Account Withdrawal in Lieu of Benefits
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;
- 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;
- 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.
Spousal Consent on Account Withdrawal
All members who are married, age 60 or older and have 5.00 years of service credit or more 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 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;
- 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 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.
Interest for all years withdrawn begins to accrue in the fiscal year following deposit. For example, interest on 2006–2007 contributions would begin accruing July 2007 and be payable August 2007 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 three years of qualifying service credit |
9/1/1920 to 12/31/2005 |
4.00% |
1/1/2006 to Present |
2.00% |
With at least three years but less than five 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 five 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% |
If you withdraw your account you will no longer be an STRS Ohio member and
will lose:
- Your accumulated STRS Ohio service credit and any benefits it may apply
to in retirement including:
- Access to optional health care coverage (if you have more than 15 years
of service credit);
- Automatic death benefits;
- Cost-of-living adjustments on the base retirement benefit; and
- Supplemental retirement benefit payments when approved by the State
Teachers Retirement Board.
- Survivor benefits (after 1.50 years of STRS Ohio service) that continue
for 27 months following your last contributing service or while you are receiving
a disability benefit;
- Disability benefits (after 5.00 years of STRS Ohio service) that continue
for two years following your last contributing service.
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 visit our Web site for an account withdrawal packet.
