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Current Members

Comprehensive Guideto Pension and HealthCare Changes

Ohio Public Employees Retirement System – 1-800-222-7377 – www.opers.org

October 2012

Comprehensive Guide to Pension and Health Care Changes

OPERS is implementing Sub. S.B. 343 within a reasonable time frame. This document reflects information as of the date listed herein.Some provisions of Sub. S.B. 343 and the changes to the OPERS health care program will not impact Combined Plan participantsdue to the difference in plan structure. There is no promise, guarantee, contract or vested right to access to health care coverageor a premium allowance. The board has the discretion to review, rescind, modify or change the health care plan at any time.


CCoommpprreehheennssiivvee GGuuiiddee ttoo PPeennssiioonn aanndd HHeeaalltthh CCaarree CChhaannggeess

Pension Changes 1

Introduction 1

PensioTransition Groups 2

Key Component Changes 2

Group A 3

Group B 3

Group C 4

Other Important Pension Changes 5

Alternative benefit formulas 5

Beneficiary designation 5

Contribution-based benefit cap 5

Disability benefits program 8

Effective date of benefits 9

Enhanced refund 9

Health care plan changes 10

Inter-system transfers 11

Minimum earnable salary 11

Plans of payment 11

Service purchases 12

Contractor Eligibility Determination 13

Health Care Changes 14

Summary of OPERS health care program changes 14

How do the health care changes affect me? 17

Eligibility 17

Coverage Type 18

Cost 19

Enrollment 24

More Information Available 26

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PPeennssiioonn CChhaannggeess –– IInnttrroodduuccttiioonn

Three years ago the Ohio Public Employees Retirement System embarked on a mission to ensure the continuedfinancial stability of your pension fund, and the retirement security of our nearly 1 million members and retirees.This effort unfolded simultaneously with an update of the OPERS health care plan to increase its future solvency.

Both missions were successful. In September 2012, the Ohio General Assembly unanimously approved newpension legislation, Substitute Senate Bill 343, which will go into effect Jan. 7, 2013, and OPERS approvedchanges to the retiree health care plan, which will begin Jan. 1, 2014.

Taken together, these initiatives will preserve our members’ retirement security. They also will requireadjustments by our members and retirees.

The information contained in this brochure will guide you through these changes. It will help you understand theimpact that the new pension law and health care plan will have on your benefits and health care coverage, andwill assist you in making good retirement decisions.

Studying both sets of changes is necessary to fully comprehend their impact on your retirement. If you havequestions or need additional information, please visit www.opers.org or call us at 1-800-222-PERS (7377).

The need for changeThe pension and health care changes are intended to keep OPERS’ programs strong in the face of manychallenges, including longer life spans, an increase in the number of retirees and rising health care costs.

OPERS’ first obligation is to fund pensions. Health care is not required; however, we understand that meaningfulhealth care is part of a secure retirement, and the adjustments we are making may allow us to continue to offerhealth care well into the future.

Who will be impacted?The pension legislation will go into effect on Jan. 7, 2013. It will not apply to members who retire with aneffective date of Jan. 1, 2013, or earlier. Your effective date of retirement is always the first day of the monthfollowing the month in which you last worked, your attainment of minimum age or service credit eligibility, or 90days prior to OPERS’ receipt of your retirement application, whichever is latest.

To retire with an effective date of Jan. 1, 2013, members must not appear on the employer’s payroll beyond Dec.31, 2012, regardless of when the members receive their final checks.

While members who retire prior to Jan. 7, 2013, will not be impacted by the new pension legislation, they will beimpacted by some of the changes to the retiree health care plan. Those changes will begin Jan. 1, 2014.


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TRANSITION GROUPS

To understand the impact of the pension changes, you’ll need to determine your transition group. OPERS developeda transition plan to ease the burden of change and allow members time to prepare. The benefit changes placemembers into one of three groups based on their proximity to retirement eligibility under the current criteria when thenew law goes into effect on Jan. 7, 2013.

If you meet any of the criteria in one group, you are a member of that group. The criteria reflect the earliest possibledate that you could retire. (Being eligible to retire means you can retire with unreduced or reduced benefits. Whenyou retire has no impact on which group you are in.)

Group AYou are a member of Group A if you are eligible to retire under the current eligibility requirements on or before Jan. 7, 2018.

Group BYou are a member of Group B if you have 20 years of service credit on Jan. 7, 2013, or are eligible to retire underthe current eligibility requirements after Jan. 7, 2018, but on or before Jan. 7, 2023.

Group CYou are a member of Group C if you are eligible to retire under the current eligibility requirements after Jan. 7, 2023,or became a member on or after Jan. 7, 2013.

For more detailed information, refer to the transition group document included in this mailing and available atwww.opers.org.

Please note that if you are eligible to purchase service credit, it could change your group. Transfers from other Ohioretirement systems also could impact your group. See the section of this brochure that outlines the special rulesabout service credit purchases, some of which also are changing and might require immediate action by members.

CHANGES TO THE KEY COMPONENTS OF PENSION REDESIGN

There are five key components to the new OPERS pension plan. Members will be affected by each one based ontheir transition group. Please read this section carefully, and also be sure to read the “Other Important PensionChanges” on page 5.

1. Age and service eligibility: Your age and the years of service you have accumulated as of your retirement effective date

2. Benefit formula: The calculation we use to determine your benefit amount3. Cost of living adjustment (COLA): The annual increase in your benefit4. Final average salary (FAS): The benefit formula factor that relates to your wages5. Early retirement reduction factors: The calculation used to determine your benefit if you retire early

PPeennssiioonn CChhaannggeess

UNREDUCED Group BAge Service

State/Local52 31

Any 3266 5

Law Enforcement 50 2564 15

Public Safety 54 2564 15

Law and Public Safety (publicsafety benefit)

54 25

REDUCED Group B

Age Service

State/Local 55 2560 5




48 25

KEY COMPONENT CHANGES FOR MEMBERS OF GROUP A

The only major provision of the new pension law that will change for Group A members is the COLA:

Cost of living adjustment (COLA): Currently retired members receive a 3 percent COLA beginning 12 months after their effective date of retirement and every 12 months thereafter. For Group A members, the new law will replace the current COLA with an allowance equal to a percentage change in the CPI, up to 3 percent.

The COLA is not compounded. It will always be based on your initial retirement benefit, not the benefit plus accumulated allowances. If the CPI used to determine a COLA is negative, no allowance will be granted in the following year.

The new law allows for a transition period for Group A members who retire within the first five calendar years after the Jan. 7, 2013, effective date of the legislation. Those members will receive the simple, 3 percent COLA until Dec. 31, 2018, and all OPERS members will receive the CPI-based allowance thereafter.

KEY COMPONENT CHANGES FOR MEMBERS OF GROUP B

The following new provisions regarding the five key components will impact Group B members:

Age and service eligibility: Depending on your years of service and your age as of Dec. 31, 2012, you may haveto work longer to be eligible for retirement. Refer to the following chart to determine the new age and service requirements for your retirement eligibility.

Cost of living adjustment (COLA): Retired members receive a 3 percent COLA beginning 12 months after their effective date of retirement and every 12 months thereafter. For Group B members, the new law will replace the current COLA with an allowance equal to a percentage change in the CPI, up to 3 percent.

The COLA is not compounded. It will always be based on your initial retirement benefit, not the benefit plus accumulated allowances. If the CPI used to determine a COLA is negative, no allowance will be granted in the following year.

Early retirement reduction factors: OPERS Group B members are eligible for early or reduced retirement benefits according to the age-and-service chart. The new pension law awards lower reduced or early retirement benefits than the current plan to reflect longer life spans. The reduction factors will be determined in the future by OPERS’ consulting actuarial firm.

We strongly recommend you review estimates of your pension benefit when the new factors are in place, as early retirement will need to be re-evaluated if you were considering it prior to this change. We will offercalculators in 2013 to help members understand how the reduction factors might affect their benefit amount.

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PPeennssiioonn CChhaannggeess (continued)

REDUCED Group C

Age Service

State/Local 57 2562 5




52 25

UNREDUCED Group CAge Service

State/Local55 32

67 5




56 25

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KEY COMPONENT CHANGES FOR MEMBERS OF GROUP C

The provisions of all five key components will impact Group C members:

Age and service eligibility: Based on your years of service and your age as of Dec. 31, 2012, you will have to work longer to be eligible for retirement. Refer to the following chart to determine the age and service requirements for your retirement eligibility.

Cost of living adjustment (COLA): Retired members receive a 3 percent COLA beginning 12 months after their effective date of retirement and every 12 months thereafter. For Group C members, the new law will replace the current COLA with an allowance equal to a percentage change in the CPI, up to 3 percent.

The COLA is not compounded. It is based on your initial retirement benefit, not the benefit plus accumulatedallowances. If the CPI used to determine a COLA is negative, no allowance will be granted in the following year.

Early retirement reduction factors: OPERS Group C members are eligible for early or reduced retirement benefits according to the age-and-service chart. The new pension law awards lower reduced or early retirement benefits than the current plan to reflect longer life spans. The reduction factors will be determinedin the future by OPERS’ consulting actuarial firm.

We strongly recommend you review estimates of your pension benefit when the new factors are in place, asearly retirement will need to be re-evaluated if you were considering it prior to this change. We will offer calculators in 2013 to help members understand how the reduction factors might affect their benefit amount.

Benefit formula: The formula used most often to determine age-and-service retirement benefits is the 2.2 percent of final average salary (FAS) calculation. The new law will maintain this formula – (2.2 percent) times (FAS) times (years of service) – but extends from 30 years to 35 years the time frame that the 2.2 percent multiplier increases to 2.5 percent. For those with more than 35 years of service, the new formula is (2.5 percent) times (FAS) times (years of service) for years 35 and beyond. The law benefit is unchanged. Members of the Combined Pension Plan use a 1.0 percent multiplier.

Final average salary (FAS): Members’ pension benefits typically are based on a formula of (2.2 percent) times (FAS) times (years of service). The FAS currently is based on your highest three calendar years of earnings. The new law will base the FAS on your highest five calendar years of earnings.

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OTHER IMPORTANT CHANGES OF PENSION REDESIGN

In addition to the key components of the new pension law, there are many other changes that could affect theretirement of current OPERS members. The following is a summary of them, and if the change affects yourgroup differently than the others, we point that out.

Alternative benefit formulasThe most common formula used to determine a member’s pension benefit is: (2.2 percent) times (years ofservice) times (final average salary). There are two seldom used, alternative benefit formulas under current law,but they are being eliminated with the enactment of the new law on Jan. 7, 2013.

One multiplies the member’s years of service by $86, which typically applies to members who contribute at a lowsalary. The other alternative formula doubles the member’s accumulated contributions and pays a benefit in theform of a monthly annuity. This formula typically applies to members who are inactive for a long period of timebefore retirement.

Beneficiary designationOPERS members may determine their beneficiaries under each of the retirement plans in one of two waysbefore applying for a retirement benefit.

The first, and most common, is by automatic succession as established by law. The order for beneficiarydetermination according to this approach is surviving spouse, children sharing equally, dependent parents,parents sharing equally and your estate. The second method is by specific designation, which requires amember to name a person, persons, trust, estate or institution as beneficiary prior to retirement.

Current pension law allows our members to designate a different set of beneficiaries for each of our retirementplans – Traditional Pension, Member Directed and Combined Plans – if they have accumulated service time intwo or more of the plans. Upon retirement, members may still designate different beneficiaries for different plans.The new law will require members to designate the same beneficiaries for all three retirement plans while themembers are active or inactive.

Contribution-based benefit capBeginning in January 2013, OPERS will apply a contribution-based benefit cap (CBBC) when calculatingpension payments for new retirees with a retirement effective date on or after Feb. 1, 2013.

This is an “anti-spiking” rule. It considers the member’s career contributions and is designed to limit the amountof monthly benefit payments for those members whose benefits are out of proportion with their contributions.

The benefit cap is not intended to impact members who have had normal raises and promotions throughout theircareers. It will, however, eliminate subsidization of benefits by those who spike their salary during their career.

The cap will apply to members of all groups, and it will not be applied retroactively to members who retire withan effective retirement date of Jan. 1, 2013, or earlier.

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For members of Group A only, any reduction caused by the cap may not exceed 5 percent of the retirementallowance the member would have otherwise received. This 5 percent limit does not apply if the member’smonthly earnable salary was less than $1,000 for any full month of service after Jan. 1, 1987.

See www.opers.org for a calculator that can help you determine if your benefit might be capped.

How does the cap actually work? It applies the following formula to each member’s career contributions:

(Accumulated contributions) times (Annuity factor) times (CBBC factor) = Annual benefit

Here are the formula definitions:

Accumulated contribution: The amount that the member contributed, plus interest.Annuity factor: An age-based figure that converts the accumulated contributions to an annuity payable over the retiree’s expected remaining life.CBBC factor: A number that reflects the ratio between the formula benefit and the annuitized accumulated contribution.Annual benefit: The amount the member receives yearly.

We’ve created an example that illustrates how the benefits of two Group A members might be affected by the cap.

Take two 65-year-old public servants who retire after 30 years of service credit. “York” has had steady salaryincreases to achieve a FAS of $60,000 at retirement. “Zoe,” who was paid at a very low salary for most of hercareer, then moved to a much higher-paying job for the final years of her career, also achieved a FAS of$60,000.

In each case under the traditional benefit formula, York and Zoe would receive a pension benefit of $39,600.However, while York has contributed (with interest) $115,000 to his pension over the course of his workingcareer, Zoe has contributed only $70,000.

In these examples, the current annuity factor for a 65-year-old is .08316. The CBBC factor that the OPERSBoard of Trustees selected is six, which means the benefit would be capped if it is six or more times theannuitized accumulated contributions.

Applying the anti-spiking formula yields the following results:

York’s annuitized accumulated contributions:

$115,000 x .08316 = $9,563

Because York’s formula benefit of $39,600 is less than six times his annuitized accumulated contribution benefit of $9,563, he would receive the formula benefit of $39,600.

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Zoe’s annuitized accumulated contribution:

$70,000 x .08316 = $5,821

Because Zoe’s formula benefit of $39,600 is more than six times her annuitized accumulated contribution benefit of $5,821, her benefit would be capped using the formula mentioned above:

$70,000 x .08316 x 6 = $34,927

The reduction from a $39,600 annual benefit to one of $34,927 is an 11.8 percent cut. But because Zoe is in GroupA and earns more than $1,000 per month, her benefit cap cannot exceed 5 percent. Thus, Zoe would receive anannual benefit of $37,620, which reflects a 5 percent cap based on the $39,600 formula benefit.

Here is an example that illustrates how the benefits of two Group B or C members might be affected by the cap.

Take two 67-year-old public servants who retire after 32 years of service credit. “Anna” has had steady salaryincreases to achieve a FAS of $54,000 at retirement. “Bob,” who was paid at a low salary for 27 years, then movedto a much higher-paying job for the final five years of his career, also achieved a FAS of $54,000.

In each case under the traditional benefit formula, Anna and Bob would receive a pension benefit of $38,000.However, while Anna has contributed (with interest) $102,000 to her pension over the course of her working career,Bob has contributed only $64,000.

In these examples, the current annuity factor for a 67-year-old is .08664. The CBBC factor that the Board selected issix, which means the benefit would be capped if it is six or more times the annuitized accumulated contribution.

Applying the anti-spiking formula yields the following results:

Anna’s annuitized accumulated contribution:

$102,000 x .08664 = $8,837

Because Anna’s formula benefit of $38,000 is less than six times her annuitized accumulated contribution benefit of $8,837, she would receive the formula benefit of $38,000.

Bob’s annuitized accumulated contribution:

$64,000 x .08664 = $5,545

Because Bob’s formula benefit of $38,000 is more than six times his annuitized accumulated contribution benefit of $5,545, his benefit would be capped using the formula mentioned above:

$64,000 x .08664 x 6 = $33,270

Bob would receive an annual benefit of $33,270 rather than $38,000.


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Disability benefits programOPERS paid nearly $1 billion in disability benefits in 2011. The new pension law is producing significant updates tothe disability benefits program. Our goal with these changes is to modernize the program to reflect the fact that manypeople who have a disability still can be gainfully employed in another job and can return to work.

Current programThe OPERS disability benefits program offers coverage for long-term disabilities to members who have at least fiveyears of service credit or 60 contributing months in the Traditional Pension Plan or the Combined Plan. The programis available to members in the Law Enforcement and Public Safety divisions regardless of service length if theybecome disabled due to on-duty injury or illness.

Members must undergo a medical evaluation with OPERS’ third-party administrator, which may include anindependent medical examination, to determine if members are disabled from the duties of their most recent publicemployment positions. After the medical evaluation is complete, OPERS’ third-party administrator will send OPERSits medical recommendations.

The OPERS medical advisors review each recommendation and make a final recommendation to the OPERS Boardof Trustees, which takes official action on the medical advisor’s recommendations.

New programThe new law will modify the criteria for the initial disability benefit determination, establish some new coveragelimitations, and establish standards to promote returning members to work.

These program changes will apply to those who submit a valid application for disability after Jan. 4, 2013.

One of the most significant changes is to the standard for making a disability determination. Currently, members areevaluated on an “own-occupation” standard, meaning they were disabled while performing their last public position.The new pension law maintains the “own-occupation” standard for initial determinations, and establishes an “any-occupation” standard for re-examinations, meaning the disability will be terminated if the member can work in anyposition that meets these criteria:

Replaces 75 percent or more of the member’s final average salaryIs reasonably found in the member’s regional job marketIs a job the member qualifies for by experience or education

Members will be required to return to work under this new “any-occupation” standard after three years on disability orup to five years if they are receiving rehabilitative services. It is important to note that the any-occupation standarddoes not impact members under the law enforcement division.

The new law also:Excludes coverage for a disability benefit resulting from cosmetic surgery (other than reconstructive surgery).

Requires that an application made in the two years after contributing service ends be considered only if the disabling condition began while the member was contributing or is related to work performed during that time. The previous thresholds allowed members to apply for a benefit for injuries or illnesses sustained after they left public employment.

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Creates a new forfeiture provision that will apply to members convicted of a felony that causes the physical or mental disability.

Provides that a disability benefit that has been granted but has not begun will not be paid if the member returns to work with the same employer in the same position or one similar.

Modifies the leave of absence period to be the first three years following the effective date of the benefit. If the member is receiving rehabilitative services acceptable to the OPERS Board of Trustees, the Board may permit the member to retain membership status and be considered on leave of absence from employment for up to five years.

Limits the free service credit granted after return to work.

The new law also applies several new provisions to offset OPERS disability benefits for receipt of a SocialSecurity disability benefit. See the Comparative Summary chart at www.opers.org for details.

Effective date of benefitsThe date that your age and service retirement benefit can begin is set in state law. It’s currently based on whenyou end public employment or when you reach age and service eligibility – whichever is later.

The new law maintains the provisions of this effective date but adds the criterion of a date that’s 90 days prior tothe date of application. In other words, OPERS will now pay retroactive benefits only to a maximum of 90 daysbefore you applied for retirement.

The law also provides that an application for age and service retirement that we receive between Jan. 7, 2013,and April 7, 2013, will have a benefit effective date on the first day of the month following the latest of:

Attainment of age and service eligibilityTermination of public employmentThe effective date of the bill (Jan. 7, 2013)

Enhanced refundWhen OPERS Traditional Pension and Combined Plan members end employment before retiring, they mayapply for a refund of the amount they contributed, plus interest. Currently, they are paid an additional amount of67 percent of their accumulated contributions plus interest if they have worked at least 10 years. If they haveworked between five and 10 years, they are paid an additional amount of 33 percent plus interest.

The new law allows the OPERS Board to determine the percentages for the additional amount and the numberof years required to be eligible, meaning the Board could act to increase, decrease or eliminate the additionalamount in the future. The law also limits the types of service credit that may be used to determine eligibility forthe additional amount to contributing service and USERRA service credit, which is credit for military leave thatinterrupts public employment.

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Health care programPension legislation included three changes to the health care program:

1. Service credit for determining health care eligibilityOPERS currently allows, with a few exceptions, a member to use both contributing service and certain types ofpurchased service credit to determine eligibility for OPERS health care coverage. The new pension legislationallows the OPERS Board of Trustees to establish the number of years and types of service credit that will countin determining health care eligibility.

In September, OPERS limited the types of service credit counting toward health care eligibility to:Contributing serviceService transfers from other Ohio Retirement systemsService purchased under USERRA (military service that interrupts public service)Restored service creditUnreported service

Once a retiree voluntarily withdraws from the OPERS health care plan on or after Jan. 1, 2014, he or she cannotre-enroll.

These new rules will begin Jan. 1, 2014. In order for service credit other than these types to count toward healthcare eligibility, your retirement effective date must be on or before Dec. 1, 2013.

2. Medicare Part A equivalent coverageCertain OPERS members hired before 1986 were not required to contribute to Medicare. Under current lawOPERS is required to provide coverage equivalent to Medicare Part A (hospitalization coverage) for thoseretirees and their spouses who are not eligible for Medicare Part A. Under current law, OPERS is required to payhalf the cost of the spousal coverage, and the new law will allow the Board to determine the portion of the costthat the system will pay.

3. Medicare Part B reimbursementOPERS currently reimburses part of the monthly Medicare Part B premium for retired members at $96.40 permonth. The new law authorizes OPERS to eliminate or set the Medicare Part B premium reimbursement at any rate.

Only 1 percent of employers across the country reimburse this premium. In order to save nearly $110 millioneach year on this benefit, OPERS will phase out the reimbursement over a three-year period according to thefollowing schedule:

2014: $96.402015: $64.602016: $31.802017: $0

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Inter-system transfersOPERS members are permitted to combine service credit and contributions earned as a member of the otherfive Ohio public pension plans, for the purpose of retirement. The new legislation creates new transfer amounts,which occur at the time of retirement.

The new transfer amounts will be increased between OPERS and the two state school pension funds. Currently,when an OPERS member retires with STRS or SERS credit, the school systems transfer to OPERS themember’s contribution times two. The new legislation increases that amount to the member’s contribution plusthe lesser of the employer contribution from the other system (which typically is more than the employeecontribution) or the amount that would have been contributed by the employer had the employee been coveredby OPERS, plus interest that’s based on the assumed, actuarial rate of return.

Transfers among OPERS and OP&F and OHPRS already use a similar formula, but the new law requires thatthe transfers occur only at retirement. It also removes the current requirement that the member’s current OPERSposition solely determine the employer contribution to be used in the benefit comparison.

These changes do not affect the amount of credit received by members or the contributions that members make.

Minimum earnable salaryBeginning Jan. 1, 2014, members must earn at least $600 per month to earn the full service credit towardpensions for that month. If a member earns less than $600 in a month, the amount of service credit will be pro-rated in the exact percentage of the salary earned. For instance, if a member earns $400, he or she will earn 67percent credit for the month.

Earning credit for health care eligibility differs from the minimum earnable salary for pensions. Beginning Jan. 1, 2014, contributing service credit for health care will be accumulated if the member earns at least $1,000per month. Health care eligibility based on the minimum earnable salary will not be prorated.

Before the changes brought by pension legislation, an OPERS member had to earn a minimum monthly salaryof $250 to receive one full month of OPERS credit for pension benefits and health-care coverage. This $250threshold was established in 1985.

Credit earned before January 2014 will not be affected by this change.

Plans of paymentCurrently OPERS members may choose one of six payment plans when they retire. (We call them plans A through F.)

The new law consolidates the number of plans to three:Single-life annuity (formerly known as Plan B)Joint and survivor annuity with varying percentages (formerly Plans A, C, & D)Multiple-life annuity (formerly Plan F)



At the time members file an application for age and service retirement, they will select one of several plans ofpayment. They may elect to receive benefits payable throughout their lifetime (Single-Life Annuity) or in a lesseramount during their life but continuing after their death to a spouse or to a designated beneficiary.

If members choose a plan that provides for their beneficiary after they die, the benefit amount to the member willbe smaller. On the other hand, if they choose to provide a greater benefit amount for themselves, less will beavailable for the beneficiary. If the member chooses a single-life annuity, the beneficiary may receive only a lumpsum amount at the member’s death.

Service purchasesService credit, the time in which a member is employed by a public employer and making contributions toOPERS, is a key determinant in the member’s retirement benefit.

In some instances, our members are able to purchase service credit. However, if the cost of the service credit isless than the full actuarial cost, the retirement system as a whole funds the remaining cost.

The new pension law will increase the cost of service purchases to better represent the actuarial cost of thebenefit, while eliminating the subsidization of this program.

Members will be permitted to make service purchases at the current rates if they initiate the purchases by July 7, 2013. They will have until July 7, 2018, to complete the purchase before the cost will be recalculated.

After July 7, 2013, members will be required to pay the full actuarial cost for the following types of service purchases:

Additional service credit: Elected and certain appointed officials are permitted to purchase an additional 35 percent service credit for every full-time year they serve. For instance, if they serve two 4-year terms, they may choose to purchase an additional 2.8 years (0.35 x 8). The pension bill allows the OPERS Board of Trustees to define “full time” for the purposes of eligibility to purchase the additional 35 percent credit.

Exempted service: This is service for a period of time in which the member was exempted from paying into OPERS while working in a position in which OPERS coverage was offered. For example, a student employed by a university may choose to be exempted from membership.

Out-of-state, federal or municipal service credit: This service credit is for public employment whileworking outside of Ohio or for the federal government or a municipal retirement system.

Leave of absence I: Up to one year of credit may be purchased at any time for authorized leaves of absence or resignation due to pregnancy or adoption of a child. Interest is included in the cost of the purchase.

Leave of absence II: This covers employer-approved leaves of absence. Members may buy service credit or contributing months and pay no interest if the purchase is completed within one year of the beginning of the leave.

Prior elected service: This type applies to Ohio elected officials, who are not required to become OPERS members immediately after their election to public service. Rather, at a future date after membership is established, they can purchase credit for service they completed as an elected official that predates their membership in OPERS, provided they did not pay into Social Security.

The new law eliminates the free service credit provided when members are receiving workers’ compensationbenefits. But it permits members to purchase up to three years of this credit and requires their employers tomake the employer contributions in such cases. The law also changes which types of service credit will applytoward health care eligibility. Please see the chart on page 15 for more information.

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PPeennssiioonn cchhaannggeess (continued)

Time limit for contractor determination requestsOPERS provides benefits to members who have earned service credit under guidelines set in state law. OhioRevised Code Section 145.037, which governs the service credit eligibility of independent contractors, is beingupdated to create a specific window for independent contractors who may wish to claim OPERS membership.

In most cases, independent contractors and those who work in certain other employee classes do not earnmembership in OPERS. However, in some cases OPERS members are mistakenly classified as contractors.These employees have the opportunity to ask OPERS for a determination of membership and in some casescan claim unreported service time.

The new pension law creates a one-year window from the effective date of legislation, which is Jan. 7, 2013, forindividuals classified as contractors prior to the legislation effective date to seek this membership determinationfrom us. No requests for determinations for personal services provided before Jan. 7, 2013, will be acceptedafter Jan. 7, 2014, unless employees are able to demonstrate through medical records to the OPERS Board ofTrustees’ satisfaction that they were physically or mentally unable to submit the request before the deadline.

Upon receipt of a properly completed form, OPERS will begin its review and may request additional informationfrom the employee and/or public employer before making a membership determination.

For more information, or to obtain a request form, please contact OPERS Employer Outreach at 888-400-0965.

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HHeeaalltthh CCaarree CChhaannggeess

On Sept. 19, 2012, OPERS adopted a set of changes to the retiree health care program designed to allow us tocontinue providing retirees with access to meaningful health care coverage. The financial and demographicchallenges we face simply will not allow us to maintain the current level of coverage.

OPERS understands that pension redesign and the upcoming health care changes have caused members,especially those who are eligible or will soon be eligible to retire, to question the timing of their retirement or even re-evaluate their plans. There are many considerations involved in making such an important decision, and this sectionhas been designed to help members understand the differences in health care coverage between retiring prior to oron or after Jan. 1, 2014.

While pension redesign will affect OPERS members differently based on when they are eligible for retirement, theimplementation of the health care changes is a bit simpler. The retiree health care plan will be administered by oneset of rules for retirees with a retirement effective date prior to Jan. 1, 2014, and by a different set of rules for retireeswith a retirement effective date on or after Jan. 1, 2014. A three-year transition will be used to phase in cost changes.

Below is a summary of the OPERS health care program changes effective Jan. 1, 2014:

To be eligible for OPERS retiree health care coverage, you must retire with 20 or more years of service and be age 60, or retire with 30 years of service at any age. The 30 years of service at any age requirement will increase to 32 years of service as the minimum years of service to qualify for a full pension benefit increases to 32 years.

The amount OPERS pays toward the total monthly cost of your coverage (allowance) will be based on your years of service and age at retirement.

Beginning in 2015 health care coverage for retirees and spouses over age 65 and enrolled in Medicare Parts A and B can be purchased via the OPERS Medicare Connector. Health care coverage for retirees and spouses under age 65 (and over age 65 but not eligible for Medicare Part A) will be provided through an OPERS-sponsored plan.

Spouses will have access to the OPERS retiree health plan through 2019. Allowances for all spouses will phaseout beginning in 2015 leading to a $0 allowance in 2017. Beginning in 2015, spouses over the age of 65 andenrolled in Medicare Parts A and B can use the OPERS Medicare Connector and will receive an allowance in2015 and 2016. By 2017, the allowance will be phased out to $0.

The surviving spouse of a deceased retiree will have access to the OPERS health care plan through 2019.The surviving spouse’s allowance will phase out beginning in 2015 leading to a $0 allowance in 2017. Beginningin 2015, surviving spouses over age 65 and enrolled in Medicare Parts A and B can use the OPERS MedicareConnector and will receive an allowance in 2015 and 2016. By 2017, the allowance will be phased out to $0.

Dependent children of members with 20 years or more of service will receive an allowance equal to 50 percent of the retiree’s allowance percentage.

Only the following types of service credit will apply toward health care eligibility: contributing service, Ohio Retirement System service, USERRA (military service that interrupts public employment), unreported time andrestored (refunded) service. In order to earn a full year of service credit applicable to health care coverageeligibility, an OPERS member must earn a minimum of $1,000 per month.

An income-based discount of 30 percent of the premium will be provided for those members with 20 years of service or more and a household income at or below 200 percent of the federal poverty level.

Once a retiree voluntarily withdraws from the OPERS health care plan, he or she cannot re-enroll.

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Below is a summary of the differences in health care eligibility and cost/allowance between retiring with aretirement effective date prior to Jan. 1, 2014, or retiring on or after Jan. 1, 2014.

Note: Your retirement effective date will be the first of the month following the date you terminate from OPERS-covered employment or attain age and service eligibility, whichever is later. Therefore, you must terminate frompublic employment no later than Nov. 30, 2013, to secure a retirement effective date prior to Jan. 1, 2014 and begrandfathered under the current health care eligibility rules. Substitute Senate Bill 343 (effective Jan. 7, 2013)maintains the provisions of this effective date but adds the criterion of a date that’s 90 days prior to the date ofapplication. Under the new law, OPERS will pay retroactive benefits only to a maximum of 90 days before youapplied for retirement.

POPULATION ELIGIBILITY - RETIRE BEFORE 2014 ELIGIBILITY - RETIRE ON OR AFTER 2014

Retiree 10 years of service.

20 years of service and age 60, 30 years of qualifyingservice at any age (32 years as the minimum yearsof service for a full pension benefit increases). Youcan retire and defer coverage until you reach age 60.

Disability recipient Continued access based on approval andannual review.

Access during the first five years receiving adisability benefit. After five years, recipientmust meet minimum age and servicerequirements or be enrolled in SSDI/ Medicareto remain enrolled.

SpouseAccess based on recipient eligibility through2019. Access to OPERS MedicareConnector in 2015 if over age 65.

Access based on recipient eligibility through2019. Access to OPERS Medicare Connectorin 2015 if age 65 or older.

Child(ren)

If retiree has 20 years of service or more,children will have continued access tocoverage.

If retiree has fewer than 20 years of service,children will have access to coveragethrough 2019.

If retiree has 20 years of service or more,children will have continued access tocoverage.

If retiree has fewer than 20 years of service,children will have access to coverage through 2019.

Service credit (as itapplies to health care

eligibility)

All service types except out-of-state, militarypurchased after Jan. 29, 1981, exemptservice purchased after May 4, 1992, andERI time apply to 10 years of serviceeligibility.

Only the following types of service credit applyto health care eligibility: contributing service,Ohio retirement systems, USERRA,unreported time and restored (refunded)service.

In order to earn a full year of service creditapplicable to health care coverage eligibility, an OPERS member must earn a minimum of $1,000 per month (not pro-rated)

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POPULATION COST/ALLOWANCE – RETIRE BEFORE 2014

COST/ALLOWANCE – RETIRE ON OR AFTER JAN. 1, 2014

Retiree

Allowance percentage based on years ofservice and age first enrolled in health careplan on new allowance table (75 – 90percent of total cost).

3-year transition to new allowancepercentage.

Allowance percentage based on years ofservice and age first enrolled in health careplan on new allowance table (51 – 90 percentof total cost); if retiring in 2014, 2015 or 2016your allowance will be subject to the 3-yeartransition.

Disability recipient

Allowance percentage based on years of service and age at retirement on newallowance table (75 – 90 percent of totalcost).

3-year transition to new allowancepercentage.

Allowance based on years of service and ageat disability retirement unless minimumrequirements are not met, then allowancepercentage set at minimum level (51 percent).

Conversion retirement recipients must meet 20year requirements if conversion date is on orafter Jan. 1, 2014.

Spouse

3-year transition with initial allowancereduction in 2015 leading to a $0 allowanceby 2017. Continued access at full premiumcost (spouses under age 65) through 2019.If enrolled in Medicare Parts A and B,access to the OPERS Medicare Connectorbeginning in 2015. No allowance beginningin 2017.

3-year transition with initial allowance reduction(for those who currently have an allowance) in2015 leading to a $0 allowance by 2017.Continued access at full premium cost(spouses under age 65) through 2019. Ifenrolled in Medicare Parts A and B, access tothe OPERS Medicare Connector beginning in2015. No allowance beginning in 2017.

Child(ren)

If retiree has 20 years of service or more,children will have 3-year transition to 50percent of retiree’s allowance percentage by 2017.

If retiree has fewer than 20 years of service,children will have 3-year transition with initialallowance reduction in 2015 leading to a $0allowance by 2017. Continued access at fullpremium cost through 2019.

If retiree has 20 years of service or more,children will have 50 percent of retiree’sallowance percentage at retirement.

If retiree has fewer than 20 years of service,children will have no allowance. Continuedaccess at full premium through 2019.

Service credit (as it applies to health care

allowance)

All service types.

Only the following types apply toward yourhealth care allowance: contributing service,Ohio retirement systems, USERRA, unreportedtime, restored (refunded) service.

In order to earn a full year of service creditapplicable to health care coverage allowance,an OPERS member must earn a minimum of$1,000 per month (not pro-rated).

Medicare BReimbursement

Reduce reimbursement by one-third in 2015and one-third in 2016 with noreimbursement by 2017.

Reduce reimbursement by one-third in 2015and one-third in 2016 with no reimbursementby 2017.

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HHeeaalltthh CCaarree CChhaannggeess (continued)

How will the health care changes affect me? If you are eligible to retire with a retirement effective date prior toJan. 1, 2014, you will want to do a careful comparison of your health care eligibility and cost/allowance scenariosbefore and after the changes are implemented in 2014. The questions and answers following will help you tounderstand the differences and begin the decision-making process.

Changes to allowance percentages and the resulting changes in monthly costs for participants, spouses and childrenwill be phased-in over three years beginning Jan. 1, 2014, and ending Jan. 1, 2017, when new allowance amounts(or no allowance) and monthly premiums will be fully implemented. Changes to applicable service credit for healthcare eligibility will take effect Jan. 1, 2014. This means any non-contributing service you have purchased will apply topension but not apply to your health care eligibility nor will it apply in determining your health care allowance if youreffective date for retirement is Jan. 1, 2014, or later.

If you are not eligible to retire with a retirement effective date prior to Jan. 1, 2014, all of the health care changeseffective Jan. 1, 2014, will apply to you. Some of the changes are subject to a three-year, phase-in plan.

ELIGIBILITY

Will I be eligible to participate in the OPERS health care plan when I retire? If you retire with a retirement effective date prior to Jan. 1, 2014, you can enroll in the OPERS health care plan with10 years of service.

If you retire on or after Jan. 1, 2014, to be eligible to participate in the OPERS health care plan you must have atleast 20 years of service and be at least age 60 when you retire. The exception is if you retire with 30 years ofqualifying service or more, you will be eligible to participate even if you are not yet age 60. The 30 years of service atany age requirement will increase to 32 years of service as the minimum years of service to qualify for a full pensionbenefit increases to 32 years.

Will my spouse be eligible to participate in the OPERS health care plan when I retire?If you retire with a retirement effective date prior to Jan. 1, 2014, your spouse can be enrolled and will receive apremium allowance. The allowance will be determined by your years of service and age at retirement. All spouseallowances will be reduced between 2015 and 2017. By 2017 the spouse allowance will be $0. Access to theOPERS health care plan for spouses under age 65 will continue through 2019 at full cost to the spouse. After 2019,OPERS will re-evaluate the cost of health care for spouses under the age of 65. If your spouse is under the age of55, he or she can participate in the OPERS retiree health plan and pay the full cost for coverage through 2019. Ifyour spouse is over 65 and enrolled in Medicare, he or she can be enrolled in the OPERS Medicare Advantage Planfor 2014. In 2015 he or she will be eligible to purchase coverage using the OPERS Medicare Connector.

If you retire on or after Jan. 1, 2014, your spouse’s eligibility for coverage will depend on his or her age and Medicarestatus. If your spouse is under age 65, he or she will be eligible to enroll in the OPERS health care plan and pay thefull cost for coverage through 2019 (following the three-year, phased-in allowance reduction). After 2019, OPERS willre-evaluate the cost of providing access to health care for spouses under age 65. If your spouse is over 65 andenrolled in Medicare Parts A and B, he or she will be eligible to purchase coverage using the OPERS MedicareConnector beginning in 2015.

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In terms of health care coverage, what will happen to my spouse when I die? On or after Jan. 1, 2014, yoursurviving spouse will not receive your health care allowance but he or she will continue to be eligible to purchasehealth care coverage in accordance with the eligibility criteria described above.

Will my dependent child have access to health care coverage? After Jan. 1, 2014, dependent children underage 26 will have access to health care coverage with an allowance based on your years of service at retirement.If you do not have at least 20 years of service at retirement, your child will not receive an allowance in 2017 after a3-year phased reduction beginning in 2015. Children with no allowance will retain access to the OPERS retireehealth plan through 2019.

What types of service credit count toward health care eligibility? Prior to Jan. 1, 2014, all service typesexcept out-of-state, military purchased after Jan. 29, 1981, exempt service purchased after May 4, 1992, and EarlyRetirement Incentive time applied to the 10 years of service eligibility.

On or after Jan. 1, 2014, only the following types of service credit will apply toward health care eligibility:contributing service, Ohio Retirement System service, USERRA, unreported time and restored (refunded) service.Additionally, the minimum earnable salary for service credit that can be applied toward health care eligibility is$1,000 per month (not pro-rated). This minimum salary rule applies to service credit earned afterJan. 1, 2014.

What if I begin receiving a disability benefit? Current health care eligibility rules will apply to those retiring witha retirement effective date prior to Jan. 1, 2014. If you begin receiving a disability benefit on or after Jan. 1, 2014,you will be eligible for health care coverage during the first five years of receiving a disability benefit. After fiveyears, you must meet the age and service requirements for health care eligibility (20 years of service and age 60or older; or 30 years of service at any age) or be enrolled in Medicare to remain enrolled in the OPERS healthcare plan. If enrolled, the allowance will be determined in the same manner as an age and service retiree.

COVERAGE TYPE

Will OPERS continue to offer a health care plan? OPERS will continue to offer the OPERS Retiree Health Planfor those participants not eligible for Medicare. In 2014 OPERS will continue offering a Medicare Advantage Planfor retirees over the age of 65 and enrolled in Medicare.

Beginning in 2015, OPERS will introduce the OPERS Medicare Connector for those who are over 65 and enrolledin Medicare Parts A and B. Those only eligible for Part B will be offered coverage through the OPERS-sponsoredplan.

What is the OPERS Medicare Connector? A Medicare Connector is a company OPERS partners with to helpyou select a Medicare Supplement or Medicare Advantage Plan. Each year during open enrollment, yourpersonal, licensed Medicare counselor will help you select the best plan for your needs. You will use your healthcare allowance amount from OPERS to purchase this plan. Depending on your selection, the Medicare Connectorshould increase your purchasing power to offset some of the changes OPERS has made. See the examplebelow:

Marie is a retiree with Medicare A and B. Her spouse, Robert, is also enrolled in Medicare A and B. She has anallowance of 76 percent ($272 per month provided by OPERS for the Medicare Connector) based on her age (63years) and years of service (28 years) at retirement (as illustrated in Chart 1 within this document).

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With the guidance of a licensed Medicare counselor, Marie can use this allowance to purchase a MedicareSupplement or Medicare Advantage plan through the OPERS Medicare Connector. At this time, MedicareSupplement plans range in cost between $61 and $265 per month and Medicare Advantage plans range between$0 and $74 per month. Marie chooses a moderate Medicare Supplement plan that costs $150 per month. Marieuses a portion of the allowance to pay her entire monthly premium for her Medicare Supplement plan. She willhave a balance of $120 per month she can use to offset other health care costs depending on hercircumstances. She may wish to use this excess to pay for non-covered medical expenses like co-payments ordeductibles. She can also use the balance to purchase a Medicare plan for her spouse.

COST

How much will I pay for my health care coverage? After Jan. 1, 2014, your allowance, or the monthly amountOPERS will pay toward the total cost for health care coverage, will depend on your years of service at retirementand your age when you first begin participating in the OPERS health care plan.

As a retiree, you will pay a portion of the full monthly premium for medical and prescription drug coverage andOPERS will pay a portion. For retirees not yet eligible for Medicare, the current full monthly premium is $814.For retirees with Medicare A and B, the current full monthly premium is $358. The premium for those covered byMedicare A and B is lower because Medicare is the primary payor.

The charts on the following pages show the percentage and monthly dollar amounts paid by both OPERS andyou for your health care coverage. The allowance percentage (Chart 1) shows you what portion of the fullmonthly premium OPERS will pay on your behalf. For instance, a member who retires with 28 years of service atage 62 would be eligible for a 73 percent allowance (Chart 1). Since this retiree is under the age of 65, the fullmonthly premium would be $814. The percentage paid by OPERS is 73 percent ($594 – Chart 2) while theremaining (27 percent) would be paid by the retiree ($220 – Chart 3).

Your monthly premium amount may vary from year to year, but your allowance percentage will not except duringthe phase-in period, if applicable. See page 23 for details on the phase-in period.

ALLOWANCE PERCENTAGEYEARS OFSERVICE/

AGE60 61 62 63 64 65

20 51% 54% 57% 60% 63% 66%

21 53% 56% 59% 62% 65% 68%

22 55% 58% 61% 64% 67% 70%

23 57% 60% 63% 66% 69% 72%

24 59% 62% 65% 68% 71% 74%

25 61% 64% 67% 70% 73% 76%

26 63% 66% 69% 72% 75% 78%

27 65% 68% 71% 74% 77% 80%

28 67% 70% 73% 76% 79% 82%

29 69% 72% 75% 78% 81% 84%

30 71% 74% 77% 80% 83% 86%

31 73% 76% 79% 82% 85% 88%

32 75% 78% 81% 84% 87% 90%

33 76% 79% 82% 85% 88% 90%

34 77% 80% 83% 86% 89% 90%

35 78% 81% 84% 87% 90% 90%

36 79% 82% 85% 88% 90% 90%

37 80% 83% 86% 89% 90% 90%

38 81% 84% 87% 90% 90% 90%

39 82% 85% 88% 90% 90% 90%

40 83% 86% 89% 90% 90% 90%

41 84% 87% 90% 90% 90% 90%

42 85% 88% 90% 90% 90% 90%

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Chart 1 - Allowance PercentageOPERS will pay a portion of the full cost of health care coverage based on your age when you first enroll in theOPERS health care plan and your years of service at retirement.

When applying this chart, if you will be under age 60 when you first enroll, use age 60. If you will be over age 65when you first enroll, use age 65. If you retire prior to Jan. 1, 2014, with less than 20 years of service, pleaseuse the 20 years of service column to locate your allowance percentage.

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Chart 2 - OPERS Monthly Premium Paid This chart shows the monthly amount OPERS pays on your behalf for health care coverage based on your agewhen you first enroll in the OPERS health care plan and your years of service at retirement. Amounts are basedon the full cost of health care coverage in 2013 ($814 under age 65 and $358 for those age 65 and over withMedicare Parts A and B).

When applying this chart, if you will be under age 60 when you first enroll, use age 60. If you will be over age 65when you first enroll, use age 65. If you retire prior to Jan. 1, 2014, with less than 20 years of service, pleaseuse the 20 years of service column to locate your monthly premium paid by OPERS.

OPERS MONTHLY PREMIUM PAIDYEARS OFSERVICE/

AGE60 61 62 63 64 65

20 $415 $440 $464 $488 $513 $236

21 $431 $456 $480 $505 $529 $243

22 $448 $472 $497 $521 $545 $250

23 $464 $488 $513 $537 $562 $257

24 $480 $505 $529 $554 $578 $264

25 $497 $521 $545 $570 $594 $271

26 $513 $537 $562 $586 $611 $278

27 $529 $554 $578 $602 $627 $286

28 $545 $570 $594 $619 $643 $293

29 $562 $586 $611 $635 $660 $300

30 $578 $602 $627 $651 $676 $307

31 $594 $619 $643 $668 $692 $314

32 $611 $635 $660 $684 $708 $321

33 $619 $643 $668 $692 $717 $321

34 $627 $651 $676 $700 $725 $321

35 $635 $660 $684 $708 $733 $321

36 $643 $668 $692 $717 $733 $321

37 $651 $676 $700 $725 $733 $321

38 $660 $684 $708 $733 $733 $321

39 $668 $692 $717 $733 $733 $321

40 $676 $700 $725 $733 $733 $321

41 $684 $708 $733 $733 $733 $321

42 $692 $717 $733 $733 $733 $321

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Chart 3 - Retiree Monthly Premium Paid The monthly premium a retiree pays for health care coverage is the difference between the full cost of coverageand the amount paid by OPERS. Amounts are based on the full cost of health care coverage in 2013 ($814under age 65 and $358 for those age 65 and over with Medicare Parts A and B).

When applying this chart, if you will be under age 60 when you first enroll, use age 60. If you will be over age 65when you first enroll, use age 65. If you retire prior to Jan. 1, 2014, with less than 20 years of service, pleaseuse the 20 years of service column to locate your locate your monthly premium paid.

RETIREE MONTHLY PREMIUM PAIDYEARS OFSERVICE/

AGE60 61 62 63 64 65

20 $399 $374 $350 $325 $301 $121

21 $382 $358 $334 $309 $285 $114

22 $366 $342 $317 $293 $268 $107

23 $350 $325 $301 $277 $252 $100

24 $334 $309 $285 $260 $236 $92

25 $317 $293 $268 $244 $220 $85

26 $301 $277 $252 $228 $203 $78

27 $285 $260 $236 $211 $187 $71

28 $268 $244 $220 $195 $171 $64

29 $252 $228 $203 $179 $154 $57

30 $236 $211 $187 $162 $138 $50

31 $220 $195 $171 $146 $122 $42

32 $203 $179 $154 $130 $105 $35

33 $195 $171 $146 $122 $97 $35

34 $187 $162 $138 $114 $89 $35

35 $179 $154 $130 $105 $81 $35

36 $171 $146 $122 $97 $81 $35

37 $162 $138 $114 $89 $81 $35

38 $154 $130 $105 $81 $81 $35

39 $146 $122 $97 $81 $81 $35

40 $138 $114 $89 $81 $81 $35

41 $130 $105 $81 $81 $81 $35

42 $122 $97 $81 $81 $81 $35

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Premium Examples:

Non-Medicare: Stephen is still working as a public employee in 2012. He decides his career is complete with 30 years of service in 2017 and retires at age 62. Stephen’s allowance percentage is 77 percent (see Chart 1.)OPERS will be paying $627 – an amount equal to 77 percent of $814 - the total cost of coverage (see Chart 2.)Stephen’s monthly premium will be $187 (see Chart 3).

Medicare: Frank is still working as a public employee in 2012. He decides to retire in 2017 with 30 years ofservice at age 65. Since Frank is enrolled in Medicare Parts A and B, he is eligible to participate in the OPERSMedicare Connector. His allowance percentage will be 86 percent (Chart 1). Frank will receive 86 percent of theOPERS Medicare rate (currently $358) on a monthly basis in a Health Reimbursement Account to be usedtoward the purchase of a Medicare plan through the OPERS Medicare Connector. OPERS will provide $307 permonth he can use to purchase a plan. If he finds a plan for less than his allowance, he may use the remainingbalance for medical expenses not covered by his plan or he may choose to purchase a plan for his spouse.

Will the changes in cost be immediate upon Jan. 1, 2014? No. Retiree allowances, regardless of yourretirement date, will not fully transition to the new percentage tables until 2017. If you retire prior to Jan. 1, 2014,you will continue to receive your current allowance percentage through 2014. Retiree allowance percentages willtransition incrementally between 2015 and 2017 when the new percentages will be fully implemented.

For example, a recipient who retires at age 61 with 31 years of service prior to Jan. 1, 2014, is eligible for anallowance percentage of 100 percent under current rules. He or she will transition to the new allowance of 76percent (Chart 1) by 2017. The following illustrates how the recipient will transition from 100 percent allowanceto 76 percent allowance between 2014 and 2017.

If you retire prior to 2014 and receive an allowance of 75 percent or greater, you will transition to a percentagebetween 75 percent and 90 percent by 2017. If you retired prior to 2014 and receive an allowance less than 75percent, you will transition to the greater of your current allowance percentage or the percentage reflected on theallowance table (Chart 1).

If you choose to retire within the transition period (2014-2016), you will receive an allowance equal to thepercentage in place at the time of retirement. In other words, you may retire within the transition and takeadvantage of the transitional allowance. You will not immediately be impacted by the new allowance tables.

What will I pay for my spouse’s health care coverage? Spouses of retirees and surviving spouses willcontinue to receive an allowance equal to current percentages through 2014 regardless of the retiree’sretirement date. A transition from current allowance percentages to the new percentages will begin in 2015 witha one-third reduction being applied each year leading to a $0 allowance by 2017. Spouses will continue to haveaccess to OPERS health care coverage through 2019, but will be required to pay the full monthly premiumfollowing the transition period.

2014 2015 2016 2017

100% 92% 84% 76%

Current allowance1/3 of difference

between current and new allowance

1/3 of difference between current and

new allowance

1/3 of difference to reach new allowance

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I have a dependent child. Will OPERS pay any of the cost for that coverage?For retirees with 20 or more years of service, children will continue to receive an allowance equal to currentpercentages through 2014 regardless of the recipient’s retirement date. Child allowance percentages will transitionbeginning in 2015 to 50 percent of the retiree’s allowance percentage. The transition will allow for a one-thirdreduction of the current allowance each year until it reaches 50 percent of the retiree’s allowance percentage by2017.

For retirees with less than 20 years of service, children will continue to receive an allowance equal to currentpercentages through 2014 regardless of the recipient’s retirement date. A transition from current allowancepercentages will begin in 2015 with a one-third reduction being applied each year leading to a $0 allowance by2017. Children of retirees with less than 20 years of service will continue to have access to OPERS health carecoverage through 2019 with responsibility for the full monthly premium. OPERS may extend this date in the future.

Will OPERS reimburse me for the cost of my Medicare B premium? If you choose to retire with a retirementeffective date prior to Jan. 1, 2014, and are enrolled in Medicare Part B, you will receive $96.40 per month topartially reimburse you for the cost of the Medicare Part B premium through 2014. The reimbursement will bereduced by one-third in 2015 and again by one-third in 2016 resulting in $0 reimbursement for Medicare Part Bpremiums by 2017. Members retiring during the transition period will receive the percentage in place at the time oftheir retirement.

Are there any discounts for low-income participants? Yes. An income-based discount will be provided forthose participants who have a household income at or below 200 percent of the Federal Poverty level and at least20 years of service. Qualifying participants will receive a 30 percent discount on medical premiums for the OPERShealth care plan. Additional information will be available in the future for what assistance low-income retirees mightqualify for through the OPERS Medicare Connector or other federal program.

ENROLLMENT

What if I decided not to enroll in the OPERS health care plan upon retiring (for example – if I am eligiblefor coverage with my spouse’s provider)? The age to be used in determining your allowance is the age atwhich you first enroll in the OPERS health care plan. This means you can increase your monthly allowance bydeferring OPERS health care coverage past your age at retirement.

What if I elect to withdraw from the OPERS health care plan? Can I rejoin at a later date? No. After Jan. 1, 2014, once a retiree voluntarily withdraws, he or she may not re-enroll in the OPERS health care plan.When a retiree becomes re-employed in an OPERS-covered position, he or she is obligated to take health carecoverage through the employer if it is offered. This is not considered voluntarily withdrawing from the OPERShealth care plan and these retirees will be permitted to re-enroll.

25



I retired prior to Jan. 1, 2014, and selected a plan of payment that reduced my monthly pension so myspouse could have access to health care if I would die before my spouse. Can I change my plan ofpayment since health care coverage for spouses will eventually be eliminated? Ohio retirement lawprovides limited ability to change your plan of payment once you retire. Only in instances of death of thebeneficiary, termination or annulment of marriage, or marriage can a retiree make a plan of payment change.Once you are vested and begin receiving your monthly pension payments you are not permitted to make achange unless you meet these very limited circumstances. The reduction in your pension payment was toprovide a pension benefit to your beneficiary in the event of your death. Your spouse is still eligible for thatbenefit.

I am not eligible for no-cost Medicare Part A. What will I be eligible for under the OPERS health careplan? Retirees and spouses not eligible for premium-free Medicare Part A will be able to enroll in an OPERS-sponsored Medicare Part A equivalent plan. They will not be eligible to participate in the OPERS MedicareConnector explained earlier.

Retirees without Medicare A will follow the same general principles to determine their OPERS allowance and willbe subject to the allowance and Medicare B premium reimbursement transitions. Spouses without Medicare PartA will also have access to an OPERS-sponsored Medicare Part A equivalent plan and will transition to a 50percent allowance by 2017.

26


MMoorree IInnffoorrmmaattiioonn IIss AAvvaaiillaabbllee

Website – Visit the Special Coverage section at www.opers.org for a variety of documents, videos andpresentations describing the impacts of both pension legislation and health care changes including a summary ofthese changes exclusively for active members considering retirement in the next few years.

Seminars, webinars and telephone seminars – Visit the Seminar Options page on the OPERS website toselect and register for seminars being held around the state or webinars you can attend from your home oroffice. OPERS will hold several telephone seminars over the next two years. Members will be contacted byphone in advance and invited to participate in the call.

Contact OPERS – OPERS is available to answer your questions regarding the upcoming changes to pensionsand health care coverage as well as answer any other questions you have about your OPERS account orbenefits.

27


NNootteess

The 11-member OPERS Board of Trustees is responsible for the administration and management of OPERS. Seven

of the 11 members are elected by the groups that they represent (i.e., college and university non-teaching employees,

state, county, municipal, and miscellaneous employees, and retirees); the Director of the Department of Administrative

Services for the State of Ohio is a statutory member, and three members are investment experts appointed by the

Governor, the Treasurer of State, and jointly by the Speaker of the Ohio House of Representatives and the President

of the Ohio Senate.

For a current listing of OPERS Board members, please visit www.opers.org.

It is your responsibility to be certain that OPERS has your current physical and e-mail address on file. If OPERS is not

made aware of address changes, we cannot guarantee that you will receive important information pertaining to your

OPERS account. This publication is written in plain language for use by members of the Ohio Public Employees

Retirement System. It is not intended as a substitute for the federal or state law, namely the Ohio Revised Code, the

Ohio Administrative Code, or the Internal Revenue Code, nor will its interpretation prevail should a conflict arise between

it and the Ohio Revised Code, Ohio Administrative Code, or Internal Revenue Code. Rules governing the retirement

system are subject to change periodically either by statute of the Ohio General Assembly, regulation of the Ohio Public

Employees Retirement Board, or regulation of the Internal Revenue Code. If you have questions about this material,

please contact our office or seek legal advice from your attorney. OPERS is not required to provide health care coverage

to retirees or their dependents and will only do so at the discretion of the Board of Trustees.

OPERS is implementing Sub. S.B. 343 within a reasonable time frame. This document reflects information as of the datelisted herein. Some provisions of Sub. S.B. 343 and the changes to the OPERS health care program will not impactCombined Plan participants due to the difference in plan structure. There is no promise, guarantee, contract or vestedright to access to health care coverage or a premium allowance. The board has the discretion to review, rescind, modifyor change the health care plan at any time.

Ohio Public EmployeesRetirement System277 East Town StreetColumbus, Ohio 43215 October 2012

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