While Ohio’s public retirement plans do not provide pre-retirement survivorship for former spouses, they do allow former spouses to be named to receive a post-retirement joint and survivorship annuity.
The process for securing this involves two steps. First, the Separation Agreement or Judgment Entry must clearly indicate the portion to be elected and second, the plan must be notified by providing them with a certified copy of the Agreement or Entry. While this might sound easy, it rarely is.
Several of the plans provide suggested language to incorporate, but only STRS allows the use of a coverture formula. Drop a few paragraphs into your Entry and you are good to go with STRS.
The other plans require the election of a percentage, rather than a coverture formula.
This presents a problem because the denominator of the coverture fraction (total credited service at retirement) is not known at the time of the divorce. Assuming the former spouse is to receive a proportionate share based on a traditional coverture formula, it is not possible to include the percentage as required by OPERS, OP&F, and SERS. In these cases, you should use language defining the survivorship amount based on the coverture assignment and then consider the way the plans will respond below.
OPERS will require a “clarifying court order” before they will allow the participant to retire. That order must state a whole percentage that the participant is required to elect. This means the parties have to come back to court at the time of retirement.
OP&F operates slightly differently. They will allow the participant to commence benefits but force a 50% survivor election for the former spouse until they receive clarification of the proper election. The issue with this is that the participant’s benefit may be reduced at a higher rate than is necessary during this period. This likely serves to motivate the participant to act quickly to resolve the election percentage.
SERS will not require any survivor election unless there is a percentage specified in the Agreement or Entry; see ORC 3309.46(b)(1) and OAC 3309-1-62. This means that even though an Entry may clearly indicate that the former spouse is to receive a survivor annuity, the lack of a whole percentage does not obligate SERS to force any election. This means that the participant could elect a single-life annuity which, after elected, cannot be changed. The safest option for a former spouse of a SERS participant may be to add SERS as a third party and restrain them from allowing the participant to retire until the percentage can be determined.