On March 5, 2021, OP&F officially closed the books on the 2020 payroll reporting process. This enabled all 2020 member payroll data to be posted to member ledgers. Not only does this ensure that member accounts are made current, it also allows OP&F to present the 2020 payroll information to its actuary in support of the annual valuation which must be performed. The valuation provides information to OP&F on its financial health and its ability to pay future retirement and disability benefits.
OP&F thanks all the OP&F employers who filed their reports of retirement deductions timely, kept current with the required payments, and addressed all reporting issues that required clarification. Employer diligence in these areas enhances our ability to serve our members, and to better achieve compliance with our fiduciary responsibilities.
Employers who still have accrued liability balances dating back to the creation of OP&F in the 1960s should have received correspondence from OP&F, including amounts due. Not all employers are subject to accrued liability, so only those that still have a remaining balance should have received the correspondence.
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 those employers who had a shortfall to pay off their share of the unfunded liability over a substantial period of years from 1969 to 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.
Payments are due on May 15 for the April billing, and Nov. 15 for the October billing. If payments are not received within 30 days following the due date(s), a penalty of five per cent of the amount due will be assessed against the employer. If the payment and penalty have not been paid within 90 days following the date the payments are due, annual interest at the rate of six per cent will be assessed against the payment and penalty from the date the payment is due.
As email becomes an essential way of contacting employers and members, OP&F asks employers for assistance in keeping these emails updated. Just as it is important for employers to keep their email addresses updated with OP&F, members can benefit as well by receiving timely correspondence and updates.
Be sure to check your approved or safe senders list in your email inbox features to be sure you will receive these emails from OP&F. If you are not receiving these emails it is possible they may have inadvertently gone into your email spam folder. Employer email addresses can be updated by emailing OP&F at email@example.com and forms such as the Employer Information Form. OP&F switched the Employer Digest newsletter to email only in 2018. The Employer Digest is also available on the OP&F website. As more communications efforts move online, feedback has been positive as an effective and quick means to receive correspondence from OP&F.
If members update their email with employers, OP&F asks that employers encourage members to notify OP&F of their updated email addresses as well. It is important to keep active members notified of changes in laws, rules, policies and Board of Trustee elections. In the future, OP&F plans to send more correspondence by email as well for efficiency and to save on postal costs.
OP&F members can update their emails easily by using the Member Self-Serve or almost any member form. It is primarily the member’s responsibility to keep addresses up to date, but OP&F appreciates employers assisting members in doing so if they have the opportunity.
OP&F encourages anyone who is in charge of or completes OP&F required reports, including payroll reports and web reporting, to take advantage of free training through our Employer Education Group.
Training can be conducted over the phone using the GoToMeeting software application. The training will be customized to meet your needs in order to maximize effectiveness. For example, if you are a new fiscal officer, you may be more interested in learning the basics of reporting payroll data and making required payments. Topics that may be offered in training include the following:
• Payroll reporting requirements
• Statutory penalties and how to avoid and mitigate them
• Pick-up resolutions
• Online payment options
• Tax-deferred payroll deductions to pay for prior service
• Electronic reporting options
• Pre-employment physicals and other new member form requirements
• Due dates
• Forms to be completed when a member retires
OP&F also has a training video for self-serve payroll uploads and pension reports through the OP&F website. The video can be accessed by clicking here.
If you’re interested in more information or training, contact OP&F at firstname.lastname@example.org, or call 614-628-8311.
All newly-hired OP&F members are required to review and complete Form SSA-1945 Statement Concerning Your Employment in a Job Not Covered by Social Security . The form is available on the OP&F website Employer Forms page and should be given to the member when hired by the employer. This is a requirement established by the federal government through The Social Security Administration, not OP&F. There are two components covered by this form; the Windfall Elimination Provision and the Government Pension Offset.
Under the Windfall Elimination Provision, a member’s Social Security retirement benefit might be reduced if a recipient receives a public pension from a job where he or she does not pay into Social Security. This is the case for OP&F members. However, if the member worked for a period of time in the private sector, he/she also may be entitled to a Social Security benefit at retirement. The Windfall Elimination Provision potentially reduces the amount the member may collect in Social Security benefits. The Government Pension Offset piece of the law affects the members’ potential spousal Social Security benefits in a similar way.
Although it is the member’s task to review and complete Form SSA-1945, it is the employer’s responsibility to submit a copy of the completed form to OP&F. This form, along with the Member Information Form, and the complete results of the pre-employment physical, including the Member’s Medical Questionnaire & Physician’s Certification, must be submitted to OP&F within 60 days of the member’s full-time hire date. Form SSA-1945 (along with the other required new-hire forms) can be located by clicking here.
Service credit can be granted to members whose police or fire service is interrupted by active military duty. In order to receive a grant of service credit for this military duty, members must have served honorably in the military and applied for reinstatement with their former employer within 90 days of the date of discharge from the military.
If the member is reinstated under these guidelines, neither the member nor the employer are responsible for submitting the employee share of contributions for the time spent fulfilling the military service obligation. However, the employer must submit the employer share of contributions based on the wages the member would have earned had they continued police or fire employment during the period of military service.
It is the member’s responsibility to contact OP&F to begin the granting process. Once a member applies to have service credit granted for a period of military duty, OP&F will send a certification packet to the member. Included in this packet is a certification form that the member will give to the employer to complete. The employer must certify the first date the member was off payroll for military leave and the first date the member was back on payroll after returning from the leave. The employer must also provide the base hours and wages the member would have earned had he or she continued police or fire employment during the period of military service.
In some cases the member may need this granted time in order to be eligible for a retirement or disability benefit, or to enroll in the Deferred Retirement Option Plan (DROP). Therefore, it is important that both the member and employer paperwork be timely completed, and the employer payment made in order to apply the service credit.
Employers can also submit lists to OP&F with member email addresses if they are available. OP&F will only use these emails addresses for OP&F communication purposes and will not supply them to other entities.
Important dates and deadlines are also posted on OP&F’s website under the Employers menu in the Calendar of Billing Deadlines and Events section.
30 Payroll deductions, member and employer contributions and payroll reports for March 2021
15 1st Semi-Annual Accrued Liability Bills
31 Payroll deductions, member and employer contributions and payroll reports for April 2021June
30 Payroll deductions, member and employer contributions and payroll reports for May 2021
31 Payroll deductions, member and employer contributions and payroll reports for June 2021
OP&F provides the Employer Digest as a general reference material in order to assist employers in properly reporting required contributions to OP&F, as well as submitting the required forms and materials that are necessary to provide benefits for our members. As a general reference material, the Employer Digest may not sufficiently represent all of the details applicable to the subjects discussed. Nothing contained in this newsletter is meant to interpret, extend or change, in any way, OP&F’s governing statutes, administrative rules or policies. If you have any questions or need information on any subjects referenced in the Employer Digest, please contact OP&F.
COPYRIGHT © 2021 by Ohio Police & Fire Pension Fund, All Rights Reserved.
For a PDF copy of the Spring 2021 Employer Digest, please click here.