Chapter 148 | Deferred Compensation Program

Section 148.01 | Deferred compensation program definitions.

• Effective: September 7, 2021
• Latest Legislation: Senate Bill 27 - 134th General Assembly

(A) As used in this chapter:

(1) "Eligible employee" means any public employee, as defined in division (A) of section 145.01 of the Revised Code; any person eligible to become a member of the public employees retirement system under section 145.20 of the Revised Code; any employee, as defined in division (C) of section 742.01, division (B) of section 3309.01, or division (A) of section 5505.01 of the Revised Code; any electing employee, as defined in section 3305.01 of the Revised Code; and any member of the state teachers retirement system.

(2) "Participant account" means any of the following accounts:

(a) An account that is maintained by the Ohio public employees deferred compensation board and that evidences moneys that have been deferred by, or on behalf of, a continuing member or participating employee and transmitted to the board by the retirement system of the continuing member or participating employee;

(b) An account that is maintained by the governing board, administrator, depository, or trustee of a deferred compensation program of a municipal corporation and that evidences moneys that have been deferred by an officer or employee of that municipal corporation and transmitted to the governing board, administrator, depository, or trustee by the retirement system of the officer or employee or in another manner;

(c) An account that is maintained by a governing board, as defined in section 148.06 of the Revised Code, and that evidences moneys that have been deferred by an officer or employee of a government unit, as defined in that section, and transmitted to the governing board by the retirement system of the officer or employee or in another manner.

(3) "Participating employee" means any eligible employee who is having compensation deferred pursuant to either of the following:

(a) An agreement that is entered into before the compensation is earned and that is with the eligible employee's employer and the Ohio public employees deferred compensation board;

(b) Automatic enrollment in the Ohio public employees deferred compensation program under section 148.042 of the Revised Code.

(4) "Continuing member" means any former participating employee who is not currently having compensation deferred, or the former participating employee's beneficiary, to whom payment has not been made of all deferred compensation distributions.

(B) Notwithstanding section 145.01 of the Revised Code, the definitions of that section are applicable to this chapter only to any extent necessary to fully understand the provisions of this chapter. Reference may also be had to Chapters 742., 3305., 3307., 3309., and 5505. of the Revised Code for that purpose.

Last updated June 10, 2021 at 9:42 AM

Section 148.02 | Public employees deferred compensation board.

• Effective: October 16, 2009
• Latest Legislation: House Bill 1 - 128th General Assembly

The Ohio public employees deferred compensation board shall be comprised of a member of the house of representatives and a member of the senate, who shall not be of the same political party, each to be appointed to serve at the pleasure of the member's respective leadership, and the members of the public employees retirement board as constituted by section 145.04 of the Revised Code, who are hereby created as a separate legal entity for the purpose of administering a deferred compensation system for all eligible employees. The public employees retirement board may utilize its employees and property in the administration of the system on behalf of the Ohio public employees deferred compensation board, in consideration of a reasonable service charge to be applied in a nondiscriminatory manner to all amounts of compensation deferred under this system.

The Ohio public employees deferred compensation board may exercise the same powers granted by section 145.09 of the Revised Code necessary to its functions. The attorney general shall be the legal adviser of the board. The Ohio public employees deferred compensation receiving account shall be in the custody of the treasurer of state, but shall not be part of the state treasury.

Section 148.04 | Program for deferral of compensation.

• Effective: September 7, 2021
• Latest Legislation: Senate Bill 27 - 134th General Assembly

(A) The Ohio public employees deferred compensation board shall initiate, plan, expedite, and, subject to an appropriate assurance of the approval of the internal revenue service, promulgate and offer to all eligible employees, and thereafter administer on behalf of all participating employees and continuing members, and alter as required, a program for deferral of compensation, including a reasonable number of options to the employee for the investment of deferred funds, always in such form as will assure the desired tax treatment of such funds. The members of the board are the trustees of any deferred funds and shall discharge their duties with respect to the funds solely in the interest of and for the exclusive benefit of participating employees, continuing members, and their beneficiaries. With respect to such deferred funds, section 148.09 of the Revised Code shall apply to claims against participating employees or continuing members and their employers.

(B) Every employer of an eligible employee shall enroll the employee in a deferred compensation program offered by the board on the employee's application to participate, on the employee's election under section 148.041 of the Revised Code, or by automatic enrollment under section 148.042 of the Revised Code.

(C) The board shall take all actions necessary to ensure that the program qualifies as an eligible deferred compensation plan under section 457(b) of the Internal Revenue Code of 1986, 26 U.S.C. 457. The board shall, subject to any applicable provisions of the Ohio public employees deferred compensation program plan, undertake to obtain as favorable conditions of tax treatment as possible, both in the initial programs and any permitted alterations of them or additions to them, as to such matters as terms of distribution, designation of beneficiaries, withdrawal upon disability, financial hardship, or termination of public employment, and other optional provisions.

The board may establish a designated Roth account feature or any other feature in which an employee may make tax-deferred or nontax-deferred contributions to an eligible government plan in accordance with 26 U.S.C. 457, as amended.

(D) In no event shall the total of the amount of deferred compensation to be set aside under a deferred compensation program and the employee's nondeferred income for any year exceed the total annual salary or compensation under the existing salary schedule or classification plan applicable to the employee in that year.

Such a deferred compensation program shall be in addition to any retirement or any other benefit program provided by law for employees of this state. The board shall adopt rules pursuant to Chapter 119. of the Revised Code to provide any necessary standards or conditions for the administration of its programs, including any limits on the portion of a participating employee's compensation that may be deferred in order to avoid adverse treatment of the program by the internal revenue service or the occurrence of deferral, withholding, or other deductions in excess of the compensation available for any pay period.

Both of the following apply to a deferred compensation program established under this section:

(1) Any income deferred under the program shall continue to be included as regular compensation for the purpose of computing the contributions to and benefits from the retirement system of an employee;

(2) Any sums deferred shall not be included in the computation of any federal and state income taxes withheld on behalf of an employee. Sums contributed to a Roth account feature or other feature to which nontax-deferred contributions are made shall be included in the computation of any federal and state income taxes withheld on behalf of an employee.

(E) This section does not limit the authority of any municipal corporation, county, township, park district, conservancy district, sanitary district, health district, public library, county law library, public institution of higher education, or school district to provide separate authorized plans or programs for deferring compensation of their officers and employees in addition to the program for the deferral of compensation offered by the board. Any municipal corporation, township, public institution of higher education, or school district that offers such plans or programs shall include a reasonable number of options to its officers or employees for the investment of the deferred funds, including annuities, variable annuities, regulated investment trusts, or other forms of investment approved by the municipal corporation, township, public institution of higher education, or school district, that will assure the desired tax treatment of the funds.

Last updated June 10, 2021 at 9:42 AM

Section 148.041 | Informational materials.

• Effective: September 7, 2021
• Latest Legislation: Senate Bill 27 - 134th General Assembly

(A) Unless the employee will be automatically enrolled in the Ohio public employees deferred compensation program under section 148.042 of the Revised Code, whenever an eligible employee becomes employed in a position paid by warrant of the director of budget and management, the employee's employer shall do both of the following at the time the employee completes the employee's initial employment paperwork:

(1) Provide to the employee materials provided by the Ohio public employees deferred compensation board under division (D) of this section regarding the benefits of long-term savings through deferred compensation;

(2) Except as otherwise provided in division (E) of this section, secure, in writing or by electronic means, the employee's election to participate or not participate in a deferred compensation program offered by the board.

(B) An election regarding participation under this section shall be made in the manner prescribed by the board.

(C) The employer shall forward each election completed under this section to the program not later than forty-five days after the date the employee's employment begins.

(D) The board shall provide informational materials and participation forms to employers required to comply with this section.

(E) If an eligible employee transfers employment from one position paid by warrant of the director of budget and management to another position paid by warrant of the director of budget and management and, at the time of transfer, is a participating employee, the employee's new employer shall not be required to secure the employee's election to participate or not participate under division (A)(2) of this section.

Last updated June 10, 2021 at 12:32 PM

Section 148.042 | Automatic enrollment.

• Effective: September 7, 2021
• Latest Legislation: Senate Bill 27 - 134th General Assembly

(A) As used in this section, "employing authority" means both of the following:

(1) The supreme court, house of representatives, senate, legislative service commission, secretary of state, auditor of state, treasurer of state, or attorney general with respect to employees of those entities;

(2) The director of administrative services, with respect to eligible employees employed in a position paid by warrant of the director of budget and management who are not employed by a person or entity listed in division (A)(1) of this section.

(B)(1) An employing authority may elect to automatically enroll employees described in division (C)(1) of this section in the Ohio public employees deferred compensation program. An employing authority that elects automatic enrollment shall notify the Ohio public employees deferred compensation board of that election. Automatic enrollment shall commence as soon as administratively practical for the board and the employing authority.

(2) An employing authority that elects automatic enrollment may cease automatic enrollment by notifying the board. The employing authority shall specify in the notice the date on which automatic enrollment will cease, and that date must be at least ninety days after the date the employing authority sends the notice. An employee who commences employment after automatic enrollment ceases may elect to participate in the program in accordance with section 148.04 or 148.041 of the Revised Code. Cessation of automatic enrollment does not affect the enrollment of employees enrolled during an automatic enrollment period.

An employing authority that ceases automatic enrollment may subsequently elect automatic enrollment by complying with division (B)(1) of this section.

(C)(1) An eligible employee employed by an employing authority that has elected automatic enrollment shall be automatically enrolled in the program if one of the following applies to the employee:

(a) The employee initially commences employment with the employing authority on or after the date automatic enrollment begins under division (B) of this section.

(b) The employee separates from employment with an employing authority, becomes a continuing member, and, on or after the date automatic enrollment begins, commences employment with that employing authority or a different employing authority.

(c) The employee is employed in a position paid by warrant of the director of budget and management and the employee transfers employment from an employing authority that has not elected to automatically enroll employees under this section to another position paid by warrant of the director of budget and management under an employing authority that has elected to automatically enroll employees, if the transfer occurs on or after the date automatic enrollment begins.

(2) An employee who, at the time of transferring from one employing authority to another as described in division (C)(1)(c) of this section, is a participating employee shall not be automatically enrolled in the program by the employing authority to which the employee transfers.

(D) The board shall establish the automatic deferral amounts and specify the investment options into which those deferred amounts will be invested for participating employees who are enrolled under this section. Deferral amounts shall not exceed the lesser of either ten per cent of an eligible employee's compensation or the maximum contribution that the employee is eligible to contribute under federal law.

(E) An employing authority that elects to automatically enroll employees under this section shall provide those employees with notice of the employee's rights and obligations in the manner prescribed by the board.

(F) An employing authority shall not elect to automatically enroll an eligible employee under this section, or elect to cease automatic enrollment, if that election conflicts with any collective bargaining agreement entered into between the employing authority and an exclusive representative as defined in section 4117.01 of the Revised Code.

Last updated June 10, 2021 at 12:32 PM

Section 148.05 | Confidentiality of records.

• Effective: October 16, 2009
• Latest Legislation: House Bill 1 - 128th General Assembly

(A)(1) As used in this division, "personal history record" means information maintained by the Ohio public employees deferred compensation board on an individual who is a participating employee or continuing member that includes the address, telephone number, social security number, record of contributions, records of benefits, correspondence with the Ohio public employees deferred compensation program, or other information the board determines to be confidential.

(2) The records of the board shall be open to public inspection, except that the following shall be excluded, except with the written authorization of the individual concerned:

(a) Information pertaining to an individual's participant account;

(b) The individual's personal history record.

(B)(1) All medical reports, records, and recommendations of a participating employee or a continuing member that are in the possession of the board are privileged.

(2) All tax information of a participating employee, continuing member, or former participant or member that is in the possession of the board shall be confidential to the extent the information is confidential under Title LVII or any other provision of the Revised Code.

(C) Notwithstanding the exceptions to public inspection in division (A)(2) of this section, the board may furnish the following information:

(1) If a participating employee, continuing member, or former participant or member is subject to an order issued under section 2907.15 of the Revised Code or is convicted of or pleads guilty to a violation of section 2921.41 of the Revised Code, on written request of a prosecutor as defined in section 2935.01 of the Revised Code, the board shall furnish to the prosecutor the information requested from the individual's personal history record or participant account.

(2) Pursuant to a court or administrative order issued pursuant to Chapter 3119., 3121., 3123., or 3125. of the Revised Code, the board shall furnish to a court or child support enforcement agency the information required under that section.

(3) Pursuant to an administrative subpoena issued by a state agency, the board shall furnish the information required by the subpoena.

(4) The board shall comply with orders issued under section 3105.87 of the Revised Code.

(D) A statement that contains information obtained from the program's records that is signed by the executive director or the director's designee and to which the board's official seal is affixed, or copies of the program's records to which the signature and seal are attached, shall be received as true copies of the board's records in any court or before any officer of this state.

Section 148.06 | Additional programs for deferral of compensation.

• Effective: March 21, 2017
• Latest Legislation: Senate Bill 220 - 131st General Assembly

(A) As used in this section:

(1) "Government unit" means a county, park district of any kind, conservancy district, sanitary district, regional water and sewer district, regional transit authority, health district, public library district, county law library, joint county department of job and family services, or a detention facility district of any kind.

(2) "Governing board" means, in the case of the county, the board of county commissioners; in the case of a park district, the board of park commissioners; in the case of a conservancy district, the district's board of directors; in the case of a sanitary district, the district's board of directors; in the case of a regional water and sewer district, the district's board of trustees; in the case of a regional transit authority, the authority's board of trustees; in the case of a health district, the board of health; in the case of a public library district, the board of library trustees; in the case of a county law library, the board of trustees of the law library association; in the case of a joint county department of job and family services, the department's board of directors; and in the case of a detention facility district, the board or joint board of county commissioners.

(B) In addition to the program of deferred compensation that may be offered under this chapter, a governing board may offer to all of the officers and employees of the government unit not to exceed two additional programs for deferral of compensation designed for favorable tax treatment of the compensation so deferred. Any such program shall include a reasonable number of options to the officer or employee for the investment of the deferred funds, including annuities, variable annuities, regulated investment trusts, or other forms of investment approved by the governing board, that will assure the desired tax treatment of the funds.

A governing board may establish a designated Roth account feature or any other feature in which an officer or employee of the government unit may make tax-deferred or nontax-deferred contributions to an eligible government plan in accordance with 26 U.S.C. 457, as amended.

Both of the following apply to a deferred compensation program established under this section:

(1) Any income deferred under the program shall continue to be included as regular compensation for the purpose of computing the contributions to and benefits from the officer's or employee's retirement system;

(2) Any sums deferred shall not be included in the computation of any federal and state income taxes withheld on behalf of an officer or employee. Sums contributed to a Roth account feature or other feature to which nontax-deferred contributions are made shall be included in the computation of any federal and state income taxes withheld on behalf of an officer or employee.

Section 148.061 | Tax treatment of deferred compensation.

• Effective: April 6, 2023
• Latest Legislation: House Bill 501 - 134th General Assembly

(A) In addition to the program of deferred compensation that may be offered under this chapter, a board of township trustees may offer to all of the officers and employees of the township plans or programs for deferring compensation designed for favorable tax treatment of the compensation so deferred. A plan or program shall present a reasonable number of options to the township's officers and employees for the investment of the deferred funds that will assure the desired tax treatment of the funds.

A board of township trustees may establish a designated Roth account feature or any other feature in which an officer or employee of the township may make tax-deferred or nontax-deferred contributions to an eligible government plan in accordance with 26 U.S.C. 457.

(B) Both of the following apply to a deferred compensation plan or program established under this section:

(1) Any income deferred under a plan or program shall continue to be included as regular compensation for the purpose of computing the contributions to and benefits from each officer's or employee's retirement system.

(2) Any sums deferred shall not be included in the computation of any federal and state income taxes withheld on behalf of an officer or employee. Sums contributed to a Roth account feature or other feature to which nontax-deferred contributions are made shall be included in the computation of any federal and state income taxes withheld on behalf of an officer or employee.

Last updated January 24, 2023 at 12:26 PM

Section 148.09 | Exemption of benefits from rights of creditors.

• Effective: March 22, 2001
• Latest Legislation: Senate Bill 180 - 123rd General Assembly

Except as provided in sections 3105.171 and 3105.63 and Chapters 3119., 3121., 3123., and 3125. of the Revised Code and this chapter, a participant account or any benefit or other right accrued or accruing to any person under this chapter or under a deferred compensation program offered by a government unit, as defined in section 148.06 of the Revised Code, or by a municipal corporation shall not be subject to execution, garnishment, attachment, sale to satisfy a judgment or order, the operation of bankruptcy or insolvency laws, or other process of law and shall be unassignable.

Section 148.10 | Withholding of restitution for certain sex offenses or theft in office from deferred compensation.

• Effective: September 21, 2000
• Latest Legislation: House Bill 628 - 123rd General Assembly

(A) Notwithstanding any other provision of this chapter, any payment, other than a survivorship benefit, that is to be made to a person by a deferred compensation program pursuant to those sections or a deferred compensation program offered by a government unit, as defined in section 148.06 of the Revised Code, or by a municipal corporation is subject to any withholding order issued pursuant to section 2907.15 or division (C)(2)(b) of section 2921.41 of the Revised Code. The Ohio public employees deferred compensation board, the governing board, as defined in section 148.06 of the Revised Code, that is associated with a government unit, and the governing board, administrator, depository, or trustee of a deferred compensation program of a municipal corporation shall comply with that withholding order in making payment.

(B) Notwithstanding any other provision of this chapter, if a deferred compensation program receives a notice pursuant to section 2907.15 or division (D) of section 2921.41 of the Revised Code that a person who has a participant account has been charged with a violation of section 2907.02, 2907.03, 2907.04, 2907.05, or 2921.41 of the Revised Code, no payment from that account shall be made prior to whichever of the following is applicable:

(1) If the person is convicted of or pleads guilty to the violation and a motion for a withholding order for purposes of restitution has not been filed under section 2907.15 or division (C)(2)(b)(i) of section 2921.41 of the Revised Code, thirty days after the day on which the person is sentenced for the violation;

(2) If the person is convicted of or pleads guilty to the violation and a motion for a withholding order for purposes of restitution has been filed under section 2907.15 or division (C)(2)(b)(i) of section 2921.41 of the Revised Code, the day on which the court decides the motion;

(3) If the charge is dismissed or the person is found not guilty or not guilty by reason of insanity of the violation, the day on which the dismissal of the charge or the verdict is entered in the journal of the court.