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In 1993, section 742.30(C) was added to the Ohio Revised
Code which provided:
(C) The board of trustees of the police and
firemen's disability and pension fund may enter into an
agreement with a municipal corporation for a single
payment by the municipal corporation of the employer's
accrued liability. The agreement may provide for a
reduction in the amount of the accrued liability based
on the value to the fund of receiving a single payment.
A municipal corporation that has made payment in
accordance with such an agreement shall have no further
obligation to make payments under this section. [Ohio
Rev. Code Ann. sec. 742.30(C) (Anderson Supp. 1995).]
Pursuant to this provision, the State Fund allowed single,
lump-sum payments, beginning October 20, 1993. The State Fund
adopted 65 percent of the outstanding principal balance as the
discounted amount it would accept for such a payment.
From October 20, 1993, to December 14, 1995, 36
municipalities, including the City, made a lump-sum payment, in
exchange for release of the full amount of their outstanding
liability to the State Fund.
On November 3, 1993, the City entered into a prepayment
agreement with the State Fund. On November 15, 1993, the
outstanding principal balance of the City Obligation was
$41,435,720, which amount was still to be paid periodically until
2035. Under the agreement, the City agreed to pay a lump sum of
$26,933,218, following which it would have no further obligation
to the State Fund. The City was obligated to make the lump-sum
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Last modified: May 25, 2011