General Information For OPERS Employers
OPERS provides age and service retirement, disability benefit and survivor benefit programs for public employees throughout the state who are not covered by another state or local retirement system. Retirement law charges payroll officers, fiscal officers and department heads with responsibility for:
- Deducting, reporting, and transmitting retirement contributions
- Paying the employer's contributions
- Maintaining records which will provide information needed by the Board of Trustees
Provisions in the law and regulations of the Board specify procedures for meeting these general responsibilities in an efficient and adequate manner.
OPERS publishes the OPERS Employer Manual detailing the administrative procedures for employers. Copies of the manual and forms are available to payroll and personnel officers on request.
Information on this Web site is a guide and not a substitute for information an employer is required to know.
The following employers -- created by action of the General Assembly or by the legislative authority of any of the units of local government not covered by the State Teachers Retirement System or the School Employees Retirement System -- are subject to coverage under OPERS:
Carryover Public Employees
A carryover employee is an OPERS member who continues to perform the same or similar duties for a private employer that contracts to provide functions that were previously publicly operated. A carryover employee has two choices:
- The employee can continue to contribute both to OPERS and to Social Security, or
- The employee can elect to terminate membership in OPERS and only contribute to Social Security.
How this is handled:
- Employees must choose whether they want to continue to contribute to OPERS within 90 days of the date of the transition to the private employer.
- If the employee elects to end participation in OPERS, OPERS will approve the form and send a confirmation letter to the private employer to terminate contributions. Contributions received on salary earned after the effective date of the transfer to the private employer will be refunded as unauthorized.
- Carryover employees who have chosen to stop contributing to OPERS may leave their accumulated contributions on deposit with OPERS or request a refund.
- New employees hired by the private employer after the date of conversion are not public employees and cannot become members of, or contribute to, OPERS.
Employer Responsibilities - Carryover Public Employees
A public employer who is transferring a public operation and its employees to a private employer should contact OPERS Employer Services (1-888-400-0965, select prompt #3 for membership and compliance) well in advance of the conversion. OPERS will supply the employer with applicable instructions and forms.
The public employer who contracts with the private employer is ultimately responsible for ensuring continuation of contribution report submission and payment.
Contribution Rates - Carryover Public Employees
The employer contribution rate is currently 14% of the employee’s earnable salary while the employee contribution rate is currently 10% of the employee’s earnable salary. The OPERS Board sets the employer and employee contribution rates as permitted by statute.
For employees remaining members of the retirement system following the conversion of a public function to a private function under a contractor, pre-tax withholdings will cease commensurate with the contract effective date. Contributions will be required to be withheld and remitted on a post-tax basis.
Fiscal officers are required by law to enroll and report all eligible employees. For new employees, a Personal History Record must be completed; for a re-employed retiree, a Notice of Re-employment or Contract Services of an OPERS or Other System Benefit Recipient (SR-6) must be completed. Both forms are available by logging onto ECS.
During the course of an employee's membership, OPERS may request an employer to complete and certify other forms or provide additional information.
Fiscal officers are required by law to withhold contributions for all employees who are subject to compulsory membership and for those employees for whom membership is optional who have chosen to become contributors.
Employee contributions withheld and employer contributions must be sent to OPERS with the proper reports. Employers can remit contributions by check or electronic funds transfer. Reporting can be done through paper reports or online through ECS. Failure to send contributions and reports on a timely basis results is assessment of penalties and interest.
Accurate reporting is essential so employees receive the proper service credit, and to ensure the proper employer contributions have been received.
Mandatory employee and employer contributions are on an after-tax basis unless an employer has established an employer "pick-up" plan for pre-tax contributions as allowed by federal tax law.
Purchase of Service Credit
OPERS members are entitled to purchase service credit through payroll deduction with their employers. A member who wishes to purchase service credit with the Retirement System should contact OPERS to determine his/her eligibility to do so and the cost.
The purchase may be done either by direct payment to OPERS or, on certain purchases, through payroll deduction. Payroll deductions are taken from the member's pay and sent by his/her employer to OPERS under specific procedures.
Purchases through payroll deduction are on an after-tax basis.
Internal Revenue Service law makes it possible for an employer to pay (pick-up) employee contributions for members of OPERS. This is a technique that enables employers to designate employee contributions picked up by the employer as employer contributions.
The federal law states that employer contributions to a qualified pension plan are non-taxable to the employee until such time as the contributions are received as a refund or as retirement benefits.
Pick-up plans for mandatory contributions and payroll deductions to purchase other service credit are separate plans which an employer must establish and qualify separately.
Alternative Retirement Plan for College/University Employees
Eligibility for participation in an ARP includes:
- All eligible, full-time employees of public universities and colleges with less than five years of service credit as of Aug. 1, 2005, who have not previously had the opportunity to choose an ARP;
- Full-time employees hired after Aug. 1, 2005;
- Employees who change from part-time to full-time status after Aug. 1, 2005, who will be treated as new hires; and
- Law enforcement personnel and re-employed retirees who are otherwise eligible.
What Your Employees Will Receive
New employees who are eligible to choose one of the three OPERS retirement plans will receive the OPERS Welcome Letter, which contains detailed information about OPERS and the benefits of membership in our system.
ARP Enrollment Information
Regarding the enrollment forms please be aware that as a university employer you may add your name, logo, listing of ARP vendors and employer code to the forms, but you may not alter the text in any way.
The Retirement Plan Election Form (ARP-3) is to be used for all new hires and newly eligible after August 1, 2005.
The deadline for colleges and universities to receive an election form from any employee eligible to elect an ARP is 120 days from their ARP eligibility date.
Automatic Transfer of OPERS Contributions
For new hires and those newly eligible for ARP (due to status change from part time to full time) on or after Aug. 1, 2005, all retirement contributions with that university or college are retroactive to the employee's ARP effective date and will automatically transfer to the selected ARP vendor.
Voluntary Transfer of Existing OPERS Contribution Balance
Employees, who have contributions on deposit prior to their ARP effective date, may transfer these contributions to their ARP account provided they are not currently contributing to OPERS in another position for which an ARP was not elected. These employees are not required to transfer their previous OPERS account and may leave it on deposit with the retirement system during and after participation in the ARP.
If your employee wishes to transfer their previous OPERS balance, they must complete the Member's application for Transfer of Accumulated Contributions to an Alternative Retirement Plan form (A-4 ARP) . Based on which OPERS retirement plan the employee has elected, this is what will be transferred:
- For Member-Directed Plan participants, the amount of transfer equals the employee contributions, including adjustments for gains or losses, plus the vested percentage of the employer contributions. The individual's vested amount in the Retiree Medical Account remains on deposit in the individual's RMA and cannot be transferred to the ARP.
The individual may use the balance of the RMA only for qualified medical expenses. For more information on RMA distributions, members may refer to the Health Care Savings Account for Member-Directed Plan Participants publication.
- For Traditional Pension Plan participants, the amount of the transfer equals the employee contributions and allowable interest. Any match amount earned will be forfeited.
- For the Combined Plan participants, the amount of the transfer equals the employee contributions, including adjustments for gains or losses, and any monies used to purchase service credit. Any match amount earned will be forfeited.
A re-employed retiree is eligible to elect an ARP during the 120-day election period.
If a retiring employee was not previously eligible to make an ARP election, the re-employed retiree is eligible to make a new ARP election upon re-employment as a retiree in an eligible position.
If the re-employed retiree was previously eligible to make an ARP election, the retiree would not be eligible for a new election and the retiree's prior election would remain in effect during re-employment, unless the retiree is employed with a different employer or more than one year has elapsed since employment with your college/university. Any re-employed retiree who works for a different college or university immediately after retirement is eligible for an ARP election.
Transfer of OPERS Contribution Balance
If a re-employed retiree under age 65 elects to transfer a money purchase account to an ARP, the OPERS employee contributions and interest will transfer to the selected ARP vendor. Re-employed retirees age 65 and older will have employee contributions and interest, plus an equal matching amount, sent to their selected ARP vendor. The time periods of contributions that automatically transfer to the ARP follow the same guidelines as employees who are not re-employed retirees. (Refer to automatic transfer of OPERS contributions, above.)
A re-employed retiree is not required to transfer their existing OPERS contribution balance. They may leave the contributions on deposit with the retirement system during and after participation in the ARP.
Transfer of Voluntary Contribution Balance
Voluntary contributions and rollovers to the Member-Directed Plan, Combined Plan or the Additional Annuity (Traditional Pension Plan) will be sent to the ARP vendor along with the other transfer amounts in that plan.
Notification of New Hires
Employers are required to notify OPERS within 10 days of an employee's eligibility to elect an ARP using the Alternative Retirement Plan (ARP) Eligibility Notice (form ARP-2). This applies to both newly hired, full-time employees and those employees whose status has changed from part time to full time. A digital version of form ARP-2 is available by logging into your ECS account.
Social Security Statement
Social Security requires the Statement Concerning Your Employment in a Job Not Covered by Social Security (form SSA-1945) to be signed by all public employees. The employer must submit a copy of the signed form to the pension-paying agency.
Special note on employer contributions
The mitigating rate is a portion of the employer contributions paid by university employers on behalf of their employees who choose not to join OPERS, and is intended to offset the financial impact of the loss of their contributions.
OPERS currently withholds 0.77 percent and this rate will increase to 2.44 percent July 1, 2017 for all ARP participants.
- OPERS recognizes the best choice of a retirement plan varies by individual and as such, there are important factors to consider when making a plan selection. Employees should consider the most current information available to make the best choice for their individual situation.
- Once an ARP is selected, it is irrevocable while an employee remains employed with the same college or university. If they change employers or there is a one-year break in service and they go back to the same college or university, they have an opportunity to select OPERS membership.
- If an employee chooses to remain with OPERS, they must check the appropriate box in Step 2 of the Retirement Plan Election Form (ENR-1), sign and submit it to their employer for completion before submission to OPERS.
Who to Contact for More Information
Contact Employer Outreach with questions or comments at 1-888-400-0965 or email@example.com. In addition, we urge you to encourage your employees to contact the OPERS Member Services Center at 1-800-222-7377 with any questions they might have. In-house and phone counseling appointments are also available to assist your employees with this very important decision.
Disability Benefits & Service Retirement
Disability benefits may be available for those members who are disabled from their last position of public employment.
OPERS offers Traditional Pension Plan members, who are eligible, one of two disability programs -- the Original Plan or the Revised Plan. Employees who had contributions on deposit with OPERS on July 29, 1992 had a one-time opportunity to select coverage under one of these programs. Those employees hired after July 29, 1992 are covered only under the Revised plan.
For more information regarding disability features, please refer to the Disability Benefits page.
The Employer's Role in Disability Benefits
The employer will need to complete the Report of Employer for a Disability Benefit Applicant (form DR-4), along with a formal job description. The member's disability application cannot move forward in the disability process without the form DR-4 and formal job description. If the employer is able to provide the final date of compensation on the DR-4 form, OPERS requests this be completed.
The employer will be notified of the outcome of the board's decision regarding the member's disability benefit application. OPERS will request the Certification of Employees Final Payroll form (DR-F85) via ECS.
Please contact Employer Outreach at 1-888-400-0965 if you have any questions regarding completing the Report of Employer for a Disability Applicant (form DR-4) or the Certification of Employees Final Payroll (form DR-F85.)
For additional questions specific to an individual's account and application, members should be encouraged to contact the OPERS Member Services Center at 1-800-222-7377.
For details of the benefits available under the OPERS retirement plans, please view the publications listed below. Please note, the information in these publications is based on changes effective Jan. 7, 2013 as a result of Sub. Senate Bill 343.
- View: Retiring from Public Employment The Traditional Pension Plan
- View: Retiring from Public Employment The Combined Plan
- View: Retiring from Public Employment The Member-Directed Plan
The Employer's Role in Service Retirement
Upon receipt of a member's retirement application, OPERS will send the employer a Certification of Employee's Final Payroll (F-85) for service retirement asking for the Final payroll information.
It is important to note that OPERS sends the F-85 letter to employers early in the process. Employers should send the completed F-85 to OPERS as soon as the employer is able to certify the member's Final payroll information. Without this information, OPERS cannot complete the processing of the member's retirement application.
For additional questions specific to an individual's member's account and application, members should be encouraged to contact the OPERS Member Services Center at 1-800-222-7377.
Membership Determination Process
Recent changes to the membership determination process have been implemented to increase efficiency by removing a level of appeal and implementing a timeline for notification of appeal of the first level determination. Effective August 1, 2012, public employers and/or their workers seeking a membership determination for either independent contract/public employee status or carryover status will follow the new process:
- First level determination by Compliance Specialist
- 30 day timeline for either party to appeal by providing additional information after receipt of first level determination
- Second level determination by Senior Staff
- 60 day timeline for either party to appeal to the Board by submitting a written appeal to the Executive Director
- Board decision to either delegate to an independent hearing examiner, or
- Final decision by the Board