130th Ohio General Assembly
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(127th General Assembly)
(Substitute Senate Bill Number 148)



AN ACT
To amend sections 3309.33, 3309.34, 3309.36, 3309.38, and 3309.381 of the Revised Code to revise retirement eligibility requirements for members of the School Employees Retirement System.

Be it enacted by the General Assembly of the State of Ohio:

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

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

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

(1) Either of the following:

(a) If the employee became a member of the retirement system before the effective date of this amendment, the member has attained age fifty and he years of age;

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

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

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

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

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

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

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

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

Sec. 3309.34. (A)(1) A member of the school employees retirement system whose membership began before the effective date of this amendment is eligible for service retirement if he the member has at least five years of total service credit and has attained sixty years of age, or if he the member has at least thirty years of total service credit at any age. A member whose membership began before the effective date of this amendment is eligible for commuted service retirement if he the member has at least twenty-five years of total service credit and has attained fifty-five years of age.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) A pension of equivalent amount.

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

(a) Eighty-six dollars;

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

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


Years of Per Cent
Attained or Ohio Service of
Age Credit Base Amount
58 25 75%
59 26 80
60 27 85
61 88
28 90
62 91
63 94
29 95
64 97
65 30 or more 100

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


Per Cent
Attained of
Age Base Amount
66 102
67 104
68 106
69 108
70 or more 110

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


Per Cent
Years of Service of
Credit Base Amount
25 75%
26 80
27 85
28 90
29 95

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

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

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

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

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

(2) A pension of equivalent amount;

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

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

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

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

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

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

(1) The greater of the following:

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

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

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

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

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

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

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

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