This information is provided in edited form as a quick reference and is
not intended to replace the Member Handbook. Additional information
about any benefit can be obtained from the handbook or by contacting
The Highway Patrol Retirement System (HPRS) is a defined benefit plan
that provides pension benefits to retirees from the Ohio State Highway
Patrol and their dependents. The plan operates on contributions from
the members during active service, from the employer and from investment
income. Benefit levels are determined by statute (Chapter 5505) and
administered by the HPRS Board of Trustees.
Final Average Salary (FAS) - A final
average salary is derived from the total of the highest three years of
salary divided by three or the highest five years of salary divided by five, depending on when the member retires or enters DROP. The FAS represents the base amount upon which
the pension is calculated. The FAS includes hazardous duty, shift
differential, longevity and professional achievement supplements, but
does not include overtime, report back time and repayment of accumulated
Senate Bill 345 was signed into law on September 26, 2012, by Governor Kasich. The new law grandfathers a member who has a "pension effective date" prior to the legislation's effective date as it pertains to the cost of living adjustment (COLA) eligibility age and FAS. January 7, 2013, is the effective date for the change in COLA eligibility, and January 1, 2015, is the effective date for the change in FAS.
In order to be grandfathered for FAS using the highest three years, a member must retire before January 1, 2015, or have entered DROP as of the last day of the employer's payroll period immediately prior to January 1, 2015, which is December 27, 2014.
On January 1, 2015, the highest five years will be used for FAS calculations. A member who wants to enter DROP between December 28-31, 2014, will be eligible for a FAS using the three highest years only if he/she qualified for DROP on December 27, 2014. Additionally, the service credit a member would earn between December 28th and December 31st will not be considered in calculating retirement benefits. In other words, a member would effectively enter DROP on December 27, 2014.
Service Credit (SC) - The service credit
is the total number of years or part thereof, of full-time service the
member accumulates. Service credit include full-time active service
with the State Highway Patrol, and can also include military service, or
service with one of the other Ohio Public Retirement Systems.
Provisions can be made to transfer any accumulated service that has not
been withdrawn from another system or to purchase service time that has
Pension Factor (PF) - A pension factor is
determined from the member's total years of service credit. A member
receives 2.5% for each of the first 20 years of service, 2.25% for each
of the next five years and 2.0% for each year in excess of 25, with a
maximum of 79.25% or 34 years of service. The FAS is multiplied by this
factor to determine the amount of pension due.
Age and Service Retirement
- Members accumulating at least 15, but less than 20, years of active
service credit with the State Highway Patrol are entitled to a PF of
1.5% of FAS multiplied by the number of years of full-time service. The
pension is payable at age 55.
- Members accumulating at least 20, but less than 25, years of
active service credit with the State Highway Patrol are entitled to a PF
of 2.5% of FAS multiplied by the first 20 years of full-time service,
2.25% PF of FAS for the years between 20 and 25 of full-time service.
The pension is payable at age 52, or at a reduced level beginning at age
- Members accumulating more than 20 years of active service credit
with the State Highway Patrol are entitled to a PF of 2.5% of FAS for
the first 20 years of full-time service, 2.25% PF of FAS for the next
five years and 2.0% PF for the years in excess of 25 accruing to a
maximum pension of 79.25% of FAS. Appropriate prior service credit can
be purchased and used for years in excess of 20. A reduced pension can
be payable beginning at age 48 if the member has less than 25 years of
service credit. The pension is payable beginning at age 48 if at least
25 years of service credit is achieved or beginning at age 52 if less
than 25 years of service credit is achieved.
- A member disabled due to an injury or illness that is not
job related is entitled to a minimum pension benefit of 50% of FAS.
Final average salary is calculated as though the member had achieved 20
years of full-time active service with the State Highway Patrol. Years
of service credit accumulated beyond 20 are calculated into the PF.
- A member disabled due to an injury or illness that is job related
is entitled to a minimum pension benefit of 61.25% of FAS. Final
average salary is calculated as though the member has achieved 25 years
of full-time active service with the State Highway Patrol. If the
member has accumulated more than 25 years of service, the additional
service credit is calculated into the PF.
- A member receiving disability pension benefits may be required by
statute to provide annual information relative to his/her disability
status and employment.
- All disability pensions are single life annuities.
- Surviving spouses of retired members, or active members
eligible for retirement, are entitled to 50% of the retiree's pension
benefit or $900 per month, whichever is greater, for their lifetime.
- Surviving spouses of active members not eligible for retirement
receive $900 per month for their lifetime.
- Surviving dependent children of retired or active members are entitled to
$150 per month until age 18 or age 23 if enrolled as a student in
certain qualified programs.
- Surviving spouses and dependent children receive the health care
benefits that are normally provided to the benefit recipient.
- Survivors of members whose deaths were duty related might be
entitled to certain death benefits afforded to police and fire
Cost of Living Adjustments
- Each benefit recipient may be eligible to receive a cost of living
adjustment; however, the type of pension benefit will impact when the
COLA adjustment is received.
- The date of the first COLA is the anniversary date for all future COLA increases.
- Must have been receiving a pension for not less than twelve months.
- Assuming the other criteria for COLA has been met, the eligibility age is 53 for those members who retired or entered DROP prior to January 7, 2013. For those members retiring or entering DROP on or after January 7, 2013, the eligibility age is 60.
- The amount of COLA will be determined annually by the Board of Trustees.
- Pension checks are mailed or electronically transferred
between the 20th and 25th of each month.
- Single Life Annuity – This option pays the highest amount to the
retiree by using the FAS and PF system described previously. Survivor
benefits are also described previously. This option is not dependent on
the marital status of the member.
- Joint & Survivor Annuity – This option permits the retiree to
defer a portion of the pension benefit to a designated beneficiary after
the retiree's death. It results in a lower pension benefit for the
retiree during his/her life, but a greater benefit for the beneficiary.
This option is not dependent on the marital status of the member.
Selection of a beneficiary is not limited to spouse or children.
- Life Annuity Certain & Continuous – This option permits the
retiree to select a specified time, 5 to 20 years, and allocate the
pension benefits to be paid during that period. Upon the death of the
retiree, the beneficiary continues to receive the payments until the
completion of the specified period. Upon the death of both the retiree
and beneficiary, the estate of the last benefit recipient receives the
remaining amount. If the retiree lives beyond the certain period
specified, the monthly benefit continues until death.
Partial Lump Sum (PLUS)
- The PLUS allows a member the opportunity to withdraw cash
or roll over into a qualified tax plan from their pension account. The
member would receive a reduced monthly pension for life. It is
important that the member understands the tax implications if PLUS is
selected. Under federal tax laws, lump-sum payments paid directly to
you are subject to a mandatory 20% federal tax withholding. In
addition, you may be subject to a 10% penalty for early withdrawal. A
PLUS payment is also subject to Ohio State income tax. It is
recommended that you contact a tax consultant for more information and,
if necessary, instructions on how to file a quarterly estimate.
To be eligible for the PLUS, upon retirement a member must have attained
age 51 with at least 25 years of total service or age 52 with at least
20 years of total service. The lump sum amount designated by the member
may not be less than six times the monthly single life pension and not
more than sixty times the monthly single life pension. Lump sum
payments paid directly to you must be electronically deposited into a
- Note: The PLUS option can be taken in addition to one of the
other three options (Single Life, Joint & Survivor or Life Certain &
Deferred Retirement Option Plan (DROP)
- History The DROP plan for HPRS
was passed by the Ohio Legislature in March of 2006 and became effective
on June 17, 2006. At that time, all active members who qualified were
eligible to enter the DROP. Thereafter, any member who achieves eligibility
may enter the DROP.
DROP plans have been operating in public safety pension plans for
several years; however, until the mandatory retirement age was increased in 2004 from 55 to 60, a DROP did not seem practical.
- Eligibility Requirement To be
eligible to enter the DROP, a member must have 25 years of service,
including credit purchased for prior military service and prior
contribution credit with the Ohio Police & Fire Fund, and be at least
age 48; OR have at least 20 years of service, and be
at least age 52.
- DROP Operations Upon entering a DROP
plan, a member will continue to work in his/her present
assignment/location as determined by the employer; and receive the
appropriate compensation for that rank. The member will also continue
to receive any salary increases appropriate for that rank. Instead of receiving a monthly pension
benefit, however, the member accrues that benefit in a tax-deferred
account until he/she terminates employment with the Highway Patrol.
An important fact to remember is that upon entering DROP, a
member ceases to accumulate additional pension service credit. An
example is included below that shows the monetary implication of the DROP
decision. Another important fact is the member will continue being
covered under the employer's healthcare plan while participating in the
- A DROP member's employment with the Highway Patrol is unaffected by participating in the DROP. As an active employee of the Highway Patrol, a member is considered an active member of HPRS except for very limited and unique circumstances. An HPRS member is not defined as a retiree until he/she retires. And, HPRS' statutes state that a member does not retire until "termination as an employee of the state highway patrol..." That means a DROP member is still employed by the Highway Patrol, so he/she is not retired. Otherwise, the IRS would not consider DROP deposits tax deferred.
- Ohio law does consider a DROP member to be "retired" when voting for HPRS board members and for the purpose of HPRS administrative rules. For the purpose of contribution rates, benefit eligibility, etc., as a DROP participant, a member is not retired until he/she terminates employment with the Highway Patrol.
Assuming a member elects to participate in the DROP, there will
be no interruptions in service with the Highway Patrol.
- The member will continue to work, draw a salary, and receive benefits.
- The member's monthly gross retirement benefit will be credited to a
- The member will continue to make a monthly employee contribution to HPRS which will also accrue to the
tax-deferred DROP account. This contribution is set at 10% of pay.
- The contributions in the DROP account will accrue interest at a
rate set by the Retirement Board.
The minimum participation period in the DROP depends on age. It is
either three years for those entering before age 52 or two years for
those entering at age 52 or older. A member may participate in the DROP
for up to 8 years, or until he/she reaches age 60, whichever comes
first. If a member discontinues DROP participation before the minimum
number of years, the member will receive the total amount of DROP
contributions, less accumulated interest, after the minimum
participation period has expired.
Special provisions have been made for those requiring disability
benefits. If a member is injured or becomes ill as the result of a
job-related cause while participating in the DROP plan, he/she will be
able to withdraw all DROP contributions, including accumulated interest;
OR the member may request to have the disability calculated as though
he/she continued in active service without participating in the DROP. If
the disability results from a non-job-related cause, the member may
withdraw all DROP contributions, including accumulated interest.
In the event a member dies while participating in the DROP,
the proceeds of the DROP account will be paid to the surviving spouse or
the estate. A surviving spouse is also entitled to a survivor benefit
equal to 50% of the member's pension benefit or $900/month, whichever is
When a member terminates service with the Highway Patrol, the total accumulation in the DROP account will be distributed as allowed by the Internal Revenue Service. Currently, the IRS provides for lump sum and partial lump sum payments, monthly payments, or rolling over the contributions into a tax-qualified plan (Deferred Comp, IRA, etc.) Provided the minimum DROP participation period has been met, a direct distribution to a DROP participant is taxed as ordinary income and is not subject to an IRS penalty.
If entry into the DROP was prior to January 7, 2013, a member is entitled to COLA, if it is authorized by the Board of Trustees and provided the member is at least 53 years old and has been retired
for at least one year.
|A 48 year old trooper with 27 years of service and a FAS of $60,000/year
decides to enter the DROP. Remember once DROP is elected, a member can only stay eight years, or in this case, age 56.
FAS = $60,000
Pension calculation = $39,150 at age 48 (65.25%)
- Year 1 = $39,150 +$6,000 (employee cont.) + int.
- Year 2 = $78,300 + $12,000 + int. + any addt'l employee contribution
- Year 3 = $117,450 + $18,000 + int. + any addt'l employee contribution
- Year 5 = $195,750 + $30,000 + int. + any addt'l employee contribution
- Year 8 = $313,200 + $48,000 + int. + any addt'l employee contribution
If this trooper stayed the entire eight years, at age 56 he/she would accumulate $361,200 + interest + additional employee contributions if raises are received. In addition, the trooper would still be receiving a paycheck from the Patrol.
The same trooper decides not to enter the DROP but retires at age 51 with 30 years of service and a FAS of $62,000 (this assumes a raise has occurred.)
FAS = $62,000
Pension calculation = $44,175 at age 51 (71.25%)
DROP accumulation = 0
What is the difference between the two examples? You should consider the additional pension benefits over your expected lifespan vs. the accumulation of the separate DROP account and future interest/investment income you will receive.
The Trooper in the DROP example accepts a lesser annual pension
benefit but accumulates a separate account that can be liquidated or
reinvested in a tax-deferred investment. Any salary increases/job reclassifications/promotions that occur
during the DROP period do not increase the annual pension benefit.
The Trooper in the non-DROP example accumulates a greater annual
pension but does not establish a separate account. Any salary increases/job reclassifications/promotions that occur
during the additional three working years will increase the annual
The trooper in DROP will accumulate approximately $135,450 + interest in the first three years. The trooper who did not enter DROP would receive $5,025 more annually in pension benefits. If the DROP trooper retired after three years and rolled over his/her DROP account to Deferred Comp., even at 3% interest, he/she would accumulate approximately $4,100 of interest income in the first year alone. The difference between the additional pension benefit for the non-DROP trooper compared to the DROP trooper is only $925/year. But remember, the DROP trooper still has an original DROP amount of $135,450.
This is a simplistic example; each memberís circumstances will be different. When considering DROP or other retirement plans, please contact HPRS to help guide you in making the best decision for you and your family.