City of Columbus, Ohio - Page 7

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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