Service Retirement Benefit Definitions

Actuarial Age
The age used in the estimate is based on the “actuarial age”. The “actuarial age” is the actual age at retirement unless the member’s birthday is within the 6 months following their retirement date. If the birthday is within 6 months after the retirement date, the age is actually increased to the next year.  

Average Annual Salary
Average annual salary is used in each of these calculations. Your average annual salary is defined under Ohio law as being the average of the three highest years of salary, earnings, or compensation, regardless of when in your career the highest years occurred. Since the term “average annual salary” is subject to certain statutory and administrative limitations, not all salary, earnings, or compensation may be used in the calculation.

The average annual salary used in this estimate is based on your latest annual salary and an estimation of the two previous years salary.  *The two previous years salaries will be calculated under the assumption that there was a 3.5% annual increase.  The formula used in this estimate is the following:

Year 1 = Salary in year of retirement
*Year 2 = (Salary in Year of Retirement / 1.035)
*Year 3 = (Salary in Year of Retirement / (1.035 * 1.035))

(Year 1 + Year 2 + Year 3)
---------------------------------
3

Beneficiary
A person designated by a member or the terms of the plan, who is, or may become entitled to a benefit under the plan upon the death of the member.

Cost-of-Living Allowance (COLA)
Under the COLA method, your benefit is calculated by taking the average of your three highest years' salary, compensation and earnings, but not including any terminal pay (such as unused sick leave, vacation, personal leave, etc.), and multiplying that amount by the relevant percentage based on years of service.  Under this method, you will receive a cost-of-living increase equal to 3% of your base pension benefit on the anniversary date of your retirement date each year.

 

Contributing Service
The bulk of your credit is earned by working as a full-time police officer or firefighter with a qualifying employer in the State of Ohio and making contributions to OP&F.  You may work as either a police officer or firefighter under any number of employers covered by OP&F and has all such contributing service count toward your pension, subject to certain statutory and administrative limitations.

 

No contributions for volunteer or part-time service may be accepted by OP&F.  In addition, no credit may be granted for periods of service that were canceled due to a refund of contribution unless you pay OP&F for the withdrawn contributions with applicable interest. 

 

In any event, no more than twelve months of credit may be earned in any calendar year.

Eligibility

The following chart outlines the age and service credit requirements and pension formulas under the three types of service retirement: normal, service commuted, and age/service commuted.

Types of Service Pensions

Types of Retirement

Age

Service Credit

Formula

Normal

48

25

2.5 % x 1 through 20 years) +

(2.0% x 21 through 25 years) +

(1.5% x 26 through 33 years) x

Average Annual Salary

Service Commuted

48*

15

(1.5% x complete years) x

Average Annual Salary

Age/Service Commuted

62**

15

2.5 % x 1 through 20 years) +

(2.0% x 21 through 25 years) x

Average Annual Salary

* You cannot be paid before 25 years has elapsed from your initial full-time hire date with a qualifying employer and the attainment of age 48, whichever is the last event to occur.

** To qualify, you must still be a contributing OP&F member on the day you reach age 62.

 

Joint and Survivor Annuity (JSA)
Under a Joint and Survivor Annuity Plan, you designate that upon your death a certain percentage (e.g. 100%, 75%, 35%, etc.) of your reduced monthly allowance is continued to your surviving nominated beneficiary for life.  You can select any percentage between 1% and 100%.  Under this plan, the greater the reduction in pension, the greater the allowance to the beneficiary .  Conversely, the smaller the continuation percentage selected, the smaller the reduction in the pension and the smaller the allowance to the beneficiary .

 

Ohio law mandates the annuity plan for someone who is married at the time you elect OP&F retirement benefits to be a joint and survivor annuity plan for the benefit of your spouse at the time of your retirement at 50%.  The standard plan then continues 50% of your reduced monthly retirement allowance to that designated person for life.

 

If you want to select a plan which continues nothing, or less than 50% of your reduced monthly retirement allowance for life to your spouse, your spouse must consent to this choice by completing a form.  Otherwise, OP&F is required by law, to treat the election of payment plan as a 50% Joint and Survivor Annuity (JSA)  for the benefit of such person.

 

If you are not married at your retirement, the standard plan is the Single Life Annuity , but you could select one of the other two types and name anyone as beneficiary *.  If you marry after the time of your retirement, you have the right to select an optional plan of payment within one year of your marriage, subject to certain limitations.

 

By choosing to receive a reduced monthly allowance for life, you secure the guarantee that upon your death, some portion of your reduced monthly allowance will be paid to a surviving nominated beneficiary for life.

 

* However, the percentage you can continue could be limited under federal law.

 

Life Annuity Certain and Continuous (LACC)
This Annuity Plan is similar to the others because it provides a lifetime allowance to the member, but it will only be paid to the designated beneficiary if the member dies and the period elected by the member has not expired.  Here again, if the member is married at the time of retirement, the spouse must consent to this election.  Otherwise, OP&F is required, by law, to treat the election as a 50% Joint and Survivor Annuity .

 

Non-Contributing Service
(Purchased Credit \ Restoration of Canceled Credit \ Service Credit Grants): This type of service credit can be acquired in one of the following ways:

  1. By purchasing credit foractive military duty, certain types of full-time Ohio public service, and full-time Federal or public out-state service from OP&F;
  2. By transferring credit for full-time Ohio public service from one of the other Ohio Retirement Systems, the Cincinnati Retirement System, or the State Highway Patrol Retirement System, with interest, to OP&F;
  3. By restoring canceled credit by re-depositing withdrawn contributions including interest with OP&F; or 
  4. By qualifying for grants of service credit.

Single Life Annuity (SLA)
Under this plan, you receive the maximum monthly pension you are entitled to and upon your death, none of your pension or benefit is continued to any beneficiary .  Even though there is no continuation of your pension benefit, a surviving spouse, eligible child, or dependent parent (in the absence of any surviving spouse or child), can receive a monthly "statutory" pension.

 

If you are married at the time you elect your form of benefits from OP&F,  your spouse must consent to a Single Life Annuity election.  Otherwise, OP&F is required, by law, to treat the election as a 50% Joint and Survivor Annuity .

 

Spousal Consent

If you want to select a plan which continues nothing or less than 50% of your reduced monthly retirement allowance for life, to your spouse, your spouse must complete a form consenting to this choice.  Otherwise, OP&F is required, by law, to treat the election of payment plan as a 50% Joint and Survivor Annuity (JSA) for the benefit of such person.

 

Retirement Date
The effective date of retirement is the day after your last day of employment and is contingent upon the type of retirement.  You are eligible for:

  • Normal: upon reaching age 48 with 25 years of service credit.
  • Service Commuted: upon reaching age 48 and 25 years has elapsed from your initial full-time hire date with a qualifying employer.
  • Age/Service Commuted: upon reaching age 62 and you must be contributing to OP&F on the day you reach age 62.