Bar public employer from paying employee retirement contributions

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 473

2025-2026

Representative Thomas, D.

Cosponsors: Representatives Fischer,
Gross, Hiner, King

To
amend sections 145.47, 742.31, 3307.27, 3309.47, 4117.08, and 5505.15
of the Revised Code
to
prohibit a public employer from paying employee contributions to a
state retirement system.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
sections 145.47, 742.31, 3307.27, 3309.47, 4117.08, and 5505.15 of
the Revised Code be amended to read as follows:

Sec.
145.47.
(A)
Each public employee who is a contributor to the public employees
retirement system shall contribute eight per cent of the
contributor's earnable salary to the employees' savings fund, except
that the public employees retirement board may raise the contribution
rate to a rate not greater than ten per cent of the employee's
earnable salary.

The
contributions required under this section shall not be paid by an
employer on a contributor's behalf, but may be treated as employer
contributions for purposes of state and federal income tax deferred
income provisions.

(B)
The head of each state department, institution, board, and
commission, and the fiscal officer of each local authority subject to
this chapter, shall transmit to the system for each contributor
subsequent to the date of coverage an amount equal to the applicable
per cent of each contributor's earnable salary at such intervals and
in such form as the system shall require. The head of each state
department and the fiscal officer of each local authority subject to
this chapter shall transmit promptly to the system a report of
contributions at such intervals and in such form as the system shall
require, showing thereon all the contributions and earnable salary of
each contributor employed, together with warrants, checks, or
electronic payments covering the total of such deductions. A penalty
shall be added when such report, together with warrants, checks, or
electronic payments to cover the total amount due from the earnable
salary of all amenable employees of such employer, is filed thirty or
more days after the last day of such reporting period. The system,
after making a record of all receipts under this division, shall
deposit the receipts with the treasurer of state for use as provided
by this chapter.

(C)
Unless the board adopts a rule under division (D) of this section,
the penalty described in division (B) of this section for failing to
timely transmit a report, pay the total amount due, or both is as
follows:

(1)
At least one but not more than ten days past due, an amount equal to
one per cent of the total amount due;

(2)
At least eleven but not more than thirty days past due, an amount
equal to two and one-half per cent of the total amount due;

(3)
Thirty-one or more days past due, an amount equal to five per cent of
the total amount due.

The
penalty described in this division shall be added to and collected on
the next succeeding regular employer billing. Interest at a rate set
by the retirement board shall be charged on the amount of the penalty
in case such penalty is not paid within thirty days after it is added
to the regular employer billing.

(D)
The board may adopt rules to establish penalties in amounts that do
not exceed the amounts specified in divisions (C)(1) to (3) of this
section.

(E)
In addition to the periodical reports of deduction required by this
section, the fiscal officer of each local authority subject to this
chapter shall submit to the system at least once each year a complete
listing of all noncontributing appointive employees. Where an
employer fails to transmit contributions to the system, the system
may make a determination of the employees' liability for
contributions and certify to the employer the amounts due for
collection in the same manner as payments due the employers'
accumulation fund. Any amounts so collected shall be held in trust
pending receipt of a report of contributions for such public
employees for the period involved as provided by law and, thereafter,
the amount in trust shall be transferred to the employees' savings
fund to the credit of the employees. Any amount remaining after the
transfer to the employees' savings fund shall be transferred to the
employers' accumulation fund as a credit of such employer.

(F)
The fiscal officer of each local authority subject to this chapter
shall require each new contributor to submit to the system a detailed
report of all the contributor's previous service as a public employee
along with such other facts as the board requires for the proper
operation of the system.

(G)
Any member who, because of the member's own illness, injury, or other
reason which may be approved by the member's employer is prevented
from making the member's contribution to the system for any payroll
period, may purchase service credit for the period of absence within
one year. Credit shall be purchased under this division in accordance
with section 145.29 of the Revised Code.

Sec.
742.31.
(A)
Except as provided in division (B) of this section, each employee
shall contribute an amount equal to a percentage of the employee's
salary to the Ohio police and fire pension fund according to the
following schedule:

(1)
For salary earned in pay periods beginning not later than July 1,
2013, ten per cent;

(2)
For salary earned in pay periods beginning not earlier than July 2,
2013, but not later than July 1, 2014, ten and three-quarters per
cent;

(3)
For salary earned in pay periods beginning not earlier than July 2,
2014, but not later than July 1, 2015, eleven and one-half per cent;

(4)
For salary earned in pay periods beginning not earlier than July 2,
2015, twelve and one-quarter per cent.

(B)
Following the actuarial investigation required by division (B) of
section 742.14 of the Revised Code due on November 1, 2017, and
following each quinquennial actuarial investigation thereafter, if,
in consultation with the board's actuary, the board determines that
an adjustment to the contribution rate is appropriate, the board may,
in accordance with rules adopted under section 742.10 of the Revised
Code, do either of the following:

(1)
If the board's determination is that an increase in the contribution
rate is necessary to preserve the fiscal integrity of the fund,
increase the contribution rate;

(2)
If the board's determination is that a decrease in the contribution
rate would not materially impair the fiscal integrity of the fund,
decrease the contribution rate.

(C)

The
contributions required under this section shall not be paid by an
employer on an employee's behalf, but may be treated as employer
contributions for purposes of state and federal income tax deferred
income provisions.

(D)

The
amount shall be deducted by the employer from the employee's salary
as defined in division (L) of section 742.01 of the Revised Code for
each payroll period, irrespective of whether the minimum compensation
provided by law for the employee is reduced thereby. Every employee
shall be deemed to consent to the deductions, and payment to the
employee less the deductions is a complete discharge and acquittance
of all claims and demands for the services rendered by the employee
during the period covered by such payment.

Sec.
3307.27.
The
contributions required under section 3307.26 of the Revised Code

shall
not be made by an employer on a teacher's behalf, but
may
be
treated
as
paid
by the employer in accordance with division (h) of section 414 of the
"Internal Revenue Code of 1986," 100 Stat. 2085, 26
U.S.C.A. 414(h), as amended.

Sec.
3309.47.
Each
school employees retirement system contributor shall contribute eight
per cent of the contributor's compensation to the employees' savings
fund, except that the school employees retirement board may raise the
contribution rate to a rate not greater than ten per cent of
compensation.

The
contributions required under this section shall not be paid by an
employer on a contributor's behalf, but may be treated as employer
contributions for purposes of state and federal income tax deferred
income provisions.

The
contributions by the direction of the school employees retirement
board shall be deducted by the employer from the compensation of each
contributor on each payroll of such contributor for each payroll
period and shall be an amount equal to the required per cent of such
contributor's compensation. On a finding by the board that an
employer has failed or refused to deduct contributions for any
employee during any year and to transmit such amounts to the
retirement system, the retirement board may make a determination of
the amount of the delinquent contributions, including interest at a
rate set by the retirement board, from the end of each year, and
certify to the employer the amounts for collection. If the amount is
not paid by the employer, it may be certified for collection in the
same manner as payments due the employers' trust fund. Any amounts so
collected shall be held in trust pending receipt of a report of
contributions for the employee for the period involved as provided by
law and, thereafter, the amount in trust shall be transferred to the
employee's savings fund to the credit of the employee. Any amount
remaining after the transfer to the employees' savings fund shall be
transferred to the employers' trust fund as a credit of the employer.

Additional
deposits may be made to a member's account. 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 amount. The deposits may be refunded to the
beneficiary or estate if the member dies before retirement, and the
board shall determine whether regular interest shall be credited to
deposits thus refunded.

Sec.
4117.08.
(A)
All matters pertaining to wages, hours, or terms and other conditions
of employment and the continuation, modification, or deletion of an
existing provision of a collective bargaining agreement are subject
to collective bargaining between the public employer and the
exclusive representative, except as otherwise specified in this
section and division (E) of section 4117.03 of the Revised Code.

(B)

Neither

All

of
the following are
not

appropriate
subjects for collective bargaining:

(1)
The conduct and grading of civil service examinations, the rating of
candidates, the establishment of eligible lists from the
examinations, and the original appointments from the eligible lists;

(2)
For collective bargaining agreements that are entered into on or
after
the
effective date of this amendment
September
30, 2025
,
the ability of state employees to perform their duties at a location
designated as a worksite
;

(3)
For collective bargaining agreements entered into on or after the
effective date of this amendment, the payment of a contribution by a
public employer to the public employees retirement system, Ohio
police and fire pension fund, state teachers retirement system, state
highway patrol retirement system, or school employees retirement
system on behalf of an employee, contributor, or teacher, as
applicable, that the employee, contributor, or teacher otherwise is
required to pay
.

(C)
Unless a public employer agrees otherwise in a collective bargaining
agreement, nothing in Chapter 4117. of the Revised Code impairs the
right and responsibility of each public employer to:

(1)
Determine matters of inherent managerial policy which include, but
are not limited to, areas of discretion or policy such as the
functions and programs of the public employer, standards of services,
its overall budget, utilization of technology, and organizational
structure;

(2)
Direct, supervise, evaluate, or hire employees;

(3)
Maintain and improve the efficiency and effectiveness of governmental
operations;

(4)
Determine the overall methods, process, means, or personnel by which
governmental operations are to be conducted;

(5)
Suspend, discipline, demote, or discharge for just cause, or lay off,
transfer, assign, schedule, promote, or retain employees;

(6)
Determine the adequacy of the work force;

(7)
Determine the overall mission of the employer as a unit of
government;

(8)
Effectively manage the work force;

(9)
Take actions to carry out the mission of the public employer as a
governmental unit.

The
employer is not required to bargain on subjects reserved to the
management and direction of the governmental unit except as affect
wages, hours, terms and conditions of employment, and the
continuation, modification, or deletion of an existing provision of a
collective bargaining agreement. A public employee or exclusive
representative may raise a legitimate complaint or file a grievance
based on the collective bargaining agreement.

Sec.
5505.15.
(A)
A member of the state highway patrol retirement system shall
contribute a certain percentage of the member's annual salary to the
state highway patrol retirement fund. The percentage shall be not
less than ten per cent of the member's annual salary but not more
than fourteen per cent. The state highway patrol retirement board
shall establish and may adjust the rate as it considers necessary to
meet the amortization period requirement of section 5505.121 of the
Revised Code. The board shall base its determination of the necessary
rate on the annual actuarial valuation required by section 5505.12 of
the Revised Code. The amount shall be deducted by the employer from
the employee's salary for each payroll period.

The
contributions required under this section shall not be paid by an
employer on an employee's behalf, but may be treated as employer
contributions for purposes of state and federal income tax deferred
income provisions.

(B)
The state shall annually pay into the employer accumulation fund, in
monthly or less frequent installments as the state highway patrol
retirement board requires, the employer contribution. The employer
contribution shall be an amount equal to twenty-six and one-half per
cent of the total salaries paid contributing members. If a member
severs connection with the patrol or is dismissed, the employer
contribution shall remain in the retirement system.

The
rate percentage of the employer contribution shall be certified by
the board to the director of budget and management and shall not be
lower than nine per cent of the total salaries paid contributing
members and shall not exceed three times the rate percentage being
deducted from the annual salaries of contributing members. The board
shall prepare and submit to the director, on or before the first day
of November of each even-numbered year, an estimate of the amounts
necessary to pay the state's obligations accruing during the biennium
beginning the first day of July of the following year. Such amounts
shall be included in the budget and allocated as certified by the
board.

Section
2.
That
existing sections 145.47, 742.31, 3307.27, 3309.47, 4117.08, and
5505.15 of the Revised Code are hereby repealed.

Section
3.
The
amendment by this act of sections 145.47, 3307.27, and 3309.47 of the
Revised Code applies to an employment contract with an employee of a
school district or other public school entered into on or after the
effective date of this section.