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Employers Manual
Retirement Incentive Plan for Defined Benefit Plan Members
Cost to Employers
The employer’s cost for service credit purchased under a Retirement
Incentive Plan is determined by an actuarially derived factor. The factor
is applied to the greater of the member’s annual earnings or contract
salary. All public earnings, summer earnings and supplemental contracts are included. The
cost to purchase retirement incentive credit for part-time employees
will be based on full-time equivalent earnings.
Two payment options are available:
- An employer may pay the total purchase cost by the last day of the
month of retirement without incurring any interest charges. For example, the retirement incentive credit cost for a member retiring
July 1 may be paid by July 31 without interest.
If STRS Ohio is unable to send the Employer Cost Notification before the effective date of retirement, the employer will have 30 days from the mailing date of the notification to pay the cost without interest.
- Employers may choose to pay for the purchased credit in equal installments
over the number of years being purchased. The first installment is
always due by June 30 following the retirement date. Subsequent payments
are due each succeeding June 30 until the cost is paid in full. Interest
will be charged on the outstanding balance at an annual rate established
by State Teachers Retirement Board Rule 3307:1-3-01. Interest begins
on the first day of the month following retirement. Accrued charges
must be paid each June 30.
Occasionally, a member will receive payment of benefits after June, retroactive to a retirement date of June 1 or earlier. When this occurs, the first installment payment is due within 30 days following notification. Employers may pay the full cost within 30 days to avoid interest charges.
After 30 days, STRS Ohio charges interest on the unpaid balance at an annual rate established by the Retirement Board, retroactive to the first day of the month following the retirement date.
