How Does the Combined Plan Work?
The STRS Ohio Combined Plan includes features of the Defined Benefit and the Defined Contribution Plans. From your current contribution of 14% of annual salary, 12% goes into a defined contribution account where the investment risk is assumed by you. However, 2% of your current contribution along with employer contributions fund a defined benefit portion of the plan — invested by STRS Ohio investment professionals — to pay for service retirement, disability or survivor benefits and access to retiree health care coverage.* Contribution rates and eligibility for health care are established by the State Teachers Retirement Board and are subject to change.
If you have credit in the Ohio Public Employees Retirement System or the School Employees Retirement System, selecting this plan may affect your future benefits from these systems. Please call STRS Ohio toll-free at 888‑227‑7877 for more information.
What This Means for You
If you retire with 35 years of service under the current formula, you will receive 35% of your final average salary as an annual retirement benefit, starting at age 60. You can also select from several payout options for the defined contribution portion of your account.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio may change or discontinue all or part of the program for all or a class of eligible benefit recipients and dependents at any time.
Plan Features to Consider
Benefits While Teaching
You can withdraw the assets of your Combined Plan or roll them into an individual retirement account (IRA), an eligible employer plan or another qualified plan if you leave STRS Ohio-covered employment before retirement eligibility. The withdrawal amount in your defined contribution account includes all contributions deposited to the account along with gains and losses. The defined benefit withdrawal is the greater of employee contributions deposited to the account or the present value of future benefits. At age 50 or later, you may withdraw or annuitize the defined contribution portion and leave the defined benefit portion to fund a service retirement benefit at age 60 with at least five years of service credit.
Upon earning five years of service credit, qualified survivors are eligible to receive annual benefits that range from 25% to 60% of final average salary. Survivors receiving this benefit have access to health care coverage (medical, dental and vision)* through STRS Ohio. All contributions and earnings in your defined contribution account and the defined benefit portion of the plan will be used to fund this benefit. Therefore, your survivors will not have a defined contribution account to oversee. Survivors will also have the option of withdrawing your entire account in lieu of receiving a benefit.
With 10 years of service credit, you may qualify for monthly disability benefits. Annual benefits range from 45% to 60% of your final average salary and you have access to health care coverage (medical, dental and vision)* through STRS Ohio. If you become disabled, all contributions and earnings in your defined contribution account and the defined benefit portion of the plan are used to fund this benefit; therefore, you will no longer have a defined contribution account to oversee. At age 65, the disability benefit converts to a service retirement benefit that provides 2.2% of your final average salary for each year of service. In lieu of disability benefits, you may withdraw your account.
Service Credit Purchase
You may be eligible to purchase credit for teaching interrupted by military service and leaves of absence.
Benefits While Retired
Benefits consist of an annuity from the defined benefit portion equal to 1% of your final average salary for each year of service credit and an annuity from the defined contribution portion based on the value of the account and market annuity rates at the time of retirement. You are eligible for the defined benefit portion at age 60 with at least five years of credit and for the defined contribution portion at age 50. Combined Plan benefits do not include cost-of-living adjustments.
Access to Optional Health Insurance*
Currently, Combined Plan members and eligible dependents may have access to health care coverage (medical, dental and vision) when benefits from the defined benefit portion begin, depending on their service credit. If these benefits begin before Aug. 1, 2023, you must have 15 years of service credit to be eligible for health care benefits, while 20 years of service credit is required if benefits begin on or after Aug. 1, 2023.
*Coverage under the STRS Ohio Health Care Program is not guaranteed. STRS Ohio may change or discontinue all or part of the program for all or a class of eligible enrollees.
What Are My Investment Choices?
A portion of your retirement income will be created through the performance of investment choices you select for your contributions. You will make your allocation decisions and use the same tools to oversee your account as STRS Ohio Defined Contribution Plan participants, such as the Investment Options Guide included in your selection packet. You have the same STRS Ohio-managed investment choices available to Defined Contribution Plan members. Asset management fees and a $10 quarterly account fee will be deducted from your investment returns.* If you leave teaching before reaching retirement eligibility, this portion of your account offers greater flexibility for withdrawal or rollover.
Fifteen of the choices represent the same diversification that is a hallmark of STRS Ohio’s total investment portfolio. They are:
|STRS Ohio Choices||Asset Classes|
|STRS Money Market Choice||Cash|
|STRS Barclays U.S. Universal Bond Index Choice||Bonds|
|STRS Large-Cap Core Choice||Large-Cap|
|STRS Russell 1000 Index Choice||Large-Cap|
|STRS Russell Midcap Index Choice||Mid-Cap|
|STRS Russell 2000 Index Choice||Small-Cap|
|STRS REIT Index Choice (Real Estate)||Real Estate|
|STRS MSCI World ex USA Index Choice (International)||International|
|STRS Target Choice 2020||Blend|
|STRS Target Choice 2025||Blend|
|STRS Target Choice 2030||Blend|
|STRS Target Choice 2035||Blend|
|STRS Target Choice 2040||Blend|
|STRS Target Choice 2045||Blend|
|STRS Target Choice 2050||Blend|
|STRS Total Guaranteed Return Choice||Balanced|
You will have considerable flexibility in transferring among the choices once you make your initial allocation on the Retirement Plan Selection Form. You can also change your allocation of future contributions at any time. Investment gains or losses are posted daily to your account.
Asset management fees will be deducted from investment returns of the individual options. A $10 account fee is deducted quarterly.* If you choose the STRS Ohio Defined Contribution Plan, you will discover that the administrative costs of maintaining your account are very low.
STRS Ohio also offers an additional investment choice — the STRS Total Guaranteed Return Choice. This option offers a guaranteed interest rate on contributions and transfers made in a given year.
If you believe the STRS Ohio Defined Contribution Plan is a viable option for you, you will want to refer to the detailed information on allocation choices in the Investment Options Guide included in your selection packet. It contains a profile of each investment choice including investment objectives, top holdings and annual fees. Also included is a questionnaire that can help you determine your investor profile. By completing this questionnaire, you will:
- Identify your time horizon. This is the period you have to invest for retirement.
- Assess your risk tolerance. All investments are affected by risk. In general, the greater potential for higher returns, the greater the risk.
You may also view or print an online version. Click here for a PDF of the questionnaire.
*Inactive members with an account balance of less than $5,000 are subject to a $10 per month fee. (“Inactive” is defined as not having any member or employer contributions applied to an account for more than 120 days.) A member will not be charged the quarterly account fee if a low balance fee was charged during the quarter.
Participation in the STRS Ohio Combined Plan provides you a predictable monthly benefit in retirement equal to 1% of final average salary for each year of service. It also gives you control of your contributions in your defined contribution account. In short, the Combined Plan offers the security of the Defined Benefit Plan with the flexibility, portability and choice of the Defined Contribution Plan.
If you choose this plan now, your decision is not permanent. You will have one more opportunity to evaluate your decision during your fifth year of membership.