Ohio Police & Fire Pension Fund
Senate Bill 340 FAQ
Will my member contribution rates increase?
Yes. Currently the member contribution rate is 10% of member’s salary. Here are the new contribution rates for members:
Beginning July 1, 2013: increased to 10.75%
Beginning July 1, 2014: increased to 11.50%
Beginning July 1, 2015: increased to 12.25%
Also, beginning Nov. 1, 2017, and every five years after that, the OP&F Board has authority to adjust the member contribution rate (higher or lower).
Will I have to work longer to be eligible for retirement?
Not if you are already an OP&F member. Currently, eligibility for normal service retirement is 25 years of service and age 48.
For those who become an OP&F member after July 1, 2013, normal service retirement is 25 years of service and age 52. Those who become members after July 1, 2013 may still retire at age 48 with 25 years of service, but with a reduced benefit.
Beginning Nov. 1, 2017, and every five years afterward, the OP&F Board has the authority to adjust the age and service credit requirements (higher or lower).
Is there a change in how my average annual salary is calculated?
If you have at least 15 years of service with OP&F on or before July 1, 2013, no, it will not change. Average annual salary will still be calculated using the highest three years of salary for these members. For members who have less than 15 years of service on July 1, 2013, the average annual salary is calculated using the highest five years of salary.
Is there now an age restriction on receiving Cost of Living Adjustments (COLAs)?
Yes. Members must be age 55 before receiving a COLA. However, if you are a statutory survivor or receive a permanent and total disability benefit, you will continue to receive the COLA regardless of your age.
Who is affected by the change in the COLA amount, from three percent to the CPI?
Current retirees and those with 15 years of service with OP&F as of July 1, 2013 will continue to receive the three percent COLA annually when eligible. New hires and those do not have 15 years of service on or before July 1, 2013 will receive a COLA equal to the lesser of either three percent or the percentage increase, if any, in the consumer price index over the 12-month period ending on Sept. 30 of the immediately preceding year.
If I’m already in DROP, will I still receive a COLA?
Yes, but only if you are at least age 55 and are currently a DROP participant. Members who enter DROP after July 1, 2013 will not receive a COLA as a part of their DROP accrual.
Is there a new minimum participation period for DROP?
Yes, for new DROP participants. If you are already in DROP, the minimum participation period to receive the full accrual is still three years. After July 1, 2013, a minimum participation of five years is required for new DROP participants to receive their full accrual.
Current members may still retire or enter DROP at age 48 (providing all other eligibility requirements are met), correct?
Yes. The retirement age change is for new members hired after July 1, 2013. Normal retirement age is still 48 for current members.
Are there any other changes to what makes up my DROP accrual?
If you are participating in DROP by July 1, 2013, no. The amount of the member contribution that is credited to your DROP account will not change.
For members who enter DROP after July 1, 2013, the amount of the member contribution credit to DROP will be:
50% for years 1-3;
75% for years 4-5; and
100% for years 6-8.
Are there changes to disability requirements?
Yes. Members whose pre-employment physical is lost or unavailable may now be entitled to a presumption that their cardiovascular or respiratory disease was incurred in the line of duty.
SB 340 authorizes the Board to grant the benefit without a pre-employment examination if competent medical evidence is submitted to the Board documenting that the disease was not evident prior to police or fire employment.
Are there now rules that help prevent “salary spiking”?
Yes. A new provision is designed to help ensure that benefits are based on actuarially sound calculations, while still allowing reasonable salary increases over the member’s career.
For members who have 15 or more years of service on or before July 1, 2013, a "salary benchmark" is established under which certain increases are excluded from salary for the purpose of determining average annual salary. Members with less than 15 years of service will have their pension benefit calculated based on a five year average annual salary with no benchmarking included.
It is also required that contributions paid to OP&F for salary that exceeds this benchmark be refunded to the member.
The OP&F funding plan calls for a plan to tie health care premium subsidies to years of service. Has this been established?
The proposal for this new subsidy formula is currently being developed for consideration by the Board of Trustees. No details will be available until after the Board has reviewed and approved the proposal.
Will any provisions be made for those that are in process of purchasing service credit in order to meet the July 1, 2013 date?
Yes. Members have until June 30, 2013 to complete service credit purchases in order to reach 15 years of service. OP&F staff is ready to assist in processing service credit purchases so members meet the deadline.