By Brian Massie, A Watchman on the Wall
We have wondered if citizens understand that their property taxes are paying for the employee portion of a school administrator’s pension benefits?
What is a SERS Pickup?
A SERS pickup is when an employer pays an employee’s portion of their State Employees Retirement System (SERS) retirement contribution directly to the retirement system on the employee’s behalf, instead of deducting it from the employee’s paycheck.
How it works
Under a Pick-Up Plan, the employer “picks up” the employee’s required retirement contribution and remits it to SERS. This amount is not taken out of the employee’s gross pay, so it is not reduced from their take-home pay. Instead, it is treated as an additional form of compensation for retirement benefit purposes SERS.
Tax treatment
- Federal income tax: Employer-picked-up employee contributions are tax-deferred until the employee receives them as a refund or retirement benefit SERS.
- State income tax: Generally tax-deferred, but local tax rules may vary — employers should check with local taxing authorities SERS.
- The picked-up amount is still considered an employee contribution for SERS purposes and is refundable to the employee if they leave the job before retirement SERS.
In short: A SERS pickup is an employer-paid employee retirement contribution that boosts retirement savings without lowering current pay, with tax benefits and specific plan requirements.
Here is Riverside’s Treasurer Dr. Steve Thompson’s current employment contract.
Item k on page 4 deals with the “pick-up” of the Treasurer’s contribution to the State Employee Retirement System (SERS).
“The Board shall pay the employer’s share of SERS contributions as required by law. The Board shall “pick-up” (pay directly) the Treasurer’s contribution to SERS. Such pick-up shall be the entire amount of the employee contribution that the Treasurer is required to contribute to SERS, based upon the salary reported to SERS as provided in this agreement.”
Recent legislative change
On June 26, 2025, the Ohio General Assembly passed a budget bill (H.B. 96) that prohibits school district boards from paying employee contributions to SERS on behalf of treasurers under a fringe‑benefit employer pick‑up arrangement .
The law also applies to superintendents and principals, but only for contracts entered into on or after the effective date (90 days after signing). Contracts before that date are “grandfathered” and can continue under existing agreements pepple-waggoner.com.
This change does not ban pick‑up for other school employees — it only restricts it for certain high‑level administrators.
Bottom line
- Pick‑up is still widely used in Ohio schools for most employees.
- New law limits it for treasurers, superintendents, and principals for new contracts after the effective date, but does not eliminate it for other staff.
- Districts can still adopt pick‑up for other employees, and many continue to do so.
And now you know about a SERS pickup. Dr. Thompson’s SERS pickup is grandfathered, and therefore is not impacted by HB 96 restrictions.
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Categories: Community Activism, Education