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Bulletins
Issued: May 2005
Written Explanation
for Early Contract Completion Required When a Member Retires
Occasionally, teachers will work weekend days or holidays to complete
their contracts ahead of schedule so they can retire early. For STRS
Ohio purposes, compensation earned for work performed on weekends or
holidays for the purpose of early contract completion may not qualify
for retirement contributions.
For example, a teacher with a 185-day contract wants to retire June 1. To be eligible for retirement, her last day of employment needs to be May 31. Since the school year doesn’t end until June 3, her employer allows her to work Saturdays during the month of May to complete her contract.
In this example, compensation earned for this work may not qualify for retirement contributions.
To help us determine if compensation earned for weekend or holiday work qualifies for retirement contributions, employers must provide the following information when they submit Deposit and Service Reports for members who have completed their contracts early:
- An explanation of why the member completed the contract early. This reason cannot be for retirement purposes.
- Evidence that other teachers, who are not retiring, also worked weekend days and/or holidays to complete their contracts early.
- The times and days the member worked, as well as an explanation of the work performed.
Please mail this information to:
STRS Ohio
Attn: Employer Reporting
275 E. Broad St.
Columbus, OH 43215-3771
You may also fax it to (614) 227-2912.
STRS Ohio will review the written documentation on a case-by-case basis to determine whether the compensation qualifies for retirement contributions.
Because this could affect a member’s final average salary calculation, it is important that you provide us with this information when you submit a Deposit and Service Report for any employee who may be affected.
If you have recently submitted a Deposit and Service Report for a member who completed a contract early by working weekends or holidays, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Federal Law Changes Hiring Process Effective
Jan. 1, 2005
Earlier this year, President Bush signed H.R. 743, the Social
Security Protection Act, into law. It requires state and local government
employers, hiring for jobs not covered under Social Security, to notify
new hires about how public employment will affect Social Security benefits.
Effective Jan. 1, 2005, employers must provide new hires with a written statement explaining the maximum impact of the Windfall Elimination Provision and the Government Pension Offset reductions. Additional information on these two provisions is provided below. New hires must sign the statement and a copy of the signed statement must then be filed with the public pension provider.
A mailing from the Social Security Administration to employers explains the new legislation and form SSA-1945. It also gives instructions for obtaining more forms. Click here for a copy of the letter and form.
When completing the form during the hiring process, write the Social Security number of the new hire where it asks for “Employee ID#” and your school’s STRS Ohio Employer Number where it asks for “Employer ID#.” The new hire must sign the form before the employer returns it to STRS Ohio. Return all forms to:
STRS Ohio
Attn: Employer Reporting
275 E. Broad St.
Columbus, OH 43215
If you have questions, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Issued: October 2004
Collectively Bargained Agreement Needed
for Contributions on Teacher Professional Organization Service
State Teachers Retirement Board Rules 3307-6-01 and 3307-6-02 went into
effect July 1, 2001, to permit contributions on compensation for teacher
professional organization (TPO) service. At that time, an application
was required for service prior to July 1, 2001, and for service from
July 1, 2001, through June 30, 2004, that was not part of a collectively
bargained agreement.
Effective July 1, 2004, compensation for TPO service must be part of a collectively bargained agreement between the employer and TPO to qualify for contributions.
The collectively bargained agreement must specify the following:
- Compensation will be paid for TPO service;
- The name of the individual or title of the position to be paid;
- The rate of pay; and
- The number of days or time periods for which the individual will be paid.
Click here for sample contract language for collectively bargained agreements.
If compensation for TPO service is included in a collectively bargained agreement, contributions on this compensation must be remitted to STRS Ohio with payroll reports and included in the Annual Report of Member Contributions.
Contributions must be remitted on all compensation paid to a member for TPO service, up to a maximum annual compensation amount determined by multiplying the teaching base contract per diem rate by 250 days.
If you have TPO service included in a collectively bargained agreement, please submit a copy of the agreement to STRS Ohio by Dec. 1, 2004, along with a listing of all STRS Ohio members who have received compensation for TPO service. This will help us ensure that the maximum annual compensation amount is not exceeded.
If you have questions about contributions on TPO service, please call your STRS Ohio employer advisor toll-free at 1-888-535-4050.
If you have questions, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Issued: September 2004
This bulletin contains important information about new criteria for determining final average salaries and verifying service credit. Please call your employer advisor toll-free at 1-888-535-4050 if you have questions about the following information.
New Exceptions to Final Average Salary
Limitations; Employer Assistance Needed
In August 2004, State Teachers Retirement Board Rule 3307:1-4-01 was
amended to include new criteria for determining the percentage increase
that may be included in compensation used to calculate a member’s
final average salary.
Prior to Aug. 19, 2004, a percentage increase otherwise excluded under Section 3307.501 of the Ohio Revised Code could be included in compensation if the same percentage increase was paid to other individuals employed in a similar position, provided that no more than one half of the similarly employed individuals were retiring. This provision no longer applies.
Effective Aug. 19, 2004, a percentage increase otherwise excluded under Section 3307.501, Revised Code, may be included in compensation used to determine final average salary if:
- It is paid pursuant to a teacher salary schedule without regard to supplemental or extended pay contracts;
- It is paid to an employee not paid under a teacher salary schedule up to the amount payable under a teacher salary schedule to employees with equivalent service and education without regard to supplemental or extended pay contracts; or
- It is paid by a university or college as an average salary increase.
As a result of the amended Board Rule, STRS Ohio will need your help determining where members, who are not paid under a teacher salary schedule, would be placed on your school’s teacher salary schedule based on their years of service and education.
If a member’s final average salary is limited, an STRS Ohio retirement liaison will contact you to determine the member’s placement on your school’s teacher salary schedule. This placement will determine the percentage increase that may be used to calculate the member’s final average salary.
Click here for a current version of all Board Rules.
Service Credit Requires Employer Verification
In October 2004, STRS Ohio members will receive an Annual Statement
of Account. This statement is a personalized history of earnings, contributions
and service credit for each fiscal year a member has worked.
To ensure member account information is accurate, members will be instructed in their annual statements to contact their employers regarding any fiscal year marked with an asterisk. An asterisk indicates that service credit may not be accurate based on compensation earned and service credit reported for the fiscal year.
For STRS Ohio to verify service credit, you must provide the supporting data used to calculate service credit for any fiscal year marked with an asterisk.
Please provide STRS Ohio with the number of days, hours or full-time equivalent by quarter or semester for each fiscal year marked. Using the definition of full time or part time for calculating service credit, please indicate if the member was employed on a full-time or part-time basis. (Refer to Section 7 of the STRS Ohio Employers Manual for a complete definition of full-time and part-time service.) STRS Ohio will use this information to make any necessary adjustments to the member’s account.
In addition to annual statements, members whose accounts were reviewed as part of a service credit audit will receive a letter from STRS Ohio instructing them to contact their employer regarding any service credit in question. Employers must submit supporting data used to calculate service credit for any fiscal year listed in this letter. Please submit this information directly to your STRS Ohio employer advisor.
Verifying service credit is an important service you provide to your employees. By verifying service credit, you help to ensure that member accounts are accurate so that retirement benefits can be properly calculated in the future.
If you have questions, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Issued: June 2004
Early Retirement Incentive Cost Factors
to Change July 1, 2004
Effective July 1, 2004, early retirement incentive (ERI) cost factors
used to calculate employer cost of ERI credit will change. The
new cost factors will be effective for teachers retiring on or after
July 1, 2004.
Under Ohio law, employers adopting early retirement incentive plans must pay the full retirement liability resulting from the purchase of credit. The changes to the factors reflect an increase in the assumed rate of investment return adopted by the State Teachers Retirement Board.
If you have questions, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Issued: December 2003
Interest Rate Change
At its November 2003 meeting, the State Teachers Retirement Board approved
a change to the system’s actuarial assumed rate of return for
investments to 8% from 7.75%.
As a result, interest charged to employers for prior year backpostings of contributions, delinquent contributions, noncontributing teaching service and retirement incentive plan payments will increase.
The effective dates for the interest rate change to 8% are listed below.
Jan. 1, 2004 — prior year backpostings of contributions, delinquent contributions and retirement incentive plan payments
July 1, 2004 — purchases of noncontributing teaching service credit by lump-sum payments and by payroll deduction
Members will also be affected since the interest paid for purchasing service will increase and those making purchases by payroll deduction will have higher minimum payments and extended payment schedules. Each member currently purchasing credit via payroll deduction will receive a letter about his or her current purchase and may make changes to the deduction amount as a result of the interest rate increase. The letter will vary depending on the type of plan (pretax or after-tax) and payment amount. Any changes to payment amounts will be effective July 1, 2004. Members making minimum payments must change their deduction to the new higher minimum amounts.
If you have questions, please contact your employer advisor via e-mail or by phone toll-free at 1-888-535-4050.
Print a copy of this Bulletin to Employers.
Issued: January 2002
Contributions to STRS Ohio Not Required
for Military Service Pay
Due to recent events, many Ohio teachers are being called to
active military duty. In addition to payments required under Ohio law,
some STRS Ohio employers are continuing to pay these employees all or
a portion of their salaries.
By law, STRS Ohio cannot accept retirement contributions on continuing salary payments made by employers to teachers called to active duty. If contributions on these payments have been submitted to STRS Ohio, please contact your employer advisor toll-free at 1-888-535-4050.
For your convenience, a link to Section 5923.05, R.C., which governs payments to Ohio public employees who are called to active military service, has been established on our Employer Web Site.
STRS Ohio members should contact the STRS Ohio Member Services Center toll-free at 1-888-227-7877 for information about service credit during active military duty.
Print a copy of this Bulletin to Employers.
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