Account Withdrawal

Upon termination of public employment in Ohio, you may elect to withdraw your account. It is important to understand that withdrawing your STRS Ohio account is not a type of service retirement. Withdrawal of your account will cancel your STRS Ohio membership, your accumulated service credit and your eligibility to qualify for STRS Ohio retirement benefits, including access to health care coverage, if eligible.

Account Withdrawal Restrictions
You cannot withdraw your STRS Ohio account if you:

• Are under any form of teaching contract, including substitute teaching;

• Are under any type of verbal or written agreement for future teaching with a board of education or other Ohio public employer under the retirement law;

• Are on a leave of absence;

• Are receiving service retirement or disability benefits from STRS Ohio; or

• Are currently contributing to a college or university alternative retirement plan. Only a transfer of STRS Ohio funds to the alternative retirement plan is permitted.

In addition, you cannot withdraw your STRS Ohio account if you have a defined benefit plan account in Ohio Public Employees Retirement System (OPERS) or School Employees Retirement System (SERS), unless you also withdraw your account in those systems.

Spousal Consent on Account Withdrawals
All married members, who are eligible for service retirement at the time of application, must obtain spousal consent to the account withdrawal as required by Ohio law.

STRS Ohio will provide a consent form that must be signed by your spouse and notarized. If you do not provide a signed and notarized spousal consent form and one is required, your withdrawal application will be considered an application for retirement and you will receive a monthly benefit paid as a Joint and Survivor Annuity with one-half to beneficiary.

How Withdrawal Amounts are Calculated
Account withdrawals consist of member contributions plus an additional amount payable under Section 3307.563 of the Revised Code (R.C.). The additional amount payable depends on years of qualifying service credit and the rates of interest established by the State Teachers Retirement Board. The interest rates noted below are the maximum allowed by law. Actual interest rates may be lower and are subject to change without notice. For current interest rates, contact us toll-free at 1-888-227-7877.

• With 5.00 or more years of qualifying service credit, interest at a rate no greater than 6% compounded annually will be paid on your teaching contributions and an additional amount equal to 50% of the sum of teaching contributions, plus interest, will also be paid;

• With at least 3.00 years but less than 5.00 years of qualifying service credit, interest at a rate no greater than 6% compounded annually will be paid on your teaching contributions;

• With less than 3.00 years of qualifying service credit, interest at a rate no greater than 4% compounded annually will be paid on your teaching contributions.

Interest for all years withdrawn begins to accrue in the fiscal year following deposit. For example, interest on 2007–2008 contributions would begin July 2008 and be payable August 2008 or later. No interest is payable if a member withdraws his or her account in July and contributed to STRS Ohio for only the year just ended. Interest stops accruing the month before account withdrawal.

Following is a list of current interest rates:

With less than 3.00 years of qualifying service credit
9/1/1920 to 12/31/2005	4.00%
1/1/2006 to Present	2.00%

 

With at least 3.00 years but less than 5.00 years of qualifying service credit
9/1/1920 to 12/31/1998	6.00%
1/1/1999 to 12/31/2005	5.00%
1/1/2006 to Present	3.00%

 

With 5.00 or more years of qualifying service credit
9/1/1920 to 12/31/1998	6.00%
1/1/1999 to 12/31/2005	5.00%
1/1/2006 to Present	3.00%

Qualifying service credit includes Ohio teaching service, restored withdrawn credit, purchased service for Ohio public teaching from which no STRS Ohio contributions were withheld, and credit obtained for leaves of absence under Section 3307.77 R.C.

Loss of Benefits With Account Withdrawal
If you withdraw your STRS Ohio account, you will lose the opportunity to qualify for valuable benefits.

After 1.50 years of service credit is earned:

• Survivor benefits are available to eligible dependents (spouse, children and parents) if the member dies before retirement. Survivors may also enroll in the STRS Ohio Health Care Program.* Eligibility for survivor protection may continue for up to 27 months following the member’s last contributing service.

After 5.00 years of service credit is earned:

Disability benefits are available to members who are found to be medically incapacitated from performing regular job duties and who are not receiving a service retirement benefit. Disability benefit recipients also have the opportunity to enroll in the STRS Ohio Health Care Program.* Eligibility for disability protection continues for two years following the member’s last date of STRS Ohio-covered employment.

After you are eligible for service retirement, you qualify for:

• Lifetime monthly pension.

• Continuing lifetime benefits to survivors if you choose.

• Annual cost-of-living adjustments on the monthly benefit.

• Automatic $1,000 death benefit payable to a beneficiary you select.

• An opportunity to enroll in an STRS Ohio-sponsored health care plan if you have 15 or more years of service credit.*

• Variable board-approved supplemental benefit payments.

*Health care coverage, premiums and eligibility criteria are subject to change.

Service Credit Canceled With Account Withdrawal
Your accumulated service credit will be canceled if you withdraw your STRS Ohio account. You may restore withdrawn service credit if you later earn 1.50 years of service with an Ohio public retirement system. To restore the service, you must pay an amount equal to the amount you withdrew — including any interest or matching funds paid to you — plus interest at a rate established by STRS Ohio. The rate is currently 8% compounded annually and is subject to change without notice.

There are no restrictions on reemployment after you withdraw your STRS Ohio account. If you return to teaching service after withdrawing your account, your STRS Ohio membership will be reactivated as if you were a beginning teacher.

Important Tax Considerations
If you choose to withdraw your STRS Ohio account, there are important tax implications.

If you choose to have your withdrawal paid directly to you:

• Your payment will be taxed in the year it is received.

• We will withhold 20% of the payment and send it to the IRS to be credited against your taxes.

• If you receive the payment before age 59-1/2, you may have to pay a 10% tax penalty for an early withdrawal.

You may roll over your withdrawal amount to an eligible retirement account that will accept your rollover and:

• Your payment will not be taxed in the current year and no income tax will be withheld.

• Your withdrawal will be paid directly to an account or fund that will accept your rollover.

• Your payment will be taxed when it is removed from your account or fund.

Beginning in the year you reach age 70-1/2 or terminate employment, whichever is later, a certain portion of your payment cannot be rolled over because it is a “required minimum payment” that must be paid to you. STRS Ohio can tell you if your payment includes amounts that cannot be rolled over.

There are other tax implications if you withdraw your STRS Ohio account. Review our brochure titled Important Information About Withdrawing Your STRS Ohio Account and consult a professional tax advisor for more information. STRS Ohio cannot provide tax advice.

Account Withdrawal Procedures
If you wish to withdraw your STRS Ohio account, call us toll-free at 1-888-227-7877 to request a withdrawal application, a withdrawal estimate and the brochure titled Important Information About Withdrawing Your STRS Ohio Account or click here to view a PDF version of the an account withdrawal packet.