ACCRUED LIABILITY FIRST-HALF BILLINGS DISTRIBUTED TO OP&F EMPLOYERS
The week of April 15, employers who still have accrued liability balances dating back to the creation of OP&F in the 1960s will be mailed an invoice from OP&F, including amounts due. Not all employers are subject to accrued liability, so only those that are subject will receive the invoice. The due dates for the first-half liability is May 15.
Accrued liability balances can be traced back to the beginnings of OP&F when in 1965, the Ohio General Assembly created the pension fund. This action resulted in the replacement of 454 separate local police and firefighter relief and pension funds around the state, with one consolidated retirement system which began operations on Jan. 1, 1967. On that date, the local funds transferred their assets and liabilities to OP&F. Unfortunately, the transferred assets totaled approximately $75 million, while the total accrued liabilities were approximately $490 billion.
To address this shortfall, the Ohio legislature enacted a statute which enabled the employers who had a shortfall to pay off their share of the unfunded liability over a substantial period of years (1969-2035). Under the law, OP&F bills employers subject to accrued liability two times per year, in April and October. These bills are made up of two components, principal and interest. The interest on an employer’s invoice is accrued at a rate of 4.25 percent of the outstanding balance. Employers that wish to pay off the balance of their accrued liability in a lump sum may do so. Such a payoff can result in significant savings by eliminating the interest portion of the cost.
Posted 4/12/2024