September 26, 2012, the Governor signed five bills to address each of the Ohio public employee retirement systems unfunded actuarial accrued liabilities. The bills are to become effective on January 7, 2013 (subject to any referendum). Key provisions of each bill are described below. Note that each bill contains important transition or grandfathering provisions that apply to certain current retirees and employees.

SB 343 for the Ohio Public Employees Retirement System (OPERS)

  • Makes change to employer or employee contribution rates.
  • Increases the years of service for retirement eligibility.
  • Increases from three to five the years used to calculate the final average salary for employees with less service.
  • Changes the cost of living adjustment rate (COLA) to be based on the lower of the consumer price index or 3.0%.
  • Modifies the benefit formula to reduce benefits for certain employees (not including law enforcement).
  • Increases the minimum salary eligibility threshold from $250 to $600 a month.
  • Implements a contribution based benefit cap that could limit benefits for some retirees.

SB 340 for Ohio Police & Fire Pension Fund (OP&F)

  • Makes change to employer contribution rate.
  • Increases the employee contribution rate from 10% to 12.25% in three annual 0.75% increases beginning in July 2013.
  • Increases the retirement age to 52 (with 25 years of service) for new hires.
  • Implements anti-salary spiking provisions.
  • Increases from three to five the years used to calculate the final average salary for employees with less service.
  • Changes the COLA to be based on the lower of the consumer price index or 3.0%.
  • Grants the board authority to make further adjustments to employee contribution rates and age and retirement eligibility after November 1, 2017 to preserve the fund's fiscal integrity.

SB 342 for State Teachers Retirement System (STRS)

  • Makes change to employer contribution rate.
  • Increases the employee contribution rate from the current 10% to a maximum of 14% in annual increments of 1% beginning July 1, 2013.
  • Increases the age and years of service for retirement eligibility.
  • Increases from three to five the years used to calculate final average salary.
  • Changes the COLA from 3.0% to 2.0%.
  • Modifies the benefit formula to reduce benefits.
  • Eliminates the early retirement incentive program.
  • Grants the board of trustees authority to further alter retirement eligibility, contribution rate and the COLA amount.

SB 341 for School Employees Retirement System (SERS)

  • Makes change to employer or employee contribution rates.
  • Increases minimum retirement age and service requirements for retirement eligibility.
  • Grants the board authority to further adjust eligibility and to establish health care coverage.

SB 345 for Highway Patrol Retirement System (HPRS)

  • Sets the employee contribution rate at 10-14% of members' salaries.
  • Raises to age 60 the minimum age for eligibility to receive a COLA increase.
  • Eliminates the annual COLA except for lower income recipients.
  • Sets at five years the number of years used to calculate the final average salary.
  • Alters the Deferred Retirement Option Plan.
  • Grants the board authority to further reduce the COLA.