130th Ohio General Assembly
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H. B. No. 315  As Introduced
As Introduced

127th General Assembly
Regular Session
2007-2008
H. B. No. 315


Representative Oelslager 

Cosponsors: Representatives Lundy, Yuko, Barrett, Evans, Healy, Okey, Seitz, Szollosi, Hughes, Brown, Williams, B., Chandler, Boyd, Dyer 



A BILL
To amend sections 3307.14, 3307.141, 3307.19, 3307.26, 3307.28, 3307.292, 3307.35, 3307.351, 3307.352, 3307.39, and 3307.61 and to enact sections 3307.143, 3307.262, and 3307.281 of the Revised Code to create the Health Care Fund in the State Teachers Retirement System (STRS) and make other changes in STRS law.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3307.14, 3307.141, 3307.19, 3307.26, 3307.28, 3307.292, 3307.35, 3307.351, 3307.352, 3307.39, and 3307.61 be amended and sections 3307.143, 3307.262, and 3307.281 of the Revised Code be enacted to read as follows:
Sec. 3307.14.  The state teachers retirement board shall be the trustee of certain funds hereby created as follows:
(A) The "teachers' savings fund" is the fund in which shall be accumulated the contributions deducted from the compensation of teachers participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code, as provided by section 3307.26 of the Revised Code, together with the interest credited thereon. Such accumulated contributions refunded upon withdrawal, or payable to an estate or beneficiary as provided in this chapter, shall be paid from this fund. Any accumulated contributions forfeited by the failure of a contributor, an estate, or a beneficiary to claim the same shall be transferred from this fund to the guarantee fund. The accumulated contributions of a member or of a teacher who qualifies for a benefit under section 3307.35 of the Revised Code shall be transferred at the member's or teacher's retirement from the teachers' savings fund to the annuity and pension reserve fund. The accumulated contributions of a member who dies prior to superannuation retirement that are forfeited by the qualified beneficiary in exchange for monthly survivor benefits, as provided by section 3307.66 of the Revised Code, shall be transferred to the survivors' benefit fund. The accumulated contributions of a superannuate or other system retirant as defined in section 3307.35 of the Revised Code shall be transferred to the survivors' benefit fund for payment of a lump-sum lump sum benefit to a beneficiary as provided in that section. As used in this division, "accumulated contributions" has the same meaning as in section 3307.50 of the Revised Code.
(B) The "employers' trust fund" is the fund to which the employer contribution made on behalf of a teacher participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code shall be credited and in which shall be accumulated the reserves held in trust for the payment of all pensions or other benefits provided by sections 3307.35, 3307.58, 3307.59, 3307.60, 3307.63, 3307.631, 3307.66, 3307.6912, and 3307.98 of the Revised Code, to teachers retiring or receiving disability benefits in the future or to their qualified beneficiaries, and from which the reserves for such pensions and other benefits shall be transferred to the annuity and pension reserve fund and to the survivors' benefit fund. The balances as of August 31, 1957, in the employers accumulation fund shall be transferred to this fund. As of September 1, 1957, an additional amount shall be transferred from the employers' trust fund to the annuity and pension reserve fund in the amount required to complete the funding of the prior service, as defined in section 3307.50 of the Revised Code, and military service pensions then payable.
(C) The "annuity and pension reserve fund" is the fund from which shall be paid all annuities, pensions, and disability benefits under the plan described in section 3307.50 to 3307.79 of the Revised Code for which reserves have been transferred from the teachers' savings fund and the employers' trust fund.
(D) The "survivors' benefit fund" is the fund from which shall be paid the survivors' benefits provided by section 3307.66 of the Revised Code and the lump sum payment to beneficiaries as provided in section 3307.35 of the Revised Code, and to which shall be transferred from the employers' trust fund the amount required to fund all liabilities as of the end of each year.
(E) The "guarantee fund" is the fund from which interest is transferred and credited on the amounts in the funds described in divisions (A), (B), (C), and (D) of this section, and is a contingent fund from which the special requirements of said funds may be paid by transfer from this fund. All income derived from the investment of funds by the state teachers retirement board as trustee under section 3307.15 of the Revised Code, together with all gifts and bequests, or the income therefrom, shall be paid into this fund.
Any deficit occurring in any other fund that will not be covered by payments to that fund, as otherwise provided in this chapter, shall be paid by transfers of amounts from the guarantee fund to such fund or funds. Should the amount in the guarantee fund be insufficient at any time to meet the amounts payable therefrom, the amount of such deficiency, with regular interest, shall be paid by an additional employer rate of contribution as determined by the actuary and shall be approved by the board, and the amount of such additional employer contribution shall be credited to the guarantee fund.
The board may accept gifts and bequests. Any funds that may come into the possession of the board in this manner or that may be transferred from the teachers' savings fund by reason of lack of a claimant, or any surplus in any fund created in divisions (A) to (F) of this section, or any other funds whose disposition is not otherwise provided for, shall be credited to the guarantee fund.
(F) The expense fund is the fund from which shall be paid the expenses for the administration and management of the state teachers retirement system as provided by this chapter.
(G) The "defined contribution fund" is the fund in which shall be accumulated the contributions deducted from the compensation of teachers participating in a plan established under section 3307.81 of the Revised Code, as provided in section 3307.26 of the Revised Code, together with any earnings and employer contributions credited thereon.
(H) The "health care fund" is the fund in which shall be accumulated the employee contributions described in section 3307.262 of the Revised Code, employer contributions described in section 3307.281 of the Revised Code and any amounts allocated prior to the effective date of this section by the board for health care coverage described in section 3307.39 of the Revised Code, together with any earnings credited thereon.
The fund shall exist only so long as the retirement system provides health care coverage under section 3307.39 of the Revised Code. The fund shall be established under Internal Revenue Code section 401(h) as a separate account, and is the fund from which shall be paid the health care coverage made available under sections 3307.39 and 3307.61 of the Revised Code, except that payments from the fund shall be limited as provided by Internal Revenue Code section 401(h).
The fund shall not hold contributions in individual accounts, rather employee and employer contributions shall be pooled.
Sec. 3307.141.  Wherever in this chapter, reference is made to the teachers' savings fund, the employers' trust fund, the annuity and pension reserve fund, the guarantee fund, the survivors' benefit fund, the expense fund, or the defined contribution fund, or the health care fund, such reference shall be construed to have been made to each as a separate legal entity but the funds established under divisions (A) to (F) of section 3307.14 of the Revised Code shall comprise a single trust fund under Internal Revenue Code section 401(a) held for the exclusive benefit of the employees and beneficiaries participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code. The defined contribution fund established under division (G) of section 3307.14 of the Revised Code shall comprise a single trust fund under Internal Revenue Code section 401(a), held for the exclusive benefit of the employees and beneficiaries participating in a plan established under section 3307.81 of the Revised Code. This section does not prevent the deposit or investment of all such moneys intermingled for such purpose but such funds shall be separate and distinct legal entities for all other purposes.
Sec. 3307.143. If the state teachers retirement board discontinues health care coverage authorized under section 3307.39 of the Revised Code, on satisfaction of all liabilities for health care coverage at the time of the discontinuance of coverage, the board shall transfer any surplus in the health care fund established under division (H) of section 3307.14 of the Revised Code in a fair and appropriate manner to the employers that have contributed to the fund.
Sec. 3307.19.  The Except as otherwise provided in this section, the state teachers retirement board shall provide for the maintenance of an individual account for each contributor showing the amount of the contributor's contributions and any accumulations thereon. Individual accounts shall not be maintained for contributions into the health care fund established by division (H) of section 3307.14 of the Revised Code.
Sec. 3307.26.  Each teacher shall contribute eight per cent of the teacher's earned compensation, except that the state teachers retirement board may raise the contribution rate to a rate not greater than ten per cent of the teacher's earned compensation. For The percentage of earned compensation contributed under section 3307.262 of the Revised Code shall not be included in computing the maximum contribution rate authorized by this section.
For teachers participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code, contributions shall be deposited in the teachers' savings fund. For teachers participating in a plan established under section 3307.81 of the Revised Code, contributions shall be deposited in the defined contribution fund. Contributions made pursuant to this section shall not exceed the limits established by section 415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 415, as amended.
The contribution for all teachers shall be deducted by the employer on each payroll in an amount equal to the applicable per cent of the teachers' paid compensation for such payroll period or other period as the board may approve. All contributions on paid compensation for teachers participating in plans established under section 3307.81 of the Revised Code shall be remitted at intervals required by the state teachers retirement system under section 3307.86 of the Revised Code. All contributions on earned compensation for teachers participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code shall be remitted to the state teachers retirement system by the thirtieth day of June of each year. Each school district shall encumber sufficient moneys by the thirtieth day of June of each year to account for the difference, if any, that may exist between contributions that would be withheld based upon compensation earned by a teacher during the year ending the thirtieth day of June and the contributions withheld based upon compensation paid to the teacher for the year. Deductions from payroll for contributions under this section, on an annual basis, shall not exceed eight per cent or other percentage established by the board authorized by this section required by this chapter shall be remitted to the state teachers retirement system in accordance with rules adopted by the board under section 3307.04 of the Revised Code.
At retirement under the plan described in sections 3307.50 to 3307.79 of the Revised Code, or upon a member's death prior to retirement under that plan, if contributions have been made after September 1, 1959, in excess of the contributions normally required to provide the retirement or survivor benefit, the excess contributions may be refunded to the member, to the member's beneficiary, or to the member's estate in a lump sum, or may be used to provide additional income.
The board may determine with regard to any member participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code whether the limits established by division (C) of section 3307.58 of the Revised Code have resulted in exclusion from use in the calculation of benefits under section 3307.58, 3307.59, or 3307.60 of the Revised Code of any compensation on which contributions have been made under this section. The board may adopt rules in accordance with section 111.15 of the Revised Code providing for the disposition of contributions attributable to such compensation and may dispose of the contributions in accordance with those rules. Any disposition of contributions made by the board in accordance with the rules shall be final.
The deductions under this section shall be made even though the minimum compensation provided by law for any teacher shall be reduced thereby. Every teacher shall be deemed to consent to the deductions made. Payment less the deductions shall be a complete discharge and acquittance of all claims and demands for the services rendered by the person during the period covered by the payment.
Additional deposits may be made to a member's account in the teachers' savings fund or defined contribution fund, subject to rules of the board. At retirement, the amount deposited with interest may be used to provide additional annuity income. The additional deposits may be refunded to the member before retirement, and shall be refunded if the member withdraws the member's refundable account. The deposits may be refunded to the beneficiary or estate if the member dies before retirement.
Sec. 3307.262. As long as the state teachers retirement board provides health care coverage under section 3307.39 of the Revised Code, each teacher shall pay a percentage of the teacher's earned compensation to the health care fund established under division (H) of section 3307.14 of the Revised Code. The percentage shall not exceed two and one-half per cent of the teacher's earned compensation. The board shall set the rate of contribution, but shall not increase the rate by more than one-half per cent per year for the first five years after the effective date of this section nor exceed any other limits established under this section.
The contribution for each teacher shall be deducted by the employer on each payroll in an amount equal to the applicable percentage of the teacher's paid compensation for the payroll period or other period as the board may approve.
The deductions under this section shall be made even though the minimum compensation provided by law for any teacher shall be reduced thereby. Each teacher shall be deemed to consent to the deductions made. Payment less the deductions shall be a complete discharge and acquittance of all claims and demands for services rendered by the teacher during the period covered by the payment.
Employee contributions to the health care fund are subject to the limits provided in Internal Revenue Code section 401(h). Contributions shall not be deposited to individual accounts but shall be contributed to a pooled account with all other employee contributions under this section and employer contributions under section 3307.281 of the Revised Code and, as such, shall not be considered for purposes of the limitations under Internal Revenue Code section 415. In the event that a teacher's interest in the health care fund is forfeited prior to the discontinuance of health care coverage under section 3307.39 of the Revised Code by the board, an amount equal to the forfeited interest shall be applied as soon as possible to reduce employer contributions under section 3307.281 of the Revised Code.
Sec. 3307.28.  Each employer shall pay annually to the state teachers retirement system an amount certified by the secretary which shall be a certain per cent of the earnable compensation of all members, and which shall be known as the "employer contribution." For members participating in the plan described in sections 3307.50 to 3307.79 of the Revised Code, the employer contribution shall be deposited into the employers' trust fund. For members participating in a plan established under section 3307.81 of the Revised Code, the employer contribution shall be deposited into the defined contribution fund in accordance with the plan selected by the member, less the amount transferred under section 3307.84 of the Revised Code.
The rate per cent of the contribution shall be fixed by the actuary on the basis of the actuary's evaluation of the liabilities of the system, not to exceed fourteen per cent, and shall be approved by the state teachers retirement board. The board may raise the rate per cent of the contribution to fourteen per cent of the earnable compensation of all members. In making such evaluation, the actuary shall use, as the actuarial assumptions, such interest rates and mortality and other tables as are adopted by the board. The actuary shall compute the percentage of such earnable compensation, to be known as the "employer rate," required annually to fund the liability for all benefits under sections 3307.50 to 3307.79 of the Revised Code, after deducting therefrom the benefits provided by the member's accumulated contributions, as defined in section 3307.50 of the Revised Code, deposits, and other appropriations, and to fund any deficiencies in the funds described in divisions (A) to (F) of section 3307.14 of the Revised Code.
The percentage of earned compensation contributed under section 3307.281 of the Revised Code shall not be included in computing the maximum contribution rate authorized by this section.
Sec. 3307.281. As long as the state teachers retirement board provides health care coverage under section 3307.39 of the Revised Code, each employer shall pay an amount equal to a percentage of each teacher's earned compensation to the health care fund established under division (H) of section 3307.14 of the Revised Code. The percentage shall not exceed two and one-half per cent of each teacher's earned compensation. The board shall set the rate of contribution, but shall not increase the rate by more than one-half per cent per year for the first five years after the effective date of this section nor exceed any other limits established under this section.
Employer contributions to the health care fund are subject to the limits provided in Internal Revenue Code section 401(h). Contributions shall not be deposited to individual accounts but shall be contributed to a pooled account with all other employer contributions under this section and employee contributions under section 3307.262 of the Revised Code and, as such, shall not be considered for purposes of the limitations under Internal Revenue Code section 415.
Sec. 3307.292.  The state teachers retirement board shall adopt rules establishing penalties to be paid by employers who fail to transmit to the state teachers retirement system the contributions required under sections 3307.26 and, 3307.262, 3307.28, and 3307.281 of the Revised Code. The rules may provide for interest, at a rate determined by the board, in addition to the penalties.
Sec. 3307.35.  (A) As used in this section and section 3307.352 of the Revised Code, "other system retirant" means a member or former member of the public employees retirement system, Ohio police and fire pension fund, school employees retirement system, state highway patrol retirement system, or Cincinnati retirement system who is receiving age and service or commuted age and service retirement, or a disability benefit from a system of which the retirant is a member or former member.
(B) Subject to this section and section 3307.353 of the Revised Code, a superannuate or other system retirant may be employed as a teacher.
(C) A superannuate or other system retirant employed in accordance with this section shall contribute to the state teachers retirement system in accordance with section sections 3307.26 and 3307.262 of the Revised Code and the employer shall contribute in accordance with sections 3307.28, 3307.281, and 3307.31 of the Revised Code. Such contributions shall be received as specified in section 3307.14 of the Revised Code. A superannuate or other system retirant employed as a teacher is not a member of the state teachers retirement system, does not have any of the rights, privileges, or obligations of membership, except as provided in this section, and is not eligible to receive health, medical, hospital, or surgical benefits coverage under section 3307.39 of the Revised Code for employment subject to this section.
(D) The employer that employs a superannuate or other system retirant shall notify the state teachers retirement board of the employment not later than the end of the month in which the employment commences. Any overpayment of benefits to a superannuate by the retirement system resulting from an employer's failure to give timely notice may be charged to the employer and may be certified and deducted as provided in section 3307.31 of the Revised Code.
(E) On receipt of notice from an employer that a person who is an other system retirant has been employed, the state teachers retirement system shall notify the state retirement system of which the other system retirant was a member of such employment.
(F) A superannuate or other system retirant who has received an allowance or benefit for less than two months when employment subject to this section commences shall forfeit the allowance or benefit for any month the superannuate or retirant is employed prior to the expiration of such period. Contributions shall be made to the retirement system from the first day of such employment, but service and contributions for that period shall not be used in the calculation of any benefit payable to the superannuate or other system retirant, and those contributions shall be refunded on the superannuate's or retirant's death or termination of the employment. Contributions made on compensation earned after the expiration of such period shall be used in calculation of the benefit or payment due under section 3307.352 of the Revised Code.
(G) On receipt of notice from the Ohio police and fire pension fund, public employees retirement system, or school employees retirement system of the re-employment of a superannuate, the state teachers retirement system shall not pay, or if paid shall recover, the amount to be forfeited by the superannuate in accordance with section 145.38, 742.26, or 3309.341 of the Revised Code.
(H) If the disability benefit of an other system retirant employed under this section is terminated, the retirant shall become a member of the state teachers retirement system, effective on the first day of the month next following the termination, with all the rights, privileges, and obligations of membership. If such person, after the termination of the retirant's disability benefit, earns two years of service credit under this retirement system or under the public employees retirement system, Ohio police and fire pension fund, school employees retirement system, or state highway patrol retirement system, the retirant's prior contributions as an other system retirant under this section shall be included in the retirant's total service credit, as defined in section 3307.50 of the Revised Code, as a state teachers retirement system member, and the retirant shall forfeit all rights and benefits of this section. Not more than one year of credit may be given for any period of twelve months.
(I) This section does not affect the receipt of benefits by or eligibility for benefits of any person who on August 20, 1976, was receiving a disability benefit or service retirement pension or allowance from a state or municipal retirement system in Ohio and was a member of any other state or municipal retirement system of this state.
(J) The state teachers retirement board may make the necessary rules to carry into effect this section and to prevent the abuse of the rights and privileges thereunder.
Sec. 3307.351.  (A) As used in this section:
(1) In addition to the meaning in section 3307.01 of the Revised Code, when appropriate "compensation" has the same meaning as in section 3309.01 of the Revised Code.
(2) "Earnable salary" has the same meaning as in section 145.01 of the Revised Code.
(3) "STRS position" means a position for which a member of the state teachers retirement system is making contributions to the system.
(4) "Other state retirement system" means the public employees retirement system or the school employees retirement system.
(5) "State retirement system" means the public employees retirement system, state teachers retirement system, or the school employees retirement system.
(B)(1) A member of the state teachers retirement system who holds two or more STRS positions may retire under section 3307.57, 3307.58, or 3307.60 of the Revised Code from the position for which the annual compensation at the time of retirement is highest and continue to contribute to the retirement system for the other STRS position or positions.
(2) A member of the state teachers retirement system who also holds one or more other positions covered by the other state retirement systems may retire under section 3307.57, 3307.58, or 3307.60 of the Revised Code from the STRS position and continue contributing to the other state retirement systems if the annual compensation for the STRS position at the time of retirement is greater than annual compensation or earnable salary for the position, or any of the positions, covered by the other state retirement systems.
(3) A member of the state teachers retirement system who holds two or more STRS positions and at least one other position covered by one of the other state retirement systems may retire under section 3307.57, 3307.58, or 3307.60 of the Revised Code from one of the STRS positions and continue contributing to the state teachers retirement system and the other state retirement system if the annual compensation for the STRS position from which the member is retiring is, at the time of retirement, greater than the annual compensation or earnable salary for any of the positions for which the member is continuing to make contributions.
(4) A member of the state teachers retirement system who has retired as provided in division (B)(2) or (3) of section 145.383 or division (B)(2) or (3) of section 3309.343 of the Revised Code may continue to contribute to the state teachers retirement system for an STRS position if the member held the position at the time of retirement from the other state retirement system.
(5) A member who contributes to the state teachers retirement system in accordance with division (B)(1), (3), or (4) of this section shall contribute in accordance with section sections 3307.26 and 3307.262 of the Revised Code. The member's employer shall contribute as provided in section sections 3307.28 and 3307.281 of the Revised Code. Neither the member nor the member's survivors are eligible for any benefits based on those contributions other than those provided under section 145.384, 3307.352, or 3309.344 of the Revised Code.
(C)(1) In determining retirement eligibility and the annual retirement allowance of a member who retires as provided in division (B)(1), (2), or (3) of this section, the following shall be used to the date of retirement:
(a) The member's earnable salary and compensation for all positions covered by a state retirement system;
(b) Total service credit in any state retirement system, except that the credit shall not exceed one year of credit for any period of twelve months;
(c) The member's accumulated contributions.
(2) A member who retires as provided in division (B)(1), (2), or (3) of this section is a retirant for all purposes of this chapter, except that the member is not subject to section 3307.35 of the Revised Code for a position or positions for which contributions continue under those divisions or division (B)(4) of this section.
(D) A retired member receiving a benefit under section 3307.352 of the Revised Code based on employment subject to this section is not a member of the state teachers retirement system and does not have any rights, privileges, or obligations of membership. The retired member is a superannuate for purposes of section 3307.35 of the Revised Code.
(E) The state teachers retirement board may adopt rules to carry out this section.
Sec. 3307.352.  For purposes of this section, "superannuate" includes a member who retired under section 3307.351 of the Revised Code.
(A) Except as provided in division (B)(3) of this section, a superannuate or other system retirant who has made contributions under section 3307.35 or 3307.351 of the Revised Code may file an application with the state teachers retirement system for a benefit consisting of a single life annuity. The annuity shall have a reserve equal to the amount of the superannuate's or retirant's accumulated contributions, as defined in section 3307.50 of the Revised Code, for the period of employment, other than the contributions excluded pursuant to division (F) of section 3307.35 of the Revised Code, and an amount determined by the state teachers retirement board from the employers' trust created by section 3307.14 of the Revised Code, plus interest credited to the date of retirement at a rate of interest determined by the board. The superannuate or other system retirant shall elect either to receive the benefit as a monthly annuity for life or a lump sum payment discounted to the present value using a rate of interest determined by the board, except that if the monthly annuity would be less than twenty-five dollars per month the superannuate or retirant shall receive a lump sum payment.
A benefit payable under this division shall commence on the latest of the following:
(1) The last day for which compensation for all employment as a teacher was paid;
(2) Attainment by the superannuate or other system retirant of age sixty-five;
(3) If the superannuate or other system retirant was previously employed under section 3307.35 or 3307.351 of the Revised Code and previously received or is receiving a benefit under this division, completion of a period of twelve months since the effective date of the last benefit under this division.
(B)(1) A superannuate or other system retirant under age sixty-five who has made contributions under section 3307.35 or 3307.351 of the Revised Code may file an application with the state teachers retirement system for a return of those the retirant's accumulated contributions as defined in section 3307.50 of the Revised Code if both of the following conditions are met:
(a) The superannuate or retirant has terminated, for any reason other than death, the employment for which the contributions were made.
(b) If the superannuate or retirant received a return of contributions under this division for a previous period of employment under section 3307.35 or 3307.351 of the Revised Code, twelve months have passed since the date the retirement system returned the contributions.
(2) A return of accumulated contributions under this division shall consist of the sum of the following:
(a) The accumulated contributions the superannuate or other system retirant made under section 3307.35 or 3307.351 of the Revised Code;
(b) Interest at a rate determined by the state teachers retirement board credited to the date that the superannuate or retirant terminated the employment for which the contributions are made.
(3) Payment of a return of accumulated contributions under this division cancels the superannuate or retirant's right to a benefit under division (A) of this section for the service for which the contributions were made.
(C)(1) If a superannuate or other system retirant who made contributions under section 3307.35 or 3307.351 of the Revised Code dies before receiving a benefit under division (A) of this section or a return of contributions under division (B) of this section, a lump sum payment shall be paid to the beneficiary designated under division (D) of section 3307.562 of the Revised Code. The lump sum shall be calculated in accordance with division (A) of this section, except that the interest shall be credited as follows:
(a) If the superannuate or retirant was under age sixty-five at the time of death, the interest shall be credited through the month of death.
(b) If the superannuate or retirant was age sixty-five or older at the time of death, the interest shall be credited through the later of the month in which the superannuate or retirant terminated the employment for which the contributions are made or the month the superannuate or retirant attained age sixty-five.
(2) If at the time of death a superannuate or other system retirant receiving a monthly annuity under division (A) of this section has received less than the superannuate or retirant would have received as a lump sum payment, the difference between the amount received and the amount that would have been received as a lump sum payment shall be paid to the superannuate's or retirant's beneficiary designated under division (D) of section 3307.562 of the Revised Code.
(D) No amount received under this section shall be included in determining an additional benefit under section 3307.67 of the Revised Code or any other post-retirement benefit increase.
Sec. 3307.39.  (A) The state teachers retirement board may enter into an agreement with insurance companies, health insuring corporations, or government agencies authorized to do business in the state for issuance of a policy or contract of health, medical, hospital, or surgical benefits coverage, or any combination thereof, for those individuals receiving, under the plan described in sections 3307.50 to 3307.79 of the Revised Code, service retirement or a disability or survivor benefit who subscribe to the plan under sections 3307.50 to 3307.79 of the Revised Code. Notwithstanding any other provision of this chapter, the policy or contract may also include coverage for any eligible individual's spouse and dependent children and for any of the individual's sponsored dependents as the board considers appropriate. If all or any portion of the policy or contract premium is to be paid by any individual receiving service retirement or a disability or survivor benefit, the individual shall, by written authorization, instruct the board to deduct the premium agreed to be paid by the individual to the companies, corporations, or agencies.
The board may contract for coverage on the basis of part or all of the cost of the coverage to be paid from appropriate funds of the state teachers retirement system. The cost paid from the funds of the system shall be included in the employee's health care contribution rate established under section 3307.262 of the Revised Code and the employer's health care contribution rate provided by section sections 3307.28 and 3307.281 of the Revised Code.
The board may enter into an agreement under this division for coverage of recipients of benefits under a plan established under section 3307.81 of the Revised Code if the plan selected includes for health, medical, hospital, or surgical benefits coverage, or any combination thereof. The board may contract for coverage on the basis that the cost of the coverage will be paid by the recipient or by the plan to which the recipient contributed under this chapter. The board may offer to recipients plans that provide for different levels of coverage or for prepayment of the cost of coverage.
The board may provide for self-insurance of risk or level of risk as set forth in the contract with the companies, corporations, or agencies, and may provide through the self-insurance method specific benefits coverage as authorized by the rules of the board.
Neither the establishment nor the collection of employee or employer health care contributions under section 3307.262 or 3307.281 of the Revised Code creates any right to or accrual of any benefit or creates any obligation on the part of the state teachers retirement system to provide health care coverage or access to health care coverage to its members.
The board shall have and at all times retain full discretion as to whether to offer health care coverage or access to health care coverage and, if it decides to offer such coverage or access to coverage, the terms and conditions of the coverage. The board may at any time amend, change, eliminate, rescind, or discontinue providing health care coverage or access to health care coverage.
(B) The board shall make a monthly payment to each recipient of service retirement, or a disability or survivor benefit under the plan described in sections 3307.50 to 3307.79 of the Revised Code who is eligible for insurance coverage under part B of "The Social Security Amendments of 1965," 79 Stat. 301, 42 U.S.C.A. 1395j, as amended, and may make a monthly payment to a recipient of benefits under a plan established under section 3307.81 of the Revised Code who is eligible for that insurance coverage if the monthly payments are funded through the plan selected by the recipient. The payment shall be the greater of the following:
(1) Twenty-nine dollars and ninety cents;
(2) An amount determined by multiplying the basic premium for the coverage by a percentage, not exceeding ninety per cent, determined by multiplying the years of service, not exceeding thirty years, used in calculating the service retirement or benefit or, in the case of a recipient of benefits under a plan established under section 3307.81 of the Revised Code, the participant's years of service by a percentage determined by the board not exceeding three per cent.
The board shall make all payments under this division beginning the month following receipt of satisfactory evidence of the payment for the coverage.
(C) The board shall establish by rule requirements for the coordination of any coverage, payment, or benefit provided under this section or section 3307.61 of the Revised Code with any similar coverage, payment, or benefit made available to the same individual by the public employees retirement system, Ohio police and fire pension fund, school employees retirement system, or state highway patrol retirement system.
(D) The board shall make all other necessary rules pursuant to the purpose and intent of this section.
Sec. 3307.61.  The state teachers retirement board shall make available to each member or former member receiving a monthly allowance or benefit under sections 3307.50 to 3307.79 of the Revised Code on or after January 1, 1968, who has attained the age of sixty-five years, and who is not eligible to receive hospital insurance benefits under the federal old age, survivors, and disability insurance program, hospital insurance coverage substantially equivalent to the federal hospital insurance benefits, Social Security Amendments of 1965, 79 Stat. 291, 42 U.S.C.A. 1395c, as amended. This coverage shall also be made available, to the wife, husband, widow, or widower of such member or former member, provided such wife, husband, widow, or widower has attained age sixty-five and is not eligible to receive hospital insurance benefits under the federal old age, survivors, and disability insurance program. The widow or widower of a member or former member shall be eligible for such coverage only if he or she is the recipient of a monthly allowance or benefit from this system. One-half of the cost of the premium for such coverage shall be paid from the appropriate funds of the state teachers retirement system and one-half by the recipient of the allowance or benefit.
The cost of such coverage, paid from the funds of the system, shall be included in the employee's health care contribution rate established under section 3307.262 of the Revised Code and the employer's health care contribution rate provided by sections 3307.28, 3307.281, 3307.30, and 3307.31 of the Revised Code. The retirement board is authorized to make all necessary rules pursuant to the purpose and intent of this section, and shall contract for such coverage as provided in section 3307.39 of the Revised Code.
Notwithstanding sections 3307.28, 3307.30, and 3307.31 of the Revised Code, the employer's contribution rate shall not be increased until July 1, 1969, or later to reflect the increased costs created by this section.
Section 2.  That existing sections 3307.14, 3307.141, 3307.19, 3307.26, 3307.28, 3307.292, 3307.35, 3307.351, 3307.352, 3307.39, and 3307.61 of the Revised Code are hereby repealed.
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