Pension Restoration of Holiday Pay Savings (HPS)
On June 24, 2009, City Council adopted Ordinance #204-2009 to implement Cost Savings Days (Holiday Pay Savings) for various City of Cincinnati employees. The offset (reduction) in earnings began with Pay Period #15 in 2009 (6/28/09) and reduced pensionable earnings for those employees affected.
In June 2010, City Council adopted Ordinance #191-2010 that allows those employees affected by the implementation of Holiday Pay Savings (HPS) the opportunity to make additional pension contributions to their Cincinnati Retirement System accounts to effectively restore their lost earnings for purposes of calculating their Final Average Salary (Average Highest Compensation).
The provisions of Ordinance #191-2010 apply to City of Cincinnati employees who are members of the Cincinnati Retirement System who are eligible to retire on or after July 1, 2010.
Members wanting to take advantage of this provision must pay BOTH the employee HPS pension contributions (currently at 8.5%) AND the HPS liability contributions (currently at 18.0% equal to employer contribution rate) to restore earnings lost as a result of Holiday Pay Savings (HPS).
Depending on the individual employee’s anticipated retirement date, it may not be advantageous to participate in this program, particularly if the anticipated retirement date is more than 3 years away. Those employees who have been impacted by HPS may request to have the required additional pension contributions deducted from their lump sum payout following their separation from service at retirement. The amount of such a deduction will need to be calculated by CRS staff based on the request from the individual employee.
- Employees must complete and sign a payroll deduction authorization form to have the required amount deducted from their lump sum payout. These carbonless forms are only available in the Cincinnati Retirement System office and the member’s signature must be notarized.
- Employee must pay the employee HPS pension contributions and the HPS liability contributions to restore lost HPS earnings to their Final Average Salary (FAS).
- In addition to lump sum payout deduction, employee members may elect to pay a lump sum amount for lost HPS earnings by personal check or from their deferred compensation (457 Plan) account.
- All payments must be completed prior to the issuance of the member’s first pension check (2 months after the member’s effective retirement date).
- All amounts paid by employee members to restore lost HPS earnings are credited to their CRS account as employee contributions.