the board prior to death. The last designation of a beneficiary revokes all previous designations. The PERS retirant's or other system retirant's marriage, divorce, marriage dissolution, legal separation, withdrawal of account, birth of a child, or adoption of a child revokes all previous designations. If there is no designated beneficiary, the beneficiary is the beneficiary determined under division (D) of section 145.43 of the Revised Code. If any benefit payable under this section due to the death of a PERS retirant or other system retirant is not claimed by a beneficiary within five years after the death, the amount payable shall be transferred to the income fund and thereafter paid to the beneficiary or the estate of the PERS retirant or other system retirant on application to the board.

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

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

Sec. 145.40. (A) Subject to the provisions of section 145.57 of the Revised Code, if a member elects to become exempt from contribution to the public employees retirement system pursuant to section 145.03 of the Revised Code or ceases to be a public employee for any cause other than death, retirement, receipt of a disability benefit, or election of an alternative retirement plan under section 3305.05 of the Revised Code, upon application the public employees retirement board shall pay the member the accumulated contributions standing to the credit of the member's individual account in the employees' savings fund, plus any principal payment and interest on it the member may have made to purchase additional service credit under this chapter or Section 4 of Substitute Senate Bill 138 of the 117th general assembly, AND PLUS ANY APPLICABLE AMOUNT CALCULATED UNDER SECTION 145.401 of the Revised Code, provided that all the following apply:

(1) Three months have elapsed since the member's public service, other than service exempted from contribution pursuant to section 145.03 of the Revised Code, was terminated;

(2) The member has not returned to public service, other than service exempted from contribution pursuant to section 145.03 of the Revised Code, during that three-month period;

(3) The member is not a member of the school employees retirement system or the state teachers retirement system.

The payment of such accumulated contributions shall cancel the total service credit of such member in the public employees retirement system.

(B) This division applies to any member who ceases to be a public employee by electing an alternative retirement plan pursuant to section 3305.05 of the Revised Code and is not otherwise employed as a public employee in a position to which the election does not apply. For purposes of this division, "continuously employed" has the same meaning as in section 3305.01 of the Revised Code.

(1) Subject to section 145.57 of the Revised Code, on the application of a member to whom this division applies who is continuously employed, the public employees retirement board shall pay the accumulated contributions standing to the credit of the member's individual account in the employees' savings fund, plus any additional amounts described in division (A) of this section, to the entity providing the member's alternative retirement plan for application to that plan in accordance with any contract the member has entered into for purposes of that plan.

(2) Subject to section 145.57 of the Revised Code, on application of a member to whom this division applies who has ceased to be continuously employed, the public employees retirement board shall pay the accumulated contributions standing to the credit of the member's individual account in the employees' savings fund, plus any additional amounts described in division (A) of this section, to the entity providing the member's alternative retirement plan for application to that plan in accordance with any contract the member has entered into for purposes of that plan, provided that all of the following apply:

(a) At least three months have elapsed since the date on which the member ceased to be continuously employed;

(b) The member has not been employed as a public employee during that three-month period;

(c) Division (A)(3) of this section applies to the member.

(3) Payment of a member's accumulated contributions under this division cancels the member's total service credit in the public employees retirement system.

Sec. 145.401. (A) AS USED IN THIS SECTION:

(1) "ELIGIBLE CONTRIBUTIONS" MEANS AMOUNTS CONTRIBUTED UNDER SECTION 145.47 OF THE REVISED CODE, AMOUNTS RECEIVED FROM A MEMBER OR TRANSFERRED UNDER SECTION 145.20, 145.295, 145.302, OR 145.44 OF THE REVISED CODE, AND ANY INTEREST CREDITED UNDER SECTION 145.471 OR 145.472 OF THE REVISED CODE. "ELIGIBLE CONTRIBUTIONS" DOES NOT INCLUDE CONTRIBUTIONS THAT WERE USED IN THE PAYMENT OF A DISABILITY BENEFIT OR, AS PROVIDED IN RULES ADOPTED BY THE BOARD, WERE REFUNDED TO A MEMBER BECAUSE THE SYSTEM WAS NOT AUTHORIZED TO ACCEPT THE CONTRIBUTIONS.

(2) "SERVICE CREDIT" MEANS SERVICE CREDIT EARNED FOR PERIODS FOR WHICH CONTRIBUTIONS WERE MADE UNDER SECTION 145.47 OF THE REVISED CODE AND, IF APPLICABLE, PERIODS FOR WHICH SERVICE CREDIT WAS PURCHASED OR TRANSFERRED UNDER SECTION 145.20, 145.295, 145.302, OR 145.44 OF THE REVISED CODE.

(B) IF A MEMBER HAS, OR AT THE TIME OF DEATH HAD, AT LEAST FIVE YEARS OF SERVICE CREDIT, THE PUBLIC EMPLOYEES RETIREMENT BOARD SHALL INCLUDE THE AMOUNT SPECIFIED IN DIVISION (B)(1) OR (2) OF THIS SECTION IN THE AMOUNT PAYABLE UNDER SECTION 145.40 of the Revised Code TO THE MEMBER, OR UNDER DIVISION (B) OF SECTION 145.43 of the Revised Code TO A BENEFICIARY OR BENEFICIARIES OF THE MEMBER, UNLESS AT THE TIME OF DEATH THE MEMBER WAS A DISABILITY BENEFIT RECIPIENT. THE AMOUNT SPECIFIED IN DIVISION (B)(1) OR (2) OF THIS SECTION SHALL BE PAID FROM THE EMPLOYERS' ACCUMULATION FUND.

(1) IF THE MEMBER HAS, OR HAD AT THE TIME OF DEATH, AT LEAST FIVE BUT LESS THAN TEN YEARS OF SERVICE CREDIT, THE AMOUNT INCLUDED SHALL BE EQUAL TO THIRTY-THREE PER CENT OF THE MEMBER'S ELIGIBLE CONTRIBUTIONS.

(2) IF THE MEMBER HAS, OR HAD AT THE TIME OF DEATH, AT LEAST TEN YEARS OF SERVICE CREDIT, THE AMOUNT INCLUDED SHALL BE EQUAL TO SIXTY-SEVEN PER CENT OF THE MEMBER'S ELIGIBLE CONTRIBUTIONS.

Sec. 145.43. (A) As used in this section and in section 145.45 of the Revised Code:

(1) "Child" means a biological or legally adopted child of a deceased member. If a court hearing for an interlocutory decree for adoption was held prior to the member's death, "child" includes the child who was the subject of the hearing notwithstanding the fact that the final decree of adoption, adjudging the surviving spouse as the adoptive parent, is made subsequent to the member's death.

(2) "Parent" is a parent or legally adoptive parent of a deceased member.

(3) "Dependent" means a beneficiary who receives one-half of the beneficiary's support from a member during the twelve months prior to the member's death.

(4) "Surviving spouse" means an individual who establishes a valid marriage to a member at the time of the member's death by marriage certificate or pursuant to division (E) of this section.

(5) "Survivor" means a surviving spouse, child, or parent.

(B) Except as provided in division (C)(1) of section 145.45 of the Revised Code, should a member die before age and service retirement, the member's accumulated contributions, any deposits for purchase of additional annuity, and any payment the member has made to restore previously forfeited service credit as provided in section 145.31 of the Revised Code, AND ANY APPLICABLE AMOUNT CALCULATED UNDER SECTION 145.401 of the Revised Code, shall be paid to the person or persons the member has designated in writing duly executed on a form provided by the public employees retirement board, signed by the member, and filed with the board prior to the member's death. A member may designate two or more persons as beneficiaries jointly to be paid the accumulated account in a lump sum. The last designation of any beneficiary revokes all previous designations. The member's marriage, divorce, marriage dissolution, legal separation, or withdrawal of account, or the birth of the member's child, or adoption of a child, shall constitute an automatic revocation of the member's previous designation. If a deceased member was also a member of the school employees retirement system or the state teachers retirement system, the beneficiary last established among the systems shall be the sole beneficiary in all the systems.

If the accumulated contributions of a deceased member are not claimed by a beneficiary or by the estate of the deceased member within five years, the contributions shall be transferred to the income fund and thereafter paid to the beneficiary or to the member's estate upon application to the board. The board shall formulate and adopt the necessary rules governing all designations of beneficiaries.

(C) Except as provided in division (C)(1) of section 145.45 of the Revised Code, if a member dies before age and service retirement and is not survived by a designated beneficiary, any beneficiaries shall qualify in the following order of precedence, with all attendant rights and privileges:

(1) Surviving spouse;

(2) Children share and share alike;

(3) A dependent parent of a member, if that parent takes survivor benefits under division (B) of section 145.45 of the Revised Code;

(4) Parents, share and share alike;

(5) Estate.

If the beneficiary is deceased or is not located within ninety days, the beneficiary ceases to qualify for any benefit and the beneficiary next in order of precedence shall qualify as a beneficiary.

Any payment made to a beneficiary as determined by the public employees retirement board shall be a full discharge and release to the board from any future claims.

(D) Any amount due a retirant or disability benefit recipient receiving a monthly benefit and unpaid to the retirant or recipient at death shall be paid to the beneficiary designated in writing on a form approved by the board, signed by the retirant or recipient and filed with the board. If no such designation has been filed, or if the designated beneficiary is not located within ninety days, any amounts payable under this chapter due to the death of the retirant or recipient shall be paid in the following order of precedence to the retirant's or recipient's:

(1) Surviving spouse;

(2) Children, share and share alike;

(3) Parents, share and share alike;

(4) Estate.

The payment shall be a full discharge and release to the board from any future claim for the payment.

Any amount due a beneficiary receiving a monthly benefit and unpaid to the beneficiary at the beneficiary's death shall be paid to the beneficiary's estate.

(E) If the validity of marriage cannot be established to the satisfaction of the retirement board for the purpose of disbursing any amount due under this section or section 145.45 of the Revised Code, the board may accept a decision rendered by a court having jurisdiction in the state in which the member was domiciled at the time of death that the relationship constituted a valid marriage at the time of death, or the "spouse" would have the same status as a widow or widower for purposes of sharing the distribution of the member's intestate personal property.

(F) If the death of a member is caused by one of the following beneficiaries, no amount due under this chapter to the beneficiary shall be paid to the beneficiary in the absence of a court order to the contrary filed with the board:

(1) A beneficiary who is convicted of, pleads guilty to, or is found not guilty by reason of insanity of a violation of or complicity in the violation of either of the following:

(a) Section 2903.01, 2903.02, or 2903.03 of the Revised Code;

(b) An existing or former law of any other state, the United States, or a foreign nation that is substantially equivalent to section 2903.01, 2903.02, or 2903.03 of the Revised Code;.

(2) A beneficiary who is indicted for a violation of or complicity in the violation of the sections or laws described in division (F)(1)(a) or (b) of this section and is adjudicated incompetent to stand trial;

(3) A beneficiary who is a juvenile found to be a delinquent child by reason of committing an act that, if committed by an adult, would be a violation of or complicity in the violation of the sections or laws described in division (F)(1)(a) or (b) of this section.

Sec. 145.471. (A)(1) ON AND AFTER THE EFFECTIVE DATE OF THIS SECTION, THE PUBLIC EMPLOYEES RETIREMENT BOARD SHALL CREDIT INTEREST TO THE INDIVIDUAL ACCOUNTS OF CONTRIBUTORS, EXCEPT THAT INTEREST SHALL NOT BE CREDITED TO THE INDIVIDUAL ACCOUNT OF A PERS OR OTHER SYSTEM RETIRANT, AS DEFINED IN SECTION 145.38 OF THE REVISED CODE, FOR CONTRIBUTIONS RECEIVED DURING THE PERIOD DESCRIBED IN DIVISION (B)(4)(a) OR (b) OF SECTION 145.38 OF THE REVISED CODE. FOR AMOUNTS DEPOSITED BY A CONTRIBUTOR UNDER DIVISION (C) OF SECTION 145.23 OF THE REVISED CODE, INTEREST SHALL BE CREDITED IN ACCORDANCE WITH THAT SECTION.

(2) EXCEPT AS PROVIDED IN SECTION 145.472 of the Revised Code, THE BOARD SHALL NOT CREDIT INTEREST TO INDIVIDUAL ACCOUNTS FOR THE PERIOD BEGINNING DECEMBER 31, 1958, AND ENDING ON THE EFFECTIVE DATE OF THIS SECTION.

(B) FOR CONTRIBUTIONS RECEIVED IN A CALENDAR YEAR, INTEREST SHALL BE EARNED BEGINNING ON THE FIRST DAY OF THE CALENDAR YEAR NEXT FOLLOWING AND ENDING ON THE LAST DAY OF THAT YEAR, EXCEPT THAT INTEREST SHALL BE EARNED, IN THE CASE OF AN APPLICATION FOR RETIREMENT OR PAYMENT UNDER SECTION 145.40 OR 145.43 of the Revised Code, ENDING ON THE LAST DAY OF THE MONTH PRIOR TO RETIREMENT OR PAYMENT UNDER THOSE SECTIONS. THE BOARD SHALL CREDIT INTEREST AT THE END OF THE CALENDAR YEAR IN WHICH IT IS EARNED.

Sec. 145.472. THIS SECTION APPLIES TO INDIVIDUALS WHO ARE CONTRIBUTORS ON THE EFFECTIVE DATE OF THIS SECTION.

(A) NOT LATER THAN THIRTY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION, THE BOARD SHALL CREDIT INTEREST TO THE INDIVIDUAL ACCOUNT OF EACH CONTRIBUTOR IN ACCORDANCE WITH THIS SECTION, EXCEPT THAT INTEREST SHALL NOT BE CREDITED TO THE INDIVIDUAL ACCOUNT OF A PERS OR OTHER SYSTEM RETIRANT, AS DEFINED IN SECTION 145.38 OF THE REVISED CODE, FOR CONTRIBUTIONS RECEIVED DURING THE PERIOD DESCRIBED IN DIVISION (B)(4)(a) OR (b) OF SECTION 145.38 OF THE REVISED CODE. FOR AMOUNTS DEPOSITED BY A CONTRIBUTOR UNDER DIVISION (C) OF SECTION 145.23 of the Revised Code, INTEREST SHALL BE CREDITED IN ACCORDANCE WITH THAT SECTION.

FOR CONTRIBUTORS WITH SERVICE CREDIT EARNED PRIOR TO DECEMBER 31, 1981, THE BOARD MAY REFLECT THE COMPOUNDING OF INTEREST BY USING FACTORS PROVIDED BY THE BOARD'S ACTUARY.

(B) THE INTEREST CREDITED UNDER THIS SECTION SHALL BE CALCULATED ON ALL AMOUNTS ON DEPOSIT IN AN INDIVIDUAL'S ACCOUNT IN THE EMPLOYEE SAVINGS FUND AS FOLLOWS:

(1) IF THIS SECTION TAKES EFFECT ON OR BEFORE DECEMBER 31, 2000, INTEREST SHALL BE CALCULATED ON AMOUNTS ON DEPOSIT ON DECEMBER 31, 1998.

(2) IF THIS SECTION TAKES EFFECT AFTER DECEMBER 31, 2000, INTEREST SHALL BE CALCULATED ON AMOUNTS ON DEPOSIT ON DECEMBER 31, 1999.

Sec. 145.473. (A) EXCEPT AS PROVIDED IN DIVISION (C) OF THIS SECTION, THE RATE OF INTEREST CREDITED TO INDIVIDUAL ACCOUNTS OF CONTRIBUTORS UNDER SECTIONS 145.471 AND 145.472 of the Revised Code SHALL BE AS FOLLOWS:

(1) FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, TO AND INCLUDING DECEMBER 31, 1955;

(2) THREE PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FROM JANUARY 1, 1956, TO AND INCLUDING DECEMBER 31, 1963;

(3) THREE AND ONE-QUARTER PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FROM JANUARY 1, 1964, TO AND INCLUDING DECEMBER 31, 1969;

(4) FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FROM JANUARY 1, 1970, TO AND INCLUDING THE DAY BEFORE THE EFFECTIVE DATE OF THIS SECTION;

(5) AN AMOUNT DETERMINED BY THE PUBLIC EMPLOYEES RETIREMENT BOARD THAT IS NOT GREATER THAN FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, ON AND AFTER THE EFFECTIVE DATE OF THIS SECTION.

(B) EXCEPT AS PROVIDED IN DIVISION (C) OF THIS SECTION, FOR THE PURPOSE OF DETERMINING THE RESERVE VALUE OF A CONTRIBUTOR'S ANNUITY, THE RATE OF INTEREST SHALL BE AS FOLLOWS:

(1) FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FOR CONTRIBUTORS RETIRING BEFORE OCTOBER 1, 1956;

(2) THREE PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FOR CONTRIBUTORS RETIRING ON OR AFTER OCTOBER 1, 1956, BUT BEFORE JANUARY 1, 1964;

(3) THREE AND ONE-QUARTER PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FOR CONTRIBUTORS RETIRING ON OR AFTER JANUARY 1, 1964, BUT BEFORE JANUARY 1, 1970;

(4) FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FOR CONTRIBUTORS RETIRING ON OR AFTER JANUARY 1, 1970, BUT BEFORE THE EFFECTIVE DATE OF THIS SECTION;

(5) AN AMOUNT DETERMINED BY THE BOARD THAT IS NOT GREATER THAN FOUR PER CENT PER ANNUM, COMPOUNDED ANNUALLY, FOR CONTRIBUTORS RETIRING ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.

(C) FOR A PERS RETIRANT WHO MAKES AN ELECTION UNDER DIVISION (C)(1)(a) OF SECTION 145.38 OF THE REVISED CODE OR AN OTHER SYSTEM RETIRANT, AS THOSE TERMS ARE DEFINED IN SECTION 145.38 OF THE REVISED CODE, THE RATE OF INTEREST SHALL BE THE CURRENT ACTUARIAL ASSUMPTION RATE OF INTEREST, AS DETERMINED BY THE BOARD'S ACTUARY, FOR THE PURPOSES DESCRIBED IN DIVISIONS (A) AND (B) OF THIS SECTION.

Sec. 3307.41. To coordinate and integrate membership in the state retirement systems, the following provisions apply:

(A) As used in this section:

(1) "Retirement systems" means the public employees retirement system, the state teachers retirement system, and the school employees retirement system.

(2) In addition to the meaning given in division (L) of section 3307.01 of the Revised Code, "disability benefit" means "disability benefit" as defined in sections 145.01 and 3309.01 of the Revised Code.

(B) At the member's option, total contributions and service credit in all retirement systems shall be used in determining the eligibility for benefits. If total contributions and service credit are combined, the following provisions apply:

(1) Service retirement or a disability benefit is effective on the first day of the month next following the later of:

(a) The last day for which compensation was paid;

(b) The attainment of minimum age or service credit for benefits provided under this section.

(2) "Total service credit" includes the total credit in all retirement systems except that such credit shall not exceed one year for any period of twelve months.

(3) In determining eligibility for a disability benefit, the medical examiner's report to the board of any retirement system, showing that the member's disability incapacitates him THE MEMBER for the performance of duty, may be accepted as sufficient for granting a disability benefit.

(4) The retirement system in which the member had the greatest service credit, without adjustment, shall determine and pay the total benefit. If his THE MEMBER'S credit is equal in two or more retirement systems, the system having the member's largest total contributions shall determine and pay the total benefit.

(5) In determining the total credit to be used in calculating a benefit, credit shall not be reduced below that certified by the system or systems transferring credit, except that such total combined service credit shall not exceed one year of credit for any one "year" as defined in the statute governing the system making the calculation.

(6) The retirement system determining and paying the benefit shall receive from the other system or systems the member's refundable account at retirement or the effective date of a disability benefit plus an equal amount from the employers' trust fund EQUAL TO THE MEMBER'S REFUNDABLE ACCOUNT LESS INTEREST CREDITED UNDER SECTION 145.471, 145.472, OR 3307.80 of the Revised Code.

(a) The annuity rates and mortality tables of the retirement system making the calculation and paying the benefit shall be applicable.

(b) Deposits made for the purchase of additional income, with guaranteed interest, upon the member's request, shall be transferred to the retirement system paying the regular benefit. The return upon such deposits shall be that offered by the retirement system making the calculation and paying the regular benefit.

(C) A person receiving a benefit under this section, who accepts employment amenable to coverage in any retirement system that participated in his THE PERSON'S combined benefit, shall be subject to the applicable provisions of law governing such re-employment. If the person is subject to section 3307.381 of the Revised Code and exceeds the limits on re-employment established by that section, the retirement system paying a combined benefit shall terminate the entire pension portion of the benefit for the period of re-employment that exceeds the limit in that section.

If a retirant should be paid any amount to which he THE RETIRANT is not entitled under the applicable provisions of law governing such re-employment, such amount shall be recouped by the retirement system paying such benefit by utilizing any recovery procedure available under the law of the retirement system covering such re-employment.

Sec. 3309.35. (A) As used in this section:

(1) "State retirement system" means the public employees retirement system, state teachers retirement system, or school employees retirement system.

(2) "Total service credit" means all service credit earned in all state retirement systems, except credit for service subject to section 3309.341 of the Revised Code. Total service credit shall not exceed one year of credit for any twelve-month period.

(3) In addition to the meaning given in division (O) of section 3309.01 of the Revised Code, "disability benefit" means "disability benefit" as defined in sections 145.01 and 3307.01 of the Revised Code.

(B) To coordinate and integrate membership in the state retirement systems, the following provisions apply:

(1) At the option of a member, total contributions and service credit in all state retirement systems shall be used in determining the eligibility and total retirement or disability benefit payable. When total contributions and service credit are so combined, the following provisions apply:

(a) Service and commuted service retirement or a disability benefit is effective no sooner than the first day of the month next following the last day of employment for which compensation was paid. If the application is filed after that date, the board may retire the member on the first day of the month next following the last day of employment for which compensation was paid.

(b) In determining eligibility for a disability benefit, the medical examiner's report to the retirement board of any state retirement system, showing that the member's disability incapacitates him THE MEMBER for the performance of duty, may be accepted by the state retirement boards as sufficient for granting a disability benefit.

(c) The state retirement system in which the member had the greatest service credit, without adjustment, shall determine and pay the total retirement or disability benefit. Where his THE MEMBER'S credit is equal in two or more state retirement systems, the system having the largest total contributions of the member shall determine and pay the total benefit.

(d) In determining the total credit to be used in calculating a retirement allowance or disability benefit, credit shall not be reduced below that certified by the system or systems transferring credit, except that such total combined service credit shall not exceed one year of credit for any one "year" as defined in the law of the system making the calculation.

(e) The state retirement system determining and paying a retirement or disability benefit shall receive from the other system or systems the member's refundable account at retirement or the effective date of a disability benefit plus an equal amount from the employers' trust fund EQUAL TO THE MEMBER'S REFUNDABLE ACCOUNT LESS INTEREST CREDITED UNDER SECTION 145.471, 145.472, OR 3307.80 of the Revised Code.

(i) The annuity rates and mortality tables of the state retirement system making the calculation and paying the benefit shall be exclusively applicable.

(ii) Deposits made for the purchase of an additional annuity, and including guaranteed interest, upon the request of the member, shall be transferred to the state retirement system paying the retirement or disability benefit. The return upon such deposits shall be that offered by the state retirement system making the calculation and paying the retirement or disability benefit.

(C) A former member receiving a retirement or disability benefit under this section, who accepts employment amenable to coverage in any state retirement system that participated in his THE MEMBER'S combined benefit, shall be subject to the applicable provisions of law governing such re-employment. If the former member is subject to section 3307.381 of the Revised Code and exceeds the limits on re-employment established by that section, the state retirement system paying a combined benefit shall terminate the entire pension portion of the benefit for the period of re-employment that exceeds the limit in that section. If a former member should be paid any amount in a retirement allowance, to which he THE FORMER MEMBER is not entitled under the applicable provisions of law governing such re-employment, such amount shall be recovered by the state retirement system paying such allowance by utilizing any recovery procedure available under the code provisions of the state retirement system covering such re-employment.

(D) An SERS retirant or other system retirant, as defined in section 3309.341 of the Revised Code, is not eligible to receive any benefit under this section for service subject to section 3309.341 of the Revised Code.