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STRS Ohio News for Reporting Employers
May 2008

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Table of contents:


Calamity Days May Affect June Retirements
When calamity days cause the school year to be extended, members who were planning to retire June 1 can be affected.

If teacher workdays have been extended in June, members who were planning to retire effective June 1 have several options. They can choose to:

  1. Work in June and retire effective July 1;

  2. Not work in June, give up salary payments and contributions to STRS Ohio for the days not worked, and still retire effective June 1 (which may lead to final average salary limitations); or

  3. Not work in June, give up salary payments for the days not worked, but complete contributions for these days by purchasing calamity days.

Options 1 and 2 are fairly easy to understand. So let’s talk about Option 3 — purchasing calamity days.

According to State Teachers Retirement Board Rule 3307:1-3-06, members can purchase calamity days by remitting 10% contributions on the salary they would have earned had they worked the extra days. Choosing this option would allow teachers to complete contributions on their full contract and still retire effective June 1.

The process of purchasing calamity days is the same as purchasing a current-year unpaid leave of absence. There are two ways to report this to STRS Ohio:

  • You can report and remit the 10% member contributions for the calamity days with any fiscal year payroll report submitted before the member’s effective retirement date; or

  • The member can make a check payable to STRS Ohio for the 10% member contributions for the calamity days and give it to you to forward to STRS Ohio with a letter explaining the payment. Be sure to include the member’s name, Social Security number and a calculation of the 10% member contributions.

When members purchase calamity days, employers are responsible for remitting the corresponding 14% employer contributions pursuant to Section 3307.77, Ohio Revised Code. In addition, it’s important to include all contributions for the purchase of calamity days in Deposit and Service Reports and your Annual Report. If you have specific questions about calamity days, please contact your employer advisor by e-mail or phone toll-free at 1-888-535-4050.

Payment Details Must Accompany Contributions
Providing payment details is a necessary part of payroll reporting. To ensure contributions are posted properly, please remember to submit an online cash remittance form via our Web site, or mail or fax a paper Employer Cash Receipt Remittance Form to STRS Ohio when you submit contribution payments.

To access the online form, visit www.strsoh.org/employer and click on “Online Remittance Submission” on the left side of the home page. To print a copy of the form, click on “PDF Remittance Form.” Although online submission is preferred, you can mail the paper form with your payment or fax it to (614) 227-4683.

Please remember to use only one submission method. If you submit the information online, please do not mail or fax a paper copy of the form. If you have questions about submitting payment details, please contact your employer advisor.

Annual Reporting Can Be a Breeze
Each summer employers must submit an Annual Report to STRS Ohio that lists service credit and contributions on compensation earned by STRS Ohio active members and reemployed retirees during the fiscal year. This year your report is due by Aug. 8.

Planning ahead can make the annual reporting process flow smoothly. Here’s some general information that will make submitting your report a breeze.

Plan Ahead

  • No extensions will be granted to the Aug. 8 deadline, so please call your employer advisor if you have questions about completing your report.

  • If a DA Site submits your report, be sure to follow the DA Site’s instructions step-by-step to ensure your report is submitted.

  • If you use our Web site to submit your report, be sure the appropriate staff will be available to complete your report. Your online report will be available July 1.

  • If you did not use our online services last year, register in advance to use the online Recap Sheet and Service Credit Verification report.

Follow the Instructions

  • Check your mail in early June for detailed annual reporting instructions and related materials. You can also print of copy of the instructions from our Web site.

  • Submit your report electronically via our Web site or file transfer protocol (ftp). If you use ftp, send your file to the address listed in the instructions, not the address used for payroll reporting.

  • Report accrued contributions separately and include them in the total contributions for each member. (Accrued contributions are contributions on compensation earned by June 30, but not paid until July 1 or after.)

  • Accurately report service credit for each active member. Service credit for reemployed retirees must be reported as zero — do not leave this field blank.

  • Submit a Recap Sheet the same day you submit your report.

  • Submit a TPO Contribution Certification form if necessary.

Use Resources on Our Web Site

  • Use the online service credit calculator to accurately calculate service credit.

  • Review fiscal year payroll data online in the Employer Reporting section of the secure Employer Account Information area.

  • Submit your Recap Sheet and Service Credit Verification report online.

  • Get answers to frequently asked questions or search the online STRS Ohio Employers Manual for valuable information.

We appreciate your efforts to submit your annual reporting materials on time. This information is necessary to update member accounts and prepare actuarial information. Please contact your employer advisor with questions — we’re here to assist you.

Ask an Advisor

Q: One of our teachers was on a leave of absence for fiscal years 2005–2006 and 2006–2007. She now wants to buy back the first year of her leave. STRS Ohio has told her that the purchase needs to be handled through our school, and she wants us to calculate the amount she owes. I’m confused. Can you explain the process to me?

A: Because this leave took place within the last two years, STRS Ohio considers it a current leave of absence. This means it’s the employer’s responsibility to handle the purchase. The amount the member owes is based on the individual’s contract amount. The member is required to pay 10% member contributions on the amount she would have earned had she worked, which is the unearned/unpaid portion of the contract. You should calculate this amount and tell her the amount due.

The member will need to give you a check payable to STRS Ohio in the correct amount. You must remit this check to STRS Ohio along with the applicable employer contributions. In addition, you need to send us a letter certifying the dates of the leave of absence, approval of leave of absence, amount of earnings the member would have earned had she worked, contributions being remitted and service credit being purchased. Please note that this process is done separately from payroll deposits. If you have additional questions, please contact your employer advisor by e-mail or phone toll-free at 1-888-535-4050.

Legislative Update

Health Care Funding Legislation Reintroduced
On Sept. 18, 2007, Rep. Scott Oelslager (R-North Canton) reintroduced the STRS Ohio-proposed health care legislation. House Bill 315, which has 14 House co-sponsors, also carries with it the support of the Health Care Advocates for STRS (HCA) — a coalition of major management, professional and retiree organizations representing Ohio’s public K–12 and higher education teachers.

This member-driven initiative calls for increasing public teachers’ contributions to STRS Ohio by up to 2.5% and their employers’ contributions by up to 2.5% of teacher payroll to create an ongoing, dedicated revenue stream for the STRS Ohio Health Care Program for current and future retired educators. These increases would be phased in over a five-year period, in .5% increments.

The bill has been referred to the House Financial Institutions, Real Estate and Securities Committee. No hearings have been scheduled at this time.

STRS Ohio staff members are available to speak with you and/or your boards about this bill. Please contact your employer advisor for more information. Updates about the bill’s progress will be included in future newsletters and posted on the STRS Ohio Web site. Additional details about the bill, including a narrated presentation, can also be accessed on the home page of the Web site.

Proposed Legislation Places New Limitation on Reemployment
Substitute House Bill 270, sponsored by Rep. Michelle Schneider (R-Madiera), proposes to suspend pension benefits for retirees who return to public employment with the same employer in the same or comparable position within two months after retirement. If enacted, this bill would prevent reemployed retirees who fall into this category from receiving a pension benefit and reemployed salary simultaneously.

The bill applies to members of STRS Ohio, Ohio Public Employees Retirement System, School Employees Retirement System of Ohio and the Ohio Police & Fire Pension Fund.

Under the bill, any retiree who violates the two-month waiting period by returning to the same employer from which he or she retired and working in the same or equivalent position will:

  • Forfeit the first two months of retirement benefits; and

  • Have all future pension benefits suspended and placed in an account held by the retirement system until reemployment ends.

At the end of reemployment, the retained pension benefits, plus interest, will be paid to the retiree as an annuity or a lump-sum payment. Monthly pension benefits would then begin the first of the month following the end of reemployment.

Please note that this bill affects only those retirees who violate the two-month waiting period by returning to work with the same employer in the same or equivalent position. If a retiree violates the two-month waiting period by returning to work in a different position or with a different employer, the retiree would only forfeit the first two months of retirement benefits. After the two-month waiting period expires, a retiree can return to work without penalty in any capacity with any employer.

Sub. H.B. 270 has been referred to the House Financial Institutions, Real Estate and Securities Committee. As of the end of April, the committee has not accepted this substitute version of H.B. 270. Updates about this legislation will be included in future newsletters and posted on the STRS Ohio Web site at www.strsoh.org.

Is a Wave of Summer Retirements Coming Your Way?
As you prepare for your teachers’ summer retirements, here are a few things to keep in mind:

  • Submit Deposit and Service Reports as soon as the information can be accurately reported. Members receive partial benefit payments until retirement processing is completed.

  • Submit a Request for Additional Information form if (1) the member had supplemental earnings in addition to contract earnings for any of the prior five years, or (2) the member’s contract year is Aug. 1 to July 31 and the member worked in the month of July.

These forms are due within two weeks after a member’s effective retirement date. Completing these forms correctly, in their entirety, and submitting them on time allows STRS Ohio to accurately determine the member’s final average salary and retirement benefits.

After the Deposit and Service Report is reviewed, an STRS Ohio associate may contact your office to request the following additional information:

  • The member’s placement on your school’s teacher salary schedule;

  • A breakdown of supplemental earnings; or

  • An explanation of a member’s early contract completion, including why the member completed the contract early, evidence that other teachers who are not retiring completed their contracts early, and times and days the member worked.

STRS Ohio appreciates your efforts to submit all necessary information on time. Information submitted after the deadline will delay the final calculation of the member’s retirement benefits. Please contact your employer advisor with questions.

New Compensation Limits Set
The Internal Revenue Service places limits on the amount of compensation on which contributions can be remitted for STRS Ohio members. Any payment to a member that exceeds these compensation limits is excluded from compensation for STRS Ohio purposes.

The following 2008–2009 fiscal year compensation limits are presented for your information only. STRS Ohio does not require you to track the retirement plans your employees participate in. We will monitor contributions and compensation for each STRS Ohio member, and notify you if contributions reported are within $2,500 of the limit or exceed the maximum contributions allowed by the IRS. If limits are exceeded, we will refund excess contributions and ask you to stop submitting contributions for affected members through the end of the fiscal year.

Compensation limits vary depending on the members’ retirement plan and the date their membership began. The limits below are based on compensation limits under 401(a)(17) and contribution limits under 415(c) of the Internal Revenue Code. If you have questions about compensation limits, please contact your employer advisor.

Compensation Limits
Retirement Plan
Effective date of membership on or after July 1, 1996
Effective date of membership before July 1, 1996
Defined Benefit Plan
$230,000
$345,000
Defined Contribution Plan*
224,390
224,390
Combined Plan
$230,000
$345,000

*Note: Defined Contribution Plan limits may increase for calendar year 2009. We’ll notify you if the IRS sets new limits.

What’s New on the Web
How Can We Help You?
We want to know how we can better assist you. To send us your feedback, please visit our Web site and click on “Employer Comments” on the left side of the home page. All comments are anonymous unless you choose to give us your name and/or employer number.

Get Your GASB Statements
Every December we publish employer disclosures for the past fiscal year in compliance with the requirements of the Governmental Accounting Standards Board (GASB). GASB Statement No. 12 provides information about post-employment benefits other than pension benefits; GASB Statement No. 27 provides information about pension benefits; and GASB Statement No. 45 (new this year) provides additional information about other post-employment benefits. To view or print a copy of these statements, visit our Web site. You can also contact your employer advisor to request a copy.

Print Your Employers Manual Updates
Before the summer ends, be sure to check our Web site for updates to the STRS Ohio Employers Manual. You will not receive updated pages in the mail, so please check our site in late August to print updated pages. If you’re unable to access the Internet, please call your employer advisor toll-free at 1-888-535-4050 or send an e-mail to report@strsoh.org to request copies of the updates.

Annual Financial Report Available
This year’s Comprehensive Annual Financial Report provides a detailed look at STRS Ohio’s investment activities, plus financial, actuarial and statistical information for the 2006–2007 fiscal year. This report has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada for 17 consecutive years, as well as recognition from the Public Pension Coordinating Council.

To view or print a copy of the report, visit the STRS Ohio Web site. You can also call STRS Ohio’s Member Services Center toll-free at 1-888-227-7877 to request a copy.

Changes to Health Care Coverage Eligibility Can Impact Reemployed Retirees
Effective Jan. 1, 2009, STRS Ohio can only provide secondary health care coverage to any health care plan enrollee — not eligible for Medicare Part B — who is employed in a public or private position and is eligible for health care coverage through the employer. This provision applies if: (1) the employer provides coverage to other employees in comparable positions at a cost no more than the cost of coverage offered to full-time employees; and (2) the plan provides medical and prescription drug coverage.

In simple terms:

  • A reemployed retiree, who is restricted from access to the employer plan due to being an STRS Ohio retiree, will not be eligible to enroll in the STRS Ohio Health Care Program.

  • An STRS Ohio retiree, who is required to pay more for coverage under the employer plan due to being reemployed, will be eligible to enroll in the STRS Ohio Health Care Program, but only as secondary coverage to the employer plan. If the retiree chooses not to enroll in the employer plan, coverage will not be available through STRS Ohio.

  • An STRS Ohio retiree, who is in a part-time or adjunct position in which other comparable employees pay a higher premium than that paid by full-time employees, is still eligible for primary coverage through STRS Ohio.

As you can see, this change could affect any person employed by your school who is receiving a retirement benefit from STRS Ohio and is enrolled in the STRS Ohio Health Care Program. For more information on this topic, including responses to hypothetical situations, click here to view a PDF that details the coverage changes and the examples. We also encourage you to call or e-mail your employer advisor with any questions you may have.

State Teachers Retirement Board Rules Update
The following State Teachers Retirement Board Rules have been amended. To view the board rules, visit our Web site.

Rule No.
Title
3307:1-10-01 Cost of living
3307:1-11-02 Health care services — eligibility
3307:1-11-03 Health care services — cost
3307:1-11-10 Responsibility for health care coverage
3307:1-12-01 Distributions.

Have You Sent Us Your Pay Schedule?
In April you received a request for your 2008–2009 pay dates. Knowing your pay dates allows us to notify you if we don’t receive your payroll reports and helps us to provide better service to members. If you haven’t sent us your pay dates, please submit them as soon as possible.

Please contact your payroll reporting specialist directly if you have questions about payroll reporting. The name of your payroll reporting specialist was included with the pay date request you received in April.
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