Ohio Admin. Code 742-3-02 - Definition and usage of terminal pay and salary in benefit and pension calculations
(A) For benefit calculation purposes, all
payments made by an employer to an employee shall be reported to and considered
by the Ohio police and fire pension fund ("OP&F") according to the
definitions contained in section
742.01 of the Revised Code and
this rule.
(B) "Terminal pay"
includes, but is not limited to, the specific payments defined in this rule,
subject to the other provisions of this rule.
(1) "Vacation or
furlough pay" refers to sums paid to employees for periods during
which they do not work, pursuant to normal employment arrangement. It also
includes additional compensation paid to employees for foregoing
vacation.
(2) "Sick leave"
represents amounts paid directly by employers to employees for periods during
which they do not work due to personal injury or sickness.
(3) "Personal leave" is paid leave other than
vacation or sick leave. If its usage results in debiting another paid leave
account for the employee, then it is not considered to be personal days, but is
defined by the form of payment from the debited account.
(4) "Compensatory time" results from
employees being credited for hours worked in excess of the employers' standard
workday.
(5) "Holiday compensation"
is payment received by an employee for a day that is customarily observed in
the community in celebration of a historical or religious occasion, regardless
of whether or not the employee works that holiday.
(6) "Longevity" is a regular, recurring
payment received by an employee based on a years-of-service schedule.
(7) "Overtime" is payment received by an
employee for duty-related work performed in excess of a standard workweek. For
purposes of divisions (K)(3) and (L)(1) of section
742.01 of the Revised Code, the
payroll period shall be determined by the employer's practice for reporting
overtime, as documented by OP&F's books and records, but in no event shall
the employer report overtime to OP&F more than sixty days after the date on
which the overtime is worked.
(8)
"Paid leave" is compensated leave received by an employee which is a
combination of vacation and sick leave.
(9) "Combined leave" is paid leave received
by an employee which is a combination of any leave described in paragraph (B)
of this rule.
(10) "Hazard pay" is
a regular payment received by an employee for employment in a high-risk
occupation.
(11) "Stress pay" is a
regular payment received by an employee to compensate for employment in a
stressful occupation.
(12) "Premium
pay" is payment received by an employee that is between his regular rate of pay
and his overtime rate of pay.
(13)
A "Kelly Day" is compensation paid to a member of OP&F which is not
vacation, sick leave, or personal leave for a continuous period of off duty
time for the purpose of reducing the hours worked in a week as specified by
contract.
(C) Use of
terminal pay in pension/benefit calculation
(1) Cost-of-living allowance (COLA) method:
For each person whose effective date of retirement falls after July 24, 1986
who has not made an election under division (B) of section
742.3716 of the Revised Code to
forego possible cost-of-living allowances in exchange for receiving a pension
or benefit in which "terminal pay" has been used shall have his/her pension
calculated under the terms outlined in this paragraph.
(a) An employee's receipt of cash for sick
leave, personal leave, compensatory time, paid leave, vacation, and similar
payments shall not be used in the calculation of pension and benefits,
regardless of the COLA or non-COLA election.
(b) Holidays and longevity may be used in the
calculation provided that payment occurs within one year of when it is earned,
subject to the following limitation: in no event shall floating holidays and
personal days/leave be included in the calculation, even if these items are
included as part of the holiday and longevity pay provided for under an
employee's contract.
(c) Subject to
the provisions of paragraph (B)(7) of this rule, overtime must be used in the
calculation if it is paid during the pay period in which it is earned or the
pay period not later than sixty days after the overtime is earned.
(d) Hazard pay, stress pay, and similar
special payments may be used in the calculation if paid within one year of the
date it is earned.
(e) Combined
leave shall be divided into its individual components, and each component will
be treated as a separate leave item for calculation purposes.
(f) To be used in the calculation, a "Kelly
Day" must be worked and the compensation for such worked "Kelly Day" must be
paid in the pay period earned or the pay period immediately
following.
(2)
Non-cost-of-living (non-COLA) method: If a member has elected to forego
possible cost-of-living allowances under division (A) of section
742.3716 of the Revised Code by
making an election under division (B) of section
742.3716 of the Revised Code,
then terminal pay shall be incorporated in the calculation of a pension or
benefit as herein described.
(a) Terminal pay
actually earned during the period over which a pension or benefit is based
shall be incorporated in the calculation base, and such terminal pay shall be
subject to employee and employer contributions.
(b) Vacation, paid leave, sick leave,
personal leave, and compensatory time alone are governed by the "first-in,
first-out" principle.
(D) For purposes of calculating pensions and
benefits, "salary," as defined in division (L) of section
742.01 of the Revised Code, is
limited to compensation earned during the period over which a pension or
benefit is based.
(E) For purposes
of calculating pensions and benefits consistent with OP&F's past practices,
"compensation for services outside the scope of the employee's regular
employment" includes any compensation paid to members based on their length of
service with the employer, including terminal pay (as defined in section
742.01 of the Revised Code and
this rule) that is converted to additional compensation paid to the member upon
the achievement of a certain length of service with the employer, but no longer
characterized as terminal pay, and not included as part of the member's base
pay from and after the entry into and exit from such salary program; provided,
however, that if this compensation is rejected by OP&F for the calculation
of a pension or benefit, OP&F will allow the member to unwind the
conversion of any terminal pay to such additional compensation in order to
include the terminal pay in the calculation of pensions and benefits, as
permitted by the terms of sections
742.01 and
742.3716 of the Revised Code and
this rule.
(F) Pursuant to the
authority granted to the board in section
742.013 of the Revised Code, the
definition of "salary" shall include amounts that exceed the salary benchmark
determined in division (G) of section
742.01 of the Revised Code if
such amounts are the result of a promotion in rank. Any other amounts that
exceed the salary benchmark shall not be included in "salary."
Notes
Promulgated Under: 111.15
Statutory Authority: 742.10
Rule Amplifies: 742.01, 742.32, 742.37, 742.39
Prior Effective Dates: 01/01/1977, 05/12/1983, 07/24/1986 (Emer.), 10/16/1986, 03/19/1987, 08/04/1988, 07/19/1999, 02/07/2000 (Emer.), 05/01/2000, 03/09/2001 (Emer.), 04/09/2001 (Emer.), 05/24/2001, 04/28/2006, 01/07/2013 (Emer.), 03/24/2013, 06/19/2020 (Emer.), 09/11/2020
Promulgated Under: 111.15
Statutory Authority: 742.10
Rule Amplifies: 742.01, 742.32, 742.37, 742.39
Prior Effective Dates: 01/01/1977, 05/12/1983, 07/24/1986 (Emer.), 10/16/1986, 03/19/1987, 08/04/1988, 07/19/1999, 02/07/2000 (Emer.), 05/01/2000, 03/09/2001 (Emer.), 04/09/2001 (Emer.), 05/24/2001, 04/28/2006, 01/07/2013 (Emer.), 03/24/2013
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.