PLOP Information

Payment of Monthly Retirement Benefits
STRS Ohio issues retirement benefits, including partial benefit payments, on the first of each month. Most service retirees who file a Service Retirement Application at least 30 days before their effective retirement date receive a partial monthly benefit payment on the date of their retirement.

Monthly retirement benefits are paid through direct deposit to the financial institution listed on the member’s Service Retirement Application and will be deposited to the members bank account on the first banking day of the month.

Payment of Lump Sum
If your Service Retirement Application is received at least 30 days before your retirement date, the PLOP payment is made on your retirement date. Otherwise, the payment is made at the same time your first benefit amount is determined and paid. 

Reemployment Violation and PLOP Payment
Reemployment in a public position in Ohio after retirement is restricted during the first two months following retirement. If you are employed by only one public employer at the time of retirement, you must wait two months after your date of retirement to return to public employment.

Retirees who return to public employment within two months after their retirement date must forfeit their monthly benefit for each month worked during the violation period. The amount a retiree forfeits by violating the two-month waiting period is the Single Life Annuity monthly benefit calculated before the reduction for a PLOP payment or a Joint and Survivor Annuity. The difference between the actual plan of payment selected and the pre-PLOP Single Life Annuity benefit will be deducted from future monthly benefits. 

Special Tax Provisions
Before selecting a PLOP payment, it is important to understand the tax implications of receiving a lump sum at retirement as well as the restrictions on rollovers. Under federal tax laws, lump-sum payments paid directly to you that are eligible for rollover are subject to a mandatory 20% federal tax withholding. In addition, you may be subject to a 10% penalty for early withdrawal. This penalty does not apply if you withdraw the lump sum after you reach age 59-1/2, or you have separated from service and have taken payment in or after the year in which you turned age 55. If you are age 70-1/2 or older, you may be subject to the required minimum distribution rules established by the Internal Revenue Code and may not be eligible to roll over the entire PLOP amount.

Neither a PLOP rollover nor a direct payment can be made by STRS Ohio until at least 30 days after you receive the Special Tax Notice Regarding Account Withdrawals. If you file your application less than 30 days before retirement, you will have the option to sign a waiver of the 30-day waiting period for a PLOP payment. The waiver will be mailed with the Special Tax Notice. If you wish to waive the 30-day waiting period, you must sign the waiver and return it to STRS Ohio.

A PLOP payment is also subject to Ohio income tax for residents of the state and may be taxable in the state of residence for non-Ohio residents. STRS Ohio is unable to withhold income tax for the state of Ohio or any other state. Contact the Ohio Department of Taxation or your state’s tax department for information on tax payment options. For further information regarding special tax provisions, consult your tax advisor.

Sixty-day Rollover Option
If you initially choose to have a PLOP payment paid directly to you and later decide you want to roll it over to a qualified plan, you have 60 days after you receive the PLOP payment to do so. You can roll over all or part of the taxable portion to an eligible employer plan that accepts rollovers. The portion of your payment that is rolled over will not be taxed until you take it out of the qualified plan.

You can roll over up to 100% of the eligible rollover distribution (subject to IRS required minimum distribution regulations), including an amount equal to the 20% of the taxable portion that was withheld for federal tax. If you choose to roll over 100%, you must find other funds within the 60-day period to contribute to the qualified plan to replace the 20% that was withheld. Conversely, if you roll over only 80% of the payment that you received, you will be taxed on the 20% that was withheld.