(A) As used in this section, "employing unit" means:

1. (1) A municipal corporation, agency of a municipal corporation designated by the legislative authority, park district, conservancy district, sanitary district, health district, township, department of a township designated by the board of township trustees, metropolitan housing authority, public library, county law library, union cemetery, joint hospital, or other political subdivision or unit of local government.
2. (2) With respect to state employees, any entity of the state including any department, agency, institution of higher education, board, bureau, commission, council, office, or administrative body or any part of such entity that is designated by the entity as an employing unit.

3. (3)

   1. (a) With respect to employees of a board of alcohol, drug addiction, and mental health services, that board.
   2. (b) With respect to employees of a county board of developmental disabilities, that board.
   3. (c) With respect to other county employees, the county or any county agency designated by the board of county commissioners.
4. (4) In the case of an employee whose employing unit is in question, the employing unit is the unit through whose payroll the employee is paid.

(C) Any classified or unclassified employee of the employing unit who is a member of the public employees retirement system shall be eligible to participate in the retirement incentive plan established by the employee's employing unit if the employee meets the following criteria:

1. (1) The employee is not any of the following:

   1. (a) An elected official;
   2. (b) A member of a board or commission;
   3. (c) A person elected to serve a term of fixed length;
   4. (d) A person appointed to serve a term of fixed length, other than a person appointed and employed by the person's employing unit.
2. (2) The employee is or will be eligible to retire under section 145.33, 145.332, or 145.37 of the Revised Code on or before the date of termination of the retirement incentive plan. Service credit to be purchased for the employee under the retirement incentive plan shall be included in making such determination.
3. (3) The employee agrees to retire under section 145.33, 145.332, or 145.37 of the Revised Code within ninety days after receiving notice from the public employees retirement system that service credit has been purchased for the employee under this section. Participation in the plan shall be available to all eligible employees except that the employing unit may limit the number of participants in the plan to a specified percentage of its employees who are members of the public employees retirement system on the date the plan goes into effect. The percentage shall not be less than five per cent of such employees. If participation is limited, employees with more total service credit have the right to elect to participate before employees with less total service credit. In the case of employees with the same total service credit, employees with a greater length of service with the employing unit have the right to elect to participate before employees with less service with the employing unit. Employees with less than eighteen months of service with the employing unit have the right to elect to participate only after all other eligible employees have been given the opportunity to elect to participate. For the purpose of determining which employees may participate in a plan, total service credit includes service credit purchased by the employee under this chapter after the date on which the plan is established. A retirement incentive plan that limits participation may provide that an employee who does not notify the employing unit of the employee's decision to participate in the plan within a specified period of time will lose priority to participate in the plan ahead of other employees with less seniority. The time given to an employee to elect to participate ahead of other employees shall not be less than thirty days after the employee receives written notice that the employee may participate in the plan.

(D) A retirement incentive plan shall provide for purchase of the same amount of service credit for each participating employee, except that the employer may not purchase more service credit for any employee than the lesser of the following:

1. (1) Five years of service credit;
2. (2) An amount of service credit equal to one-fifth of the total service credited to the participant under this chapter, exclusive of service credit purchased under this section. For each year of service credit purchased under this section, the employing unit shall pay an amount equal to the additional liability resulting from the purchase of that year of service credit, as determined by an actuary employed by the public employees retirement board.