| Frequently Asked Questions
Eligibility
Who is eligible to choose a retirement plan option?
Educators who are new members to STRS Ohio on or after July 1, 2001, are eligible to select a plan.
STRS Ohio Plan Options
What retirement plans are offered?
Defined Benefit Plan
Members currently contribute 10% of their annual salary, while employers currently contribute an additional 14% of members’ annual salary for retirement, survivor and disability benefits. A portion of the employer contribution is used to pay for past plan benefit enhancements, also referred to as the system’s unfunded liability. STRS Ohio professionals oversee all investments. Benefits include disability and survivor protection while teaching, and a monthly retirement payment with annual cost-of-living adjustments. Plan participants also have access to optional health care coverage* in retirement if they meet health care eligibility conditions.
Defined Contribution Plan
Members currently contribute 10% of their annual salary, while employers currently contribute an additional 10.5% of members’ annual salary on behalf of the plan participant. These contributions are deposited to a defined contribution account. The employer also currently contributes an additional 3.5% toward the system’s unfunded liability. Retirement income is based on the performance of investment choices selected by the member. Survivor and disability benefits are limited to the value of the account. Access to STRS Ohio health care coverage upon retirement is not provided.
STRS Ohio Combined Plan
Members currently contribute 10% of their annual salary to a defined contribution account, while employers currently contribute 14% for a service retirement benefit as well as disability and survivor protection, and access to optional health care coverage* in retirement (upon meeting health care eligibility conditions). As in the Defined Benefit Plan, a portion of the employer contribution goes toward the system’s unfunded liability. For participants in the Combined Plan, part of their retirement income is based on the performance of investment options they choose for their contributions.
Contribution rates and eligibility for health care coverage are established by the State Teachers Retirement Board and are subject to change.
Instead of participating in the Defined
Benefit, Defined Contribution or Combined Plan offered by STRS Ohio, can I choose another retirement plan?
No. Ohio public educators participate in one of these STRS Ohio retirement plans. However, you may elect to participate in other voluntary plans, such as a 403(b), IRA (individual retirement account) or a 457(b) governmental plan, to supplement STRS Ohio’s retirement program.
What are 403(b) plans, IRAs and 457(b) plans?
These terms describe different types of optional, individual investment accounts that may be offered by your employer. They are separate from your STRS Ohio retirement plan and can supplement the retirement income you will receive from STRS Ohio. Each of these accounts may have different plan characteristics — such as maximum annual contribution limits, withdrawal limitations, etc. You may want to consult a financial adviser to determine if one of these plans is right for you.
Will additional contributions to these voluntary plans
be affected by selecting the Defined Contribution or Combined
Plan?
No. Contribution limits to 403(b), IRAs and 457(b) plans are based on your taxable income. Contributions to the Defined Contribution or Combined Plan are made at the same rate as the Defined Benefit Plan; therefore, your taxable income is not affected.
STRS Ohio Investment Options
What investment options are available in the Defined
Contribution and Combined Plans?
Members are offered the following investment options:
What information is available to help me decide which
investment options are best for me?
STRS Ohio has contracted with Nationwide Retirement Solutions
(NRS) to provide help in administering the defined contribution
aspects of the STRS Ohio retirement plan options. NRS retirement
specialists can discuss your investment choices with you by telephone.
Just call toll-free 1-866-332-3342, Monday–Friday, 8 a.m.–6 p.m. to talk
with an NRS representative. Additional
investment information from NRS can also be accessed online.
You may also want to consult with a financial planner or adviser
concerning your retirement planning needs.
Finally, be sure to review the Investment Options Guide
included in your selection packet. Answering a short questionnaire
in the guide will help you determine your investment profile based
on time horizon and risk tolerance. You can then develop your
investment strategy. Click here
for a PDF version of the questionnaire.
Are there fees for the STRS Ohio Defined Contribution and Combined
Plans, and how are they charged?
Yes. Members who participate in the Defined Contribution or Combined
Plan are charged asset management fees, except with the STRS Total
Guaranteed Return Choice. The Investment Options Guide
lists the fee for each investment option.
In addition, a quarterly account fee of $10 is charged. This
fee is taken proportionately from the member’s account balance
on the last business day of the quarter.
Finally, members whose account balance is less than $5,000,
and who are inactive for more than 120 consecutive days, are charged
a $10 per month maintenance fee. “Inactive” is defined
as not having any member or employer contributions applied to
an account. Members are not charged the quarterly account fee
if this low balance fee was charged during the quarter.
When are contributions deposited to my defined contribution
account?
Employers will send contributions directly to STRS Ohio after
each payroll. STRS Ohio will deposit contributions within five
business days of receipt.
How can I keep track of investments in the defined contribution
account?
STRS Ohio will send you quarterly statements that detail all activity
in your account for the quarter — deposits, investment allocations,
investment performance, etc. You
can also use the STRS Ohio/NRS Web site or an interactive
voice response system to access your account balance and to make
changes to your investment portfolio — 24 hours per day,
seven days a week. If you prefer to talk to a Nationwide Retirement
Solutions customer service representative, you can reach one by
calling toll-free 1-866-332-3342, Monday–Thursday, 8–9
p.m. and Friday, 8–6 p.m.
If I select the STRS Ohio Defined Contribution or Combined Plan,
are there any restrictions on moving money from one investment
option to another? How do I make changes to my account?
If you pick the STRS Total Guaranteed Return Choice, you allocate
100% of all payroll contributions for the year to this option
and keep them there for five years — in return for a guaranteed
interest rate.
With the other investment choices, you may change your allocations
through
the Web site, through an interactive voice response system
or with a Nationwide Retirement Solutions customer service representative.
You are permitted 20 trade events each calendar year. A trade
event is defined as any trade or combination of trades occurring
on a given valuation day. NRS also provides these additional safeguards
to protect STRS Ohio from illegal late-day trading and improper
market-timing trading.
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If six or more trade events occur in one calendar quarter,
NRS will notify the participant by U.S. mail that he or she
has been identified as engaging in potentially harmful trading
practices.
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Following this notification, if more than 11 trade events
occur in two consecutive calendar quarters, NRS will require
the participant to submit all future trade requests in paper
form only via regular U.S. mail for the remainder of the calendar
year.
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If 20 trade events occur in a calendar year, NRS will require
the participant to submit all future trade requests in paper
form via U.S. mail for the remainder of the calendar year.
If you select the Defined Contribution or Combined Plan, you will receive detailed instructions on how to access account information and make changes. A confirmation of all changes will be mailed to you within two days of your transaction.
STRS Ohio Service Credit
What is “service credit”?
Service credit is the number of years earned through contributing service or purchased under STRS Ohio’s plan provisions. Service credit is one of the factors used to determine the amount of the monthly service retirement benefit in the Defined Benefit and Combined Plans and is calculated by your employer according to the rules established by the State Teachers Retirement Board.
If you choose the Defined Benefit or Combined Plan, you will receive an Annual Statement of Account each October that provides you with an estimated value for your survivor, disability and service retirement benefits, depending on the years of service you have accumulated. It also reports calculated earnings, deposits and years of service credit, as well as the value of your account should you terminate teaching and decide to withdraw it.
Is service credit applicable in the STRS Ohio Defined Contribution
or Combined Plan options?
In the Defined Contribution Plan, member contributions, employer
contributions and the performance of investment choices you select
determine retirement plan benefits. Service credit is not a factor
in your retirement benefit.
In the Combined Plan, service credit is used in a calculation
to determine the defined benefit portion of the account. You must
have five years of service credit and be at least 60 years old
to receive service retirement benefits from the defined benefit
portion of the Combined Plan.
I currently have contributions and service credit with
the Ohio Public Employees Retirement System (OPERS) or the School
Employees Retirement System (SERS). How will my choice affect
my accounts with those systems?
Nonconcurrent service with OPERS or SERS can be combined with
an STRS Ohio Defined Benefit Plan account to provide for an earlier
retirement or a larger benefit. These accounts cannot be combined
with STRS Ohio Defined Contribution or Combined Plan accounts.
To receive a benefit from OPERS or SERS, you must qualify independently
with those systems. If you have credit with OPERS or SERS, call
STRS Ohio toll-free at 1-888-227-7877 before enrolling in the
STRS Ohio Defined Contribution or Combined Plan.
Portability
What do you mean by “portability” of my account?
The term “portability” refers to your ability to move
your retirement funds if you leave public teaching in Ohio. Once
you have completed one year of teaching, the Defined Contribution
Plan offers the greatest flexibility in this area. Below is an
outline of the amount you will receive under each plan if you
withdraw your account:
Defined Benefit Plan participants
If you leave public teaching in Ohio, you can withdraw your contributions
plus interest* earned. STRS Ohio pays:
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Up to 6% interest* compounded annually plus 50% matching funds on your contributions if you have at least five years of qualifying service credit.
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Up to 6% interest* compounded annually if you have at least three years, but less than five years, of qualifying service credit.
- Up to 4% interest* compounded annually if you have less than three years of qualifying service credit.
Defined Contribution Plan participants
If you leave public teaching in Ohio, you can withdraw the value
of your account. STRS Ohio pays:
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Your total contributions and all allocated employer contributions,
plus all investment gains or losses on those contributions,
if you have at least one year of membership in STRS Ohio.
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Your total contributions, plus any investment gains or losses
on those contributions, if you have less than one year of membership
in STRS Ohio.
Combined Plan participants
If you leave public teaching in Ohio before age 50, a withdrawal
must include both the defined benefit and defined contribution
portions of your account. At age 50 or after, you may withdraw
the defined contribution portion upon termination of employment and leave the
defined benefit portion on account for a benefit at age 60.
You
may withdraw the defined benefit portion only if you are also
withdrawing the defined contribution portion.
For the defined contribution portion of your account, STRS Ohio
pays:
- Your contributions and the gains or losses on those contributions.
For the defined benefit portion of your account, STRS Ohio pays:
- The present value of benefits that would have been paid during
retirement. If you terminate employment with less than five
years of service credit, the value is zero.
Rollovers
Can I roll over my balance in the STRS Ohio Defined Contribution or Combined Plan to an IRA, an eligible employer plan or another qualified plan?
Yes. Upon separation of service or retirement, you have the ability to roll over your balance to a traditional IRA, an eligible employer plan or another qualified plan that will accept your rollover. At age 50, you may also just roll over the defined contribution portion of the Combined Plan and leave the defined benefit portion to fund a service retirement at age 60.
Can I roll over funds from an IRA or another qualified plan to my defined contribution account?
Yes. If you permanently choose the STRS Ohio Defined Contribution or Combined Plan after your fourth anniversary, you will be able to roll over funds from a qualified account.
Additional Benefit Information
Can you describe the optional health care coverage that
is offered under the STRS Ohio Defined Benefit and Combined Plans?
STRS Ohio retirees have access to optional health care coverage*
under the Defined Benefit or Combined Plan if they have at least
15 years of service credit. This coverage includes hospitalization,
physician fees and prescriptions, as well as optional dental and
vision coverage. Premiums and copayments depend on the coverage
you select and your years of service credit. Eligibility for optional
health care coverage is established by the Retirement Board and
is subject to change.
Can you describe the survivor and disability protection
that is offered under the STRS Ohio Defined Benefit and Combined Plans?
Disability Benefits
After you attain five years of service credit, you are eligible
to apply for disability benefits if you become disabled while
employed or within two years following your last date of STRS
Ohio-covered service. You may receive monthly benefits ranging
from 45% to 60% of your final average salary. Access to optional
health care coverage*, including optional dental and vision coverage,
is also available.
Survivor Benefits
After you’ve earned 1-1/2 years of contributing service
credit, benefits are paid to qualified survivors if you die prior
to service retirement. Benefits range from 25% to 60% of final
average salary. Access to optional health care coverage*, including
optional dental and vision coverage, is also available.
Do Social Security windfall and offset provisions affect me if I choose the Defined Contribution or Combined Plan?
All three STRS Ohio retirement plan options are treated equally and all are subject to the Social Security windfall and offset provisions.
What benefits do I retain if I take a leave from teaching?
If you take a leave from teaching, you could retain some benefits,
depending on your years of service and the retirement plan selection
you make. If you withdraw your account when you stop teaching,
you lose eligibility for these benefits.
With 1-1/2 years of service under the Defined Benefit or Combined
Plan, you qualify for survivor benefits. This survivor protection
continues for 27 months following your last contributing service.
With five years of service, you may qualify for disability benefits.
Eligibility continues for two years following your last contributing
service. Also, with five years of service under the STRS Ohio
Defined Benefit or Combined Plan, you qualify for a retirement
benefit at age 60.
Making a Choice
Questions to consider when selecting a retirement plan
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Will you stay in Ohio or move out of state during your career?
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How long will you teach?
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How old will you be when you want to start receiving a retirement
benefit?
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How confident are you in making investment decisions?
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What type of retirement plan and benefits does your spouse
have?
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Do you have access to other sources of retirement income?
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How will you provide for disability and survivor protection
during your working career?
When does my 180-day selection period begin?
The selection period begins on your first day of paid service — in other words, your first day of work for your employer, regardless of when you signed your contract.
What happens to my contributions before I make my retirement
plan selection?
You will contribute to the Defined Benefit Plan until you return your Retirement Plan Selection Form. Once we receive your selection form, the account for the plan you choose will be set up within 14 days. If you select the Defined Contribution or Combined Plan, your contributions prior to your selection will be credited to your new account.
After I select my STRS Ohio retirement plan option, can my selection
be changed?
Your flexibility to change plans depends on the plan you select. If you choose the Defined Benefit Plan, your choice is final and permanent. If you choose the Defined Contribution or Combined Plan, you will have a one-time option to remain in the same plan or transfer to another STRS Ohio plan before completing your fifth year of membership. Information will be mailed to you prior to the fifth anniversary of your first day of paid service. At that time, the retirement plan option you select will be final.
If I choose the Defined Contribution or Combined Plan now, can I switch plans at any time during the initial five-year period?
No. If you select the Defined Contribution or Combined Plan, you will have a one-time opportunity to change plans. This will take place in June following the fourth anniversary of your first day of paid service. There is no provision in the law that allows you to switch plans at any other time, even in the case of a life-changing event (e.g., marriage, divorce, death of a spouse, etc.).
If I select the Defined Contribution Plan, then switch to the Combined Plan at the five-year point, how much of my account transfers to the defined contribution portion of the Combined Plan?
Your contributions and the earnings on those contributions go into the defined contribution portion of the Combined Plan. The employer contributions and the earnings on those contributions fund the defined benefit portion of the Combined Plan. You will receive service credit as if you had always been in the Combined Plan. Depending on the amount of credit, you could be immediately vested for survivor and disability benefits.
If I select the Combined Plan, then switch to the Defined Contribution Plan at the five-year point, how much of my account transfers to the new plan?
You will take your account withdrawal value to the Defined Contribution Plan as of July 1 of the switch year. This would include the entire defined contribution account balance and the present value of future benefits you earned in the defined benefit portion of your account. If the service credit is less than five years, the value of the defined benefit portion is $0. If you have five years of service credit, you will get the present value of being paid 5% of final average salary for life at age 60.
If I select the Defined Contribution or Combined Plan now and switch to the Defined Benefit Plan following my fourth anniversary, how will my account be affected?
STRS Ohio will create a Defined Benefit Plan account for you as if you had elected that plan originally. The Defined Contribution or Combined Plan accounts — and any accompanying gains or losses — are absorbed by the Defined Benefit Plan.
What happens if I do not make a selection?
Members who do not complete a selection form will participate in the STRS Ohio Defined Benefit Plan, and will forfeit any option to switch plans following their fourth anniversary — as outlined previously.
Can I select a new plan again if I change employers?
If you select the Defined Contribution or Combined Plan during your first 180 days of employment, you cannot switch plans until the one-time option in your fifth year of membership (as outlined previously). Once you make your final selection in your fifth year of membership, you cannot switch plans.
Note: If you terminate employment and withdraw your account after your initial selection is made, but before making your permanent choice in your fifth year of membership, you will be eligible to make a new selection if you resume your teaching career. However, members who choose or are placed in the Defined Benefit Plan remain in it as long as they teach in Ohio.
If I leave teaching and withdraw my account, can I restore the service credit if I return to teaching?
You will be able to restore service credit in the Defined Benefit Plan account; however, restoration of service credit is not permitted for Combined Plan accounts.
General Plan Information
Can my account balance in the Defined Contribution Plan be offered as collateral when seeking loans? Can I borrow against this account?
No. Your account balance in any plan is not a liquid asset and cannot be considered as collateral when applying for a loan. Also, members are not eligible to withdraw funds while employed.
In the Defined Benefit Plan, I am able to retire once I have 30 years of service credit, regardless of age. Is this true of the Defined Contribution and Combined Plans as well?
Members enrolled in the Defined Contribution Plan are eligible to start distributions from their account at age 50 or later, provided they have stopped teaching. They can take an annuity, which is a fixed, regular payment of their account balance. A Single Life Annuity provides monthly payments equal to contributions plus earnings spread over the retiree’s lifetime. A Joint and Survivor Annuity provides lifetime benefits for both the retiree and a named beneficiary. A member may also withdraw the entire account in a lump sum. Additional information about benefit payment options is available by calling the STRS Ohio Member Services Center toll-free at
1-888-227-7877.
Members enrolled in the Combined Plan are
eligible for the defined benefit portion of the account at age 60 with five years of service credit. Distributions from the defined contribution account balance may be started at age 50, provided the member has stopped teaching. The member can choose a lifetime annuity or a lump-sum withdrawal.
Upon retirement from the Defined Contribution or Combined Plan, will I be eligible for the possible annual supplemental benefit payment?
No. This benefit is available only to Defined
Benefit Plan members who are receiving a monthly benefit.
If I select the Defined Contribution Plan, will I have access to STRS Ohio health care coverage at retirement?
No. STRS Ohio health care is not available to members who retire under the Defined Contribution Plan.
Is more information about my plan options available?
Extensive information is available on this site.
You can also call the Member Services Center toll-free at 1-888-227-7877.
Member service representatives are available Monday–Friday, 8–5 p.m. |
