Early Retirement Incentive

State law permits Ohio's public employers to establish a retirement incentive plan. Such a plan, if established, allows the employer to purchase additional service credit for eligible employees, enabling those employees to retire early or to retire with a larger retirement benefit than they may have otherwise been entitled.

ERI Forms

• Model Early Retirement Incentive Plan
• Employer Notice of Adoption of an Early Retirement Incentive Plan (F-111ab)
• Early Retirement Incentive Plan Employee and Employer's Agreement (F-111c)

If an employer establishes a plan that is offered to less than 100 percent of the employees, total service credit with OPERS, including STRS and SERS credit, is used to determine employee seniority for participation in the plan. An employer may obtain service credit information from OPERS only upon completion of an Authorization for Release of Account Information.

• Authorization for Release of Account Information for Early Retirement Incentive (LL-2ERI)

Requirements

The following is a summary of the requirements that must be considered when an employer establishes a plan:

• It must be in writing and must provide for the employer's purchase and payment of the credit to be purchased. The employer's cost of the service credit is the amount of the additional retirement liability, including health care liability, as calculated by OPERS based on factors supplied by the OPERS actuary. This cost will be more than employee and employer contributions.
• It must incorporate the approval of the employing unit.
• It must specify the maximum number of years that can be purchased. Service credit may be purchased up to a maximum of five years. The actual purchase for any individual employee is the lesser of 1/5 (20 percent) of his/her service credit or the maximum number of years purchasable under the plan.
• It must be in effect for a minimum of one year.
• No employer can have more than one plan in effect at one time.
• It must be offered to the number of eligible employees represented by a minimum of 5 percent of the employer's OPERS-covered employees as of the date the plan goes into effect.
• A grievance procedure must be provided to resolve disputes arising under the plan.
• An employer must give 30 days notice to OPERS and to its employees prior to termination of the plan.
• Voluntary plan documents must be submitted to OPERS for review at least 60 days prior to the effective date of the ERI plan.

In addition to the above requirements, a state employer which closes a state institution or institutes a layoff which affects 350 people or 40 percent of the employer's OPERS-covered employees within a six-month period is required to establish a mandatory retirement incentive plan. This provision excludes any state employing unit with 50 or fewer employees.

Eligibility

Employees eligible to participate in a plan are those who are contributing members of OPERS and who qualify to retire or will qualify to retire on an age and service benefit with the purchase of additional credit under the plan.

Not eligible to participate in a plan are the following individuals:

• Those in elective positions
• Those appointed to a position of fixed length
• Members of boards or commissions
• OPERS members retiring under the law enforcement division
• Employees who retire on a disability benefit

Adoption of a plan does not affect any other provisions of Chapter 145, Ohio Revised Code. An employee must meet appropriate age and service requirements with the purchased credit, file an application for retirement and retire within 90 days.