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The district’s total surcharge may be included in the Foundation Program deductions for foundation-participating employers or paid directly to SERS.

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Payment of the surcharge amount is due within 30 days from notification that the final surcharge amount has been calculated.

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An additional employer charge is levied on the salaries of lower-paid SERS members. The minimum annual compensation is determined annually by the System’s actuaries. The current minimum annual compensation is available on the Audit Resources page.

This surcharge amount is exclusively used to fund health care.

The initial individual surcharge is figured at 14% of the difference between the member’s annual compensation and the minimum compensation level.

For example, if the minimum compensation level is $23,000 and the employee earned $7,000, the surcharge is:

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Surcharge base $23,000
Covered compensation 7,000
Difference 16,000
Initial individual surcharge $16,000 x 14% = $2,240

If the member is paid for less than 120 days during the year, the surcharge is pro-rated. The fraction used is the number of days paid over 180 days, a school year. This is the same fraction as used in determining the amount of contributing service credit for a member.

For example, the surcharge on the employee above who works only 110 days is:

Initial individual surcharge $2,240
Pro-rated fraction 110 days/180 days = 0.611
Pro-rated Surcharge .611 x $2,240 = $1,368.64

The surcharge applies to all SERS members reported during the fiscal year on the CDRs except:

  • members who retired, refunded their account, or received disability benefits effective before July 1
  • members who died before July 1
  • reemployed Ohio public retirees

The first instance is tracked by SERS internally, and the affected member should not appear in the surcharge listing, which SERS makes available to you. However, SERS is not always aware of the second and third instances. During the surcharge process, you are allowed to review your surcharge listing and exempt any members who you identify as meeting the last two
qualifications.

The surcharge is limited to 2% of each district’s total qualified SERS payroll, not the total of the initial individual surcharge. The statewide limit is 1.5% of total qualified payroll for all employers.

A list of members subject to the surcharge is available through eSERS in August of each year.

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