What is the retirement plan option law?
Ohio law gives eligible faculty at state public universities and colleges the
option to participate in STRS Ohio or an alternative retirement plan (ARP) offered
by a private vendor. You will have 120 days from your first day of paid service
to elect participation in STRS Ohio or an ARP. If you choose STRS Ohio, you
will have an additional 60 days (180 days from your first day of paid service)
to select one of the three retirement plans offered by STRS Ohio.
Do Social Security windfall and offset provisions
affect me if I choose the STRS Ohio Defined Contribution Plan, Combined Plan
or an ARP?
All three STRS Ohio retirement plan options and ARPs are treated equally and
all are subject to the Social Security windfall and offset provisions.
Eligibility
Who is eligible to choose a retirement plan?
Employers must offer the choice to full-time employees who are newly hired or
have changed to full-time status.
Which universities or colleges are considered
a “public institution of higher education”?
Public institution of higher education means a state university as defined in
Ohio law. This includes: state universities; the Medical University of Ohio at
Toledo; the Northeastern Ohio Universities College of Medicine; or a university
branch, technical college, state community college or municipal university.
View a complete list of the 37 institutions
affected.
STRS Ohio Plan Options
What STRS Ohio retirement plans are offered?
STRS Ohio Defined Benefit Plan
As its name implies, your retirement income is “defined” by a calculation that uses your age, your years of service and your final average salary. You also have survivor and disability protection while you teach. Access to optional health care coverage* is provided to retirees who meet the necessary qualifications — currently, 15 years of service credit.
STRS Ohio Defined Contribution Plan
In this plan, your retirement income is based on the performance of investment choices you select for the contributions made by you and your employer. You may allocate your contributions among various investment options managed by STRS Ohio. Retirement, survivor and disability benefits are limited to the value of your account. Access to STRS Ohio health coverage upon retirement is not provided. This plan is comparable to the ARPs offered by private vendors.
STRS Ohio Combined Plan
This plan allows you to create a portion of your retirement income through the performance of investment choices you select for your contributions, while contributions from your employer pay for a combination of service retirement, disability and survivor benefits. Access to optional health care coverage* is provided to retirees who meet the necessary qualifications — currently, 15 years of service credit.
Contribution rates and eligibility for optional health care coverage are established
by the State Teachers Retirement Board and are subject to change.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio hopes to continue the program indefinitely, but reserves the right to change or discontinue all or part of the program for all or a class of eligible enrollees.
Instead of participating in an STRS Ohio
plan or an ARP, can I choose another retirement plan?
No. Full-time faculty members participate in an STRS Ohio or an alternative retirement plan.
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
your retirement program.
What are 403(b) plans, IRAs and 457(b) plans?
These terms describe different types of optional, individual investment accounts.
They are separate from your retirement plan. 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 STRS Ohio 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 STRS Ohio 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 phone. 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
the plan 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 of the questions.
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 a.m.–9 p.m. and Friday, 8 a.m.–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.
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.
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.
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 an OPERS or SERS account,
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. Below is an outline of the amount you will receive under each plan
if you withdraw your account:
STRS Ohio Defined Benefit Plan participants
If you leave public teaching in Ohio, you can withdraw your contributions plus
interest earned. STRS Ohio pays:
Up to 6% interest* compounded annually plus 50% matching funds on your contributions if you have at least five years of qualifying service credit.
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.
*For current interest rates, contact STRS Ohio toll-free at 1-888-227-7877 or visit our Web site.
STRS Ohio Defined Contribution Plan participants
If you leave public teaching in Ohio, you can withdraw the value of your account.
STRS Ohio pays:
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.
Your total contributions, plus any investment gains or losses on those
contributions, if you have less than one year of membership in STRS Ohio.
STRS Ohio Combined Plan participants
If you leave public teaching in Ohio prior to 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? Currently, 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.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio hopes to continue the program indefinitely, but reserves the right to change or discontinue all or part of the program for all or a class of eligible enrollees.
Can you describe the survivor and disability
protection that is offered under the STRS Ohio Defined Benefit and Combined
Plans?
Survivor benefits Once eligibility conditions are met, monthly benefits are paid to qualified survivors if you die before service retirement. Annual benefits range from 25% to 60% of final average salary. Access to health care coverage,* including optional dental and vision coverage, is also available.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio hopes to continue the program indefinitely, but reserves the right to change or discontinue all or part of the program for all or a class of eligible enrollees.
Disability benefits
Once eligibility conditions are met, you ay apply for monthly disability benefits if you become disabled while employed or within two years following your last date of STRS Ohio-covered service. Annual benefits range from 45% to 60% of your final average salary. Access to health care coverage,* including optional dental and vision coverage, is also available.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio hopes to continue the program indefinitely, but reserves the right to change or discontinue all or part of the program for all or a class of eligible enrollees.
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.
Making A Choice
Questions to Consider When Selecting a Retirement Plan
Will you stay in Ohio or move out of state during your career?
How long will you teach?
How old will you be when you want to start receiving a retirement benefit?
How confident are you in making investment decisions?
What type of retirement plan and benefits does your spouse have?
Do you have access to other sources of retirement income?
How will you provide for disability and survivor protection during your working career?
How long do I have to make
my decision?
You will have 120 days from your first day of paid service to elect participation
in STRS Ohio or an ARP. If you choose STRS Ohio, you will have an additional
60 days (180 days from your first day of paid service) to select one of the
three retirement plans offered by STRS Ohio. Please note: Your first day of
paid service is 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?
If you choose STRS Ohio, you will contribute to the Defined Benefit Plan until
you return your STRS Ohio 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 STRS Ohio Defined Benefit Plan, your choice is final and irrevocable. If
you choose the Defined Contribution or Combined Plan, you will have a one-time
opportunity to change plans during your fifth year of membership. Additional
information will be mailed to you at that time. 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.).
Can I select a new STRS Ohio plan again
if I change employers?
This depends on the plan you select and the retirement options offered by a
future employer.
If you enroll in an STRS Ohio plan and move to another Ohio public college
or university, you will have the choice between your STRS Ohio plan that is
in place and the ARPs being offered by your employer.
If you select the STRS Ohio Defined Contribution or Combined Plan, and have
made your final election in your fifth year, you cannot switch STRS Ohio retirement
plans — but again, you will have the choice between your STRS Ohio plan
that is in place and the ARPs being offered by your new employer.
Note: If you selected the STRS Ohio Defined Contribution or
Combined Plan, terminate employment and withdraw your STRS Ohio account after your initial election is made, but before making your permanent choice in
the fifth year, you will be eligible to make a new selection from the three
STRS Ohio retirement plan options if you resume your teaching career.
If you select an ARP now and later change employers, you will have the option
of choosing STRS Ohio or the ARPs being offered by your new employer.
If I select the STRS Ohio Defined Contribution
Plan, then switch to the STRS Ohio 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 STRS Ohio Combined Plan,
then switch to the STRS Ohio 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 elect the STRS Ohio Defined Contribution
or Combined Plan now and switch to the STRS Ohio 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.
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 STRS Ohio 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.
If I select the STRS Ohio Defined Contribution
Plan, will I have access to STRS Ohio optional 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 a.m.–5
p.m.
