PLOP Information

Payment of Monthly Retirement Benefits
STRS Ohio issues retirement benefits, including partial benefit payments, on the first of each month. 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. 

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. STRS Ohio is unable to withhold the State of Ohio income tax. Contact the Ohio Department of Taxation for information on tax payment options. For further information regarding special tax provisions, consult your tax advisor.

Sixty-day Rollover Option
If your eligible rollover distribution is paid to you, you can still roll over all or part of it to a traditional IRA or to an eligible employer plan that accepts rollovers. If you decide to roll over your distribution, you must make the rollover within 60 days after you receive the payment. The portion of your payment that is rolled over will not be taxed until you take it out of the traditional IRA or the eligible employer plan.

You can roll over up to 100% of the eligible rollover distribution, including an amount equal to the 20% of the taxable portion that was withheld. If you choose to roll over 100%, you must find other funds within the 60-day period to contribute to the traditional IRA or the eligible employer 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.