Employer Digest

Winter 2022

HOUSE BILL 512

PUBLIC SAFETY PENSION MODERNIZATION ACT

On Dec. 2, 2021, OP&F Executive Director Mary Beth Foley represented the OP&F Board at a press conference with State Representatives Cindy Abrams (a former police officer) and Brian Baldridge (a former firefighter) to introduce a bill that would raise the employer’s contribution rates for OP&F members. It’s important to note that employers’ contributions have remained unchanged since 1986.

OP&F addressed that our members have taken benefit cuts, health care cuts, and seen the employee contribution increase in the last eight years, while the employer contribution rates haven’t changed since 1986. If passed, HB 512 will increase the contributions from fire employers by 2.5 percent. For police employers, the increase would be 7.0 percent. The increases would be phased in over a five year period. The 26.5 percent employer contribution being sought is the same employer rate currently approved by the legislature for the Ohio Highway Patrol Retirement System.

"We owe an obligation to our police officers, retired police officers, to make sure that they have what they were promised and we have to figure that out," said Ohio Governor Mike Dewine.

While OP&F’s financial outlook appears strong, meeting and beating the benchmark 30-year solvency, the forecast is based on a higher-than-industry-average investment returns of 8.0 percent. It’s important to note that reducing the fund’s assumed rate of return by just one quarter of one percent moves the fund outside the 30-year required funding window.

OP&F’s success so far has also been dependent on $3.2 billion in benefit cuts (which includes a 2.25 percent increase in employee contributions) and an additional $150 million from changes to retiree health care in the last eight years.Add on new pressures like increasing early retirements, difficulty recruiting first responders, which limits payroll growth, and anticipated lower capital market growth and the formula is there for future challenges. Representative Abrams said that the time is now to make these changes.

“This bill is meant to ensure the long-term stability of the pension fund,” Abrams said. “This is good government at its best – looking ahead, acknowledging challenges on the horizon, and answering those challenges in a fiscally responsible way before it’s too late.”

Representative Baldridge said that first responders have always deserved and received the support of Ohio taxpayers.

“I’m proud of our commitment to first responders, and I’m glad OP&F has been a stable source for retirees, but after cuts and increasing what the employee must contribute to their pension, we must look for bigger solutions to ensure the next generation of first responders has our full support.”

The bill has the support of the OP&F Board of Trustees. Additionally, the Fraternal Order of Police of Ohio and the Ohio Association of Professional Firefighters support this bill.

OP&F Executive Director Mary Beth Foley praised Representatives Abrams and Baldridge for their help.

“Representative Abrams and Baldridge have been great partners for u as we work to modernize our fund for the next generations,” Foley said. “Their experience as first responders coupled with their commitment to good government should be an example for every member of the general assembly.”

The Public Safety Pension Modernization Act was recently assigned to the House Insurance Committee for consideration and will now pass through hearings and a house vote before going to the Senate. This general assembly meets through 2022 and action could be taken anytime during the year. OP&F values our relationship with our employer partners and will keep you informed as the legislative process continues.

EARNINGS PERIOD CALENDAR

To assist in the convenience of payroll reporting, OP&F employers can produce customized earning period calendars directly from the OP&F website. The OP&F Report of Retirement Deductions is based on earning dates rather than pay dates. It is helpful to know what those earning dates are for each report throughout the calendar year. The website calendar also lists the number of earning periods in each reporting month, as well as the due dates for the reports and payments.

To access the earning period information follow the link below. At that location, simply input the pay frequency, bi-weekly, weekly, semi-monthly, monthly, choose the correct pay period begin date, and then select submit. Employers can then view and download the printable version of the calendar which is a convenient visual reminder of beginning and ending dates for each month of the calendar year.

To use the Earnings Period Calendar please click here.

EMPLOYER TRAINING VIDEO AVAILABLE

OP&F has a training video on its website, featuring OP&F Employer Education Manager John Gresh, in a continuing effort to enhance employer education. The video provides a visual and verbal instructional overview of how to navigate the Employer Self-Serve application, including uploading, processing, and submitting a pension file. Already, over two-thirds of OP&F employers submit payrolls through the OP&F Self Serve application.

The employer education video also covers topics such as how to complete a manual entry pension report, how to complete and submit the Summary of Payment Remittance Information Form (Recap), and how to make an online payment. To view the Employer Training video please click here.

For questions or concerns about payroll reporting please contact Employer Education Manager John Gresh at jgresh@op-f.org or (614) 628-8430.

EMPLOYER SERVICES GROUP CONTACTS

The OP&F Employer Services Group ensures the accuracy and completeness of employer payroll reports, often working one-on-one with an employer's payroll clerk. Please feel free to contact the employer’s designated payroll representative for any questions or assistance in completing and submitting a payroll report. The Employer Services Group chart can also be found on the OP&F website by clicking here and is updated whenever there is a change.

NEW PENSION ADMINISTRATION SYSTEM COMING TO OP&F

As previously mentioned in the fall Employer Digest, OP&F is in the process of replacing the current pension administration system with updates and enhancements for both members and employers. It is expected that the new pension administration system will go live sometime in 2024.

Once the new system is implemented, OP&F employers will continue to report member pension data online, but with a more intuitive and accessible interface than the current version. OP&F will ask employers for feedback and they will be updated on the process as the new system design progresses toward completion. Employers will be notified well in advance of any updates.

OP&F is working with LifeWorks on the new system, a recognized leader in designing and implementing employee benefit programs, including pension administration. LifeWorks serves over 24,000 organizations nationally and internationally.

REPORTING ANNUAL PAYMENTS

At this time of year, many OP&F employers report annual member payments such as unused holiday, longevity, physical fitness incentives, sick leave incentives, certification pay, and merit bonuses, which require earning dates different from the standard earning dates of the regular pension reports. However, all retirement calculations are based on when payments are earned. For annual payments, these dates would most likely be Jan. 1 through Dec. 31 of the calendar year. If an employer’s payroll software does not assign annual earning dates to these payments, they may have to be manually adjusted so the dates are correct.

Once the pension reports are updated by OP&F the payments will be pro-rated across the earning period for the member(s), so that each reporting period in a member’s account will contain one-twelfth of the total annual payment. If the employer self-service web application is being used, the system will flag payments that don’t have the annual earning dates that are required. This will enable employers to correct these dates before submitting their report. It is also important to remember that all annual payments must be included in the regular pension reports, as OP&F is not able to process supplemental reports.

IMPORTANT DATES AND DEADLINES

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.

March 31

Payroll deductions, member and employer contributions and payroll reports for February 2022.

April 30

Payroll deductions, member and employer contributions and payroll reports for March 2022.

May 15

1st Semi-Annual Accrued Liability Bills.

May 31

Payroll deductions, member and employer contributions and payroll reports for April 2022.

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 © 2022 by Ohio Police & Fire Pension Fund, All Rights Reserved.

Posted 3/3/2022