Ohio Admin. Code 742-5-02 - Interest rate for service credit purchases or refunds/purchase of civilian service credit
(A) The rate of compounded interest for the
purchase of service credit under section
742.21 of the Revised Code or
for the payment of back contributions shall be calculated separately for each
year in accordance with the terms of division (H) of section
742.21 of the Revised Code.
(B) Prior to January 1, 1987, and
for all purchases of civilian service credit and not military service credit,
the interest charge for the purchase of service credits or the payment of back
contributions shall be six per cent.
(C) From and after January 1, 1987 through
and including September 16, 1998, the interest charge for the purchase of
service credits or the payment of back contributions, except military
purchases, shall be the actuarial interest assumption rate adopted by the board
for the year in which the service credit was purchased, compounded annually.
(D) Service credit may be
purchased in increments of not less than one month except:
(1) Where the total service available for
purchase under a section of the Revised Code is less than a full month; or,
(2) Where less than one full month
is necessary to accumulate the maximum number of years which may be used in
benefit calculations; or
(3) Where
four purchases of service credit have already been made in any calendar year.
(E) Where the
calculation of the cost of purchase of service credit involves the repayment of
withdrawn employee contributions, the monthly contribution for the total period
of the withdrawn service credit shall be the base for calculating the cost.
(F) For any person who becomes a
member of the fund on or after the effective date of this rule, such member
shall pay the interest charge for the purchase of service credits or the
payment of back contributions, in accordance with the terms of division (H) of
section 742.21 of the Revised Code.
(G) From and after the effective
date of this rule and unless otherwise provided by law, when a payment is
received by the fund which is less than the full payment of the total amount of
employer and employee contributions for the entire amount of service credit
available, the fund is authorized to prorate the amount purchased in accordance
with the following:
(1) The amount paid will
be divided by amount due on that billing;
(2) The number derived from the computation
described in paragraph (G)(1) of this rule will be multiplied by the entire
amount of service credit available;
(3) The number derived from the computation
described in paragraph (G)(2) of this rule will then be divided by twelve, with
the number to the left of the decimal representing the number of years
purchased;
(4) The number to the
right of the decimal derived from the computation described in paragraph (G)(3)
of this rule will then be multiplied by twelve, with the number to the left of
the decimal representing the number of months purchased; and
(5) The number to the right of the decimal
derived from the computation described in paragraph (G)(4) of this rule will
then be multiplied by thirty, with the number to the left of the decimal
representing the number of days purchased; provided, however, that the fund
shall round the number of days to the next higher number if the number to the
right of the decimal is equal to or greater than .50 and the fund shall round
the number of days to the next lower number if the number to the right of the
decimal is less than .50.
(H) For any partial purchase of service
credit, the cost of the purchase of such service credit shall be based upon the
monthly contribution for the total period.
(I) Except as expressly provided by law and
for purposes of qualifying for the fund's benefits, the purchased service
credit shall be the equivalent of service credit earned as an active member of
the fund provided the fund receives the total amount of the applicable interest
and the total amount of the employer and employee contributions due for the
amount of service credit being purchased, as if such person was a member of the
fund at the time the contributions were made for the service credit being
purchased by the member.
(J) The
cost of the service credit available will
may change if the
total amount due is not paid within the stated billing period.
(K) The amount due for the purchased service
credit shall be based upon the applicable interest and the total amount of the
employer and employee contributions that would have been due the fund, if such
person were a member of the fund at the time the contributions were made for
the service credit being purchased by the member.
(L) For purposes of this rule, "member" shall
have that meaning set forth in division (E) of section
742.01 of the Revised Code and
shall include those members who elected disability benefits under former
section 742.37 of the Revised Code or
section 742.38 of the Revised Code, who
did not purchase eligible service credit at the time of his/her acceptance of
disability benefits and who later has his/her disability benefit terminated by
OP& F in accordance with the provisions of section
742.40 of the Revised Code.
(M) This rule shall only apply to
the purchase of civilian service credit and shall not apply to the purchase of
military credit.
(N) For purposes
of computing the refund according to division (J)(2) of section
742.21 of the Revised Code,
OP& F shall calculate the interest based on the actuarial interest
assumption rate established by the board of trustees at the time of the refund.
Notes
Promulgated Under: 111.15
Statutory Authority: 742.10
Rule Amplifies: 742.21
Prior Effective Dates: 01/01/1977, 11/15/1979, 11/15/1986, 11/10/1998 (Emer.), 07/19/1999, 01/22/2004, 07/17/2004, 03/03/2005 (Emer.), 05/19/2005, 10/13/2005, 12/10/2009, 09/20/2012
Promulgated Under: 111.15
Statutory Authority: 742.10
Rule Amplifies: 742.21
Prior Effective Dates: 01/01/1977, 11/15/1979, 11/15/1986, 11/10/1998 (Emer.), 07/19/1999, 01/22/2004, 07/17/2004, 03/03/2005 (Emer.), 05/19/2005, 10/13/2005, 12/10/2009, 09/20/2012
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