(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,
sections 742.21 (service credit earned for full-time service as member of state
or municipal retirement system, 742.221 (conditions to receive credit for time
spent on pregnancy or medical disability leave), 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 lay off period), 742.371
(redeposit of withdrawn contributions), 742.375 (credit for service as a member
of the state highway patrol retirement system), 742.376 (credit for service as
a full-time member of a police or fire department prior to January 1, 1967),
742.52 (purchase of credit for military service), and 742.521 (granting of
credit for military service) of the Revised Code.
(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,
and cause his or her employer to sign, the authorization form prepared by
OP&F and return the form to OP&F. The member shall provide his or her
employer with a copy of the authorization form in a timely manner so that the
employer can properly implement the payroll deduction plan elected by the
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 and rule 742-8-07
of the Administrative 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 and rule
742-8-07 of the Administrative 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 and rule 742-8-07 of the Administrative 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 and rule 742-8-07 of the Administrative 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 allow the employer 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 and rule 742-8-07 of the Administrative 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) 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 of 1986, 26
U.S.C.A. 414(h)(2) 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. 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. Employers that wish to pay all or part of the voluntary contributions for
the purchase of service credit through payroll deductions shall submit the
standard resolution in the form adopted by OP&F's board of trustees,
as required by rule 742-7-14 of the Administrative 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 of 1986, 26 U.S.C.A. 414(h)(2),
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 of 1986, 26 U.S.C.A. 414(h)(2),
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 exceeds 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 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 became effective 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.
