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Ohio University announced plans March 6, 2009, for an early retirement incentive plan (ERIP) for eligible administrative and classified employees who are members of the Ohio Public Employees Retirement System (OPERS). The following information is intended to address frequently asked questions about the current Ohio University ERIP offering.

What is an early retirement incentive plan (ERIP)?
An early retirement incentive plan, or ERIP, commonly known as a buyout, allows an employer to purchase additional service credit for eligible employees. The additional credit may enable an employee to retire early or to retire with a larger retirement benefit than he or she may have otherwise. This plan is voluntary; the employee decides whether or not to participate.

What does Ohio University's current ERIP offer consist of?
Ohio University will purchase one year of service credit from OPERS for eligible employees. For those non-bargaining unit employees who sign up by April 1, 2009, and retire by May 31, 2009 [with a June 1, 2009, OPERS retirement date], the university also will provide a $5,000 incentive bonus. Those who retire after June 1 will receive the additional year of service credit, but no incentive bonus.

Who is eligible to participate?
Administrative and classified employees who are members of OPERS and have achieved a certain age and/or level of service are eligible to participate in the current ERIP.

Employees are considered eligible if:

•  they are currently eligible or become eligible to retire due to the one-year buyout based on:

• they become eligible any time during the open period (March 9, 2009 through August 31, 2009)
• they become eligible due to purchasing service credit (exempt, refunded, military, etc.)

Employees who are at least age 60 with less than 5 years of service should contact OPERS, 1-800-222-7377, to determine eligibility.

If I have service credit from another university, could that make me eligible for the ERIP?
Eligibility is based on total state service. If you contributed to Ohio’s Public Employees Retirement System (OPERS) at another university contact OPERS at 1-800-222-7377 to determine your total state service credit, as Ohio University may not have record of other state time.

When would I have to decide whether or not I want to participate?
Employees have until August 31, 2009, to decide if they wish to participate. Non-bargaining unit employees who sign a statement of intent to participate by April 1, 2009, and retire by May 31, 2009 [with a June 1, 2009, OPERS retirement date] will receive a $5,000 incentive bonus. The $5,000 bonus is being negotiated for members of the bargaining unit.

If I participate in the ERIP, will one year be added to my current service credit or only enough to bring me up to where I can retire?
Yes, one year will be added; however, the most service credit an employee may receive is either 20% of their state service credit or one year – whichever is less. For example, someone who is 60 years old and has 5 years of service would be eligible to receive a buyout of 1 year. (5 years x 20% = 1 year).

The Ohio Revised Code does not permit employers to purchase more than 20% of an employee's state service credit; therefore, a person must have 5 years to receive the full one-year buyout; those with less than 5 years should contact OPERS to verify their eligibility. 

Will the one purchased year increase my final average salary?
No, your final average salary is calculated based on actual years worked and is the average of your three highest years of earnings.

What resources are available to help me determine my eligibility and level of benefits?

• The OPERS Web site (www.opers.org) can provide online estimates of the retirement benefit for which you are eligible. There are two different ways to access estimates on OPERS' web site:
• The Members Benefits System (MBS) section of OPERS allows you to create an account and obtain estimates based on your membership data. 
• At the main OPERS Web site, employees can obtain estimates by visiting the "members" heading, selecting  "traditional plan" and then clicking on "benefit estimator." Use this calculator to determine your retirement benefit. Your OPERS annual statement will be helpful when completing estimates.

•  To determine your purchasable time, call 1-800-222-7377. (Ohio University does not have access to your OPERS account.)

• For informational updates as they become available, visit www.ohio.edu/hr/benefits/retirement/erip_info.cfm

 
Will all eligible employees qualify for the incentive?
Non-bargaining unit employees who are eligible to retire by June 1, 2009 (including those who become eligible due to the buyout), qualify for the $5,000 incentive. For example, a 55-year-old employee who will have 24 years of service on August 1, 2009, would NOT be eligible for the $5,000 incentive because he or she would not be eligible to retire on or before June 1, 2009, even with the additional year of service provided by the buyout.

An employee must sign up for the plan by April 1, 2009, to receive the $5,000 incentive.

If I receive the $5,000 incentive, will this be added to my final annual salary?
No, incentives are not considered earnable salary according to OPERS. No OPERS deduction will be taken from this amount.

How much tax will be withheld from the incentive?
A flat tax --  25% for federal and 3.5% for state -- will be applied. A city tax also will be applied. Employees may be able to minimize taxes by utilizing a 403B or 457 retirement account. Please contact your 403B or 457 retirement account provider for more details.

How do I sign up for the ERIP or learn more about it?
There are a number of options available to complete your required retirement paperwork. You can meet with OPERS or a member of your Human Resources staff:

• Call OPERS, 1-800-222-7377, to schedule an appointment in Columbus
• OPERS also accepts walk-in appointments from 7:30 a.m. to 4 p.m. Monday through Friday. The office is located at 277 E.  Town St., Columbus, Ohio, 43215.
• OPERS will be on campus April 28 and 29 for individual appointments; call 740-593-1636 for availability
• Call University Human Resources at 740-593-1636 to schedule an individual appointment with an HR staff member
• In addition, HR staff will host group sessions that will walk participants through the OPERS online estimator program to prepare individual retirement and healthcare estimates. An active e-mail account is required. Call University Human Resources to sign up for one of the sessions, titled "Navigating OPERS Member Benefits System (MBS)"

 Employees must complete the following forms in order to participate in the ERIP:

• Ohio University ERIP Statement of Intent
• OPERS Application for Retirement
• OPERS Retirement Incentive Plan Employee and Employer Agreement
• Ohio University Sick Leave Conversion Statement

• Birth certificate
• Beneficiary's (spouse) birth certificate, if applicable
• Marriage certificate, if applicable

Required forms and a checklist are available at the University Human Resources Web page: http://www.ohio.edu/hr/benefits/ERIP_packet09.cfm

Hard copies are also available for pick up at University Human Resources.

All forms can be submitted to University Human Resources for processing.

Is there an optimum time of the month to retire?
Per OPERS rules, retirements are effective the first day of the month following the last day worked. Working through the end of the month allows the employee to achieve the highest final average salary and allows the employee to avoid gaps in pay and health-care coverage. OPERS requests that paperwork be completed and submitted 60 days prior to the retirement effective date, or as soon as possible.

Can I participate in the ERIP and later be rehired by Ohio University?
Participating in the ERIP limits an employee's ability to be rehired by the university. Board of Trustee approval is required for a retiree to be rehired.

Will I receive one year's worth of sick leave and vacation time?
No, eligible employees who participate in the plan will receive one year of service credit. The employee will retire with their current sick leave and vacation balance at the time of retirement. 

How much of my sick leave will I receive upon retirement?
Classified employees who retire with 10 or more years of state service will receive half of their sick leave balance up to a maximum of 480 hours/60 days, per Ohio University Policy 40.030).

Administrators with 10 or more years of service would receive one quarter of their sick leave balance up to a maximum of 30 days, per Ohio University Policy 40.029.

Will I receive a vacation payout?
Yes, classified employees who have passed their initial probation will receive payment for earned and unused vacation, per Ohio University Policy 41.000.

Administrative staff will receive payment for earned but unused vacation time up to a maximum of 32 days, per Ohio University Policy 41.001.

Will I continue to be covered under Ohio University's health insurance?
No, eligible employees will sign up for health-care coverage through OPERS. An employee must have 10 years of Ohio service credit (not including the one year buyout) to qualify for the OPERS health-care plan. Visit https://www.opers.org/healthcare/index.shtml for more information on OPERS health-care options.

If I retire, will I be eligible for educational benefits?
Yes, retirees and their dependents will continue to receive educational fee waivers from Ohio University, per Ohio University policies 40.015 and 40.016.

OPERS retirement benefits are effective the first day of the month following the last day worked. Working through the end of the month allows the employee to achieve the highest final average salary and allows the employee to avoid gaps in pay and health-care coverage.

• April 1, 2009, is the earliest an employee may retire under this plan

• The plan is effective March 9, 2009, through August 31, 2009

• The $5,000 incentive is provided to those non-bargaining unit employees who sign the ERIP statement of intent by April 1, 2009, and retire by May 31, 2009 [with a June 1, 2009, OPERS retirement date].

• The employee must become eligible by August 31, 2009, in order to participate in the plan.

ERIP: Early retirement incentive plan, state law permits Ohio's public employers to establish a retirement incentive plan. Such a plan, if established, allows the employer to purchase additional service credit for eligible employees, enabling those employees to retire early.

FAS:  Final Average Salary, average of the employee's three highest years of earnings.

OPERS ANNUAL STATEMENT: Contains information as of December 31, 2008, including the employee's accrued service credit, estimated final average salary and projected retirement benefits.

EARNABLE SALARY: Under Ohio law, contributions are due only on "earnable salary" paid to a public employee for actual services performed by the employee. For example, salary and wages are considered 'earnable salary' where as payments made at retirement for accrued vacation and sick leave are not.