New Full-time Hires: Frequently Asked Questions

Retirement Plan Option Law

What is the retirement plan option law?
Ohio law gives eligible faculty at state public colleges and universities 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 their status to full-time.

Which colleges or universities 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
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. 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.

STRS Ohio 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 optional 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 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 one of these 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 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:

• STRS Money Market
• STRS Lehman Universal Bond Index Return
• STRS Large-Cap Core Choice
• STRS Russell 1000 Index Return
• STRS Russell 2000 Index Return
• STRS REIT Choice
• STRS MSCI World ex USA Index Return
• STRS Total Guaranteed Return Choice

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 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. An example of how these fees are incurred is included on Page 14 of the guide.

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 in this area. 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 STRS Ohio 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.

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 STRS Ohio 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

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 For New Members. 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.

In the STRS Ohio Defined Benefit Plan, I am able to retire once I have 30 years of service credit, regardless of age. Is this true of the STRS Ohio Defined Contribution and Combined Plans as well?
Members enrolled in the STRS Ohio 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 at any age if employment is terminated. 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 STRS Ohio 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. A lump-sum withdrawal can also be made at any age if employment is terminated.

Upon retirement from the STRS Ohio Defined Contribution or Combined Plan, will I be eligible for the possible annual supplemental benefit payment?
No. This payment is available only to Defined Benefit Plan members who are receiving a monthly benefit.

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.