Current through all regulations passed and filed through September 16, 2024
(A) For purposes of Chapter 145. of the
Revised Code and Chapters 145-1 to 145-4 of the Administrative Code:
(1) "Service purchase" means both of the
following:
(a) For members participating in
the traditional pension plan, payment for the purchase of service credit
pursuant to section 145.20,
145.201,
145.28,
145.291,
145.292,
145.293,
145.299,
145.2915,
145.301,
145.302,
145.31, or
145.47 of the Revised Code,
former section 145.295,
145.2911, or
145.2913 of the Revised Code as
they existed prior to January 7, 2013, or rule
145-2-18
of the Administrative Code.
(b) For
members participating in the combined plan, payment for the purchase of service
credit pursuant to section
145.20,
145.201,
145.291,
145.292,
145.293,
145.299,
145.2915,
145.302, or
145.47 of the Revised Code,
former section 145.295,
145.2911, or
145.2913 of the Revised Code as
they existed prior to January 7, 2013, rule
145-3-21,
145-3-22, or
145-3-40
of the Administrative Code, or section
3.11 or
3.12 of the combined plan
document.
(2) "One-time
or lump-sum payment" means a service purchase that is the full cost of the
service credit a member elects to purchase and is paid directly to the public
employees retirement system.
(3)
"Partial payment" means a service purchase that is less than the full cost of
the service credit a member elects to purchase and is paid directly to the
retirement system.
(4) "Payroll
deduction" means a service purchase made pursuant to section
145.294 of the Revised Code and
rule
145-1-38
of the Administrative Code.
(5) A
"statement of cost" means a bill prepared by the retirement system stating the
cost of the service credit to be purchased.
If a statement
of cost described in this paragraph is not paid in full prior to its
expiration, the member may complete the purchase of the remaining service
credit by a lump sum or one-time partial payment of the cost, as recalculated
by the system at the time of the final payment.
(6) "Sixty-month amortization amount" means
the monthly dollar amount necessary to complete a service purchase prior to the
expiration of a statement of cost.
(B) A member participating in the traditional
pension plan or combined plan may make a service purchase, pursuant to Chapter
145. of the Revised Code and Chapters 145-1 to 145-4 of the Administrative Code
and federal Internal Revenue Code section 415, either directly to the
retirement system or by payroll deduction. A statement of cost issued on or
after July 7, 2013, shall expire not later than five years after the date of
the first payment or first deduction.
(C)
(1)
Except as otherwise provided in Chapter 145. of the Revised Code, the interest
rate to be used in calculating the cost of a service purchase shall be six per
cent compounded annually. Beginning on January 1, 2014, the interest rate shall
be a per cent equal to the assumed actuarial rate of interest compounded
annually. Interest shall be calculated under the applicable Revised Code
section from the first date through the end of the month of payment.
(2) Interest shall be applied to unpaid
balances of service purchases by partial payment or payroll deduction at a rate
equal to the assumed actuarial rate of interest compounded annually after the
first payment or deduction. Interest shall be calculated from the date of the
first payment through the last day of the month in which the cost statement
expires.
(3) The public employees
retirement board may adjust the interest rates in paragraphs (C)(1) and (C)(2)
of this rule. If adjusted, the new interest rate shall apply to any statement
of cost issued or initial payroll deduction begun after the
adjustment.
(D) If the
retirement system is required to apply the member's contribution rate at the
time the service occurred against the member's earnable salary in calculating
the cost of a service purchase, such rate shall not exceed the maximum employee
contribution limits that were applicable at the time the service
occurred.
(E)
(1) Service credit shall be granted following
receipt of all lump-sum payments, partial payments, or payroll deductions
received in a month.
(2) Except as
otherwise provided in Chapter 145. of the Revised Code, when a member makes a
service purchase by partial payment or by payroll deduction, interest at a per
cent equal to the assumed actuarial rate of interest compounded annually shall
be applied to the unpaid balance. The minimum payment accepted by the system
shall be the greater of one hundred dollars or the sixty-month amorization
amount. The system may recalculate the sixty-month amortization amount when the
member's payment or payments cause a material increase or reduction in the
sixty-month amorization amount, as determined by the system. Service credit
shall be granted by multiplying the service credit not yet purchased by a
fraction having as the numerator the payment amount less current interest paid
and as the denominator the unpaid balance on which the current interest was
calculated.
(F)
In addition to the requirements specified in paragraph (B) of
this rule, all service purchases shall be completed prior to issuance of the
initial benefit payment. Subject to the requirements specified in paragraph (B)
of this rule, a disability benefit recipient may purchase service credit after
the issuance of the initial benefit payment while on a leave of absence
described in section 145.362 of the Revised Code. Any
service purchased by a disability benefit recipient during the leave of absence
described in this paragraph shall take effect on the first day of the month
following the date of purchase.
Five Year Review (FYR) Dates:
09/29/2015 and
09/29/2020
Promulgated
Under: 111.15
Statutory
Authority: 145.09,
145.294,
145.80,
145.82
Rule
Amplifies: 145.01,
145.20,
145.201,
145.28,
145.29,
145.291,
145.292,
145.293,
145.294,
145.299,
145.301,
145.302,
145.31,
145.47,
145.81
Prior
Effective Dates: 8/20/76, 1/1/78, 12/14/89, 5/29/95, 11/2/96, 9/27/97, 9/27/98,
3/27/99, 2/3/00, 3/22/02, 1/1/03, 12/24/04, 1/1/06, 7/1/07 (Emer.), 8/9/07,
1/12/08, 4/1/08 (Emer.), 6/23/08, 1/1/12, 1/7/13 (Emer.), 3/24/13, 7/7/13
(Emer.), 9/16/13, 5/8/14, 1/1/15, 3/23/15 (Emer.),
6/6/15
