Chapter 742-5 Service Credit

(A) Years of service and years of active service accumulated by members of the fund for calculation of benefits and pensions was broadly interpreted to include part-time service in a police or fire department;

(B) Years of service and years of active service shall mean years of full-time service, including a full-time appointment to the position as a police officer or firefighter;

(1) That members of the fund who were members of local police and fire relief and pension funds at time of transfer of assets to the police and firemen’s disability and pension fund (now known as police and fire pension fund) shall receive service credit as reported by the trustees of the police and fire relief and pension funds on which accrued liability payments were established;

(2) That subsequent to January 1, 1967, years of service or years of active service shall mean years of full-time service for which retirement contributions are deducted from “salary,” as such term is defined in section 742.01 of the Revised Code and rule 742-3-01 of the Administrative Code, and forwarded to the police and firemen’s disability and pension fund (now known as police and fire pension fund);

(3) Notwithstanding the above, volunteer and part-time members of police and fire relief and pension funds at time of transfer of assets to the police and firemen’s disability and pension fund (now known as police and fire pension fund), as provided by former section 742.26 of the Revised Code, shall receive service credit as members of the police and firemen’s disability and pension fund (now known as police and fire pension fund) provided retirement contributions were deducted from the salary and forwarded to the police and firemen’s disability and pension fund.

HISTORY: Eff 1-1-77; 7-31-03

Rule promulgated under: RC 111.15

Rule authorized by: RC 742.10

Rule amplifies: RC 742.37

R.C. 119.032 review dates: 05/14/2003 and 07/21/2008

(A) The rate of compounded interest for the purchase of service credit under section 742.379 of the Revised Code or for the payment of back contributions shall be calculated separately for each year in accordance with the terms of division (H) of section 742.379 of the Revised Code.

(B) Prior to January 1, 1987, and for all purchases of civilian service credit and not military service credit, the interest charge for the purchase of service credits or the payment of back contributions shall be six per cent.

(C) From and after January 1, 1987 through and including September 16, 1998, the interest charge for the purchase of service credits or the payment of back contributions, except military purchases, shall be the actuarial interest assumption rate adopted by the board for the year in which the service credit was purchased, compounded annually.

(D) Service credit may be purchased in increments of not less than one month except:

(1) Where the total service available for purchase under a section of the Revised Code is less than a full month; or,

(2) Where less than one full month is necessary to accumulate the maximum number of years which may be used in benefit calculations; or

(3) Where four purchases of service credit have already been made in any calendar year.

(E) Where the calculation of the cost of purchase of service credit involves the repayment of withdrawn employee contributions, the average monthly contribution for the total period of the withdrawn service credit shall be the base for calculating the cost.

(F) For any person who becomes a member of the fund on or after the effective date of this rule, such member shall pay the interest charge for the purchase of service credits or the payment of back contributions, in accordance with the terms of division (H) of section 742.379 of the Revised Code.

(G) From and after the effective date of this rule and unless otherwise provided by law, when a payment is received by the fund which is less than the full payment of the total amount of employer and employee contributions for the entire amount of service credit available, the fund is authorized to prorate the amount purchased in accordance with the following:

(1) The amount paid will be divided by amount due on that billing;

(2) The number derived from the computation described in paragraph (G)(1) of this rule will be multiplied by the entire amount of service credit available;

(3) The number derived from the computation described in paragraph (G)(2) of this rule will then be divided by twelve, with the number to the left of the decimal representing the number of years purchased;

(4) The number to the right of the decimal derived from the computation described in paragraph (G)(3) of this rule will then be multiplied by twelve, with the number to the left of the decimal representing the number of months purchased; and

(5) The number to the right of the decimal derived from the computation described in paragraph (G)(4) of this rule will then be multiplied by thirty, with the number to the left of the decimal representing the number of days purchased; provided, however, that the fund shall round the number of days to the next higher number if the number to the right of the decimal is equal to or greater than .50 and the fund shall round the number of days to the next lower number if the number to the right of the decimal is less than .50.

(H) For any partial purchase of service credit, the cost of the purchase of such service credit shall be based upon the average monthly contribution for the total period.

(I) Except as expressly provided by law and for purposes of qualifying for the fund’s benefits, the purchased service credit shall be the equivalent of service credit earned as an active member of the fund provided the fund receives the total amount of the applicable interest and the total amount of the employer and employee contributions due for the amount of service credit being purchased, as if such person was a member of the fund at the time the contributions were made for the service credit being purchased by the member.

(J) The cost of the service credit available will change if the total amount due is not paid within the stated billing period.

(K) The amount due for the purchased service credit shall be based upon the applicable interest and the total amount of the employer and employee contributions that would have been due the fund, if such person were a member of the fund at the time the contributions were made for the service credit being purchased by the member.

(L) For purposes of this rule, “Member” shall have that meaning set forth in division (E) of section 742.01 of the Revised Code and shall include those members who elected disability benefits under former section 742.37 of the Revised Code or section 742.38 of the Revised Code, who did not purchase eligible service credit at the time of his/her acceptance of disability benefits since the credit did not enhance the benefit, and who later has his/her disability benefit terminated by OP&F in accordance with the provisions of section 742.40 of the Revised Code.

(M) This rule shall only apply to the purchase of civilian service credit and shall not apply to the purchase of military credit.

(N) For purposes of computing the refund according to division (J)(2) of section 742.21 of the Revised Code, OP&F shall calculate the interest based on the actuarial interest assumption rate established by the board of trustees at the time of the refund.

Effective: 10/13/2005

R.C. 119.032 review dates: 07/27/2005 and 10/13/2010

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.21

Prior Effective Dates: 1/1/77, 11/15/79, 11/15/86, 11/10/98 (Emer.), 7/19/99, 1/22/04, 7/17/04, 3/3/05 (Emer.), 5/19/2005

(A) As used in this rule:

(1) “Contributing service credit” means service credit earned by a member of the police and fire pension fund (“OP&F”) as a result of OP&F receiving employee contributions on salary of that member, as required under section 742.31 of the Revised Code, for full-time contributing service rendered by an OP&F member to a covered employer.

(2) “Full-time contributing service credit” means the following:

(a) For police officers or firefighter assigned to work a standard forty hour work week, the police officer or firefighter must be compensated by his/her employer for at least thirty-seven and one half hours of service for each week included in any normal monthly payroll reporting period; or

(b) For members assigned to work a twenty-four hour platoon system (i.e. twenty-four hours then followed by forty-eight hours off), the fire fighter must be compensated by his/her employer for at least the number of hours of service specified in the following table for each week included in any normal monthly payroll reporting period:

Table – To obtain the appendix, table, image, etc. please call LSC’s ERF Helpdesk at 614-387-2078 or send an email to erfhelpdesk@lsc.state.oh.us.

(3) “Partial contributing service credit” means prorated service credit allowed for hours of service for each week included in any normal monthly payroll reporting period, which fails to qualify as “full-time contributing service credit,” as defined in paragraph (A)(2) of this rule.

For partial contributing service credit, OP&F shall prorate the service credit by dividing the hours compensated during the normal monthly payroll reporting period by the hours base for the monthly reporting period.

(4) “Hours compensated” means hours for which salary is earned by working regularly scheduled hours or by using accumulated leave hours in order to meet the full-time contributing service credit threshold defined in paragraph (A)(2) of this rule.

(5) For purposes of this paragraph, “hours base” shall mean the standard number of hours the member is scheduled per work week.

(B) On and after the first pay period ending in 1999, OP&F shall accrue contributing service credit to a member’s account based on the definitions contained in this rule only for contributing service rendered to an employer as a member of OP&F for the first pay period ending in 1999 and thereafter and in all cases, subject to the provisions of section 742.01 of the Revised Code and rule 742-3-02 of the Administrative Code.

(C) On and after October 1, 1997, employers shall comply under section 742.32 of the Revised Code with the amended member contributions reporting requirements needed to credit service consistent with the terms of this rule, as detailed in the notice provided by OP&F to the employers dated July 31, 1997.

(D) If the actual number of hours compensated is not available from payroll records and the member of OP&F is compensated on an annual salary basis, then a full month of contributing service credit shall accrue for any month in which one twelfth of the annual contract salary is paid.

A partial month of contributing service credit shall accrue for any month in which less than one twelfth of the annual contract salary is paid. The partial month of contributing service credit shall be prorated based on the salary paid divided by one twelfth of the annual contract salary.

(E) Not more than twelve months of contributing service credit can be allowed in a calendar year.

(F) Notwithstanding this rule, on and after October 1, 1997, no person shall be allowed contributing service credit before the date the person becomes a member of OP&F or after the member’s effective date of termination or retirement.

Effective: 04/28/2006

R.C. 119.032 review dates: 02/10/2006 and 04/28/2011

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.31, 742.32

Prior Effective Dates: 4/25/97, 11/18/99 (EMERG.), 2/5/00, 11/23/2000

(A) The first full-time Ohio public service covered under any state or in a municipal retirement system of this state which is subject to purchase or transfer under section 742.21, 742.212, 742.51, 742.511, 742.512, 742.513, 742.514, or 742.515 of the Revised Code, subject to purchase under section 742.23, 742.24, 742.375, 742.376, 742.511, or 742.512 of the Revised Code, or subject to redeposit under section 742.371 of the Revised Code, shall be considered “the first year of full-time service in Ohio” covered by any state or municipal retirement system of this state following termination of military service as used in section 742.52 of the Revised Code in reference to the purchase of military service credit.

As used in section 742.52 of the Revised Code, “annual compensation” means the initial annual salary rate for the full-time position used to compute the cost of purchasing credit for military service.

(B) The employer contribution required under section 742.521 of the Revised Code shall be based on the base salary the police officer or fire fighter would have earned had military service not interrupted the member’s police or fire service. Base salary is the hourly rate equivalent upon which the overtime compensation rate, if any, is based.

The employer contribution required under section 742.521 of the Revised Code shall not be levied in connection with any credit granted for military service that occurred prior to October 29, 1996.

(C) For purposes of section 742.52 of the Revised Code, a person shall be deemed to be receiving a disability benefit or pension if the person fails to withdraw his/her application, as outlined in rule 742-3-17 of the Administrative Code.

(D) The recovery procedures outlined in division (E)(2) of section 742.52 of the Revised Code shall include, but not be limited to, the recovery procedures outlined in rule 742-3-08 of the Administrative Code.

(E) Prior to September 21, 2000, the nominal method shall be used for the calculation of compounded interest at the rate established by the board of trustees. Beginning on September 21, 2000, the effective method shall be used for the calculation of compounded interest at the rate established by the board of trustees.

Effective: 04/28/2006

R.C. 119.032 review dates: 02/10/2006 and 04/28/2011

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.21, 742.212, 742.23, 742.24, 742.371, 742.375, 742.376, 742.51, 742.511, 742.512, 742.513, 742.514, 742.515, 742.52, 742.521

Prior Effective Dates: 6/30/76, 1/18/97, 3/19/2001

Merchant marine service during wartime shall be considered service in the “armed forces of the United States” for the purpose of purchasing service credit to be used in making pension benefit calculations under sec. 742.52 of the Revised Code.

Effective: 04/28/2006

R.C. 119.032 review dates: 02/10/2006 and 04/28/2011

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.52

Prior Effective Dates: 1/1/1977

As used in section 742.52 of the Revised Code, the phrase “honorably discharged” shall be construed to mean the favorable character of service status given by the department of defense or the national guard, as the case may be, for the member’s service in the armed forces of the united states, as defined in section 742.52 of the Revised Code, whether characterized as honorable or general (under honorable conditions).

R.C. 119.032 review dates: 03/03/2006 and 03/03/2011

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.52

Prior Effective Dates: 7/20/1981, 4/19/2001

(A) For purposes of sections 742.21 and 742.251 of the Revised Code, a “purchase” shall mean that the Ohio police and fire pension fund (“OP&F”) member withdrew his/her contributions from the applicable retirement system or out-of-state or local government and a “transfer” shall mean that the OP&F member maintained his/her contributions with the applicable retirement system.

(B) For purposes of section 742.21 of the Revised Code, “attributable to full-time service or purchase of credit” shall mean contributions paid by or for the benefit of the eligible member for service credit that was full-time, as defined in rule 742-5-03 of the Administrative Code and this rule.

(C) For purposes of divisions (B)(1) and (C)(1)(a) of section 742.21 of the Revised Code, “amount withdrawn” shall mean contributions paid by the member to the applicable retirement system for service credit, which are later withdrawn from that retirement system by the member, but shall not include interest paid to the member on such contributions by the withdrawing retirement system. In no event, however, shall this definition impact OP&F’s right to the payment of interest according to divisions (B), (C), (H) and (I) of section 742.21 of the Revised Code.

(D) For purposes of determining whether an OP&F member is not receiving a pension or benefit payment, as outlined in sections 742.21 and 742.251 of the Revised Code, OP&F will rely upon the terms of rule 742-3-17 of the Administrative Code and its books and records.

(E) For purposes of determining “full-time service,” OP&F may request the employer and the member to certify the full-time service, but in any event, OP&F will determine that the contributing credit was for “full-time service.” In order for the service to be “full-time”, as provided for in divisions (A) and (B) of section 742.01 of the Revised Code: (1) the service credit to be purchased or transferred must have been rendered while employed in a full-time public position; and (2) the individual must meet the criteria for “full-time contributing service,” as outlined in rule 742-5-03 of the Administrative Code. As a result, any pay period in which the member failed to work the equivalent of thirty-seven and one half or more hours per week does not qualify as “full-time” and in such event, OP&F will pro-rate such credit.

(F) As required by section 742.21 of the Revised Code, in no event can credit be purchased or directly transferred for employment in a part-time position. For purposes of meeting the definition of “full-time service” in section 742.21 of the Revised Code and this rule, periods of service in part-time positions cannot be combined to equal “full-time service.”

(G) Credit may not be purchased or directly transferred for periods of employment concurrent with any employment for which the member has already received OP&F service credit.

(H) Subject to the other provisions of this rule, an OP&F member who is not receiving a pension or benefit payment from OP&F may purchase qualifying service credit for periods of full-time service in a full-time public position as a member of a state or municipal retirement system in the state of Ohio, provided that such service credit has been canceled by the system in which it was earned.

(I) Subject to the provisions of section 742.251 of the Revised Code and the other provisions of this rule, an OP&F member who is not receiving a pension or benefit payment from OP&F may purchase qualifying service credit for periods of full-time service in a full-time public position as an employee of an entity of an out-of-state or local government, or of an entity of the United States government, provided that such service credit is not used in the calculation of any public or private retirement benefit, other than federal social security benefits.

A member who chooses to purchase service credit under this paragraph rather than transferring the qualifying service credit under paragraph (I) of this rule is entitled to be granted service credit for periods of active duty military service, as provided for in section 742.521 of the Revised Code.

(J) To initiate the transfer of eligible service credit to OP&F under section 742.21 of the Revised Code, the member should initiate the request with the transferring retirement system. Within a reasonable time from OP&F’s receipt of the ledger of contributions and the employer address from the transferring system, OP&F will send a certification to both the employer and the OP&F member on the “full-time” status and other payroll information. Upon receipt of this information, OP&F will then review the certifications and ledger information and notify the transferring system of the eligible service credit that should be transferred pursuant to section 742.21 of the Revised Code. In the event that the transferring system transfers monies to OP&F without OP&F’s review and approval, OP&F reserves the right to reject service credit that does not meet the criteria for “full-time,” as outlined in this rule.

(K) To initiate a purchase of eligible service credit from OP&F, the member may notify OP&F or OP&F may receive the request from the member’s former retirement system. Within a reasonable time period of such notice, OP&F will send a certification to the member and the member’s former employer, which will request, among other things, whether the position was full-time and the dates of employment. Notwithstanding this certification, OP&F will review the documentation and determine if the service is “full-time,” as required by section 742.21 of the Revised Code, and as more fully outlined in this rule. Once OP&F determines the service credit meets the statutory and administrative requirements, OP&F will provide the eligible member with a cost statement in such monthly increments, as determined by OP&F’s director of member services. Once the member pays monies to OP&F, whether the full or partial amount, OP&F will request that the former system transfer the monies to OP&F, as required by section 742.21 of the Revised Code. In the event that the former system transfers monies to OP&F without OP&F’s review and approval, OP&F reserves the right to reject service credit that does not meet the criteria for “full-time,” as outlined in this rule.

(L) For purposes of division (K) of section 742.21 of the Revised Code, purchased service credit not only includes purchased service credit, but it shall also include service credit transferred by the Cincinnati retirement system, a non-uniform retirement system, or the other uniform retirement system to OP&F.

(M) The interest rate charged for the purchase of civilian service credit shall be the actuarial interest assumption adopted by the board.

HISTORY: Eff 7-24-86 (Emer.); 10-16-86; 7-17-93; 8-5-96; 2-22-02; 11-3-03

Rule promulgated under: RC 111.15

Rule authorized by: RC 742.10

Rule amplifies: RC 742.21

R.C. 119.032 review dates: 08/18/2003 and 11/03/2008

(A) A member of Ohio police and fire pension fund (“OP&F”) may purchase any type of service credit through payroll deduction that a member is eligible to purchase under any provisions of Chapter 742. of the Revised Code, including but not limited to, Revised Code sections 742.21 (service credit earned for full-time service as member of state or municipal retirement system or united states armed forces; computation of benefits, purchase of service credit), 742.221 (pregnancy or medical disability; purchase of service credit), 742.23 (credit to police officers for service time as firefighters), 742.24 (credit to firefighters for service time as police officers), 742.27 (credit for time laid off), 742.371 (redeposit of withdrawn contributions), 742.375 (police officers and firefighters to receive credit for service in state highway patrol), 742.376 (provisions for credit as full-time member of police or fire department), 742.52 (purchase of credit for military service refund), 742.521 (military service credit).

(B) Upon a member’s request to OP&F to purchase service credit by payroll deduction for service credit the member is eligible to purchase pursuant to section 742.56 of the Revised Code and this rule, OP&F will prepare an authorization form which states the following:

(1) The service to be purchased, including the total months of service and the type of service;

(2) The total cost of the service credit to be purchased through payroll deduction;

(3) An authorization from the member to make the total number of payroll deductions in the stated amount, starting with the proposed start date and ending on the proposed completion date; provided, however, that the payroll deduction cannot exceed the member’s net compensation after all deductions and withholdings required by law.

(C) If the member wishes to complete the payroll plan referenced in paragraph (B) of this rule, the member must sign the completed form in the format prescribed by OP&F or substantially similar thereto, the member shall cause the employer to sign the completed form in the format prescribed by OP&F or substantially similar thereto for members purchasing service credit with amounts designated by the employer as picked-up contributions under section 414(h)(2) of the Internal Revenue Code, and return the fully executed original form to OP&F, with a copy being given by the member to the member’s employer on a timely basis in order for the employer to properly implement the payroll deduction plan elected by the OP&F member.

(D) The procedure to be followed by OP&F in determining the total cost of the eligible service credit to be purchased by an OP&F member through a payroll deduction will be based upon the assumption that the purchase is to be made in a single lump-sum payment on the proposed date of the completion of the purchase, with the total cost then being divided by the number of payroll periods between the proposed start and the proposed completion date of the payroll deduction in order to yield a level amount of the deduction, which is all based upon the member’s original request.

(E) As required by section 742.56 of the Revised Code, OP&F will certify the amount to the employer through a monthly billing the amount of each deduction and the payrolls from which deductions are to be made. The employer shall forward that payroll deduction to OP&F so that the applicable payroll deduction and the payroll deduction statement are received by OP&F by the close of business on the last business day of the following month, excluding any legal holidays, consistent with the reporting requirements in section 742.32 of the Revised Code. The employer’s payroll deduction statement shall be accompanied by a completed OP&F recap form, as referenced in rule 742-9-17 of the Administrative Code.

(F) For purposes of assessing the penalties prescribed by section 742.352 of the Revised Code for all filings due OP&F under section 742.56 of the Revised Code, OP&F shall take the following course of action:

(1) No payroll deduction report/no payroll deduction. If the required payroll deduction prescribed by section 742.56 of the Revised Code is not made in accordance with the deadline outlined in such section and no payroll deduction report is filed with OP&F in accordance with the deadline outlined in such section, OP&F shall assess the penalties prescribed by section 742.352 of the Revised Code.

(2) Payroll deduction report/no payroll deduction. If the required payroll deduction report prescribed by section 742.56 of the Revised Code is filed with OP&F in accordance with the deadline outlined in such section, but the proper payroll deduction is not paid to OP&F in accordance with the deadline outlined in such section, OP&F shall assess the penalties prescribed by section 742.352 of the Revised Code.

(3) No payroll deduction report/payroll deduction. If the required payroll deduction report prescribed by section 742.56 of the Revised Code is not filed with OP&F in accordance with the deadline outlined in such section, but a payroll deduction is made with OP&F in accordance with the deadline outlined in such section, OP&F shall assess the penalties prescribed by section 742.352 of the Revised Code.

(4) All other cases, the following shall apply:

(a) Non-conforming payroll deduction report. OP&F shall initially give verbal notice to the employer of the non-conforming nature of the report and allow the employer to have an opportunity to take corrective actions to cure such deficiencies within thirty days of OP&F’s verbal notice of deficiency. If the employer has not submitted a writing to OP&F that properly addresses the noted deficiencies by Friday of the week in which OP&F gave the verbal notice, OP&F shall then send a written notice to the employer of the non-conforming nature of the report and allow the employer to still have an opportunity to take the corrective actions identified in the written notice from OP&F within thirty days of OP&F’s initial verbal notice (referred to herein as the “cure period”), and the following shall apply:

(i) If the employer files a corrected payroll deduction report and such report is received by OP&F on or before the expiration of the cure period, no penalties will be assessed by OP&F against the employer.

(ii) If OP&F does not receive from the employer a corrected payroll deduction report, as noted in OP&F’s written notice to the employer, on or before the expiration of such cure period, then OP&F will assess the penalties prescribed by section 742.352 of the Revised Code, beginning the day after the expiration of the cure period.

(b) In all other situations, OP&F will notify the employer in writing of the employer’s failure to comply with the provisions of section 742.56 of the Revised Code and shall then send a written notice to the employer of the failure to comply with section 742.56 of the Revised Code and shall allow the employer to still have an opportunity to take the corrective actions identified in the written notice from OP&F within thirty days of OP&F’s initial verbal notice (referred to herein as the “cure period”), and the following shall apply:

(i) If the employer files a correct payroll deduction report and such report is received by OP&F on or before the expiration of the cure period, no penalties will be assessed by OP&F against the employer.

(ii) If OP&F does not receive from the employer the proper payroll deduction report, as noted in OP&F’s written notice to the employer, on or before the expiration of such cure period, then OP&F will assess the penalties prescribed by section 742.352 of the Revised Code, beginning the day after the expiration of the cure period.

(5) Even with the cure period, the employer will still be assessed any statutory fines for late filings and/or payments, as the case may be under the applicable statutory provision.

(6) This rule shall apply once the payment and/or report has been filed with OP&F and shall not limit any other remedies available to OP&F by law.

(G) Upon receipt of the applicable monthly payroll deduction, as certified by OP&F, OP&F will grant the service credit to the member based on the percentage of the service credit for which the member is eligible to receive multiplied by the ratio of the amount actually received by OP&F divided by the total amount due OP&F pursuant to section 742.56 of the Revised Code and this rule.

(H) All payroll deduction plans may last no longer than sixty months, or if less, the period of service to be purchased.

(I) No member may participate in more than one payroll deduction plan to purchase service credit provided for in section 742.56 of the Revised Code and this rule, even though the payroll deduction plan may include various types of service credit.

(J) Tax deferred payroll deduction plans (i.e. pick-up plans) shall be irrevocable and may only be terminated upon the member’s termination of employment with the employer who is implementing the member’s payroll deduction plan.

(K) Except for tax deferred payroll deduction plans (i.e. pick-up plans), a member can increase or decrease the member’s payroll deduction by written notice to the member’s employer and OP&F, except that in no event shall a deduction be decreased to less than an amount specified by OP&F in a board policy or the current month’s interest, whichever is greater.

(L) Beginning from and after September 16, 1998, OP&F will not treat a member who is purchasing credit pursuant to this rule with amounts designated by the employer as picked-up contributions under section 414(h)(2) of the Internal Revenue Code unless the employer certifies in writing the tax deferred status of the payroll deduction plan as part of the employee’s enrollment in the payroll deduction plan or within ninety days of OP&F’s request and OP&F will rely upon certification in determining the taxability of benefits due the member, as outlined in rule 742-9-14 of the Administrative Code. In the event that the employer fails to provide such certification, then OP&F will treat the payroll deduction plan as a regular non-tax deferred payroll deduction plan. In all events, it shall be the responsibility of the employer to establish the tax deferred payroll deduction plan, as required by the applicable terms of the Internal Revenue Code.

(M) For members who are purchasing credit pursuant to this rule with amounts designated by the employer as picked-up contributions under section 414(h)(2) of the Internal Revenue Code, such members cannot do any of the following:

(1) Decrease or increase the payroll deduction;

(2) Terminate the payroll deduction, unless the member has terminated employment with such employer or all of the service credit has been purchased through the applicable payroll deduction plan; or

(3) Make a partial payment for the purchase of service credit outlined in this rule.

(N) For members who are purchasing credit pursuant to this rule with amounts designated by the employer as picked-up contributions under section 414(h)(2) of the Internal Revenue Code, the employer cannot decrease, increase, or terminate such payroll deduction unless the member has terminated employment or all of the service credit has been purchased through the applicable payroll deduction plan.

(O) Except for tax deferred payroll deduction plans (i.e. a pick-up plan), a payroll deduction plan may be terminated upon any of the following events:

(1) The failure of the employer to forward to OP&F the monthly payroll deduction for three consecutive months, with the termination being effective the first month in which the employer failed to forward the deduction to OP&F without any further action on the part of the employee, the employer or OP&F;

(2) Upon the member’s termination of employment with the employer who is implementing the member’s payroll deduction plan;

(3) In cases where a payroll deduction exceed the member’s net pay after all deductions and withholdings required by law; or

(4) When the payroll deductions received by OP&F equal the total cost of the eligible service credit, as originally outlined in OP&F’s authorization form duly signed by the member.

(P) On early termination of the payroll deduction plan, the member will be credited with a proportion of the service to be purchased equal to the proportion of time the payroll deduction plan was in effect to the time the payroll deduction plan was scheduled to complete the purchase. In addition, OP&F will provide written notice of such termination to the member. Beginning January 1, 2007, for employers who wish to pay all or part of the voluntary contributions for the purchase of service credit through payroll deductions, the employers shall submit the standard resolution in the form adopted by OP&F’s board of trustees.

Effective: 05/22/2008

R.C. 119.032 review dates: 03/07/2008 and 05/22/2013

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.10, 742.21, 742.221, 742.23, 742.24, 742.27, 742.32, 742.371, 742.375, 742.376, 742.52, 742.521, 742.56

Prior Effective Dates: 12/29/86, 6/24/01, 10/26/2006

(A) For purposes of division (B)(1) of section 742.27 of the Revised Code, Ohio police and fire pension fund (“OP&F”) shall consider a member to be “entitled to receive disability benefits” if that member is receiving a disability benefit from OP&F and that member has not timely withdrawn his/her disability application in accordance with the provisions of rule 742-3-17 of the Administrative Code, but in no event shall a member be entitled to purchase lay-off credit for any period that overlaps the receipt of that person’s disability benefits.

(B) As part of the purchase of such credit, the member must provide the following to OP&F:

(1) Written certification from the employer that the member was removed from active service as a result of a lay off that was involuntary;

(2) Written certification of the date on which the member returned to full-time duty as a member of the police or fire department (as such terms are defined in sections 742.01(A) and (B) of the Revised Code, respectively), which is certified by either the employer with whom the lay-off occurred or the new OP&F-covered employer in the event the member does not return to the prior employer;

(3) Written certification from the member that during the time the member was laid off, the member did not render any service that is not permitted according to division (B)(2) of section 742.27 of the Revised Code.

(C) As determined by OP&F’s board of trustees, after consultation with OP&F’s actuary, the “additional liability” to OP&F resulting from the purchase of lay-off credit is the amount the member and his/her employer would have contributed during the lay off period, including interest. Interest shall be calculated at OP&F’s actuarially assumed interest rate compounded annually based on the effective method of calculating interest from the date the member returned to duty as a full-time member of a police or fire department through the date OP&F receives the payment for such credit and the statutory contributions shall be, based on the member’s “salary” (as such term is defined in division (L) of section 742.01 of the Revised Code and section 742-3-02 of the Administrative Code) reported to OP&F subject to contribution for the last full month of his/her full-time employment prior to being laid off.

(D) A member may choose to purchase only part of such credit in any one payment, provided that any reduced credit is purchased in increments of one-year periods and if the amount of the lay-off credit is less than one year, then the purchase is for the full amount of the lay-off credit. If OP&F receives less than the full amount referenced in division (C) of section 742.27 of the Revised Code, as more fully described in paragraph (C) of this rule, this shall constitute the member authorization to OP&F to grant a proportionate amount of lay-off credit, which is calculated by taking the lay-off credit the member is eligible to receive multiplied by the ratio of the amount actually received by OP&F divided by the total amount due OP&F pursuant to division (C) of section 742.27 of the Revised Code, as more fully described in paragraph (C) of this rule.

HISTORY: Eff 7-17-93; 3-9-01 (Emer.); 5-24-01; 5-24-04

Rule promulgated under: RC 111.15

Rule authorized by: RC 742.10

Rule amplifies: RC 742.27

Replaces: Prior version of 742-5-09

RC 119.032 Review Date: 03/09/2004 and 05/14/2009

Rescinded eff 7-17-04

For purposes of division (G) of section 742.21 of the Revised Code, the word “concurrent” shall mean service credit earned in another retirement system during the same time period in which the police and fire pension fund has granted or will grant service credit to such member.

Effective: 12/20/2007

R.C. 119.032 review dates: 10/03/2007 and 12/20/2012

Promulgated Under: 111.15

Statutory Authority: 742.10

Rule Amplifies: 742.21

Prior Effective Dates: 12/06/2002