Pension legislation is causing a small update for current revised plan recipients of the Ohio Public Employees Retirement System’s disability benefits program.
This change affects the date at which a revised plan disability benefit recipient switches over to an age-and-service retirement benefit. We call that a “conversion retirement,” and after Jan. 7, 2013, the conversion retirement date will be based on the member’s age-and-service retirement transition group.
By Ohio law, current revised plan disability benefit recipients must convert to an age-and-service retirement at the appropriate time. For members who began receiving benefits before age 60, that conversion date is age 65.
As of Jan. 7, members who began receiving a disability benefit before age 60 will convert from a disability benefit to an age-and-service retirement benefit based on the eligibility requirement for his/her retirement transition group. Group A members will continue to convert at age 65. However, Group B members now will convert at age 66, and Group C members will convert at age 67.
This adjustment is being made to reflect the new minimum ages required to qualify for an unreduced age-and-service retirement benefit. Pension legislation is increasing the age to 66 and 67 for Group B and Group C members, respectively.
At conversion, disability benefit recipients receive the greater of:
- Final average salary times 2.2 percent, multiplied by years of service (with the benefit not to exceed 45 percent of FAS)
- The regular or law enforcement benefit calculation, using only years of contributing service.
No current disability recipients will be impacted by the new pension law while they are receiving the disability benefit. But in converting to an age-and-service retirement, they will be subject to all of the changes in the pension law, which we have detailed in the Comprehensive Guides to Pension and Health Care.
Current disability benefit recipients also will face changes in health care, mostly according to the general revisions that OPERS approved this year. Their health care allowances will be based on their years of service and their age at retirement, and there will be a three-year transition to the new allowance percentages.
It’s important to note that members who apply for a conversion retirement with an effective date on or after Jan. 1, 2014, must meet the new age-and-service requirements to be eligible for health care coverage. Those thresholds are 20 years of service at age 60 or 30 years of service at any age.